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Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 1 of 14
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
`
`
`
`
`Civil Action No.
`
`SHANNON JENKINS,
`
`Plaintiff,
`
`
`
`v.
`
`
`HARVEST HEALTH & RECREATION INC.,
`EULA L. ADAMS,
`MICHAEL SCOTT ATKISON,
`MARK NEAL BARNARD,
`ANA DUTRA,
`ELROY P. SAILOR, and
`STEVEN M. WHITE,
`
`
`Defendants.
`
`
`COMPLAINT AND JURY DEMAND
`
`
`Plaintiff Shannon Jenkins (“Plaintiff”), by and through her undersigned counsel, for her
`
`complaint against defendants, alleges upon personal knowledge with respect to herself, and upon
`
`information and belief based upon, inter alia, the investigation of counsel as to all other allegations
`
`herein, as follows:
`
`NATURE OF THE ACTION
`
`1.
`
`Plaintiff brings this action against Harvest Health & Recreation Inc. (“Harvest” or the
`
`“Company”) and its Board of Directors (the “Board” or the “Individual Defendants”) for violating
`
`Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§
`
`78n(a), 78t(a), and U.S. Securities and Exchange Commission (“SEC”) Rule 14a-9, 17 C.F.R. §
`
`240.14a-9. By the action, Plaintiff seeks to enjoin the vote on a proposed transaction pursuant to
`
`which Trulieve Cannabis Corp. (“Trulieve”) will acquire the Company through Trulieve’s affiliates
`
`Trulieve Acquisition Corp. (“Trulieve”), Mustang MergerCo Inc. (“Merger Sub”) and Trulieve
`
`

`

`Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 2 of 14
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`Intermediate Holding Corp. (“Intermediate Holdco”) (the “Proposed Transaction”).1
`
`2.
`
`On May 10, 2021, Harvest and Trulieve jointly announced their entry into an
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`Arrangement Agreement (the “Merger Agreement”) to sell the Company to Trulieve.2 Under the
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`terms of the Merger Agreement, each Harvest stockholder will be entitled to receive 0.1170 of a
`
`subordinate voting share of Trulieve for each Harvest share they own (the “Merger Consideration”).3
`
`3.
`
`On July 13, 2021, Harvest filed a Schedule 14A Definitive Proxy Statement (the
`
`“Proxy Statement”) with the SEC. The Proxy Statement, which recommends that Harvest
`
`stockholders vote in favor of the Proposed Transaction, omits and/or misrepresents material
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`information essential and necessary to that decision. Defendants authorized the issuance of the false
`
`and misleading Proxy Statement in violation of Sections 14(a) and 20(a) of the Exchange Act.
`
`4.
`
`It is imperative that the material information omitted from the Proxy Statement is
`
`disclosed to the Company’s stockholders prior to the forthcoming stockholder vote so that they can
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`properly exercise their corporate suffrage rights.
`
`5.
`
`For these reasons and as set forth in detail herein, Plaintiff seeks to enjoin Defendants
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`from taking any steps to consummate the Proposed Transaction unless and until the material
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`information discussed below is disclosed to the Company’s stockholders or, in the event the Proposed
`
`Transaction is consummated.
`
`JURISDICTION AND VENUE
`
`6.
`
`This Court has jurisdiction over the claims asserted herein for violations of Sections
`
`
`1 Trulieve is a fully licensed medical cannabis company in the State of Florida. Trulieve is also a
`licensed operator in California, Massachusetts, Connecticut, Pennsylvania, and West Virginia.
`Trulieve shares trade on the Canadian Securities Exchange under the symbol “TRUL,” and on the
`OTCQX Best Market under the symbol “TCNNF.”
`2 The Board approved the Merger Agreement on or around May 10, 2021.
`3 The approximate value of the Proposed Transaction is $2.1 billion.
`
`

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`Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 3 of 14
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`14(a) and 20(a) of the Exchange Act and SEC Rule 14a-9 promulgated thereunder pursuant to Section
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`27 of the Exchange Act, 15 U.S.C. § 78aa, and 28 U.S.C. §1331 (federal question jurisdiction).
`
`7.
`
`This Court has jurisdiction over the defendants because each defendant is either a
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`corporation that conducts business in and maintains operations within this District, or is an individual
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`with sufficient minimum contacts with this District so as to make the exercise of jurisdiction by this
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`Court permissible under traditional notions of fair play and substantial justice.
`
`8.
`
`Venue is proper in this District pursuant to 28 U.S.C. § 1391 because Plaintiff’s claims
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`arose in this District, where a substantial portion of the actionable conduct took place, where most of
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`the documents are electronically stored, and where the evidence exists. Harvest operates and
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`maintains a corporate office as well as a manufacturing facility in this District. Moreover, each of
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`the Individual Defendants, as Company officers or directors, either resides in this District or has
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`extensive contacts within this District.
`
`PARTIES
`
`9.
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`Plaintiff is, and has been continuously throughout all times relevant hereto, the owner
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`of Harvest common stock.
`
`10.
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`Defendant Harvest is a British Columbia corporation with its principal executive
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`offices located at 1155 W. Rio Salado Parkway, Suite 201, Tempe, Arizona 85281, and a corporate
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`office and manufacturing facility located in Denver, Colorado. Harvest is a vertically integrated
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`cannabis company and multi-state operator. The Company’s common stock is traded on the OTC
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`Markets under the ticker symbol “HRVSF.”
`
`11.
`
`Defendant Eula L. Adams (“Adams”) has been a director of the Company since
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`December 2019.
`
`12.
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`Defendant Michael Scott Atkison (“Atkison”) has been a director of the Company
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`since May 2020.
`
`

`

`Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 4 of 14
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`13.
`
`Defendant Mark Neal Barnard (“Barnard”) has been Chairman of the Board since
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`March 2020, and a director of the Company since November 2018.
`
`14.
`
`Defendant Ana Dutra (“Dutra”) has been a director of the Company since December
`
`2019.
`
`15.
`
`Defendant Elroy P. Sailor (“Sailor”) has been Chief Strategy Officer of the Company
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`since January 2020 and a director since November 15, 2018.
`
`16.
`
`Defendant Steven M. White (“White”) co-founded Harvest in 2012, is Chief Executive
`
`Officer (“CEO”) of the Company, and has been a director at all relevant times.
`
`17.
`
`Defendants identified in paragraphs 10 to 15 are collectively referred to herein as the
`
`“Board” or the “Individual Defendants.”
`
`SUBSTANTIVE ALLEGATIONS
`
`The Proposed Transaction
`
`18.
`
`On May 10, 2021, Harvest and Trulieve issued a joint press release announcing the
`
`Proposed Transaction. The press release stated, in relevant part:
`
`TALLAHASSEE, Fla. and PHOENIX, May 10, 2021 -- Trulieve Cannabis Corp.
`(“Trulieve” or the “Company”) (CSE: TRUL) (OTC: TCNNF) and Harvest Health &
`Recreation Inc. (“Harvest”) (CSE: HARV, OTCQX: HRVSF) are pleased to announce
`they have entered into a definitive arrangement agreement (the “Arrangement
`Agreement”) pursuant to which Trulieve will acquire all of the issued and outstanding
`subordinate voting shares, multiple voting shares and super voting shares (the “Harvest
`Shares”) of Harvest (the “Transaction”). Under the terms of the Arrangement
`Agreement, shareholders of Harvest (the “Harvest Shareholders”) will receive 0.1170
`of a subordinate voting share of Trulieve (each whole share, a “Trulieve Share”) for
`each Harvest subordinate voting share (or equivalent) held (the “Exchange Ratio”),
`representing total consideration of approximately $2.1 billion based on the closing
`price of the Trulieve Shares on May 7, 2021.
`
`Trulieve, a leading multi-state operator with a focus on the northeast and southeast
`regions of the United States, and Harvest, a leading multi-state operator with a focus
`on the west coast and northeast regions of the United States, have built deep, vertically
`integrated operations in their key markets, becoming leading operators in the United
`States, the world’s largest regulated cannabis market.
`
`Key Transaction Highlights and Benefits
`
`

`

`Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 5 of 14
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` •
`
`
`
`Increases Scale Across Our Hub Markets – through the creation of the largest U.S.
`cannabis operator on a combined retail and cultivation footprint basis;
`• Creates the Most Profitable US MSO – with combined 2020 Adjusted EBITDA of
`$266 million1,2 and combined 2021E consensus Adjusted EBITDA3 of $461
`million, delivering an unparalleled platform for continued growth;
`• Delivers a Superior Existing Retail and Distribution Model – from a robust retail
`network of 126 dispensaries across 11 states, the combined company will have
`leading market shares in Arizona and Florida;
`• Strong and Expanding Multi-State Presence – bolsters Trulieve’s expansion in US
`northeast and southeast hubs in Florida, Pennsylvania and Maryland, and
`establishes a southwest hub in core markets including Arizona, where recreational
`adult use of cannabis was recently legalized;
`• Optimizes Nationwide Presence – through well-established retail and wholesale
`channels across markets, as well as the ability to reach an estimated total
`addressable market of US$19.3 billion in 2025E (Arcview market estimate);
`• Adds Premium Brands – to Trulieve’s portfolio of in-house brands and national
`brand partners with a successful line of products across multiple form factors;
`• Leverages Expert Operating Teams and Best Practices – from each of Trulieve and
`Harvest, enhancing operational excellence by combining unparalleled knowledge
`of, and success in winning, state license application processes and the ability to
`rapidly bring operations to market; and
`• Accretive Transaction Reinforces Trulieve’s Leading Financial Metrics – by
`reinforcing superior financial performance relative to peers through industry-
`leading margins and strong projected profitable growth.
`
`
`Management Commentary
`
`“Today’s announcement is the largest and most exciting acquisition so far in our
`industry, creating the most profitable public multi-state operator. Importantly, our
`companies share similar customer values with a focus on going deep in core markets.
`This combination offers us the opportunity to leverage our respective strong
`foundations and propel us forward with an unparalleled platform for future growth,”
`stated Kim Rivers, Chief Executive Officer of Trulieve. “Harvest provides us with an
`immediate and significant presence in new and established markets and accelerates
`our entry into the adult use space in Arizona. Trulieve and Harvest are leaders in our
`markets, recognized for our innovation, brands, and operational expertise with true
`depth and scale in our businesses. We look forward to providing best-in-class service
`to patients and customers on a broader national scale as we create an iconic US
`cannabis brand.”
`
`“We are thrilled to be joining Trulieve, a company that has achieved unrivaled success
`and scale in its home state of Florida,” said Steve White, Chief Executive Officer of
`Harvest. “As one of the oldest multi-state operators, we believe our track record of
`identifying and developing attractive market opportunities combined with our recent
`successful launch of adult use sales in Arizona will add tremendous value to the
`combined organization as it continues to expand and grow in the coming years.”
`
`
`

`

`Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 6 of 14
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`Terms of the Transaction
`
`The Transaction will be effected by way of a plan of arrangement pursuant to
`the Business Corporations Act (British Columbia). Under the terms of the
`Arrangement Agreement, Trulieve will acquire all of the issued and outstanding
`Harvest Shares, with each Harvest Shareholder receiving 0.1170 of a Trulieve Share
`for each Harvest Share, implying a price per Harvest Share of US$4.79, which
`represents a 34% premium to the May 7, 2021 closing price of the Harvest Shares.
`After giving effect to the Transaction, Harvest Shareholders will hold approximately
`26.7% of the issued and outstanding pro forma Trulieve Shares (on a fully-diluted
`basis). The Exchange Ratio is subject to adjustment in the event that Harvest
`completes certain interim period refinancing measures, with the potential adjustment
`in proportion to the incremental costs from such financing relative to the Transaction
`value. Additional details of the Transaction will be described in the management
`information circular and proxy statement (the “Circular”) that will be mailed to
`Harvest Shareholders in connection with a special meeting of Harvest Shareholders
`(the “Meeting”) expected to be held in the third quarter to approve the Transaction.
`
`The Transaction has been unanimously approved by the Boards of Directors of each
`of Trulieve and Harvest. Harvest Shareholders holding more than 50% of the voting
`power of the issued and outstanding Harvest Shares have entered into voting support
`agreements with Trulieve to vote in favor of the Transaction.
`
`The Arrangement Agreement provides for certain customary provisions, including
`covenants in respect of non-solicitation of alternative transactions, a right to match
`superior proposals, US$100 million reciprocal termination fees under certain
`circumstances and reciprocal expense reimbursement provisions
`in certain
`circumstances.
`
`The Transaction is subject to, among other things, the approval of the necessary
`approvals of the Supreme Court of British Columbia, the approval of two-thirds of the
`votes cast by Harvest Shareholders at the Special Meeting, receipt of the required
`regulatory approvals, including, but not limited, approval pursuant to the Hart–Scott–
`Rodino Antitrust Improvements Act, and other customary conditions of closing.
`Approval of Trulieve Shareholders is not required. Additional details of the
`Transaction will be provided in the Circular.
`
`The Board of Directors of Harvest (the “Harvest Board”) has unanimously determined,
`after receiving financial and legal advice and following the receipt and review of a
`unanimous recommendation of a special committee of independent directors (the
`“Special Committee”), that the Transaction is in the best interests of Harvest, and that,
`on the basis of the Fairness Opinion (as defined herein), that the consideration to be
`received by the Harvest Shareholders is fair, from a financial point of view, to the
`Harvest Shareholders.
`
`The Harvest Board unanimously recommends that Harvest Shareholders vote in favour
`of the resolution to approve the Transaction. The Special Committee obtained a
`fairness opinion from Haywood Securities Inc., (the “Fairness Opinion”) which
`
`

`

`Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 7 of 14
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`provides that, as at the date of such opinion and based upon and subject to the
`assumptions, procedures, factors, limitations and qualifications set forth therein, the
`consideration to be received by the Harvest Shareholders pursuant to the Transaction
`is fair, from a financial point of view, to the Harvest Shareholders.
`
`Financial and Legal Advisors
`
`Canaccord Genuity Corp. acted as exclusive financial advisor and DLA Piper
`(Canada) LLP and Fox Rothschild LLP acted as Canadian and United States legal
`counsel, respectively, to Trulieve. Canaccord Genuity Corp. also provided a fairness
`opinion to the Board of Directors of Trulieve.
`
`Moelis & Company LLC acted as financial advisor and Bennett Jones LLP and
`Troutman Pepper LLP acted as Canadian and United States legal counsel, respectively,
`to Harvest. Haywood Securities Inc. provided a fairness opinion to the Special
`Committee.
`
`
`The Proxy Statement Contains Material Misstatements or Omissions
`
`19.
`
`Defendants filed a materially incomplete and misleading Proxy Statement with the
`
`SEC and disseminated it to Harvest’s stockholders. The Proxy Statement misrepresents or omits
`
`material information that is necessary for the Company’s stockholders to make an informed voting or
`
`appraisal decision in connection with the Proposed Transaction.
`
`20.
`
`Specifically, as set forth below, the Proxy Statement fails to provide Company
`
`stockholders with material information or provides them with materially misleading information
`
`concerning: (a) Harvest’s and Trulieve’s financial projections; (b) the data and inputs underlying the
`
`financial valuation analyses that support the fairness opinions provided by the Company’s financial
`
`advisor Moelis & Company LLC (“Moelis”) and financial advisor to the special committee of the
`
`Board (“Special Committee”), Haywood Securities Inc. (“Haywood”); (c) potential conflicts of
`
`interest faced by Haywood; and (d) the background of the Proposed Transaction.
`
`Material Omissions Concerning Financial Projections for Harvest and Trulieve
`
`21.
`
`The Proxy Statement omits material information regarding the Company’s financial
`
`projections for Harvest and Trulieve, including the financial metrics underlying (a) gross profit, (b)
`
`

`

`Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 8 of 14
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`EBITDA and (c) unlevered free cash flow with respect to each of the “Management Financial
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`Projections” and “Trulieve Adjusted Management Projections.”
`
`22.
`
`The omission of this information renders the statements in the “Harvest’s Unaudited
`
`Financial Projections” section of the Proxy Statement false and/or materially misleading in
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`contravention of the Exchange Act.
`
`Material Omissions Concerning Moelis’s and Haywood’s Financial Analyses
`
`23.
`
`The Proxy Statement describes Moelis’s and Haywood’s fairness opinions and the
`
`underlying valuation analyses in support thereof. Those descriptions, however, fail to include key
`
`inputs and assumptions underlying these analyses. Without this information, as described below,
`
`Harvest’s public stockholders are unable to fully understand these analyses and, thus, are unable to
`
`determine what weight, if any, to place on Moelis’s and Haywood’s fairness opinions in determining
`
`whether to vote in favor of the Proposed Transaction or seek appraisal.
`
`24. With respect to Moelis’s Discounted Cash Flow Analyses, the Proxy Statement fails
`
`to disclose: (a) the inputs and assumptions underlying the discount rate range of 9.75% to 13.50%
`
`used for Harvest; and (b) the inputs and assumptions underlying the discount rate range of 8.75% to
`
`11.75% used for Trulieve.
`
`25. With respect to Haywood’s Analysis of Select Publicly Traded Companies, the Proxy
`
`Statement fails to disclose the financial multiples and metrics for each of the selected companies
`
`analyzed by Haywood in the analyses.
`
`26. With respect to Haywood’s Discounted Cash Flow analyses of Harvest and Trulieve,
`
`the Proxy Statement fails to disclose: (a) the inputs and assumptions underlying the discount rate
`
`ranges used in the analyses; (b) the terminal values; and (c) the implied per share ranges for Harvest
`
`and Trulieve resulting from the analyses.
`
`27. When a banker’s endorsement of the fairness of a transaction is touted to stockholders,
`
`

`

`Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 9 of 14
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`the valuation methods used to arrive at that opinion as well as the key inputs and range of ultimate
`
`values generated by those analyses must also be fairly disclosed.
`
`28.
`
`The omission of this information renders the statements in the “Opinions of Harvest’s
`
`Financial Advisors” section of the Proxy Statement false and/or materially misleading in
`
`contravention of the Exchange Act.
`
`Material Omissions Concerning Haywood’s Potential Conflicts of Interest
`
`29.
`
`The Proxy Statement fails to disclose material information concerning potential
`
`conflicts of interest faced by the Special Committee’s financial advisor, Haywood, including whether
`
`Haywood has performed any past services for the Company or Trulieve and, if so, the amount of fees
`
`Haywood received for those services.
`
`30.
`
`Full disclosure of investment banker compensation and all potential conflicts is
`
`required due to the central role played by investment banks in the evaluation, exploration, selection,
`
`and implementation of strategic alternatives.
`
`31.
`
`The omission of this information renders the statements in the “Opinions of Harvest’s
`
`Financial Advisors” section of the Proxy Statement false and/or materially misleading in
`
`contravention of the Exchange Act.
`
`Material Omissions Concerning the Background of the Proposed Transaction
`
`32.
`
`The Proxy Statement fails to disclose material information concerning the background
`
`process leading to the Proposed Transaction, including whether confidentiality agreements the
`
`Company entered into with potential counterparties contained standstill provisions or “don’t-ask,
`
`don’t-waive” (“DADW”) standstill provisions that are still in effect and currently precluding these
`
`parties from making a topping bid for the Company.
`
`33.
`
`The failure to disclose the existence of DADW provisions creates the false impression
`
`that a potential bidder who entered into a confidentiality agreement could make a superior proposal
`
`

`

`Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 10 of 14
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`for the Company. If the potential acquirer’s non-disclosure agreement contains a DADW provision,
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`then that potential bidder can only make a superior proposal by (a) breaching the confidentiality
`
`agreement—since in order to make the superior proposal, it would have to ask for a waiver, either
`
`directly or indirectly; or by (b) being released from the agreement, which if action has been done, is
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`omitted from the Proxy Statement.
`
`34.
`
`Any reasonable Harvest stockholder would deem the fact that a likely topping bidder
`
`for the Company may be precluded from making a topping bid for the Company to significantly alter
`
`the total mix of information.
`
`35.
`
`Additionally, the Proxy Statement fails to disclose: (a) the valuations set forth in
`
`Trulieve’s January 8, 2021 and January 11, 2021 letters of intent; (b) Trulieve’s concerns with
`
`Harvest’s February 3, 2021 financial analysis; (c) the valuations set forth in Trulieve’s February 26,
`
`2021 proposal letter; and (d) the specific terms of Company A’s proposal, including the valuation set
`
`forth in Company A’s proposal.
`
`36.
`
`The omission of this information renders the statements in the “Background to the
`
`Arrangement” section of the Proxy Statement false and/or materially misleading in contravention of
`
`the Exchange Act.
`
`37.
`
`The Individual Defendants were aware of their duty to disclose this information and
`
`acted negligently (if not deliberately) in failing to include this information in the Proxy Statement.
`
`Absent disclosure of the foregoing material information prior to the stockholder vote on the Proposed
`
`Transaction, Plaintiff and the other stockholders of Harvest will be unable to make a sufficiently
`
`informed voting or appraisal decision in connection with the Proposed Transaction and are thus
`
`threatened with irreparable harm warranting the injunctive relief sought herein.
`
`
`
`
`
`

`

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`COUNT I
`
`Against All Defendants for Violations of Section 14(a) of the
`Exchange Act and SEC Rule 14a-9 Promulgated Thereunder
`
`38.
`
`Plaintiff repeats and realleges each and every allegation contained above, as though
`
`fully set forth herein.
`
`39.
`
`During the relevant period, defendants disseminated the false and misleading Proxy
`
`Statement specified above, which failed to disclose material facts necessary in order to make the
`
`statements made, in light of the circumstances under which they were made, not misleading in
`
`violation of Section 14(a) of the Exchange Act and SEC Rule 14a-9 promulgated thereunder.
`
`40.
`
`By virtue of their positions within the Company, the defendants were aware of this
`
`information and of their duty to disclose this information in the Proxy Statement. The Proxy
`
`Statement was prepared, reviewed, and/or disseminated by the defendants. It misrepresented and/or
`
`omitted material facts, including material information about Harvest’s and Trulieve’s financial
`
`projections, the data and inputs underlying the financial valuation analyses that support the fairness
`
`opinions provided by Moelis and Haywood, potential conflicts of interest faced by Haywood and the
`
`background of the Proposed Transaction. The defendants were at least negligent in filing the Proxy
`
`Statement with these materially false and misleading statements.
`
`41.
`
`The omissions and false and misleading statements in the Proxy Statement are material
`
`in that a reasonable stockholder would consider them important in deciding how to vote on the
`
`Proposed Transaction.
`
`42.
`
`By reason of the foregoing, the defendants have violated Section 14(a) of the Exchange
`
`Act and SEC Rule 14a-9(a) promulgated thereunder.
`
`43.
`
`Because of the false and misleading statements in the Proxy Statement, Plaintiff is
`
`threatened with irreparable harm, rendering money damages inadequate. Therefore, injunctive relief
`
`is appropriate to ensure defendants’ misconduct is corrected.
`
`

`

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`COUNT II
`
`Against the Individual Defendants for Violation of Section 20(a) of the Exchange Act
`
`Plaintiff incorporates by reference and realleges each and every allegation contained
`
`44.
`
`above, as though fully set forth herein.
`
`45.
`
`The Individual Defendants acted as controlling persons of Harvest within the meaning
`
`of Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions as officers and/or
`
`directors of Harvest and participation in and/or awareness of the Company’s operations and/or
`
`intimate knowledge of the false statements contained in the Proxy Statement filed with the SEC, they
`
`had the power to influence and control and did influence and control, directly or indirectly, the
`
`decision-making of the Company, including the content and dissemination of the various statements
`
`which Plaintiff contends are false and misleading.
`
`46.
`
`Each of the Individual Defendants was provided with or had unlimited access to copies
`
`of the Proxy Statement and other statements alleged by Plaintiff to be misleading prior to and/or
`
`shortly after these statements were issued and had the ability to prevent the issuance of the statements
`
`or cause the statements to be corrected.
`
`47.
`
`In particular, each of the Individual Defendants had direct and supervisory
`
`involvement in the day-to-day operations of the Company, and, therefore, is presumed to have had
`
`the power to control or influence the particular transactions giving rise to the securities violations as
`
`alleged herein, and exercised the same. The Proxy Statement at issue contains the unanimous
`
`recommendation of each of the Individual Defendants to approve the Proposed Transaction. They
`
`were, thus, directly involved in the making of this document.
`
`48.
`
`In addition, as the Proxy Statement sets forth at length, and as described herein, the
`
`Individual Defendants were each involved in negotiating, reviewing, and approving the Proposed
`
`Transaction. The Proxy Statement purports to describe the various issues and information that they
`
`

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`Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 13 of 14
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`reviewed and considered—descriptions which had input from the directors.
`
`49.
`
`By virtue of the foregoing, the Individual Defendants have violated Section 20(a) of
`
`the Exchange Act.
`
`50.
`
`As set forth above, the Individual Defendants had the ability to exercise control over
`
`and did control a person or persons who have each violated Section 14(a) and SEC Rule 14a-9,
`
`promulgated thereunder, by their acts and omissions as alleged herein. By virtue of their positions as
`
`controlling persons, these defendants are liable pursuant to Section 20(a) of the Exchange Act. As a
`
`direct and proximate result of defendants’ conduct, Harvest’s stockholders will be irreparably harmed.
`
`PRAYER FOR RELIEF
`
`WHEREFORE, Plaintiff demands injunctive relief, in her favor and against defendants as
`
`follows:
`
`A.
`
`Preliminarily and permanently enjoining defendants and all persons acting in concert
`
`with them from proceeding with, consummating, or closing the Proposed Transaction and any vote
`
`on the Proposed Transaction;
`
`B.
`
`In the event defendants consummate the Proposed Transaction, rescinding it and
`
`setting it aside or awarding rescissory damages to Plaintiff;
`
`C.
`
`Awarding Plaintiff the costs of this action, including reasonable allowance for
`
`Plaintiff’s attorneys’ and experts’ fees; and
`
`D.
`
`Granting such other and further relief as this Court may deem just and proper.
`
`[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
`
`
`
`
`
`

`

`Case 1:21-cv-02045-NRN Document 1 Filed 07/28/21 USDC Colorado Page 14 of 14
`
`Plaintiff demands a trial by jury on all claims and issues so triable.
`
`JURY DEMAND
`
`Dated: July 28, 2021
`
`
`
`
`OF COUNSEL:
`
`LONG LAW, LLC
`Brian D. Long
`3828 Kennett Pike, Suite 208
`Wilmington, DE 19807
`Telephone: (302) 729-9100
`Email: bdlong@longlawde.com
`
`Respectfully submitted,
`
`/s/ Richard A. Acocelli
`Richard A. Acocelli
`WEISSLAW LLP
`1500 Broadway, 16th Floor
`New York, NY 10036
`Telephone: (212) 682-3025
`Facsimile: (212) 682-3010
`Email: racocelli@weisslawllp.com
`
`Attorneys for Plaintiff
`
`
`
`
`
`

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