Case 9:19-cv-80781-RLR Document 1 Entered on FLSD Docket 06/13/2019 Page 1 of 28

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA
CASE NO.
__________________________________________
L2 CAPITAL, LLC
411 Dorado Beach
East Dorado, PR 00646

Plaintiff,
v.

ANTHONY L.G., PLLC f/k/a

LEGAL & COMPLIANCE LLC
625 N. Flagler Drive, Ste, 600,
West Palm Beach, FL 33401
and
LAURA ANTHONY, ESQUIRE
ANTHONY L.G., PLLC
625 N. Flagler Drive, Ste, 600,
West Palm Beach, FL 33401
and
CHAD FRIEND, ESQUIRE
ANTHONY L.G., PLLC
625 N. Flagler Drive, Ste, 600,
West Palm Beach, FL 33401

Defendants.
____________________________________/

COMPLAINT AND DEMAND FOR JURY TRIAL

Plaintiff L2 Capital, LLC (“L2”), by and through its undersigned counsel,

Alan L. Frank Law Associates, P.C., hereby files its Complaint against Defendants Anthony

L.G., PLLC f/k/a Legal & Compliance, LLC (“Legal & Compliance”), Laura Anthony, Esquire

(“Anthony”), and Chad Friend, Esquire (“Friend”), and in support thereof avers as follows:

INTRODUCTION

1. This is a legal malpractice case. Through this Complaint, L2 seeks to recover the

significant damages caused by Legal & Compliance, Anthony, and Friend’s representation of L2

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in certain investment/funding transactions. Legal & Compliance, Anthony and Friend’s

lawyering failures were both pervasive and egregious. As described more fully below, they

materially contributed and proximately caused L2 to suffer damages in excess of 8 Million

Dollars.

JURISDICTION AND VENUE

2. This Court has subject matter jurisdiction under 28 U.S.C. § 1332 because there is

complete diversity of citizenship and the amount in controversy exclusive of attorney’s fees and

costs exceeds Seventy Five Thousand Dollars.

3. Venue is proper in the Southern District of Florida under 28 U.S.C. § 1391

because Defendants Legal & Compliance, Anthony and Friend reside and maintain their office

and practice in this District, and a substantial part of the events or omissions giving rise to L2’s

claims occurred in this District.

PARTIES

4. Plaintiff L2 is a Kansas limited liability company with a principal place of

business at 411 Dorado Beach, East Dorado, Puerto Rico. The sole member of Plaintiff L2 is

Adam Long, who is domiciled in, a resident, and citizen of Puerto Rico.

5. Defendant Legal & Compliance1 is a Florida limited liability company, and is a

corporate, securities and business transactions law firm that engages in the practice of law in the

State of Florida and elsewhere, and it maintains its principal place of business at 625 N. Flagler

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Legal & Compliance, LLC filed a Name Change to Anthony L.G., PLLC, which became
effective on October 9, 2018. See, Articles of Amendment to Articles of Organization of Legal
& Compliance, LLC (a Florida Limited Liability Company) dated October 13, 2018 and filed
with the Florida Department of State, Division of Corporations, attached hereto as Exhibit “A”.

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Drive, Ste, 600, West Palm Beach, FL 33401. See, 2019 Florida Limited Liability Company

Annual Report for ANTHONY L.G., PLLC filed with the Florida Secretary of State, attached as

Exhibit “B”; See also, Articles of Organization for Legal & Compliance. LLC filed with the

Florida Department of State, Division of Corporations, on October 29, 200, and attached as

Exhibit “C”.

6. Upon information and belief, and specifically based on the Articles of

Organization for Legal & Compliance, at Article IV, filed with the Florida Department of State,

Division of Corporations, the “single member” of Defendant Legal & Compliance is Defendant

Laura E. Anthony, who, is domiciled in, is a resident and citizen of Florida2. See, Articles of

Organization for Legal & Compliance. LLC filed with the Florida Department of State, Division

of Corporations, on October 29, 200, at paragraph IV, attached as Exhibit “C”.

7. Defendant Anthony is a licensed Florida lawyer, and is the founding and

managing Partner of Defendant Legal & Compliance. As Legal & Compliance’s website states,

“For 23 years Ms. Anthony has focused her law practice on small and mid-cap private and public

companies, the OTC market, NASDAQ, NYSE MKT, going public transactions, mergers and

acquisitions, private placement and corporate finance transactions, Regulation A/A+, Exchange

Act and other regulatory reporting requirements, FINRA and DTC requirements, state and

federal securities laws, crowdfunding, general corporate law and complex business transactions.”

Legal & Compliance website and webpage for Anthony is attached as Exhibit “D”.

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Although the Articles of Organization for Legal & Compliance, at Article IV, identifies
Laura E. Anthony as its sole member, and no amendment thereto, other than the name change to
to Anthony L.G., PLLC, was filed with the Florida Department of State, Legal & Compliance
identifies 2 additional partners, one of which is Defendant Friend, and each of whom, upon
information and belief, are domiciled in and citizens of the State of Florida.

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8. Upon further information and belief, Defendant Friend is domiciled in, is a

resident and citizen of Florida, is admitted to the Florida Bar, is a licensed Florida lawyer, and is

a Partner of Defendant Legal & Compliance. As Legal & Compliance’s website states, Friend

has been a Partner since 2018 and “specializes in buyer side transactional work (represents funds

and investors)” and “Friend resides in Palm Beach County with his wife and two sons”. Legal &

Compliance website and webpage for Friend is attached as Exhibit “E”. (Legal & Compliance,

Anthony and Friend will be collectively referred to herein as “Defendants”.)

FACTUAL BACKGROUND

9. L2 Capital was organized and incorporated in November of 2016.

10. L2's principal, Adam Long, before organizing and incorporating L2 and while in

his previous employment, retained the Defendants for certain legal representation.

11. Upon creating L2, Mr. Long sought Defendants’ representation to prepare L2's

corporate

organizational documents and to represent L2 in certain investment transactions.

12. In or around December of 2016, L2 retained the Defendants to represent them in

its first investment transaction, and afterwards L2 routinely engaged Defendants to represent it in

various transactional matters.

13. Defendants represented L2 in several significant transactions, in which the

Defendants’ representation caused L2 substantial damage.

The MoneyonMobile, Inc. Transaction- August 29, 2017

14. L2 loaned a total of approximately 1 Million Dollars to MoneyonMobile, Inc., a

Texas microcap technology company that provides digital payment services in India

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(“MoneyonMobile”), in separate tranches pursuant to a Securities Purchase Agreement executed

on August 29, 2017, an 8% Convertible Promissory Note in the principal amount of $1,136,363,

Common Stock Warrant Agreement, and Irrevocable Transfer Agent Instructions (the Securities

Purchase Agreement, Convertible Promissory Note, Common Stock Warrant Agreement, and

Irrevocable Transfer Agent Instructions shall be collectively referred to herein as the

“MoneyonMobile Transactional Documents”). See MoneyonMobile Transactional Documents

attached collectively as Exhibit “F”.

15. Friend and Legal & Compliance, on L2’s behalf, drafted the MoneyonMobile

Transactional Documents.

16. Prior to L2 entering into the loan transaction with MoneyonMobile, prior to

Friend and Legal & Compliance drafting the MoneyonMobile Transactional Documents, and

prior to L2 executing the MoneyonMobile Transactional Documents, MoneyonMobile

contemplated completing a 1 for 20 reverse stock split in order to up-list to the NASDAQ, which

it disclosed in its Form 10-Qs for the quarters ending June 30, 2017 and September 30, 2017

(“On May 1, 2017, the Company held a special meeting of shareholders pursuant to notice duly

given. At the special meeting, the Company submitted for approval by its shareholders

proposals (i) to amend its Amended and Restated Certificate of Formation-For-Profit

Corporation to effect a reverse share split with the Company’s issued and outstanding common

stock, par value $0.001 per share, at a ratio of between 1-for-5 and 1-for-20 (the ‘Exchange

Range’), with the ratio within such Exchange Range to be determined at the discretion of the

Board (the ‘Reverse Share Split’) and the Reverse Share Split shall be effected at such time as

the Board deems proper and ready....”). See MoneyonMobile Form 10-Q for the quarter ending

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September 30, 2017, at page 18, paragraph 11 [publicly available].

17. Thus, Friend and Legal & Compliance knew or should have known of the

intended reverse stock split and should have addressed the same with specific terms in the

MoneyonMobile Transactional Documents, but did not.

18. In accordance with the MoneyonMobile Convertible Promissory Note, on August

30, 2017, L2 funded the first tranche of $568,181.50 (the “First Tranche”), on September 21,

2017 L2 funded the second tranche of $284,090.75 (the “Second Tranche”), on October 12, 2017

L2 funded the third tranche of $170,454.45 (the “Third Tranche”), and the fourth tranche of

$113,636.30 (the “Fourth Tranche”) was funded by L2 on November 8, 2017.

19. In connection with the funding of the First Tranche, MoneyonMobile issued a

warrant to purchase 688,704 shares of its common stock (the “First Warrant”), in connection

with the funding of the Second Tranche, MoneyonMobile issued a warrant to purchase 344,352

shares of its common stock (the “Second Warrant”), in connection with the funding of the Third

Tranche, MoneyonMobile issued a warrant to purchase 206,612 shares of its common stock (the

“Third Warrant”), and in connection with the funding of the Fourth Tranche, MoneyonMobile

issued a warrant to purchase 137,741 shares of its common stock (the “Fourth Warrant”) (the

First, Second, Third and Fourth Warrants are collectively referred to as the “MoneyonMobile

Warrants”).

20. The Common Stock Warrants, drafted by Friend and Legal & Compliance and

executed with respect to each of the tranches, provided that “if the Market Price of one share of

Common Stock is greater than the Exercise Price, and the Warrant Shares are not registered at

that time under an effective registration statement of the Company and able to be deposited

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pursuant to such effective registration statement”, then L2 could “elect to receive Warrant Shares

pursuant to a cashless exercise, in lieu of a cash exercise, equal to the value of this Warrant

determined in the manner described below (or of any portion thereof remaining unexercised) by

surrender of th[e] Warrant and a Notice of Exercise”, in which event MoneyonMobile was

required to issue to L2 a number of Common Stock computed using the following formula:

X = Y (A-B)
A
Where X = the number of Shares to be issued to Holder.
Y = the number of Warrant Shares that the Holder elects to purchase under this Warrant
(at the date of such calculation).
A = the Market Price (at the date of such calculation).
B = Exercise Price (as adjusted to the date of such calculation).

See Exhibit “F”.

21. After the Note and First and Second Warrants had been issued and outstanding for

six months, L2 asked Friend to provide MoneyonMobile with a calculation for the warrants,

pursuant to the above described formula outlined in the Common Stock Warrant.

22. Friend and Legal & Compliance provided the calculation for the warrants on L2's

behalf to MoneyonMobile.

23. MoneyonMobile disputed Friend and Legal & Compliance’s calculation and

argued that the warrant terms, drafted by Friend and Legal & Compliance, were ambiguous and

that the anti-dilution and ratchet provisions could not be used simultaneously.

24. In response, Friend and Legal & Compliance revised the calculation for the

MoneyonMobile warrants to MoneyonMobile’s benefit and for a reduced number of shares to

L2.

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25. On March 26, 2018, per Friend’s advice and calculations, L2 executed and

submitted an exercise notice for the cashless purchase of the reduced number of MoneyonMobile

common stock.

26. In connection with this exercise, although MoneyonMobile continued to

challenge Friend’s revised calculations, it did not attempt to block L2's exercise and the transfer

agent did deliver 1,176,095 shares of MoneyonMobile’s common stock to L2 in exchange for a

full cashless exercise of both the First Warrant and Second Warrant.

27. On the following day, Legal & Compliance issued a Rule 144 Opinion which

stated, in relevant part, that it was “of the opinion that the Shares issued pursuant to the exercise

of the Warrant, under the circumstances set forth above, may be sold immediately in a public

market or by private transfer by L2 Capital without registration under the Act in reliance on the

Rule 144(b) exemption from registration and need not bear a restrictive legend pertaining to any

sale or disposition of said shares.” See Legal & Compliance Rule 144 Opinion attached as

Exhibit “G”.

28. As a result of MoneyonMobile challenges to Friend and Legal & Compliance ’s

calculation for the First and Second Warrants and L2's concession as a result thereof, L2 advised

Friend that the warrant language in the documents needed to be clearer in any new transaction so

that L2’s calculation were not debatable or could in any way be construed as ambiguous.

29. On or about April 24, 2018, as MoneyonMobile had previously disclosed in its

Form 10-Qs for the quarters ending June 30, 2017 and September 30, 2017, MoneyonMobile

executed a one-for-twenty reverse split of its common stock, and as a consequence each

shareholder then owned one-twentieth of the original shares of common stock, but the value of

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each share had increased twenty-fold.

30. Due to the reverse split the MoneyonMobile stock value increased to a high of

$10 per share.

31. At that time L2 had held the 3 and 4th Warrants for more than six months and due

to the increase in value of the MoneyonMobile common stock as a result of the reverse split, L2

sought to exercise its remaining MoneyonMobile warrants.

32. L2 requested that Friend and Legal & Compliance prepare the necessary

paperwork and provide a calculation for the warrants.

33. At that time Friend and Legal & Compliance did the calculation and explained to

L2 that the documents, which Friend and Legal &Compliance drafted, negotiated and advised L2

to execute, including specifically the Warrant Agreement, did not include any language that

addressed stock splits, and did not include any terms that addressed whether the number of

common shares to be issued would adjust if MoneyonMobile executed a stock split. See Exhibit

“F”.

34. Transactional documents usually include a provision to account for stock splits,

both forward and reverse splits, especially under circumstances where the entity has publicly

disclosed its intention to execute a reverse stock split, and in fact, MoneyonMobile had entered

into a funding transaction with an unrelated entity prior to L2's funding that involved a warrant

agreement that included language that addressed stock splits.

35. Notwithstanding that the MoneyonMobile Transactional Documents drafted by

Friend and Legal & Compliance did not address stock splits, Friend and Legal & Compliance

advised L2 to move forward with the exercise of the 3rd and part of the 4th warrants as if the

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MoneyonMobile Transactional Documents provided that there was no adjustment of the number

of common shares as a result of the stock split.

36. Pursuant to Friend and Legal & Compliance’s advice, on or about May 30, 2018,

L2 executed and delivered an exercise notice, whereby L2 attempted to exercise the right to

purchase 380,000 shares of common stock of MoneyonMobile by cashless exercise pursuant to

the Third and part of the Fourth Warrants, based on the calculations in L2's exercise notice,

prepared by Friend, which did not adjust for MoneyonMobile’s reverse stock split. See May 30,

2018 Exercise Notice attached as Exhibit “H”.

37. In support thereof, on May 30, 2018, Legal & Compliance, issued a Rule 144

Opinion which stated, in relevant part, that “L2 Capital is deemed to have acquired the 380,000

shares on November 8, 2017 (at the latest), the funding date of the Fourth Tranche, and has

satisfied the requisite six month holding period discussed above.” The Legal & Compliance

May 30, 2016 Rule 144 Opinion letter is attached as Exhibit “I”.

38. If the Warrants had been issued without an adjustment for the one-for-twenty

stock split, then L2 would have obtained roughly twenty times more value than what it would

have obtained if the Warrants were exercised prior to the stock split.

39. Upon receipt of the May 2018 Warrant Exercise Notice, the stock transfer agent,

informed MoneyonMobile that, barring a court order enjoining or restraining it from doing so, it

would issue the 380,000 Warrant Shares to L2 according to L2’s calculation in the exercise

notice.

40. In response, MoneyonMobile filed an action in the District Court of Dallas

County, Texas, 134th Judicial District (the “Texas Court”), seeking a temporary injunction to,

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among other things, enjoin and restrain the transfer agent from attempting to issue shares of

MoneyonMobile common stock to L2, which temporary injunction was granted on or about June

7, 2018 (the “Texas Preliminary Injunction Action”).

41. On June 11, 2018, L2 filed a lawsuit against MoneyonMobile and the transfer

agent in the District Court of Johnson County, Kansas asserting claims for Breach of Contract,

Declaratory Judgment and Injunctive Relief (the “Kansas MoneyonMobile Action”).

42. On June 26, 2018, the parties jointly filed a Stipulated Temporary Restraining

Order in the Kansas MoneyonMobile Action pursuant to which all parties agreed to leave a TRO

in place pending the Kansas’Court’s ruling on MoneyonMobile’s motion for preliminary

injunction.

43. On November 2, 2018 the Kansas Court entered and Order and Opinion granting

MoneyonMobile’s motion for preliminary injunction, and enjoing L2 “from taking any action or

undertaking any effort to seek, force or compel the issuance of common stock in

[MoneyonMobile] to [L2] pursuant to the Common Stock Purchase Warrants that

[MoneyonMobile] issued to [L2], unless an adjustment is made in the exercise notice to account

for [MoneyonMobile’s] one-for-twenty reverse stock split”. See November 2, 2018 Order and

Opinion of District Court Judge Paul C. Gurney, attached hereto as Exhibit “J”.

44. In so ordering, the Court specifically found that“the evidence presented at the

injunction hearing tends to indicate that the parties did not account for a stock split at the time

the Warrant agreement was made.” See Exhibit “J”.

45. During the pendency of the Kansas MoneyonMobile Action the MoneyonMobile

share price dropped from $10 per share to .20 cents per share.

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46. As a direct and proximate result of result of Friend and Legal & Compliance’

breaches and negligence in failing to account or address stock splits in the MoneyonMobile

Transactional Documents they prepared, negotiated and advised L2 to execute, L2 lost

approximately Four Million Dollars ($4,000,000) in the MoneyonMobile transaction, and

incurred significant legal fees and litigation costs.

The Amedica Corp. Transaction- January 30, 2018

47. L2 loaned Amedica Corporation (“Amedica”) a total of approximately $840,000

by February 5, 2018, in separate tranches, pursuant to a Securities Purchase Agreement executed

on January 30, 2018, an 8% Convertible Promissory Note in the principal amount of $840,000,

Common Stock Warrant Agreement, and Irrevocable Transfer Agent Instructions (the Amedica

Securities Purchase Agreement, Convertible Promissory Note, Common Stock Warrant

Agreement, and Irrevocable Transfer Agent Instructions shall be collectively referred to herein

as the “Amedica Transactional Documents”).

48. Friend and Legal & Compliance, on L2’s behalf, drafted, negotiated and advised

L2 to execute the Amedica Transactional Documents.

49. After holding the Amedica warrants for six months, in or around August 1, 2018,

L2 sought to move forward with the exercise of the Amedica warrants.

50. Again, Friend and Legal & Compliance provided L2 the calculation for the

exercise of the Amedica warrants, and in accordance with those calculations, on August 3, 2018,

L2 executed an exercise notice in which it demanded, per Friend’s calculations, that Amedica

deliver 442,137 shares of its common stock to L2 in exchange for a full cashless exercise of the

Warrant. See Amedica Exercise Notice dated August 3, 2018 for 442,137 shares attached as

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Exhibit “K”.

51. Friend and Legal & Compliance’s calculation of the 442,137 shares was based on

“the formula on page 2 of the warrant” and the “following paragraph from the 8-K filed on May

15, 2018”:

“Conversion Price.
The Series B Preferred Stock is convertible into shares of Common Stock by
dividing the stated value of the Series B Preferred Stock ($1,100) by: (I) for the first
40 trading days following the closing of this offering, $1.4512 (the “Conversion
Price”), (ii) on or after July 12, 2018 but prior September 7, 2018, the lesser of? (a)
the Conversion Price and (b) 87.5% of the lowest volume weighted average price for
our Common Stock as reported at the close of trading on the market reporting
trade prices for the Common Stock during the five trading days prior to July 12,
2018, and (iii) on or after September 7, 2018, the lesser of? (a) the Conversion Price
and (b) 87.5% of the lowest volume weighted average price for our Common Stock
as reported at the close of trading on the market reporting trade prices for the
Common Stock during the five trading days prior to the date of the notice of
conversion. In the case of (ii)(b) and (iii)(b) above, the share price shall not be less
than $0.48 (the “Floor Price”).”

See Friend Email dated August 6, 2018, Subject: Re: L2 Capital - AMDA - Warrant Exercise

Notice, attached as Exhibit “L”.

52. Amedica, through its counsel, challenged Friend and Legal & Compliance’s

calculations and L2's Exercise Notice based on ambiguity in the language of the Amedica

Transactional Documents, drafted by Friend and Legal & Compliance, stating in relevant part

“Adam, we’ve gone back through the warrant again and are still of the view that the language is

clear that the adjusted strike price for the warrant is $0.6543/share and not the floor price

specified in the Series B convertible note terms. If the language was ambiguous we might be

more inclined to reach a settlement....We feel that the company’s position in this case is in

harmony with the language in the warrant. Even with the $0.6543 price, the result is an

additional 242,000 shares which at a current market price of $0.46/share have an approximate

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value of $111,000. Again, if you want to resubmit the warrant exercise notice with the $0.6543

price we will process it promptly.” See August 10, 2018 email of Kevin J. Ontiveros, Subject:

Re: L2 Capital - AMDA - Warrant Exercise Notice, attached as Exhibit “M”.

53. By email of the same date, L2's principal questioned Friend whether the

“language

[was] ambiguous?”, to which Friend responded “This is a unique situation because they don't

have the right to receive shares at the lower price in the future necessarily, it is just the lowest

floor price that it can be reset to. If the preferred was convertible at $0.49 at any time after

December 31, 2018, for example, then it would be clear that at some point in the future they

would be entitled to this price. As the language of the convertible preferred reads, they may or

may not be entitled to that price depending upon the market price at the time of reset. The

argument can be made either way (which is usually the case) but the issuers resort to litigation in

many situations when this type of clause is being enforced (ratcheting to the lowest conceivable

rather than the dilutive price that the 3rd party has the right to today). It may be best to just avoid

the escalation and concede the pricing or hold on for future exercise.” See August 10, 2018

emails between Adam Long and Friend Subject: Re: L2 Capital - AMDA - Warrant Exercise

Notice, attached as Exhibit “N”.

54. Based on Friend’s advice to “concede the pricing”, which was based on the

ambiguity in the Amedica Transactional Documents he drafted and advised L2 to execute, on

August 13, 2018, L2 advised Amedica’s counsel that L2 would “take “[Amedica’s] number” and

L2 executed and delivered a new exercise notice dated August 2, 2018 using Amedica’s share

numbers, wherein it demanded that Amedica deliver 242,063 shares of its common stock to L2

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in exchange for a full cashless exercise of the Warrant. See Adam Long email dated August 13,

2018, attached as Exhibit “O”; and Exercise Notice dated August 3, 2018 for 242,063 shares

attached as Exhibit “P”.

55. With respect thereto, Legal & Compliance issued a Rule 144 Opinion which

stated, in relevant part, “L2 Capital is deemed to have acquired the 242,063 shares on February

5, 2018 (the date when the Note was fully funded), and has satisfied the requisite six month

holding period discussed above.” See August 3, 2018 Rule 144 Opinion letter of Legal &

Compliance attached as Exhibit “Q”.

56. Ultimately L2's concession from Friend’s calculation of shares to Amedica’s

calculation of shares, based on the ambiguity arising as a result of the Amedica’s Transactional

Documents, drafted by Friend and Legal & Compliance, caused L2 approximately $75,000 in

losses.

57. Again, L2 discussed with Friend revising any future transactional documents to

avoid the ambiguity raised by Amedica which caused the reduction in shares.

58. Friend agreed to “fix” the documents going forward.

FTE Networks, Inc. Transaction- January 30, 2018

59. FTE Networks, Inc. (“FTE”) was seeking $1,000,000 in funding, half of which L2

agreed to provide and the other half of which was to be funded by Peak One Investments, LLC,

an entity unrelated to L2. See Jason Goldstein January 31, 2018 email to David Lethem of FTE

attached as Exhibit “R”.

60. As to L2's half of the funding, on January 30, 2018, L2 agreed to loan

approximately $555,556 to FTE through a convertible debenture in the original principal amount

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of $555,556 (the “FTE Debenture”), a Securities Purchase Agreement and Irrevocable Transfer

Agent Instructions (the FTE Debenture, Securities Purchase Agreement, and Irrevocable

Transfer Agent Instructions shall be collectively referred to herein as the “FTE Transactional

Documents”). The FTE Transactional Documents are attached hereto as Exhibit “S”.

61. Friend and Legal & Compliance, on L2’s behalf, drafted, negotiated and advised

L2 to execute the FTE Transactional Documents. See, Friend January 29, 2018 email (without

attachments) attaching draft FTE Transaction documents for L2's review, attached as Exhibit

“T”.

62. L2 funded the amount of the FTE Debenture by wire transfer on February 2,

2018.

63. It was at all times intended that the FTE Debenture would mature and be due six

months from the date of issuance, as outlined in the Letter of Intent dated January 26, 2018 and,

if said loan was not paid back within 6 months, L2's debt would be converted to equity, provided

however, that the conversion of debt to equity could not occur unless and until the note matured.

See Peak One Letter of Intent dated January 26, 2018 attached as Exhibit “U”; and FTE

Debenture at Paragraph 2, attached as Exhibit “S”.

64. Despite the intent of all parties to the transaction, and specific instruction by L2 to

Friend and Legal & Compliance, the FTE Debenture drafted by Friend and Legal & Compliance,

and executed by the parties provided that the Debenture was due July 30, 2021 (3 years and 6

months, rather than the 6 months intended). See FTE Debenture, at paragraph 14, attached as

Exhibit “S”.

65. The FTE Debenture further included, at paragraph 14, a provision stating, in

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relevant part, “In the event of any inconsistency between the provisions of this Debenture and

the provisions of any other Transaction Document, the provisions of this Debenture shall

prevail.” See Exhibit “S”, at paragraph 14.

66. When the 6 months elapsed and L2 sought to convert the loan to equity the error

as to the due date of the FTE Debenture was realized.

67. When L2 brought it to Friend’s attention, Friend explained that it was “his

scriviner’s error”, that it happens all the time, that he would correct the due date and forward a

Revised Convertible Debenture to L2, and further advised L2 to send the unilaterally Revised

Convertible Debenture directly to the transfer agent to convert, without informing FTE.

68. L2 refused to send the Revised Convertible Debenture to the Transfer Agent

without notifying FTE, and instead forwarded the Revised Convertible Debenture to FTE and

explained by cover email if FTE had no issue with the revision that L2 would be forwarding a

Conversion Notice the same day to the transfer agent. See Adam Long’s August 6, 2018 email

to David Lethem stating “Jason at Peak One brought to my attention there was a typo in our

debenture. I’m attaching the corrected version for your records”, attached as Exhibit “V”.

69. When L2 did not hear back from FTE, Friend and Legal & Compliance advised

L2 to act as if the correct maturity date was outlined in the executed FTE Debenture and to move

forward with the equity conversion by executing and delivering the Conversion Notice as

outlined in L2's correspondence to FTE, and in support thereof Legal and Compliance issued a

Rule 144 opinion. See, L2 FTE Conversion Notice and Legal and Compliance Opinion Letter,

collectively attached as Exhibit “W”.

70. On the same date FTE’s counsel challenged L2's FTE Conversion Notice, stating

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in relevant part “[t]he Revised Debenture was not authorized, executed or delivered by FTE, and

based upon our review of available documents and emails, it seems obvious that someone with

L2 unilaterally changed the due date on the Debenture to July 31, 2018 without the consent of

FTE and circulated the Revised Debenture with the forged signature of David Lethem chief

financial offïcer of FTE”, and demanded “withdrawal or rescission of the Conversion Notice” by

12:00 p.m. the following day, and further advised that failure to withdraw the Conversion Notice

would result in FTE seeking “injunctive relief together with a claim for damages, both actual and

punitive”, and further threatened to file criminal forgery claims against L2's principal, Adam

Long. See August 6, 2018 Letter of C. Thomas Barton, Jr., attached as Exhibit “X”.

71. On the same date, Friend responded to FTE’s counsel letter claiming that the

“2021 reference was a scrivener’s error” [Friend’s error in that he and Legal & Compliance

drafted the FTE Transactional Documents] and that FTE’s “threat of criminal action against L2,

coupled with [FTE]’s knowledge of the six month maturity date (as confirmed in the ancillary

documents and on phone discussions with respect to this transaction), arguably rises to the level

of extortion.” See Friend August 6, 2018 email to Thomas Barton Jr., attached as Exhibit “Y”.

72. With the threat of criminal action by FTE, L2 immediately agreed to temporarily

rescind the FTE Conversion Notice, and as a result of Friend and Legal & Compliance’s error on

the FTE Debenture and advice provided with respect thereto, L2 was forced to settle the dispute

and entered into a confidential settlement agreement with FTE. See Adam Long August 7, 2018

email, attached as Exhibit “Z”.

73. With regard to the FTE Transaction, and as a direct and proximate result of

Defendants’ actions and omissions with respect to the FTE Transaction, L2 suffered significant

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damages.

74. Following this transaction, L2 ceased using Friend and Legal & Compliance for

any new transactions, but continued to be represented by Legal & Compliance for legal work

related to L2 transactions Legal & Compliance was previously involved in, and for certain Rule

144 Opinion letters.

The Biostem Technologies, Inc. Transaction -September 2018

75. By September 2018, L2 had negotiated and executed a term sheet dated

September 24, 2018 with Biostem Technologies, Inc. (“Biostem”) for a Private Placement by L2

with registration rights for the purchase of up to $10,000,000 of common stock of Biostem’s

Securities, and L2 was being represented by new counsel in this transaction. See Biostem Term

Sheet is attached as Exhibit “AA”.

76. However, as provided in the term sheet, “closing was subject to mutual agreement

of final documentation” between L2 and Biostem. See Exhibit “AA”.

77. The transactional documents for this Biostem investment, including a Registration

Rights Agreement, Equity Purchase Agreement and Irrevocable Transfer Agent Instruction

(“Biostem Transactional Documents”) were drafted and provided by L2's new counsel to

Biostem.

78. After receiving the Biostem Transactional Documents, L2 spoke to Biostem’s

Chief Financial Officer, Jason Matuszewski, who explained that Biostem’s attorneys advised

them not to enter into any transaction with L2.

79. When L2 asked who Biostem’s attorney was, Jason Matuszewski advised that

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they were being represented by Laura Anthony of Legal & Compliance.

80. Neither Laura, nor Friend, nor anyone from Legal & Compliance spoke to or

informed L2 of the adverse representation or sought a waiver of conflicts from L2 with respect

thereto.

81. As a result of Legal & Compliance’s advice to Biostem, the transaction with L2

was not consummated, and L2 lost approximately 1.5 Million Dollars.

82. Defendants were continuously engaged by L2 from November 2016 through

January, 2019 to assist and advise L2 on various loan and funding transactions, including

specifically, drafting transactional documents, providing L2 advice related to L2’s rights and

obligations under the transactional documents, calculating shares to which L2 was entitled under

the transactional documents, drafting and advising L2 on exercise notices, protecting L2's rights,

property and interests, and issuing Rule 144 legal opinions.

83. At all relevant times, L2 relied on the guidance and advice of Defendants, and

depended upon them to appropriately draft the transactional documents, to advise L2 on its

ownership and/or entitlement to money and/or warrants and/or shares thereunder, to protect L2's

interests, and steps to be taken to ensure ownership and/or entitlement and/or repayment, and to

maximize L2's returns on its investments.

84. As outlined more fully above, Defendants committed the following errors

omissions, and breaches during its representation of L2 related to the loan/funding transactions

described herein:

A. Defendants knew and/or should have known of MoneyonMobile’s publicly

documented intention to effect a reverse share split and failed to properly draft the
MoneyonMobile Transactional Documents to address the same with specific
terms;

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Case 9:19-cv-80781-RLR Document 1 Entered on FLSD Docket 06/13/2019 Page 21 of 28

B. Defendants failed to properly draft the Amedica Transactional Documents such

that there were ambiguities and contradictions in the anti-dilution and ratchet
protection provisions;

C. Defendants failed to properly draft the FTE Transactional Documents, and the
Debenture as drafted by Defendants provided that it was due July 30, 2021 (3
years and 6 months), rather than the 6 months intended;

D. Defendants negligently advised L2 to unilaterally correct the due date outlined in

the FTE Debenture and to act as if the intended 6 month maturity date was
outlined in the executed FTE Debenture and to move forward with an equity
conversion based thereon by executing and delivering a Conversion Notice based
thereon;

E. Defendants never advised, spoke to or informed L2 of any actual or potential

conflict arising out of their adverse representation of Biostem, nor did they seek
or obtain a waiver of conflicts from L2 with respect thereto;

F. Defendants failed to adequately protect and represent the interests of L2;

G. Defendants failed to take immediate action and correct ambiguities in the

transactional documents they drafted following the MoneyonMobile transaction –
indeed ignored L2's pleas to take such action; and

H. Defendants excessively charged L2 for work that was performed with gross
negligence, or was performed contrary to the L2’s interests or directions.

85. As a direct and proximate result of the afore-described conduct of the Defendants,

L2 has incurred substantial damages, as set forth above.

86. The Defendants acted with malice, moral turpitude, gross negligence, reckless

indifference, wantonness, oppression, and outrageous aggravation towards L2.

87. L2 had to incur and continues to incur significant additional legal costs to defend

the claims made with respect to the above outlined transactions and to rectify the erroneous

advice of and malpractice by Defendants.

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Case 9:19-cv-80781-RLR Document 1 Entered on FLSD Docket 06/13/2019 Page 22 of 28

COUNT I
PROFESSIONAL NEGLIGENCE/LEGAL MALPRACTICE
Plaintiff v. All Defendants

88. L2 realleges and reavers the factual allegations contained in the Paragraphs above

as if fully set forth herein.

89. Defendants were employed by L2 to represent them in the transactional matters

described above.

90. Attorneys such as the Defendants have a duty to L2 to possess the skill and

knowledge possessed by other members of the profession in similar circumstances, and must

carry out L2’s matters entrusted to their professional care with a reasonable degree of skill and

knowledge.

91. The Defendants materially breached that duty, and were negligent, careless,

willful, wanton, and/or reckless, in their performance of L2's legal representation.

92. The Defendants failed to possess and exercise such skill and knowledge before,

during and after their representation of L2, in the following ways:

A. Defendants knew and/or should have known of MoneyonMobile’s publicly

documented intention to effect a reverse share split and failed to properly draft the
MoneyonMobile Transactional Documents to address the same with specific
terms;

B. Defendants failed to properly draft the Amedica Transactional Documents such

that there were ambiguities and contradictions in the anti-dilution and ratchet
protection provisions;

C. Defendants failed to properly draft the FTE Transactional Documents, and the
Debenture as drafted by Defendants provided that it was due July 30, 2021 (3
years and 6 months), rather than the 6 months intended;

D. Defendants negligently advised L2 to unilaterally correct the due date outlined in

the FTE Debenture and to act as if the intended 6 month maturity date was
outlined in the executed FTE Debenture and to move forward with an equity

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Case 9:19-cv-80781-RLR Document 1 Entered on FLSD Docket 06/13/2019 Page 23 of 28

conversion based thereon by executing and delivering a Conversion Notice based

thereon;

E. Defendants never advised, spoke to or informed L2 of any actual or potential

conflict arising out of their adverse representation of Biostem, nor did they seek
or obtain a waiver of conflicts from L2 with respect thereto;

F. Defendants failed to adequately protect and represent the interests of L2;

G. Defendants failed to take immediate action and correct ambiguities in the

transactional documents they drafted following the MoneyonMobile transaction –
indeed ignored L2's pleas to take such action; and

H. Defendants excessively charged L2 for work that was performed with gross
negligence, or was performed contrary to the L2’s interests or directions.

93. In performing work for L2, the Defendants neglected reasonable duties and

operated under impermissible and unethical conflicts of interests.

94. Defendants’ negligence/professional malpractice was the direct and proximate

cause of L2’s substantial damages, in excess of Eight Million Dollars ($8,000,000), as set forth

more fully above.

95. The Defendants acted with malice, moral turpitude, gross negligence, reckless

indifference, wantonness, oppression, and/or outrageous aggravation towards L2.

WHEREFORE, Plaintiff L2 capital, LLC hereby demands judgment against the

Defendants, jointly and severally, for money damages, consequential damages, pre- and post-

judgment interest, court costs, punitive damages, and such other and further relief as this Court

deems just and proper.

COUNT II
BREACH OF FIDUCIARY DUTY

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Case 9:19-cv-80781-RLR Document 1 Entered on FLSD Docket 06/13/2019 Page 24 of 28

Plaintiff v. All Defendants

96. L2 realleges and reavers the factual allegations contained in Paragraphs 2-86

above as if fully set forth herein.

97. L2 and Defendants has a relationship whereby L2 reposed trust and confidence in

Defendants as its legal counsel.

98. The Defendants have obligations and duties to represent L2 in a manner

consistent

with their common law fiduciary duties of loyalty, care and candor.

99. The Defendants owed a duty to L2 to act in good faith, with the care that an

ordinarily prudent person in a like position would exercise under similar circumstances, and in a

manner that they reasonably believe to be in the best interests of L2.

100. The Defendants invited L2’s utmost trust and loyalty as it’s fiduciary and, as a

result, L2 reposed the utmost of trust and loyalty in the Defendants.

101. Defendants represented and promised to represent L2 in accordance with their

duties of loyalty, care and candor, and free of conflicting interests.

102. The Defendants intentionally and/or negligently violated the trust and

confidence of L2 and thereby materially breached their fiduciary duties to L2, by virtue of the

following acts:

A. Defendants knew and/or should have known of MoneyonMobile’s publicly

documented intention to effect a reverse share split and failed to properly draft the
MoneyonMobile Transactional Documents to address the same with specific
terms;

B. Defendants failed to properly draft the Amedica Transactional Documents such

that there were ambiguities and contradictions in the anti-dilution and ratchet
protection provisions;

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Case 9:19-cv-80781-RLR Document 1 Entered on FLSD Docket 06/13/2019 Page 25 of 28

C. Defendants failed to properly draft the FTE Transactional Documents, and the
Debenture as drafted by Defendants provided that it was due July 30, 2021 (3
years and 6 months), rather than the 6 months intended;

D. Defendants negligently advised L2 to unilaterally correct the due date outlined in

the FTE Debenture and to act as if the intended 6 month maturity date was
outlined in the executed FTE Debenture and to move forward with an equity
conversion based thereon by executing and delivering a Conversion Notice based
thereon;

E. Defendants never advised, spoke to or informed L2 of any actual or potential

conflict arising out of their adverse representation of Biostem, nor did they seek
or obtain a waiver of conflicts from L2 with respect thereto;

F. Defendants failed to adequately protect and represent the interests of L2;

G. Defendants failed to take immediate action and correct ambiguities in the

transactional documents they drafted following the MoneyonMobile transaction –
indeed ignored L2's pleas to take such action; and

H. Defendants excessively charged L2 for work that was performed with gross
negligence, or was performed contrary to the L2’s interests or directions.

103. As a direct and proximate result of the afore-described conduct of the Defendants,

Plaintiff has incurred substantial damages, in excess of Eight Million Dollars ($8,000,000), as set

forth above.

104. The Defendants acted with malice, moral turpitude, gross negligence, reckless

indifference to the rights of others, wantonness, oppression, and/or outrageous aggravation

towards L2.

105. If the Defendants’ misconduct were permitted without rebuke, it would encourage

others attorneys and fiduciaries to engage in such reprehensible misconduct.

WHEREFORE, Plaintiff L2 capital, LLC hereby demands judgment against the

Defendants, jointly and severally, for money damages, consequential damages, pre- and post-

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Case 9:19-cv-80781-RLR Document 1 Entered on FLSD Docket 06/13/2019 Page 26 of 28

judgment interest, court costs, punitive damages, and such other and further relief as this Court

deems just and proper.

COUNT III
BREACH OF CONTRACT
Plaintiff v. All Defendants

106. L2 realleges and reavers the factual allegations contained in the Paragraphs 2-86

above as if fully set forth herein.

107. The attorney-client relationship between Defendants and L2 was created by a

binding contract between the parties.

108. It was understood as part of the contract that Defendants had a duty to use their

best efforts, with the requisite skill, knowledge and attention, to represent the L2’s interests

fully, diligently and free of conflict.

109. L2 paid the Defendants substantial sums of money as consideration for their

representation under these terms.

110. The Defendants materially breached that duty by failing to possess and

exercise the requisite skill and knowledge throughout their representation of L2, in the following

ways:

A. Defendants knew and/or should have known of MoneyonMobile’s publicly

documented intention to effect a reverse share split and failed to properly draft the
MoneyonMobile Transactional Documents to address the same with specific
terms;

B. Defendants failed to properly draft the Amedica Transactional Documents such

that there were ambiguities and contradictions in the anti-dilution and ratchet
protection provisions;

C. Defendants failed to properly draft the FTE Transactional Documents, and the
Debenture as drafted by Defendants provided that it was due July 30, 2021 (3
years and 6 months), rather than the 6 months intended;

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Case 9:19-cv-80781-RLR Document 1 Entered on FLSD Docket 06/13/2019 Page 27 of 28

D. Defendants negligently advised L2 to unilaterally correct the due date outlined in

the FTE Debenture and to act as if the intended 6 month maturity date was
outlined in the executed FTE Debenture and to move forward with an equity
conversion based thereon by executing and delivering a Conversion Notice based
thereon;

E. Defendants never advised, spoke to or informed L2 of any actual or potential

conflict arising out of their adverse representation of Biostem, nor did they seek
or obtain a waiver of conflicts from L2 with respect thereto;

F. Defendants failed to adequately protect and represent the interests of L2;

G. Defendants failed to take immediate action and correct ambiguities in the

transactional documents they drafted following the MoneyonMobile transaction –
indeed ignored L2's pleas to take such action; and

H. Defendants excessively charged L2 for work that was performed with gross
negligence, or was performed contrary to the L2’s interests or directions.

111. As a direct and proximate result of the afore-described conduct of the Defendants,

L2 has incurred substantial damages, in excess of Eight Million Dollars ($8,000,000) as set forth

above.

WHEREFORE, Plaintiff L2 capital, LLC hereby demands judgment against the

Defendants, jointly and severally, for money damages, consequential damages, pre- and post-

judgment interest, court costs, punitive damages, and such other and further relief as this Court

deems just and proper.

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Case 9:19-cv-80781-RLR Document 1 Entered on FLSD Docket 06/13/2019 Page 28 of 28

Dated: June 13, 2019 Respectfully submitted,

/s/ Evan L. Frank

EVAN L. FRANK, ESQ.
Bar No. 0099761
E-mail: [email protected]
Alan L. Frank Law Associates, P.C.
135 Old York Road
Jenkintown, PA 19046
T: 215.935.1000
F: 215.935.1110
Attorneys for Plaintiff L2 Capital, LLC

DEMAND FOR JURY TRIAL

L2 hereby demands trial by jury on all issues so triable.

Dated: June 13, 2019 Respectfully submitted,

/s/ Evan L. Frank

EVAN L. FRANK, ESQ.
Bar No. 0099761
E-mail: [email protected]
Alan L. Frank Law Associates, P.C.
135 Old York Road
Jenkintown, PA 19046
T: 215.935.1000
F: 215.935.1110
Attorneys for Plaintiff L2 Capital, LLC

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