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DOCUMENT INFORMATION

Agency Name: Broward County Clerk of Courts

Clerk of the Circuit Court: Honorable Brenda D. Forman

Date Issued: 9/8/2022 7:25:01 PM

Unique Reference Number: CAA-FAA-BCABB-GDEBBDGF-EGEAID-H

Case Docket: 9/7/2022 - Complaint (eFiled) - 12 Pages

Requesting Party Code: 500

Requesting Party Reference: A20220908192433EF8E

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Case 0:22-cv-61688-RS Document 1-2 Entered on FLSD Docket 09/09/2022 Page 1 of 13
Filing# 156956255 E-Filed 09/07/2022 10:09:44 PM

IN THE CIRCUIT COURT OF THE SEVENTEENTH

JUDICIAL CIRCUIT IN AND FOR BROWARD

COUNTY, FLORIDA

Case No. 22- CA

N9 ADVISORS, LLC, on

its own behalf and on

behalf of Bang, Inc.,

Plaintiffs,

V.

BANQ, INC., JON JILES,

and PRIME TRUST LLC,

Defendants.

COMPLAINT

PlaintiffN9 Advisors, LLC ("N9 Advisors")sues Defendants Bang, Inc. ("Bang") and

Prime Trust LLC ("Prime Trust")and sues, on behalf of Bang, lnc., Defendant Jon Jiles ("Jiles")

and Prime Trust.

INTRODUCTION

1. Defendant Jon Jiles,while wearing two conflictinghats,upturnedBang's

business,leavingthat company a shell of its former self. Because Jiles breached his fiduciary

duties to Bang, N9 Advisors-an investor in Bang-brings this derivative lawsuit againstJiles

for breachinghis fiduciaryduties and againstPrime Trust for aidingand abettingJiles's

breaches. It also brings suit on its own behalf for collection on a promissorynote signedby Bang

and againstPrime Trust for its tortious interference with N9 Advisors' investment relationship

with Bang.

*** FILED: BROWARD COUNTY, FL BRENDA D. FORMAN, CLERK 09/07/2022 10:09:42 PM.****

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JURISDICTION AND VENUE

2. The Court has jurisdictionbecause this is an action at law in which the matter in

controversy exceeds the sum of $30,000,exclusive of interest,costs, and attorney'sfees.

3. Venue is proper in Broward County under Florida Statutes § 47.011 because it is

the county where Bang resides and is where the claims accrued and under § 47.061 because it is

the county where the maker resides.

4. The Court has personaljurisdictionover Bang under § 48.193(1)(b)because itis a

Florida corporationthat engages in substantial activityin Florida and under § 48.193(1)(a)7for

breachinga contract in Florida.

5. The Court has personaljurisdictionover Prime Trust and Jiles under §

48.193(1)(a)2because they committed tortious acts within Florida.

THE CONVERTIBLE PROMISSORY NOTE

6. Bang is a Florida corporationthat in May of 2021 was a neobank-that is,it

providedbanking services to consumers through a mobile app and website.

7. On July 16, 2021, N9 Advisors became an investor in Bang when Bang and N9

Advisors executed the Convertible PromissoryNote ("Note"),which is attached as Exhibit 1.

8. Under the Note, Bang promised to pay N9 Advisors $3,000,000 with an interest

of 10% per annum, compounding annually.

9. The Note matured in 2026, and itgave N9 Advisors the optionof either receiving

payment in dollars or convertingthe outstanding amount to shares of stock in Bang.

10. Though the Note matured in 2026, it allowed N9 Advisors to accelerate payment

if Bang defaulted under certain events, including"any material change in the nature of [Bang' s]

business.'"

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11. Because N9 Advisors was not merely a note holder but also had the abilityto

convert its interest to ownership in Bang, Bang issued N9 Advisors the Side Letter, which is

attached as Exhibit 2.

12. The Side Letter gave N9 Advisors many rightsconsummate with an ownership

interest in Bang, like broad observer rightsand the rightto receive information, including

confidential information from Bang.

JILES'S BREACHES OF FIDUCIARY DUTIES

13. At all relevant times, Jiles was (and is)the chairpersonof Bang's board of

directors and thus owed Bang fiduciaryduties.

14. At all relevant times,Jiles was also (and is also)the managing member of Prime

Trust, a Nevada limited liabilitycompany that provides"fintech" and "digitalasset" innovators

with financial infrastructure.

15. To operate as a neobank, Bang relied on Prime Trust's infrastructure.

16. Jiles's positionas chairpersonof Bang and manager and owner of Prime Trust

constitutes a conflict of interest under Florida Statutes § 607.0832 and raises serious questions

about Jiles's fiduciaryduties,especiallyhis duty of loyalty,given that he headed two different

entities,one of which relied heavilyon the services of the other entity.

17. Jiles quicklyshowed that his loyaltybelongedto Prime Trust,not Bang.

18. Despitebeing Bang's chairpersonand thus owing Bang fiduciaryduties,on

information and belief,liles in July of 2021 threatened to use his family'scontrollinginterest in

Bang to terminate Bang's board of directors,assume control of Bang, and leave Bang withjusta

few months' worth of working capital.

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19. These threats,in themselves, are radical and breaches of Jiles's fiduciaryduties to

Bang, but they are more alarmingbecause Jiles freelyadmitted that he wanted to undertake these

actions so that Prime Trust would have leverageover Bang.

20. Not done there,Jiles next soughtto requirean inexplicable non-compete

agreement from Bang's then-CEO Scott Purcell.

21. On information and belief,liles became adamant that Purcell must signa noncompete agreement, but the non-compete agreement would not have barred Purcell from

competingwith Bang but,rather,would have barred Purcell from competingwith Prime Trust.

22. Jiles's insistence that Purcell signthe non-compete agreement highlightsJiles's

foremost loyaltyto Prime Trust and to his own personalinterests at the expense of Bang.

23. liles's insistence also propelledan irreconcilable conflict between Jiles and

Bang's management team, includingPurcell,Bang's generalcounsel,and Bang's CTO.

24. From July to December of 2021, Jiles,despitehis fiduciaryduties to Bang, did

not resolve an ever-increasing rift with Bang's management team as Jiles's conflict of interest

and breach of duty of loyaltybecame more and more apparent and he began to increase his

influence over Bang's other directors,and the relationship between Jiles and management

became increasinglydysfunctionalas Bang's business hopes became ever-more fraught.

PRIME TRUST AND BANQ

25. Eventually,.andin contravention of his fiduciaryobligationsto Bang, Jiles began

to plotBang's downfall throughhis control of Prime Trust.

26. Bang's reliance on Prime Trust's financial infrastructure cannot be understated:

Without it or an alternative provider,Bang could not operate as a neobank.

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27. On information and belief,in late August or earlySeptember, Prime Trust

requiredthat Bang meet new "compliance requirements,"and Prime Trust sent an on-boarding

manual to Bang, even though Bang already used Prime Trust's services.

28. The new requirementswould take a largeeffort for an earlystage company with

limited resources, like Bang, to integrateto its code and ApplicationProgramming Interface

("API").

29. To alter its code, Bang would have to blueprintthe necessary changes, write new

code, amend the old code, undertake qualitycontrol,and integrateall the moving pieces.

30. On information and belief,on or about mid-October 2021, Bang's chief

technologyofficer spoke with Prime Trust's chief complianceofficer and chief information and

securityofficer to request that theyprioritizethe various new demands made on Bang so that

Bang could comply in a reasonable,workable manner and timeframe.

31. Given the breadth of the newly imposed requirementsby Prime Trust, the effort

would likelyhave taken a month or two to fullycomply, so Bang asked Prime Trust which

changes it should prioritize.

32. At this meeting,Prime Trust's chief complianceofficer and chief information and

securityofficer informed Bang that Prime Trust's Board of Managers-n which Jiles served as

Chairman-demanded that Bang make all the necessary changes in a few days and informed

Bang that the failure to make all the changes would be deemed noncompliance and lead to

immediate termination of Prime Trust and Bang's relationship.

33. The totalityof Prime Trust's request was impossible to accomplishwithin that

time period;Bang could not even blueprintor architect all the requestedchanges in ten business

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days,and, at this meeting,Bang told Prime Trust that the deadline was impossiblefor Bang to

meet.

34. On information and belief,justthree days later,Bang received a letter from Prime

Trust's general counsel in which Prime Trust terminated its relationship with Bang.

35. Prime Trust and its Board of Managers, led by Jiles,imposed this unattainable

goal not for any rational or business reasons but specifically because Jiles wanted to upend

Bang's business and knew Bang could not meet the technical goal within the allotted time.

36. On information and belief,to increase pressure on Bang, Jiles also had Prime

Trust send Bang a demand letter,assertingthat Bang owed Prime Trust $300,000.Though Bang

did owe Prime Trust some money, the money owed was nowhere near $300,000.

37. The demand letter was simply another attempt by Jiles and Prime Trust to derail

Bang's business.

38. Having recognizedthe growing confiict of interest of Jiles and other Bang board

members with interests and positionswith Prime Trust, Bang's management team lined up an

alternative banking partner to providefinancial infrastructure in lieu of Prime Trust.

39. When Bang's management reportedto Bang's board of directors,Jiles was upset

and surprised-notpleased-thatBang would continue its business with an alternative banking

partner.

40. On information and belief,a few days after management informed the Bang board

that Bang would survive thanks to its new relationship with a new, alternative banking and

financial infrastructure partner in lieu of Prime Trust, someone contacted that new partner and

informed it that Prime Trust had allegedlyterminated its relationshipwith Bang because of

compliance issues.

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41. On information and belief,this contact was from someone on behalf of Prime

Trust and was caused by the management team's revelation of Bang's alternative to Prime Trust

duringBang's board meeting,which demonstrated the sharing ofBanq information to Prime

Trust for the benefit of Prime Trust and to the detriment of Bang.

42. On information and belief,this contact directlyled to the banking partner's

terminatingits relationshipwith Bang, leavingBang without itsplanned alternative to Prime

Trust.

43. Jiles admitted to previouslydisclosingconfidential Bang information handed to

him at Bang board meetingsto Prime Trust directors and agents, and this event further

highlightedhis breaches of fiduciaryduties to Bang in order for him to benefit personallyand

throughhis interests in Prime Trust.

44. After these events, Jiles decided that he should create a "specialcommittee,,,

selected by him alone, which would make the ultimate decision on whether Bang should sue

Prime Trust for its actions that had devastated Bang.

45. In short,despitethe clear conflict,Jiles wanted to decide whether the company he

chaired (Bang) should sue the company that he managed and largelyowned (Prime Trust).

46. By October of 2021, Bang was left without time or capitalto pursue another

infrastructure provider,which effectivelyended Bang's business as a neobank.

47. To help end Jiles's fightswith management and his use of Prime Trust to destroy

Bang, N9 Advisors sought to purchaseJiles's shares in Bang.

48. Clearlyaware of his improperactions,Jiles refused to sell unless, in part, Bang

released him from any and all claims of any nature whatsoever whether based on contract, tort,

includingbreach of fiduciaryduties,or statute.

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BANQ'S RADICAL BUSINESS CHANGE

49. Given Jiles's threats,Prime Trust's actions,and Jiles's fightswith management,

Bang's entire management team resigned,and Jiles appointedan actingCEO.

50. The new CEO was given six weeks to create a new plan and goalsfor Bang.

51. In Februaryof 2022, Bang hosted a board meeting, at which N9 Advisors

expecteda business plan with new goalsfor Bang's business.

52. Instead,Jiles broughta lawyerto the meeting and pressuredthe board-with

repeatedassertions that the board had a fiduciarydutyto do so-to investigatethe former

management team with an eye toward future litigation.

53. Notably, no meaningfulaction was taken againstPrime Trust despiteits

interference with Bang's business operations.

54. At no pointduringthe February 2022 board meeting did Jiles or anyone else

present a planfor the continuation of Bang as a viable business.

55. Instead,justas Jiles had intended,Bang became a company with no active

operationsor revenue.

56. When N9 Advisors justifiablyexpressed concern about the lack of plan, Bang

barred N9 Advisors from appearingat any future board meetings in breach of section 5 ofthe

Side Letter.

57. Eventually,at Jiles's behest,Bang sued the former management team in United

States District Court for the District ofNevada, Bang, Inc. v. Purcell,No. 22-cv-773 (D. Nev.

May 15, 2022).

58. As of today, Bang is not a neobank and has no discernable business model.

Instead,it appears that Bang's true, sole purpose at this time is to sue the former management

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team, which is burningthrough Bang's remainingcash reserves rather than being directed toward

generatingrevenue.

59. As a result,Bang's business today has materiallychanged in nature from Bang's

business when N9 Advisors and Bang executed the Note.

60. All conditions precedentto this action have occurred, have been performed,or

have been waived.

COUNT I: BREACH OF NOTE

(BY N9 ADVISORS AGAINST BANQ)

61. Plaintiff incorporatesand adoptsallegations1 through60 herein.

62. The Note is a valid contract executed by Plaintiff and Bang.

63. By materiallychangingthe nature of its business and breachingthe Side Letter,

Bang breached the Note.

64. Those breaches are material.

65. Those breaches damaged Plaintiff.

WHEREFORE, PlaintiffN9 Advisors requests that judgment be entered in its favor and

againstDefendant Bang, Inc. for (a)compensatory damages, (b) interest on money owed, (c)

attorneys'fees, costs, and all expenses to litigatethis lawsuit under § 7.7 of the Note, and (d) any

and all further relief this Court deems just.

COUNT II: TORTIOUS INTERFERENCE

(BY N9 ADVISORS AGAINST PRIME TRUST)

66. Plaintiff incorporatesand adoptsallegations1 through60 herein.

67. Bang and N9 Advisors had a business or contractual relationshipunder which N9

Advisors has legalrights.

68. Prime Trust knew of the existence of that relationship.

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69. Prime Trust,with intent and without justification, interfered with that relationship

by scheming with and aidingJiles in ruiningBang's business,demanding that Bang meet

compliancegoalsin impossibletimeframes,and interferingwith Bang's relationshipwith its

alternative partner.

70. N9 Advisors was damaged by Prime Trust's interference,

WHEREFORE, PlaintiffN9 Advisors requests that judgment be entered in its favor and

againstDefendant Prime Trust LLC for (a)compensatory damages, (b)interest,and (c)any and

all further relief this Court deems just.

COUNT III: BREACH OF FIDUCIARY DUTY

(BY BANQ AGAINST JILES)

71. Plaintiff incorporatesand adoptsallegations1 through 60 herein.

72. N9 Advisors is a shareholder or beneficial shareholder of Bang.

73. Under § 607.0742, Florida Statutes,demanding action by the corporationwould

be futile given Jiles's control over the board of directors.

74. As director of Bang, Jiles owed Bang certain duties, includingfiduciaryduties of

loyaltyand care.

75. Jiles breached his fiduciary duties to Bang by acting in his best interest and in the

interest of Prime Trust rather than in the interest of Bang, by scheming to upend Bang's business,

by refusingto create a new business planfor Bang, by treatingBang as a mechanism to fund

litigationagainstBang's former management, and by usingBang's remainingreserves for

litigation.

76. Jiles's breaches allow him to derive an improperpersonalbenefit by allowing him

to aid Prime Trust,a company that he has an ownership interest in,that he is a manager of, and

that he effectivelycontrols.

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77. Jiles's actions were not fair,reasonable,or in the best interests of Bang and were

not done in good faith.

78. Jiles's breaches proximatelycaused damage to Bang.

WHEREFORE, Plaintiff,N9 Advisors, on behalf of Bang, requests that judgment be

entered in its favor and againstDefendant Jon Jiles for (a)damages, (b)attorneys'fees, costs,

and all expenses to litigatethis lawsuit under § 607.0746, Florida Statutes,and (c)any and all

further relief this Court deems just.

COUNT IV: AIDING AND ABETTING BREACH OF FIDUCIARY DUTY

(BY HAINQ AGAINST PRIME TRUST)

79. Plaintiff incorporatesand adopts allegations1 through 60 herein.

80. Jiles,as Bang's chairperson,owed Bang fiduciaryduties.

81. Jiles breached those fiduciaryduties.

82. Prime Trust knew about Jiles's breach of fiduciaryduties.

83. Prime Trust provided Jiles with substantial assistance or encouragement in the

breach of fiduciaryduties.

WHEREFORE, Plaintiff,N9 Advisors, on behalf of Bang, requests that judgment be

entered in its favor and against Defendant Prime Trust LLC for (a) damages, (b) attorneys' fees,

costs, and all expenses to litigatethis lawsuit under § 607.0746, Florida Statutes, and (c)any and

all further relief this Court deems just.

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VERIFICATION

As requiredby § 607.0742,Florida Statutes,I declare,under penaltyof perjury,that I

have read the foregoing,and the facts allegedtherein are true and correct to the best of my

knowledge and belief.

Patambupahuya

Petamber Pahuja

Dated: September7,2022 RespectfullySubmitted,

TOTH FUNES PA

s/FreddyFunes

Brian W. Toth

Florida Bar No. 57708

btoth@tothfunes.com

Freddy Funes

Florida Bar No. 87932

25 Southeast Second Avenue Suite 805

Miami, Florida 33131

Telephone:(305)617-7850

Counselfor Plainti#s

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