GAW.15716/01503943 v6

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF FLORIDA

WEST PALM BEACH DIVISION

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LEGACY KNIGHT STRATEGIC 

OPPORTUNITIES FUND – PARALLEL SERIES,

Plaintiff,

-againstWILLIAM “BEAU” WRIGLEY, JR., JAMES 

HOLMES, JAMES WHITCOMB, SH PARENT 

INC. d/b/a PARALLEL, and SURTERRA 

HOLDINGS INC.

Defendants.

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Case No. ________________

JURY TRIAL DEMANDED

COMPLAINT

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Plaintiff Legacy Knight Strategic Opportunities Fund – Parallel Series (“Legacy Knight”) 

for its Complaint against Defendants William “Beau” Wrigley, Jr. (“Wrigley”), James “Jay” 

Holmes (“Holmes”), James Whitcomb (“Whitcomb”), SH Parent Inc. d/b/a Parallel (“Parallel”), 

and Surterra Holdings, Inc. (“Surterra,” together with Parallel, the “Company” and with Wrigley, 

Holmes, and Whitcomb, the “Defendants”), alleges as follows:

NATURE OF THE ACTION 

1. This is an action against Beau Wrigley, Jr., heir to the Wrigley fortune, and 

associated individuals and entities, for: (1) committing federal securities fraud in violation of

Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), and Rule 10b-5 

promulgated thereunder; (2) violation of Section 20(a) of the Exchange Act; (3) violation of 

Georgia Uniform Securities Act of 2008, Ga. Code. Ann. § 10-5-58; (4) violation of Georgia 

Uniform Securities Act of 2008, Ga. Code. Ann. § 10-5-58(g); (5) committing fraud and/or 

fraudulent inducement of contract; and (6) seeking rescission of contract.

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2. Wrigley, the Chairman and CEO of the Company during the relevant period, along 

with the other Defendants, fraudulently induced Plaintiff, by means of various misrepresentations 

and omissions about the Company’s true financial condition, to enter into and invest $7.4 million 

in a so-called “SAFE” security—a Simple Agreement for Future Equity—issued by the Company.

1

Wrigley and the Defendants initially portrayed the SAFE as a way to maintain planned investments 

in operating and capital expenditures pending consummation of an announced public merger 

through a special purpose acquisition company (“SPAC”). After the merger talks terminated, the 

Defendants then sold the SAFE as a way to bridge the Company’s operating and capital 

expenditures through the second quarter of 2022, and further represented to Plaintiff that they

anticipated an alternative sale would be consummated by the end of 2021.

3. In reality, however, the SAFE was a Ponzi-like scheme that used funds from 

Plaintiff to pay off earlier investors. Wrigley and the other Defendants were secretly just trying to 

keep the Company from collapsing under the weight of its debt by soliciting new investment funds. 

Indeed, among many other things, Wrigley and the other Defendants failed to inform the Plaintiff 

on September 20, 2021—the day that Plaintiff funded its $7.4 million investment—that the 

Company was about to experience a cascade of defaults on $300 million of its outstanding debt 

beginning just three days later.

4. Following several months of discussions, Wrigley and the other Defendants were 

responsible for, among others, the following litany of misrepresentations and omissions designed 

to induce Plaintiff to enter the SAFE Agreement and provide the Company with $7.4 million:

(a) That as of September 20, 2021—the day that Plaintiff wired its $7.4 

million—the Company failed to advise that it was on the brink of: (i) covenant and payment 

1 The executed September 13, 2021 “SAFE” agreement is hereinafter referred to as the “SAFE Agreement.”

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defaults on $145 million of recently-issued junior debt; (ii) cross-defaults on $165 million of senior 

debt; and (iii) defaults on a $13.5 million promissory note issued by Wrigley’s “family office,” the 

Defendant PE Fund (the “PE Fund Note”);

2

(b) That as of September 20, 2021, the Company also was in payment default 

on approximately $44 million of notes issued by Defendant Green Health (the “Green Health 

Notes”)—a different Wrigley family office;

(c) That, before Wrigley and his co-Defendants would move Plaintiff’s money 

out from escrow, the total SAFE investment would reach $50 million as per Whitcomb’s August 

30, 2021 e-mail and Holmes’ oral assurances; instead the Defendants moved the Plaintiff’s funds 

in late September 2021 despite having fallen $10 million short of this threshold;

(d) That, on June 30, 2021, PE Fund and the Company had violated the 

Company’s junior debt by entering into the PE Fund Note on terms, devised by Wrigley, that were 

unconscionable;

(e) That the $50 million SAFE investment would be used to fund capital 

expenditures that would bridge the Company through the end of the second quarter of 2022, when, 

in fact, the Defendants instead needed the money to make payments to creditors (including 

Wrigley’s own PE Fund) in mere days and there was no conceivable way that the funds would last 

until the end of December 2021; and

(f) That the Company’s performance was actually quite different from what 

was presented to Plaintiff, making inconceivable the assurances of the funds lasting until the end 

of the second quarter of 2022, especially in light of the imminent violation of financial covenants 

under the Company’s junior debt agreement.

2 Unbeknownst to Plaintiff prior to investment, PE Fund also held $91.2 million of the Company’s $165 

million in senior debt.

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5. The Defendants made other misrepresentation and omissions to Plaintiff’s 

detriment. Holmes advised Sawyer in or about August 2021 that Wrigley would also be investing 

at least $5 million of the anticipated $50 million. (Moreover, several times, the Defendants advised 

Plaintiff that there was upwards of $60-80 million in demand for the SAFE.). Then Wrigley 

ignored this promise, and the SAFE closed without Wrigley’s investment and well short of its 

promised $50 million investment level. Wrigley’s intent to defraud Plaintiff is evident from his 

own reluctance to throw good money after bad by refusing to commit even a tiny portion of his 

fortune to the SAFE. It was not until several months later in November 2021 that Wrigley finally 

deposited approximately $10 million to get the SAFE up to $50 million. Even then, upon 

information and belief, the Company had quietly used $3 million of the SAFE money deposited 

by Wrigley to pay back part of Wrigley’s PE Fund Note, which means that while Wrigley was out 

soliciting “bridge” financing, he was actually taking $3 million out of the Company.

6. The Defendants’ urgent need for cash before the end of September 2021, and their 

willingness to make misrepresentations and omit relevant facts to obtain it, was a direct result of 

Wrigley’s wasteful and incompetent leadership (as later confirmed by Whitcomb to Sawyer in a 

January 20, 2022 call). By the summer of 2021, Wrigley had burdened the Company with 

enormous amounts of debt, and it could not make the required payments as they came due. Upon 

information and belief, by the end of June 2021, as discussed above, the Company had incurred 

more than $350 million in debt, a portion of which—the PE Fund Note—constituted an 

undisclosed default of its Senior and Junior Note. Significantly, although the existence of the note 

was disclosed to Plaintiff in a presentation received on or about August 10, 2021, the default was 

never disclosed. Added to this was the Company’s relatively poor recent performance—due, in 

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part, to an industry-wide decline and, in part, to Wrigley’s incompetence as CEO—which meant 

the Company would fall far short of its own contemporaneous, optimistic projections.

7. In fact, the Company artificially maintained a strong financial appearance in order 

to take Plaintiff’s money, only to slash its projections just weeks later, and even more drastically 

thereafter. The side-by-side comparison of the Company’s projections shown to Plaintiff preclosing and post-closing is staggering:

August 2021 October 2021 January 2022

Projected 2022 Net Revenue $618 million $492 million $362 million

Projected 2022 Adjusted EBITDA $167 million $99 million $56 million

8. Stated differently, the Company cut its revenue projections for 2022 by 40 percent, 

and its EBITDA projections for 2022 by two-thirds, between the month before the Defendants 

took Plaintiff’s money and just three months after. The sheer magnitude of the revisions indicates 

that the Company’s August 2021 projections—which Defendants used for purposes of marketing 

the SAFE to Plaintiff and which Plaintiff relied upon—lacked any reasonable basis or were 

intentionally false.

9. Still, during the summer of 2021, Wrigley and the Defendants were aiming to put 

all of the above behind them through acquisition via Ceres Acquisition Corp. (“Ceres”), a SPAC, 

which at the time was backed by music industry mogul Scott “Scooter” Braun. So, at that point, 

Wrigley and the other Defendants pitched the SAFE financing as a “bridge” until the SPAC could 

be completed. But by August 2021, the original SPAC transaction value of $1.8 billion had been 

adjusted to just over $1 billion, and, regardless, Wrigley understood that the Company’s poor 

performance would translate to poor performance in the public markets. He therefore abandoned 

the SPAC transaction.

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10. To keep investors interested even after the SPAC opportunity had ended, Wrigley 

and the Defendants pivoted (before the truth about the Company could come out and ruin 

everything) and claimed that the Company was worth considerably more than the adjusted SPAC 

valuation, and would obtain much greater value through a third-party sale. So, the Defendants 

stated that the Company needed a “bridge” until it could complete an alternative sale transaction. 

Holmes and Whitcomb supported this storyline by telling Plaintiff that industry players were 

lighting up their phones and lining up, unsolicited, to buy the Company.

11. Plaintiff inquired as to how much capital the Company would actually need to 

operate until the end of the second quarter of 2022—by which time the Company expressed 

extreme confidence that it would be sold to a major industry player. (Indeed, multiple assurances 

were made that the Company would be sold by year-end 2021.) Whitcomb and/or Holmes claimed 

$50 million in SAFE funds would be enough, and the funds would be used to improve the 

Company’s assets to make it even more attractive to a buyer while the Company completed its 

sales process.

12. On the basis of these misrepresentations, and unaware of the Company’s dire 

undisclosed financial situation, on September 20, 2021, Plaintiff advanced $7.4 million in SAFE 

financing to the Company.

13. In fact, the Defendants had no basis to represent that the SAFE would tide the 

Company over until the end of the second quarter of 2022—let alone through the end of 2021. The 

Company had defaulted, and was continuing to default, on its outstanding debt; it had incurred 

other obligations that it also could not pay; its projections were an inflated fiction; it needed the 

SAFE to make Ponzi-like payments to its other investors; and these and other performance issues 

meant it would run out of funds long before the end of the second quarter of 2022. Upon 

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information and belief, the Defendants never intended to use the SAFE investment for operational 

purposes because that money was needed to pay the Company’s significant debts beginning just 

days later.

14. In November 2021 (but unbeknownst to Plaintiff until January 2022), having 

backed himself into a corner, Wrigley resigned as CEO, and his PE Fund (in its capacity as holder 

of $91.2 million of the Company’s senior notes and not in its capacity as lender of the PE Fund 

Note) sent the first of the default notices to the Company. 

15. The junior creditors soon followed with their own more comprehensive notice, 

which first exposed that the making of the PE Fund Note itself was a default under the Junior Note 

(which in turn cross-defaulted the Senior Notes). 

16. Despite the fact that the Company promised regular reporting and quarterly 

financials, Plaintiff was never informed of these material events at the time they occurred and 

never received any regular reporting after it funded its investment in September 2021 (discussed 

below). And beginning in January 2022, Plaintiff began to learn for the first time the extent to 

which the Defendants had misrepresented the Company’s condition and the actual nature of the 

Plaintiff’s investment.

17. The misconduct described above, and detailed herein, entitles Plaintiff to rescission 

of its investment together with costs, fees and other expenses, including fees and expenses for 

enforcing its rights. 

PARTIES 

18. Plaintiff Legacy Knight Strategic Opportunities Fund – Parallel Series is a Texas

company with its principal place of business in Dallas, Texas. Plaintiff invested $7.4 million in 

the SAFE.

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19. Defendant Parallel, a Delaware corporation, is a holding company that focuses on 

the development, production, and sale of cannabis products, oils, and extracts through subsidiaries, 

including in the State of Florida. Its principal place of business is in Georgia.

20. Defendant Surterra Holdings Inc. is a Delaware corporation with its principal place 

of business in Georgia and a registered agent in Florida. Surterra is owned by Parallel. Parallel

and Surterra are referred to herein as the “Company.”

21. Non-party PE Fund, a Delaware limited partnership, is a holder of $91.2 million in 

the Company’s Senior Notes and the holder of the PE Fund Note. PE Fund is an investment vehicle 

within Wrigley’s family office, and is controlled by Wrigley out of West Palm Beach, Florida.

22. Non-party Green Health, a Delaware limited liability company, is a holder of $44.3 

million of convertible secured notes issued by the Company. Green Health is an investment vehicle 

within Wrigley’s family office, and is controlled by Wrigley out of West Palm Beach, Florida.

23. Defendant Wrigley initially invested in the Company in 2017 and assumed day-today operations as Chairman and CEO in late 2018. Wrigley resigned as CEO effective November 

19, 2021 when it became clear the Company would be disclosing various defaults, including one 

caused by his vehicle, PE Fund, under the Note Purchase Agreement (described below). He 

continues to serve as Chairman of the Company. Wrigley controlled Green Health and PE Fund 

at all relevant times. Upon information and belief, Wrigley resides in Palm Beach County, Florida.

24. Defendant Holmes was a director at the Company from September 2017 through 

November 2021, as well as its Chief Strategy Officer from January 2019 through December 

2021. Upon information and belief, Holmes resides in Palm Beach County, Florida.

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25. Defendant Whitcomb was the Company’s Chief Development Officer until 

November 19, 2021, when he replaced Wrigley as CEO. Upon information and belief, Whitcomb 

resides in Florida.

JURISDICTION AND VENUE 

26. This Court has federal question jurisdiction over this action pursuant to Section 27 

of the Exchange Act, 15 U.S.C. § 78aa, and 28 U.S.C. § 1331 and has supplemental jurisdiction 

over the state law claims pursuant to 28 U.S.C. § 1367(a).

27. Venue is proper in this District pursuant to Section 27 of the Exchange Act, and 28 

U.S.C. § 1391.

28. The court has personal jurisdiction over Defendants because, on information and 

belief, Defendants Wrigley, Holmes, and Whitcomb reside in the State of Florida, all Defendants 

regularly conduct business in the State of Florida, and all Defendants transacted business relating 

to the causes of action alleged herein within the State of Florida, and/or committed tortious acts in 

the State of Florida, and/or committed tortious acts causing injury to persons or property in the 

State of Florida.

FACTUAL BACKGROUND 

I. THE COMPANY’S CAPITAL STRUCTURE

29. As alleged above, Wrigley assumed control of the Company in late 2018. Almost 

immediately after doing so, he began to saddle the Company with substantial amounts of debt and 

other obligations.

A. The Senior Notes

30. The most senior tranche of the Company’s capital structure is $165.5 million in 

aggregate 10% Senior Notes due October 16, 2028 (the “Senior Notes”) (plus interest as well as 

potential pre-payment penalties). The Company incurred these obligations in October 2018, 

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almost immediately after Wrigley effectively assumed full control of the Company as Chairman 

and CEO.

31. The Senior Notes were issued pursuant to, and are governed by, a Note Purchase 

Agreement (“NPA”), by and among the Company and holders of the Senior Notes, dated October 

16, 2018.

32. The Senior Notes are secured by first priority liens on, and security interests in, 

substantially all the assets of the Company, as well as each of its direct and indirect subsidiaries, 

pursuant to Section 3.01 of a Guarantee and Collateral Agreement dated October 16, 2018.

33. PE Fund—which, again, Wrigley controls—holds $91.2 million of the Senior 

Notes, and is therefore their majority holder.

34. Upon information and belief, beginning in or around June 2021, and continuing 

past September 2021, the Company defaulted on the Junior and Senior Notes in multiple ways. In 

particular, the Company issued the PE Fund Note on June 30, 2021 to avoid defaulting on its 

obligations under the Bergmann Settlement (discussed below), only to breach covenants under the 

just-executed Junior Note (as defined below) which restricted the Company’s ability to issue 

additional indebtedness and to enter into affiliate transactions (including with PE Fund). The 

default, in turn, cross-defaulted the Senior Notes. And then, as of September 30, 2021, the 

Company breached various financial tests and additional covenants of its Junior and Senior Notes.

35. Defendants did not, however, disclose these defaults to Plaintiff until January 2022 

which was well after the Company took and used Plaintiff’s $7.4 million in SAFE investment 

funds.

B. The Junior Note

36. The Company’s second-largest debt obligation, which is junior to the Senior Notes, 

is $145 million of junior secured debt issued on May 7, 2021 (the “Junior Note”) to SAF Group 

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(“SAF”) (plus interest as well as potential pre-payment penalties). SAF Group is an alternative 

investment management firm based in Canada.

37. The Company used the Junior Note to refinance seller financing provided by the 

sellers of New England Treatment Access (“NETA”). NETA is a cannabis facility that the 

Company acquired in 2019. The Junior Note carries an annual non-default interest rate of 14.25%.

C. The Green Health Endeavors, LLC Convertible Secured Notes (“Green 

Health Notes”)

38. The Company also appears to owe approximately $54 million on $44.3 million of 

certain convertible secured notes issued to non-party Green Health. The Green Health Notes 

accrue interest at a rate of 16% per year, and carried a prepayment penalty of 25% (inclusive of all 

interest) had they been repaid before the May 1, 2021 maturity date.

39. When the Green Health Notes were negotiated, Wrigley was Chairman and CEO 

of the Company and also the Chairman and CEO of Green Health. He was therefore conflicted, 

as he served as both lender and borrower in the Green Health Notes transaction, and had the ability 

to choose which side received the best deal.

40. Needless to say, Wrigley selected Green Health to get the best deal. The Green 

Health Notes convert into preferred equity of the Company on extortionate terms that enrich 

Wrigley at the expense of the Company’s stockholders. Specifically, under the terms of the 

conversion, the amount of accrued “debt” represented by the Green Health Notes is multiplied by 

2.5x, such that Green Health’s actual contribution of $44.3 million (now $54 million counting 

accumulated “interest”) would be magnified into a shocking $135 million, and would convert into 

that amount of preferred stock. 

41. Upon information and belief, the Company conducted no arm’s length negotiation 

over the financing terms of the Green Health Notes, and failed to explore other financing options 

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that might offer better terms. In fact, Wrigley’s lieutenant, Holmes, represented Green Health in 

the transaction, while also serving in his capacities as director and Chief Strategy Officer for the 

Company, and it is unclear who—if anyone—played the part of Company representative in the 

sham negotiations. Holmes’ positions at the two companies had one main feature in common: 

both reported directly to Wrigley. Thus, both principal (Wrigley) and agent (Holmes) were 

conflicted in negotiating the Green Health Notes.

42. Plaintiff does not have full insight into the specific uses of the proceeds from the 

Green Health Notes. But it appears that Wrigley would periodically plug the Company’s operating 

cash shortfalls by advancing funds from his family office, Green Health, and then taking, in 

exchange, a usurious note with equity-like returns for Green Health. The characterization of these 

investments as “debt” is highly suspect.

43. For example, upon information and belief, Green Health provided $6 million to the 

Company in January 2021, and took a convertible secured note in exchange. Upon information 

and belief, that $6 million later converted into Series D Preferred Stock on the sweetheart terms 

described above. Upon information and belief, the $6 million was used to pay the first installment 

on the Company’s Bergmann Debts (described below).

44. The total amount of approximately $44.3 million advanced under the Green Health 

Notes was amended and restated on May 7, 2021 through instruments referred to as the Third and 

Fourth Amended Green Health Endeavors Convertible Secured Notes (“Third and Fourth 

Amended Green Health Notes”). These two promissory notes likewise carried the same features 

as the original: interest accrual at a usurious 16% with a punishing prepayment penalty of 25% 

(inclusive of all interest) if repaid prior to the maturity date of May 1, 2021, and the 2.5-times 

multiplier to gouge stockholders if Wrigley preferred the conversion option—a decision he could 

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wait until the last minute to make, depending on the Company’s prospects as observed from the 

C-suite. (Although the 25% pre-payment obviously never took place, it reflects Wrigley’s intent 

to provide for himself a minimum return of 25% on the short-term advance of funds).

45. Upon information and belief, the fact that the Third and Fourth Amended Green 

Health Notes were executed as of May 7, 2021, with a past-due maturity date of May 1, 2021, 

means the notes were already in default upon execution. Apparently realizing that fact, the 

Company also entered into an undisclosed forbearance agreement with Green Health on May 7, 

2021, pursuant to which the Company purportedly waived any claims it might have against Green 

Health. No information about those potential claims has ever been disclosed. Upon information 

and belief, the forbearance agreement expired on October 31, 2021.

46. But Wrigley’s Green Health scheme was far from over. On the same date as the 

forbearance agreement—May 7, 2021—the Company substituted the Third and Fourth Amended 

Green Health Notes with substitute or “restated” obligations (the “Fourth and Fifth Restated Green 

Health Notes”). The Company now inserted preconditions to the “restated” debts—albeit 

ceremonial ones—on the approval of Green Health Notes, including approval of: (i) a majority of 

disinterested directors; (ii) a majority of “Unaffiliated Directors,” pursuant to the requirements of 

Section 8(w) of the Company’s Stockholders Agreement; (iii) a majority of independent directors 

of SH Parent, pursuant to Section 10.2 of the NPA; (iv) the Required Holders, as defined in the 

NPA (i.e., PE Fund, which was Wrigley); and (v) a majority of Company minority stockholders. 

The Company’s and Wrigley’s failures to require similar approvals and authorizations for previous 

iterations of the Green Health Notes was never explained, and the idea that one could fairly seek 

approvals of insider debts that are already in default is absurd.

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47. As a whole, the Green Health Notes were a sweetheart deal for Wrigley, negotiated 

on both sides by him and his lieutenant, Holmes. Upon information and belief, Wrigley had no 

expectation that the nominal “debt” obligation would ever be repaid—indeed, the maturity 

windows were so artificial that the last two iterations of the debts were already in default upon 

issuance. Rather, Wrigley intended to benefit from the relatively quick conversion of the Green 

Health Notes into a tranche of preferred stock that was, remarkably, senior to every other existing 

tranche and so jumped to the front of the liquidation line, ahead of all other preferred stockholders.

48. Furthermore, there was no justification for the conversion to take place at an 

extortionate 2.5 times the accrued value of the Green Health Notes, such that the initial $44.3 

million of capital would be fictionally treated as a staggering $135 million in preferred equity 

when the Company only received $44.3 million in consideration. Upon information and belief, 

that figure was devised by, and for the benefit of, Wrigley.

D. The Bergmann Debts

49. Non-party Robert “Jake” Bergmann was a founder of the Company and its first 

CEO. Wrigley succeeded Bergmann, who stepped down as CEO on November 5, 2018.

50. A dispute between Bergmann and the Company arose over the value of Bergmann’s 

common stock. Upon information and belief, to resolve the dispute, and disregarding that 

Bergmann’s interests should have been junior to all of the Company’s debt and Preferred Stock 

obligations described herein, the Company entered into the Bergmann Settlement in or around 

January 2021.

51. Under the Bergmann Settlement, the Company agreed to pay Bergmann $38.5 

million (which valued each of Bergmann’s 1.25 million common shares at $30.80). Upon 

information and belief, on or about January 8, 2021, the Company made an initial $6 million 

payment to Bergmann. As noted above, upon information and belief, the Company did not have 

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this $6 million in available funds, so Wrigley financed this initial payment through a Green Health 

Note.

52. As part of the Bergmann Settlement, the Company obligated itself to pay the 

remaining $32.5 million to Bergmann (the “Bergmann Debts”) by:

(a) Obligating itself to pay $12.5 Million, which despite accruing interest at 

16% and requiring payment of principal and interest at maturity six months later, was denominated 

a “second payment,” rather than a promissory note or other debt instrument. The Bergmann 

Settlement also carried the express understanding that the “second payment” would increase to 

$13.5 million if the Company did not make the payment before June 30, 2021; and

(b) Issuing the “$20 Million Bergmann Note” at 16% interest and with 

amortization of $2.5 million every six months, with the first payment due June 30, 2021.

53. Defendants did not disclose the Company’s subsequent inability to satisfy its 

obligations under the Bergmann Debts before the Company took Plaintiff’s $7.4 million. Once 

the Company took Plaintiff’s $7.4 million and converted it into equity, it would be subordinate to 

all Company debts.

E. The PE Fund Note, Which Breached The Prohibition 

Under the Junior Note Against Incurring Additional Prohibited Debt

54. Upon information and belief, as of June 30, 2021, and consistent with the 

Company’s increasingly bleak (and undisclosed) financial landscape, the Company lacked the 

funds to make the “second payment”—now $13.5 million—under the Bergmann Settlement ($12.5 

million plus $1.0 million late fee). Upon information and belief, the Company also was unable to 

make the first $2.5 million amortization payment under the $20 Million Bergmann Note due June 

30, 2021.

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55. To make up for some of the shortfall, Wrigley turned to PE Fund, of which his 

namesake family office is the General Partner. Upon information and belief, on or about June 30, 

2021, Wrigley caused PE Fund to advance $13.5 million to the Company in exchange for the PE 

Fund Note, which would then need to be repaid within six months. The PE Fund Note transaction 

also included an unexplained (and inexplicable) $2.5 million “transaction fee,” which would be 

added to the balance due at maturity on a note that already accrued interest at an exorbitant 16%, 

thus effectively increasing the annual interest rate to over 53% per annum.

56. Defendants failed to disclose that the PE Fund Note constituted a default under the 

Junior Note, which then cross-defaulted the Senior Notes.

57. Notably, the $13.5 million value of the PE Fund Note, along with the $2.5 million 

transaction fee, matches the $16 million presumably paid to Bergmann in June 2021 in connection 

with the Bergmann Settlement. In other words, the $16 million that the Company previously owed 

to its former CEO Bergmann it now owes to PE Fund, and therefore to its own CEO at the time, 

Wrigley.

58. For reasons similar to the Green Health Notes, the PE Fund Note transaction was a 

conflicted transaction, orchestrated by Wrigley acting on both sides for the benefit of his own 

entity. In particular, it appears the funds advanced in connection with the PE Fund Note were used 

to pay Bergmann for his interest in the Company, which was held in common stock. In other 

words, while the Company was beginning its downward spiral, the PE Fund Note was used to 

jump the line of priority to pay Bergmann—whose common equity interests were otherwise 

subordinate to every holder of debt and preferred stock. Stated differently, Bergmann should not 

have received anything for his equity interest until all holders of debt and preferred equity were 

made whole.

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F. Other Potential Debt Obligations

59. Finally, upon information and belief, there is up to $107 million of consideration 

that the Company owes in connection with its 2021 deal to acquire certain operations of Windy 

City Cannabis (“Windy City”), an Illinois-based cannabis dispensary.

60. On information and belief, Wrigley recklessly entered into the Windy City 

acquisition knowing the Company lacked the means to pay for it, in an effort to bolster the 

prospects of closing the SPAC by expanding the Company’s geographic footprint and augmenting 

the Company’s EBITDA. Windy City is now such a liability to the Company that it serves only 

to impede the very alternative acquisition transaction Wrigley claimed to be seeking. Upon

information and belief, the Windy City transaction was awaiting regulatory approval from the State 

of Illinois, though such approval still will not solve the Company’s problem of how to actually pay 

the required consideration.

G. The Company’s Remaining Capital Structure

61. Upon information and belief, as of April 2022, the total remaining invested capital 

was structured as follows:

(a) Approximately $67 million3invested through SAFE securities that the 

Company is holding in cash or has transferred to operating subsidiaries; if not rescinded prior to 

conversion, the SAFE was to be converted into Series EE Preferred Stock on December 31, 2021. 

That conversion ultimately occurred;

(b) $79 million in aggregate Series E Preferred Stock;

(c) $166 million in aggregate Series D Preferred Stock; and

3 This figure reflects the value of the SAFE investment—including Wrigley’s post-closing 

supplement of more than $10 million (discussed below)—after conversion to Series EE Preferred 

Stock of the Company.

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(d) Certain additional interests of Preferred and Common Stock that are junior 

to the Series EE, Series E, and Series D Preferred Stock.

II. THE DEFENDANTS INDUCE PLAINTIFF TO ENTER SAFE AGREEMENT AND 

SOLICIT $7.4 MILLION IN SAFE FUNDING FROM PLAINTIFF THROUGH 

MISREPRESENTATIONS AND OMISSIONS

62. On or about January 28, 2021, Plaintiff was introduced to Wrigley and Holmes in 

connection with a potential PIPE (private investment in public equity) transaction. On or about 

February 12, 2021, the PIPE Subscription Agreement was executed by Plaintiff.

63. Plaintiff began discussing the SAFE investment with the Defendants in or around 

August 2021. Between then and September 20, 2021, when Plaintiff funded its $7.4 million SAFE 

investment, the Defendants offered a litany of false and misleading statements and omissions 

concerning matters critical to the SAFE investment and the Company’s finances. Each of these

was made intentionally, to induce Plaintiff to supply the Company with critically-needed capital 

against a false picture of the Company’s financial condition, and contrary to federal and state antifraud securities laws, as well as common-law fraud principles.

64. Crucially, at no time prior to the execution of the SAFE Agreement, did Wrigley, 

Holmes or Whitcomb disclose:

(a) The Company did not actually have $50 million in SAFE commitments; 

(b) The Company’s recent inability to meet the obligations under the Bergmann 

Debts;

(c) The purpose of the PE Fund Note, or that its issuance defaulted the Junior 

Note, which in turn cross-defaulted the Senior Notes; or

(d) That the Company had no foreseeable way to meet all of its existing 

obligations, including the Senior and Junior Note, the Green Health Notes, the PE Fund Note, and 

the $20 Million Bergmann Note.

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A. The Defendants’ Initial Claims and Omissions

65. On or about August 5, 2021, David Sawyer, Chief Operating Officer and Managing 

Partner of Plaintiff participated in a Zoom call with Wrigley and Holmes. During the call, Wrigley 

and Holmes explained that the SPAC transaction was being repriced at a lower value, and that the 

Company was looking to raise between $30 and $50 million as part of a new SAFE security. 

(Thereafter, Sawyer was told that interest from investors for the SAFE was in the $60-80 million 

range.) 

66. At this point, Wrigley and Holmes’ story was that the additional funds would be 

“bridge” capital to fund the Company’s capital projects and operating expenses until the SPAC 

could close. (The Company also advised that the SPAC might not close but that the Company 

would be sold to a third party, and that there were numerous, interested third-party buyers.) 

Because the Company actually intended to use the SAFE proceeds to pay looming debt obligations 

to other investors, these statements concerning the use of the SAFE proceeds were materially false 

and misleading.

67. Following up on the August 5, 2021 call, on or about August 10, 2021, Holmes sent 

an e-mail to Sawyer (copying Whitcomb and Wrigley) attaching the draft SAFE Agreement, SAFE 

risk factors and an “August 2021 Company Overview: Parallel/Ceres Acquisition Corp. SPAC 

transaction” presentation. 

68. The 64-page presentation outlined the proposed SPAC transaction with Ceres and 

provided purportedly updated and accurate information about the Company, its capital structure, 

and its financing needs. In particular, consistent with Wrigley’s and Whitcomb’s representations 

concerning the purposes of the SAFE financing, the presentation claimed that the Company

“anticipates raising a $50 million SAFE to fund capex plan through SPAC closing (this will be 

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non-dilutive to PIPE and SPAC investors).” This presentation was likewise false and misleading 

because the Company intended to use the SAFE proceeds to attempt to stave off payment defaults 

on obligations to other investors, rather than for capital or operating expenses. Notably, as 

discussed below, the SAFE included risk “warnings” about the Company’s debt that were 

misleading because the hypothetical “risks” they identified had in fact already materialized.

69. The same presentation also projected that the Company’s revenue for 2022 would 

be $618 million, and its adjusted EBITDA would be $167 million. Upon information and belief, 

in October 2021, shortly after the Defendants withdrew the Plaintiff’s $7.4 million in funds from 

escrow, the Company revised those projections downward by approximately 20% and 40%, 

respectively, and again in early January by approximately 25% and 45% as compared to the 

October projections:

August 2021 October 2021 January 2022

Projected 2022 Net Revenue $618 million $492 million $362 million

Projected 2022 Adjusted EBITDA $167 million $99 million $56 million

In just the three months after Plaintiff provided its funds, the Company had lowered its revenue 

projections for 2022 by more than 40% and its EBITDA projections by 66%. The August 2021 

projections were therefore false and misleading, and lacked any reasonable basis.

70. Following the August 5, 2021 transmittal of this presentation, days later on August 

13, 2021, Holmes e-mailed Sawyer (copying Whitcomb and Wrigley) advising that the Defendants 

had “$40m committed to the SAFE and are hoping to close in the next week or so, would love to 

have you all participate.”

71. On August 16, 2021, Sawyer sent an e-mail to Holmes advising that Plaintiff was 

interested in participating in the SAFE with an investment of between $5 million and $10 million. 

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On or about August 17, 2021, Sawyer had a Zoom call with Company executives, including 

Whitcomb and Holmes, regarding the SAFE investment.

72. During the various communications between Plaintiff and the Defendants, Holmes, 

Whitcomb and Wrigley informed Sawyer that the Company’s board of directors had approved 

increasing the maximum proceeds of the SAFE because they had demand in excess of $50 million. 

Defendants also discussed the reduced SPAC valuation and treatment of warrants. The Defendants 

even represented to Sawyer that the lowered valuation was beneficial, because the Company’s 

stock would outperform expectations once it began trading.

B. Defendants Change Their Story, But Continue Misrepresentations and 

Omissions

73. On or about August 24, 2021, Sawyer had a further Zoom call with Holmes and 

Whitcomb about the SAFE Agreement and investment as well as the termination of the PIPE 

Investment. Notably, at or around this time, Holmes conceded that the pending SPAC transaction 

might not be consummated. Pivoting to the new storyline, and despite knowing their revenue and 

EBITDA projections were completely unrealistic, he claimed the SPAC valuation was too low, 

the SPAC market was in decline, and the public shares would in any case be relatively illiquid 

because they would be listed on a Canadian exchange. Instead, Holmes explained that the SAFE 

funding would be sufficient to fund the Company—and specifically its capital and operating 

expenses— until a private sale could be consummated. These assertions were all false and 

misleading. In fact, Holmes had no reasonable basis to claim the SAFE would bridge the Company 

until a private sale. They were merely spinning a new tale to obtain badly-needed cash under false 

and fraudulent pretenses. 

74. On the August 24 call, Defendants reviewed in greater detail the Company’s plans 

for capital expenditures through the end of 2022. Defendants again indicated—again with no 

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reasonable basis—that $50 million would bridge the capital expenditure needs through the end of 

the second quarter of 2022. They made this plain misrepresentation because Plaintiff, particularly 

through Sawyer, again sought assurance that the Company would not run out of funds before the 

sale process could be completed. Holmes and Whitcomb noted that the Company might 

conceivably need to raise an additional $25-$50 million to sustain the Company through the end 

of 2022 after the $50 million SAFE investment had bridged the Company through second quarter 

2022.

75. Holmes and Whitcomb also again indicated to Sawyer that the $50 million would 

increase the operating cash to over $100 million which would be more than sufficient to fund the 

Company’s capital and operating expenses—which, as noted above, was false—and also that the 

Company would use the SAFE funds for capital and operating expenses, and therefore not to make 

Ponzi-like payments on upcoming obligations to other investors. In fact, during this same time 

period, the Company continued to emphasize that it would apply the SAFE funds to the Company’s 

capital needs by walking the Plaintiff through its (supposed) capital expenditure plans, including 

funding growth in Florida, opening a new store in Massachusetts and funding a Texas operation. 

At no time during these detailed discussions about the use of proceeds did Defendants mention 

that the SAFE proceeds would instead be used to pay down the Company’s impending debt 

obligations, which was a misleading omission totally inconsistent with the optimistic projections 

provided (presumably for exactly that reason) that also rendered false the Company’s statements 

about its capital expenditure plans.

76. Further, as of August 24, 2021, the Company lacked the commitments it assured 

Plaintiff that it had, and ultimately closed the SAFE and took Plaintiff’s money without the $50 

million in total commitments that Holmes and Whitcomb represented they had. On the August 24, 

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2021 call, Sawyer explained to Holmes—not for the first time—that Plaintiff would commit funds 

to the SAFE only if Plaintiff was confident that: (i) the Company had significant SAFE and PIPE 

commitments already in hand, and (ii) the funds raised in connection with the SAFE would be a 

sufficient bridge until the Company could be sold. Sawyer sought assurances that sufficient funds 

would be invested in the SAFE by other investors alongside the Plaintiff’s proposed $5-10 million 

commitment (for a total of $50 million, which was the amount needed to get through the sale 

process). Holmes and Whitcomb stated that the Company had more than $50 million in SAFE 

commitments already in hand and about $70-80 million in verbal commitments (including $5 

million from Wrigley). These statements were false in light of the fact that the Company did not 

have the minimum $50 million in funds in the SAFE account when it closed the SAFE, and took 

the Plaintiff’s $7.4 million.

C. Plaintiff Enters SAFE Agreement Based on Defendants’ Misrepresentations 

and Omissions 

77. On August 25, 2021, Holmes sent an e-mail to Sawyer and Whitcomb attaching, 

inter alia, the Surterra Series E Fifth Amended and Restated Stockholder’s Agreement. Holmes 

advised that the “Series EE once constituted will share the same rights as Series E (attached for 

review) but will be senior in liquidation preference.” 

78. On August 30, 2021, Holmes (copying Whitcomb) sent an e-mail to Sawyer 

advising that they had obtained “consents from the shareholders to proceed with the SAFE and 

intend to hold a first close this week most likely.” Sawyer then sent an e-mail to Holmes and 

Whitcomb attaching an executed PIPE termination agreement, and Holmes later supplied a 

counter-signed version.

79. Also on August 30, 2021, Whitcomb sent a separate e-mail to Sawyer and Holmes 

concerning closing the SAFE transaction. He indicated—again falsely—that “this is a structured 

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close for $50 m[illion] coming from multiple investors. Any paperwork you sign prior to then 

(which we would like you to do) will be held in escrow until close.” In fact, the Defendants knew, 

or were reckless in not knowing, they would have to close the transaction, including Plaintiff’s 

$7.4 million, in order to meet looming debt obligations—regardless of the level of total SAFE 

commitments that the Defendants had repeatedly assured Plaintiff the Company would have.

80. During an early September 2021 call with Holmes, Holmes advised Sawyer that the 

SPAC was unlikely. In light of this, Sawyer underscored more urgently that Plaintiff was 

interested in a SAFE investment solely if the Defendants could provide reasonable assurance that 

the Company had sufficient capital to operate until a sale, and what amount of capital that was. 

Holmes again stated that $50 million would be sufficient, and expected that, even absent the SPAC, 

the Company would be sold before the end of the second quarter of 2022, and possibly as early as 

year-end 2021. Holmes lacked any reasonable basis to make these statements, given the 

Company’s existing debt defaults, looming additional defaults, cratering revenues and EBITDA, 

and mounting obligations. These statements were therefore knowingly false when made. The

assurance of an imminent sale was reiterated to Plaintiff numerous times during communications 

with the Defendants and was a basis to induce Plaintiff to invest in the SAFE even if the SPAC 

was not consummated.

81. In further support of their new story that the Company would be acquired through 

a private sale, on or about September 2, 2021, Holmes e-mailed Sawyer (with a copy to Whitcomb)

a spreadsheet entitled “M&A Analysis” indicating potential values if the Company were acquired 

by any of four different, well-known, cannabis companies. For the most part, the scenarios 

envisioned an acquisition value between $1.5 and $2.0 billion, premised upon the projected 

revenue and EBITDA contemporaneously disclosed to Plaintiff. Although the Company indicated 

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the spreadsheet was illustrative, it was part and parcel of the broader misrepresentations that the 

Company was performing in line with projections and therefore had a reasonable expectation of 

being acquired at a value greatly exceeding the Company’s debt. Indeed, Holmes and Whitcomb 

were also representing to Sawyer around this time that they had received unsolicited offers from 

major cannabis companies to purchase the Company. 

82. On September 13, 2021, Holmes sent an e-mail to Sawyer and Whitcomb stating to 

Sawyer, “I wanted to circle back and see how things are progressing here as we are looking to lock 

in allocations.” Plainly, Holmes was anxious to get his hands on Plaintiff’s funds. That same day, 

Sawyer responded by e-mail advising that Plaintiff would be investing $7.5 million, though the 

final number wound up being $7.4 million.

83. Later that day, in reliance on the representations made by Defendants, Plaintiff 

transmitted a signed version of the SAFE Agreement to the Defendants to be held in escrow. 

D. Defendants Improperly Remove Plaintiff’s Monies from Escrow

84. Based on assurances Sawyer received from Holmes and Whitcomb, it was 

Plaintiff’s understanding that the signature pages and the invested funds would not be released 

from escrow until such time as the Company actually received the promised $50 million from all 

investors. These assurances were also false and misleading because, regardless of whether or not 

it reached the $50 million investment that the Company had promised to Plaintiff, the Company 

intended to close the SAFE investment in order to access the Plaintiff’s money to keep the 

Company afloat.

85. Upon information and belief, in late September 2021, Defendants withdrew 

Plaintiff’s $7.4 million from escrow. In particular, it was the Defendants’ misrepresentations that 

the preconditions for releasing Plaintiff’s signatures from escrow and closing its $7.4 million 

investment—i.e., the remaining SAFE investment totaled at least $50 million—that induced 

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Plaintiff to execute the SAFE and to deposit the funds in the first instance. Even setting aside the 

Defendants’ other misrepresentations and omissions, withdrawing Plaintiff’s $7.4 million without 

first achieving the $50 million in funding as promised entitles Plaintiff to rescission of the 

September 13, 2021 SAFE Agreement and return of the $7.4 million investment plus interest.

86. Approximately one month after the Defendants improperly removed the $7.4 

million from escrow, on or about October 19, 2021, Sawyer e-mailed Holmes to inquire as to the 

status of the investment including what to expect in the way of reporting from the Company. Later 

that day, Holmes e-mailed Sawyer advising, “[w]e will resume normal reporting.” Plaintiff never 

received any written financials or other quarterly information thereafter. Instead, during a 

November 1, 2021 Zoom call between Holmes and Sawyer, Holmes advised that everything was 

going as planned and the Company had plenty of cash to operate. Holmes also stated that there 

was significant interest in a potential sale of all or part of the Company or other business 

combination transaction and potential capital raise transactions; and that a Strategic Alternatives 

Committee comprised of the Company’s Board of Directors was evaluating the potential options 

with the assistance of Perella Weinberg Partners as financial advisor and Mayer Brown as legal 

advisor. This messaging was reiterated in a November 4 e-mail from the Company. Significantly, 

there was no mention that the Company was in default.

III. THE SAFE AGREEMENT ALSO CONTAINED MISREPRESENTATIONS

87. SAFE stands for “Simple Agreement for Future Equity.” A SAFE is a relatively 

new type of security under which, depending upon the terms of the individual instrument, an 

investor’s cash investment generally converts to equity in the issuing company under conditions 

specified in the SAFE. They are often issued to provide a company with bridge financing until it 

can complete an additional capital raise or sale of the company, and will often convert to equity 

upon the occurrence of that future, specified event.

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88. Plaintiff entered into the SAFE Agreement with SH Parent (i.e., the Company), 

which was executed on or about September 13, 2021. Whitcomb executed the SAFE on behalf of 

SH Parent in his capacities as its Chief Development Officer and Secretary.

E. The Conversion Terms

89. The SAFE Agreement provided that it would convert to equity upon the occurrence 

of certain specified events:

(a) First, the SAFE would convert to shares of certain preferred stock, referred 

to in the SAFE as SAFE Preferred Stock, upon an Equity Financing (as defined in the SAFE) of 

at least $10 million. SAFE ¶ 1(a);

(b) Second, the SAFE would convert to shares of Series EE Preferred Stock, 

upon a Liquidity Event, which the SAFE defined as a change in control of SH Parent, or the closing 

of the SPAC transaction. Id. ¶ 1(b);

(c) Third, the SAFE would convert to shares of Series EE Preferred stock upon 

a Dissolution Event, which the SAFE defined as including termination of the Company’s 

operations, assignment of its assets to creditors, or its liquidation. Id. ¶ 1(c); and

(d) Finally, the SAFE Agreement provided that, if none of the foregoing events 

had occurred by December 31, 2021, the SAFE would (after obtaining certain approvals and 

authorizations) “automatically and immediately convert into the number of shares of Series EE 

Preferred Stock equal to the Deemed Series EE Purchase Amount divided by the Series EE 

Preferred Stock Price.” Id. ¶ 1(d).

F. The SAFE’s Ineffective Attempts to Disclaim Liability

90. The SAFE Agreement also contains certain provisions that purport to limit the 

liability of SH Parent and its officers and directors. For instance, the SAFE Agreement represents 

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that the investor “has had an opportunity to ask questions of and receive answers from 

representatives of the Company concerning the investment in this [SAFE] and the securities to be 

acquired by the Investor hereunder.” Id. ¶ 4(c). As detailed herein, although Plaintiff may have 

had the opportunity to ask questions, the Defendants failed to provide truthful, complete, nonfraudulent answers.

91. Although Plaintiff noted its “knowledge and experience in financial and business 

matters,” id., and that it had attempted to conduct responsible and adequate due diligence before 

investing, id., any investor, regardless of sophistication, would be thwarted in its efforts to conduct 

sufficient diligence when met with misleading and fraudulent misrepresentations and omissions.

92. Similarly, the generic, blanket provision that “no representations or warranties have 

been made to the Investor other than pursuant to Section 3 [of the SAFE Agreement] and that the 

Investor has not relied upon any representation or warranty in making or confirming [its] 

investment other than pursuant to Section 3,” id. ¶ 4(c), is ineffective, and cannot relieve the 

Defendants of their basic legal (not to mention ethical) responsibilities to provide true and 

complete information and disclosures. Notably, the SAFE expressly provides that Plaintiff 

“acknowledges that it is not relying upon any person, other than the Company and its officers and 

directors, in making its investment or decision to invest in the Company.” Id. ¶ 4(e).

G. The SAFE Agreement Included Incomplete and Misleading Risk Factors

93. The SAFE Agreement also included a list of general warnings, most of which 

concerned the Company’s business operations, rather than the Company’s capital structure. 

Regardless, none of these could have sufficiently apprised Plaintiff that the Company would 

simply misrepresent its finances, including by omitting that it was in default on, and just days away 

(i.e., by September 30, 2021) from incurring additional significant defaults on, at least $300 million 

in debt obligations, which if honestly revealed would have stopped Plaintiff from investing $7.4 

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million in the SAFE. Indeed, the Company misleadingly warned that there could be “no 

assurance” that additional financing “will be available to the Company or [the post-SPAC the 

Company entity], as applicable, on favorable terms or at all,” without disclosing that its ability to 

obtain financing had evaporated along with myriad existing and/or imminent defaults on the vast 

majority of its debt obligations. The foregoing warning was, in other words, at best a misleading 

and impermissible half-truth.

94. Similarly, the Company’s “warning” that “[t]he Company’s debt could have 

important consequences to the Company” and that the Company’s debt could cause numerous 

operational difficulties, was incomplete and misleading because it failed to address not only that 

the Company had already defaulted on its Senior and Junior Notes by issuing the PE Fund Note, 

but that, come September 30, 2021, the Company was going to pile more defaults on top of those 

based on its poor performance, dooming the Company into being at the mercy of their secured 

lenders. The notion that the Company’s debt “could have important consequences” for the 

Company was starkly misleading because that day had already arrived.

95. The risks and problems that the Company warned about in general terms had 

already materialized in the specific form of serious debt defaults on the vast majority of the 

Company’s outstanding debt obligations, and such warnings were therefore fraudulent and 

misleading.

IV. JUST DAYS AFTER PLAINTIFF FUNDED THE SAFE, 

PARALLEL INCURRED NUMEROUS ADDITIONAL DEBT 

DEFAULTS ON $300 MILLION OF SENIOR AND JUNIOR NOTES

96. On September 30, 2021—just days after Plaintiff funded its $7.4 million 

investment—the Company incurred further defaults on the Senior and Junior Notes, which 

comprise approximately $300 million in debt obligations, and comprise the vast majority of the 

Company’s outstanding debt. The Company thus knew, but did not disclose, that based on its 

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actual financial performance during the diligence period, it was about to incur numerous additional 

defaults on its outstanding obligations, and therefore failed to disclose material information 

necessary to, among other things, make statements about the sufficiency of the Company’s funding 

and capital, and the warning language in the SAFE Agreement, not misleading. Upon information 

and belief, the individual Defendants in their high-level roles at the Company were aware of these 

covenants and defaults. 

97. On November 29, 2021, PE Fund—which indisputably was the cause of one of the 

Company’s defaults under the Senior and Junior Notes—in its capacity as the “Required Holder” 

for the Senior Notes, notified the Company that, as of September 30, 2021, the Company had 

defaulted on certain covenant obligations under the Senior Notes. Specifically, PE Fund notified 

the Company that it had failed to deliver to the lenders under the Senior Notes the Company’s 

financial statements for the quarter ended September 30, 2021, and failed to notify the Senior Note 

holders that it defaulted on this obligation. Upon information and belief, including the Company’s 

and its executives’ knowledge of its obligations under the Senior and Junior Notes and the timing 

of those obligations, the Company was aware as of September 20, 2021—the date the Plaintiff 

funded its $7.4 million SAFE investment—that the Company would incur this default on 

September 30, 2021.

98. Upon information and belief, on December 16, 2021, the Company received an 

even more alarming default notice—this time for the Junior Note—in the form of a Notice of 

Default, Election of Default Rate and Reservation of Rights to the Company (the “Junior Lien 

Notice”) from Talladega LP, the Administrative Agent and Collateral Agent for the Junior Note 

holders. The Junior Lien Notice informed the Company that it had failed to: (i) maintain the 

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required debt-service-coverage ratio; (ii) maintain specified adjusted consolidated EBITDA as of 

September 30, 2021; and (iii) “pay Catch-Up [a]mount[s]” due as of September 30, 2021.

99. The Junior Lien Notice also explained that the Company had defaulted on the Junior 

Note through its “incurrence of Indebtedness pursuant to that certain Negotiable Subordinated 

Promissory Note dated June 30, 2021”—i.e., the PE Fund Note. Section 9.11 of the NPA 

incorporates these Junior Note covenants as equal protections for the Senior Notes, so the 

Company’s defaults under the Junior Note constituted Events of Default under the Senior Notes. 

Upon information and belief, including the Company’s knowledge of its obligations under the 

Senior and Junior Notes and the timing of those obligations, and the Company’s knowledge that it 

had incurred the obligations under the PE Fund Note (and had not disclosed the effect of those 

obligations to investors), the Company was aware as of September 20, 2021—the date Plaintiff 

funded its $7.4 million SAFE investment—that the Company would incur these defaults just days 

later.

100. Further, although the foregoing default notices did not raise the issue, as of

September 20, 2021 (the date that Plaintiff wired the $7.4 million to the Company), the Company

also knew that its forbearance agreement with Green Health would expire 30 days after September 

30, 2021—and that the Company had no way to meet an obligation to pay Green Health $44.3 

million (now $54 million with accrued interest) by November 1, 2021. To the contrary, the 

Defendants had disclosed that the Green Health Notes would have converted into equity by the 

time the SAFE funding had closed—which was false.

101. Notably, on October 1, 2021, the Company sent an e-mail, on behalf of Wrigley, to 

the Company’s investors explaining that the Company was no longer pursuing the SPAC 

transaction. Among other things, he noted that the Company would “focus on alternative financing 

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avenues to pursue a vast array of growth opportunities,” and that, the Company had “just raised 

and closed a significant initial equity financing through the private markets,” referring to the 

SAFE.

102. What this e-mail omitted was Wrigley’s extreme resistance—given his knowledge 

of the Company’s dire finances—to put up any of his own funds to support the SAFE. As part of 

the SAFE negotiations, Sawyer conveyed to Holmes and Whitcomb that it was important to 

Plaintiff that Wrigley be invested in the SAFE. Holmes and Whitcomb represented that Wrigley 

would agree to commit $5 million. But, as it turns out, Wrigley had not invested anything in the 

SAFE at the time that Plaintiff’s $7.4 million was withdrawn from escrow. Moreover, Defendants 

had closed the SAFE and removed Plaintiff’s money from escrow despite failing to reach the $50 

million investment that they promised they would reach before withdrawing Plaintiff’s $7.4 

million.

103. Upon information and belief, Wrigley finally invested his own personal funds in 

late November 2021, though now he had to contribute $10.5 million to make up for the shortfall 

from the previously-promised $50 million. This fact further shows that in late September the 

SAFE was never fully subscribed—and certainly not over-subscribed—as represented by the 

Defendants. But even after contributing $10.5 million, Wrigley failed actually to maintain even 

that level of investment commitment to the SAFE. Upon information and belief, the Company

had used $3 million of the SAFE proceeds to make a payment back to Wrigley under the PE Fund 

Note. In other words, Wrigley invested $10.5 million in the Company from one pocket (to 

artificially make it appear there was $50 million raised), but had taken $3 million back to put in 

another pocket. Consequently, even with Wrigley’s post-closing SAFE advance, the Company

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never had $50 million in capital to bridge to the end of the second quarter 2022, because $3 million 

of what Wrigley paid was transferred to an entity that he controlled, for his own benefit.

DEFENDANTS’ MISREPRESENTATIONS FINALLY COME TO LIGHT

V. PARALLEL REVEALS NUMEROUS DEBT DEFAULTS ON AT LEAST $300 

MILLION IN OUTSTANDING DEBT OBLIGATIONS AND THE DIRE STATE 

OF ITS CAPITAL NEEDS

104. On December 1, 2021—approximately two months after Plaintiff entered the SAFE 

Agreement and funded its $7.4 million SAFE investment—the Company revealed more previously

undisclosed facts that completely altered the landscape of the investment.

105. Upon information and belief, during a Zoom call that day between representatives 

of TradeInvest Asset Management Company (“TradeInvest”)4and Perella Weinberg Partners 

(“PWP”)—one of the Company’s financial advisors in connection with the purported effort to sell 

the Company—PWP disclosed that the year-end interest payment due on the $165 million in 

Senior Notes would not be paid, because the Company would instead need to conserve precious 

cash for the sale process.

106. This same disclosure also made clear that, contrary to the Company’s repeated 

portrayals, the funds raised through the SAFE would not last the Company even through the end 

of the second quarter of 2022. Indeed, it would not last the Company through the end of 2021. 

The Defendants, with full knowledge of the Company’s own capital structure, with exclusive 

knowledge of the internal finances, and knowing the truth behind their diminishing revenue and 

EBITDA prospects and projections, had no reasonable basis to claim that the SAFE would last the 

4 On or about March 8, 2022, TradeInvest and other plaintiffs commenced a similar fraud lawsuit 

against the Defendants and others for, inter alia, securities fraud arising out of their $25 million 

SAFE investment (the “TradeInvest Lawsuit”). That case (No. 22-CV-80360-AMC) is currently 

pending in this Court. 

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Company through the end of the second quarter of 2022, and indeed knew (or were reckless in not 

knowing) it could not.

107. Upon information and belief, during the same call, PWP disclosed for the first time 

the various debt defaults enumerated above—including the issuance of the PE Fund Note (as of 

June 2021), and the various defaults that happened on September 30, 2021 (just days after Plaintiff 

was induced to provide the Company with $7.4 million).

108. On or about January 17, 2022, Sawyer learned from Holmes that Wrigley and 

Holmes were no longer employed by the Company. On January 19, 2022, the Company’s Deputy 

General Counsel Courtney Stough advised Sawyer to speak with Whitcomb who was the 

Company’s new CEO.

109. On or about January 20, 2022, Sawyer had a Zoom call with Whitcomb. Whitcomb 

informed Sawyer of the Company’s financial problems including the various defaults. Whitcomb 

stated unequivocally that Wrigley grossly mismanaged the Company by being missing-in-action, 

and was forced to resign by Whitcomb. Whitcomb advised that Wrigley created the situation 

where the Company was close to running out of money on various occasions, and then Wrigley 

would rescue the Company by offering to lend money at high rates of interest in an effort to enrich 

himself. Whitcomb also stated that Wrigley wasted a lot of money by hiring large numbers of 

unnecessary white collar professionals which led to excessive cash burn. Whitcomb further 

conceded during the same call that Wrigley initially failed to fund his SAFE commitment, yet had 

taken Plaintiff’s $7.4 million without reaching the agreed-upon $50 million.

110. Only after Sawyer’s January 20, 2022 call with Whitcomb was Plaintiff granted 

access to PWP’s data room for the very first time. One of the documents titled “Capital Structure 

and Waterfall Information,” was obviously important to investors given the (now disclosed) state 

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of free fall debt defaults. Unlike the projections provided to Plaintiff to induce the SAFE 

Agreement and investment which made no mention of the Green Health Notes, the PWP data room 

showed that the Green Health Notes were still outstanding. Plaintiff would not have executed the 

SAFE and advanced funds to be converted into equity had it known that equity would be repaid in 

liquidation behind the Green Health Notes. However, the Company had previously advised that

the Green Health Notes could convert into equity prior to (and thus be junior to) the SAFE 

investment’s conversion.

VI. PARALLEL REVEALS THE SAFE FUNDS WERE 

USED TO PAY OTHER INVESTORS, INCLUDING PE FUND

111. On January 24, 2022, the PWP data room was updated with another revealing chart:

112. The Company yet again revealed another set of astounding misrepresentations. The 

Defendants, through PWP and the above chart, admitted that the Company used the proceeds from 

the SAFE to fund outstanding debt obligations, as opposed to using it to fund the capital and 

operating expenses that Defendants had all along represented it was to be used for.

113. The same chart even revealed that the Company had used at least $3 million of the 

SAFE proceeds to pay down the obligation under the PE Fund Note, meaning Wrigley actually 

paid $3 million of his own SAFE commitment back to himself no more than two months later.

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VII. PLAINTIFF SOUGHT RESCISSION PRIOR TO FILING SUIT, BUT THE 

DEFENDANTS REFUSE TO RETURN THE $7.4 MILLION

114. On or about August 10, 2022, Plaintiff sent a letter to the Company proposing to 

tender the shares to the Company in exchange for the return of its $7.4 million investment plus 

applicable interest, costs and fees. Over 30 days have elapsed and the Company has ignored this 

request.

JUSTIFIABLE RELIANCE 

115. Plaintiff believed and relied upon the false and misleading representations 

described above when entering into the SAFE Agreement and making its investment. But for the 

material misrepresentations and omissions (all of which occurred via e-mails or telephone/Zoom 

calls involving interstate commerce) committed by the Defendants concerning the Company’s 

capital structure, finances, level of SAFE investment, that the SAFE investment would bridge the 

Company’s capital needs until the end of the second quarter of 2022, and the intended use of the 

SAFE proceeds, Plaintiff would not have agreed to enter into the SAFE.

116. Plaintiff reasonably and justifiably relied upon these material misrepresentations 

and omissions about the Company and the SAFE. As officers of the Company, Wrigley, Holmes, 

and Whitcomb were uniquely situated to know and understand the full picture of the Company’s 

finances and prospects, as well as how much had been raised for the SAFE and how the Company

would use those proceeds. Nonetheless, the Defendants deliberately made the material 

misrepresentations and omissions detailed above. Plaintiff, by contrast, were not in a position to 

know the non-public, undisclosed information about the Company’s obligations, including 

existing, undisclosed debt defaults.

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SUMMARY OF SCIENTER ALLEGATIONS

117. It is clear from the foregoing allegations that the Defendants via interstate 

commerce made numerous misrepresentations and omissions about the Company, its capital 

structure, and the SAFE Agreement and investment, while in possession of material, undisclosed 

facts that were contrary to their representations, or necessary to make their representations 

complete and not misleading. The Defendants therefore made these alleged misstatements 

knowingly and intentionally to induce Plaintiff to provide $7.4 million for the SAFE, and intended 

that Plaintiff rely on them. The statements by the executives of the Company and on its behalf 

were either made either with actual knowledge of their falsity, or under circumstances where the 

Defendants should have known of their falsity. 

118. The Defendants had both motive and opportunity to deceive Plaintiff. The 

Defendants were engaged in a Ponzi-like scheme to solicit new investors to keep the Company 

from collapsing under the weight of its debt. As officers of the Company, they stood to gain from 

successfully raising tens of millions of dollars with the SAFE, particularly because the SAFE 

required no expenditure in interest or repaid principal on the part of the Company. Further, 

Wrigley in particular stood to gain because the SAFE could help alleviate the burdens on the 

Company so that the obligations to his personal investment vehicles—Green Health and PE 

Fund—could be satisfied. And the Cash Flow Bridge chart above shows that the SAFE proceeds 

were used to pay at least $3 million to PE Fund—which benefited Wrigley personally. Indeed, 

this also means that, even though Wrigley purported to invest $10.5 million in the SAFE, he took 

$3 million back almost immediately thus decreasing his exposure in this suspect investment.

LOSS CAUSATION 

119. Plaintiff has been deprived of, and lost, at least $7.4 million in connection with the 

SAFE. In particular, Defendants’ misrepresentations and omissions caused Plaintiff to execute the 

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SAFE and commit $7.4 million to the SAFE, which they would not have committed had Plaintiff 

known the truth that was revealed shortly afterward.

120. Furthermore, it was Defendants’ misrepresentations and omissions that caused 

Plaintiff’s losses, because absent those misrepresentations and omissions, Plaintiff would still be 

in possession of the $7.4 million of which it was deprived.

121. Plaintiff has been required to retain undersigned counsel to represent its interests in 

this matter and has agreed to pay counsel a reasonable fee.

FIRST CAUSE OF ACTION

For Violations of §10(b) of the Exchange Act and Rule 10b-5

(Against All Defendants)

122. Plaintiff repeats and realleges the allegations in Paragraphs 1- 121 as if fully set 

forth herein.

123. Plaintiff brings this cause of action against the Defendants for violation of Section 

10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder.

124. Between August and September 2021, inclusive, the Defendants made the various 

false and materially misleading statements specified above via interstate commerce, which they 

knew or recklessly disregarded were false and misleading because they misrepresented or omitted 

material facts necessary to make the statements made, in light of the circumstances under which 

they were made, not misleading. 

125. The Defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 in that 

they: (a) employed devices, schemes, and artifices to defraud; (b) made untrue statements of 

material facts or omitted to state material facts necessary in order to make the statements made, in 

light of the circumstances under which they were made, not misleading; or (c) engaged in acts, 

practices, and a course of business that operated as a fraud or deceit upon Plaintiff related to the 

SAFE.

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126. As a direct and proximate result of the Defendants’ wrongful conduct, Plaintiff 

suffered damages in connection with the SAFE. In reliance on the Defendants’ misstatements and 

omissions, Plaintiff executed the SAFE Agreement and committed $7.4 million to the SAFE. 

Plaintiff would not have provided those funds for the SAFE if it had been aware of the 

misstatements and omissions made by the Defendants. Plaintiff did not know, and could not in 

the exercise of reasonable diligence have known, of the Defendants’ misrepresentations and 

omissions. These same misrepresentations and omissions caused the Plaintiff’s losses.

127. By virtue of the conduct alleged herein, the Defendants have each violated Section 

10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and are liable to Plaintiff for 

damages in an amount to be determined at trial, but not less than $7.4 million plus interest.

SECOND CAUSE OF ACTION

For Violations of Section 20(a) of the Exchange Act

(Against Wrigley, Holmes, and Whitcomb)

128. Plaintiff repeats and realleges the allegations in Paragraphs 1- 127 as if fully set 

forth herein.

129. Plaintiff brings this cause of action against Wrigley, Holmes, and Whitcomb for 

violations of Section 20(a) of the Exchange Act, 15 U.S.C. § 78(a).

130. In their positions as officers and directors of the Company, Wrigley, Holmes, and 

Whitcomb were controlling persons of the Company within the meaning of Section 20(a) of the 

Exchange Act. By reason of their positions of control and authority as officers and/or directors of 

the Company, Wrigley, Holmes, and Whitcomb had the power and authority to cause the Company

to engage in the conduct complained of herein. Their level of control is also evidenced by their 

active roles in making the decisions and entering contracts on behalf of the Company discussed 

above. These Defendants were able to—and did—control, directly and indirectly, the decisionCase 9:22-cv-81569-DMM Document 1 Entered on FLSD Docket 10/12/2022 Page 39 of 45
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making of the Company, including the misstatements and omissions made by and on behalf of the 

Company via interstate commerce.

131. Furthermore, Wrigley, Holmes, and Whitcomb, as alleged above, had significant 

day-to-day involvement in the operations of the Company and in particular the transactions at issue 

here, and are therefore culpable participants in the alleged misconduct. They participated in calls, 

written communications, and other aspects of the transactions that were responsible for inducing 

Plaintiff to enter the SAFE Agreement and invest $7.4 million in the SAFE.

132. As a result, Wrigley, Holmes, and Whitcomb were control persons of the Company

within the meaning of Section 20(a) of the Exchange Act.

133. The Company committed violations of Section 10(b) of the Exchange Act.

134. By reason of the foregoing, Wrigley, Holmes, and Whitcomb violated Section 20(a) 

of the Exchange Act, 15 U.S.C. § 78(a), and are liable to Plaintiff.

THIRD CAUSE OF ACTION

For violation of Georgia Uniform Securities Act of 2008 (Blue Sky Laws) 

Ga. Code Ann., § 10-5-58

(Against All Defendants)

135. Plaintiff repeats and realleges the allegations in Paragraphs 1- 134 as if fully set 

forth herein.

136. Upon information and belief, the Defendants negotiated significant portions of the 

SAFE investment within, from, and/or directed into the state of Georgia, and executed the SAFE 

in Georgia, as evidenced by, among other things, the address under Whitcomb’s signature on the 

SAFE itself, which is in Atlanta, Georgia. The Defendants were therefore subject to, and required 

to comply with, the requirements of the Georgia Uniform Securities Act of 2008.

137. Plaintiff brings this cause of action under Section 10-5-58 of the Georgia Code

against the Defendants. Plaintiff is not required under this cause of action to allege that the 

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Defendants acted with scienter or fraudulent intent, as these are not elements of a claim under 

Section 10-5-58(c).

138. During discussions concerning the SAFE, the Defendants made the false and 

materially misleading statements specified above, and omitted to state material facts necessary in 

order to make the statements made, in light of the circumstances under which they were made, not 

misleading.

139. The Defendants did not disclose the concealed information described above to 

Plaintiff. Rather, Plaintiff first learned that information beginning in January 2022, approximately 

four months after executing the SAFE Agreement and providing its SAFE investment to the 

Defendants. Plaintiff did not know, and could not in the exercise of reasonable diligence have 

known, of the Defendants’ misrepresentations and omissions.

140. But for the Defendants’ misrepresentations and omissions, Plaintiff would not have 

invested in the SAFE. As a direct and proximate result of the Defendants’ wrongful conduct, upon 

which Plaintiff did rely, Plaintiff has suffered damages in connection with the SAFE.

141. By virtue of the conduct alleged herein, the Defendants have each violated § 10-5-

58 of the Georgia Uniform Securities Act of 2008, and are liable to Plaintiff for damages in an 

amount to be determined at trial, but not less than $7.4 million. Plaintiff is also entitled to 

rescission of the SAFE investment, along with interest, expenses, fees, and costs associated with 

the investment and recovery thereon.

FOURTH CAUSE OF ACTION

For Violation of Georgia Uniform Securities Act of 2008 (Blue Sky Laws)

Ga. Code Ann., § 10-5-58(g)

(Against Wrigley, Holmes, and Whitcomb)

142. Plaintiff repeats and realleges the allegations in Paragraphs 1- 141 as if fully set 

forth herein.

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143. Plaintiff brings this cause of action pursuant to Section 10-5-58(g) of the Georgia 

Code against Wrigley, Holmes, and Whitcomb. Plaintiff is not required to allege that Wrigley, 

Holmes, and Whitcomb acted with scienter or fraudulent intent.

144. As directors, executive officers, and/or “persons” who directly or indirectly control 

the Company, Wrigley, Holmes, and Whitcomb are liable jointly and severally with and to the 

same extent as the Company under Section 10-5-58(g) of the Georgia Code.

145. By reason of their positions of control and authority as officers and/or directors of 

the Company, Wrigley, Holmes, and Whitcomb had the power and authority to cause the Company

to engage in the conduct complained of herein. These Defendants were able to, and did, control, 

directly and indirectly, the decision-making of the Company, including the statements made to the 

representatives of Plaintiff.

146. Wrigley, Holmes, and Whitcomb, in their capacities as officers and/or directors of 

the Company, participated in and materially aided the misstatements and omissions set forth above. 

Wrigley, Holmes, and Whitcomb had direct and supervisory involvement in the SAFE investment 

and in procuring funds related thereto, and had the ability to influence and direct and did so 

influence and direct the activities of the Company in its violations of Section 58 of the Georgia 

Uniform Securities Act of 2008.

147. As set forth above, the Defendants violated Section 58 of the Georgia Uniform 

Securities Act of 2008. By virtue of their positions as controlling persons, executive officers and 

directors, and as a result of their aforesaid conduct and culpable participation, Wrigley, Holmes, 

and Whitcomb are liable pursuant to Section 58(g) of the Georgia Uniform Securities Act of 2008, 

jointly and severally with, and to the same extent as the Company is to Plaintiff.

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148. By reason of the foregoing, Wrigley, Holmes, and Whitcomb violated Section 58(g) 

of the Georgia Uniform Securities Act of 2008, Georgia Code § 10-5-58(g), and are liable to 

Plaintiff.

FIFTH CAUSE OF ACTION

For Common Law Fraud / Fraudulent Inducement

(Against All Defendants)

149. Plaintiff repeats and realleges the allegations in Paragraphs 1- 148 as if fully set 

forth herein.

150. Each of the Defendants made, authorized, or caused the misrepresentations or 

omissions at issue, which are summarized above.

151. The misrepresentations and omissions set forth above were fraudulent and 

material.

152. Each of the Defendants knew or recklessly disregarded that their representations 

and omissions were false and/or misleading at the time they were made. Each of the Defendants 

made the misleading statements with an intent to defraud Plaintiff, as detailed above.

153. The Defendants had reason to expect that Plaintiff would rely on such 

representations and intended that their misleading statements and omissions would fraudulently 

induce Plaintiff to both enter into the SAFE Agreement and invest $7.4 million in the SAFE.

154. Plaintiff justifiably relied on the Defendants’ misrepresentations and omissions, as 

detailed above. Plaintiff did not know, and could not in the exercise of reasonable diligence have 

known, of the Defendants’ misrepresentations and omissions.

155. Had Plaintiff known the facts regarding the SAFE and the Company, it would not 

have invested in the SAFE.

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156. As a direct and proximate result of the Defendants’ false representations and 

omissions, Plaintiff has suffered damages in an amount to be proven at trial, but no less than $7.4 

million plus interest.

SIXTH CAUSE OF ACTION

Rescission

(Against the Company)

157. Plaintiff repeats and realleges the allegations in Paragraphs 1- 156 as if fully set 

forth herein.

158. Defendants made knowingly false representations to Plaintiff when they advised, 

inter alia, that (i) Plaintiff’s $7.4 million would not be withdrawn from escrow until a total of $50 

million in investments had been received by the Company, including at least $5 million from 

Defendant Wrigley; and (ii) the investment would be used to fund future capital expenditures,

when in fact the money was used to satisfy outstanding and future debt defaults. 

159. Defendants’ misrepresentations were made with the intent of inducing Plaintiff to 

act in reliance on the deliberate misrepresentations.

160. Plaintiff justifiably relied on Defendants’ misrepresentations, to its detriment. 

161. Plaintiff has offered to tender the shares in exchange for the return of its $7.4 

million investment plus interest at a legal rate from the date of purchase, plus all costs and 

reasonable attorneys’ fees as permitted under applicable law.

162. Defendants have ignored this request.

163. Plaintiff has been damaged in an amount of at least $7.4 million plus interest, costs, 

fees and expenses.

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PRAYER FOR RELIEF 

WHEREFORE Plaintiff prays for relief as follows:

164. An award in favor of Plaintiff against the Defendants, jointly and severally, in an 

amount to be proven at trial, but no less than $7.4 million; and/or rescission of Plaintiff’s SAFE 

investments together with interest, fees, costs, and expenses, and such other and further relief as 

the Court may deem just and proper; and

165. All other relief in favor of Plaintiff and against Defendants that the Court deems 

just and proper. 

DEMAND FOR JURY TRIAL

Plaintiff hereby demands a trial by jury on all issues so triable.

NASON YEAGER GERSON HARRIS & 

FUMERO, P.A.

By: /s/ Gary A. Woodfield

Gary A. Woodfield

3001 PGA Blvd., Suite 305

Palm Beach Gardens, Florida 33410

(561) 686-3307

gwoodfield@nasonyeager.com 

MINTZ, LEVIN, COHN, FERRIS,

GLOVSKY AND POPEO, P.C.

By: /s/ John F. Sylvia

John F. Sylvia (pro hac vice to be filed)

One Financial Center

Boston, MA 02111

(617) 542-6000

Attorneys for Plaintiff Legacy Knight 

Strategic Opportunities Fund – Parallel 

Series

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