Court Opinion

ID: 9946629
Source: CourtListenerOpinion
Date Created: 2024-02-29 22:02:29.331486+00
Date Added: 2024-06-11T14:25:41.103878
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

STEVEN F. URVAN,                  )
                                  )
                       Plaintiff, )
                                  )
      v.                          )
                                  )
AMMO, INC.; SPEEDLIGHT            )
GROUP I, LLC; FRED W.             )
WAGENHALS; CHRISTOPHER            )
D. LARSON; JOHN P. FLYNN;         )
JESSICA M. LOCKETT;               )
RICHARD R. CHILDRESS;             )
HARRY S. MARKLEY;                 )
RUSSELL WILLIAM                   )
WALLACE, JR.; ROBERT J.           )   Consol. C.A. No. 2023-0470 PRW
GOODMANSON; AND                   )
ROBERT D. WILEY,                  )
                                  )
                    Defendants. )
_______________________________ )
                                  )
AMMO, INC.,                       )
                                  )
                       Plaintiff, )
                                  )
      v.                          )
                                  )
STEVEN F. URVAN,                  )
                                  )
                     Defendant. )

                  Submitted: December 18, 2023
                   Decided: February 27, 2024
     Upon Defendants Ammo, Inc., Speedlight Group I, LLC, Fred W. Wagenhals,
    Christopher D. Larson, John P. Flynn, Jessica M. Lockett, Richard R. Childress,
      Harry S. Markley, Russel William Wallace, Jr., Robert J. Goodmanson, and
                        Robert D. Wiley’s Motion to Dismiss
                       DENIED, in part; GRANTED, in part.

                Upon Defendant Steven F. Urvan’s Motion to Dismiss
                                    DENIED.

                    MEMORANDUM OPINION AND ORDER

Kevin M. Coen, Esquire, Rachel R. Tunney, Esquire, MORRIS, NICHOLS, ARSHT &
TUNNEL LLP, Wilmington, Delaware, Nicholas Cutaia, Esquire, Jaclyn Grodin,
Esquire, GOULSTON & STORRS PC, New York, New York, Joshua M. Looney,
Esquire, Nora A. Saunders, Esquire, GOULSTON & STORRS PC, Boston,
Massachusetts, Attorneys for Plaintiff/Counterclaim Defendant Steven F. Urvan.

A. Thompson Bayliss, Esquire, Peter C. Cirka, Esquire, Abrams & Bayliss LLP,
Wilmington, Delaware, Attorneys for Defendant/Counterclaim Plaintiff AMMO,
Inc. and Defendants Speedlight Group I, LLC, Fred W. Wagenhals, Christopher D.
Larson, John P. Flynn, Jessica M. Lockett, Richard R. Childress, Harry S. Markley,
Russell William Wallace, Jr., Robert J. Goodmanson, and Robert D. Wiley.

WALLACE, J. 1

1
   Sitting by designation of the Chief Justice pursuant to In re Designation of Actions Filed
Pursuant to 8 Del. C. § 111 (Del. Feb. 23, 2023) (ORDER).
      These consolidated cases emanate from a merger agreement executed in April

2021 by AMMO, Inc., SpeedLight Group I, LLC, Gemini Direct Investments, LLC,

and Steven F. Urvan (the “Merger Agreement”).             That agreement facilitated

Mr. Urvan’s sale of Gemini and its subsidiaries to AMMO. Under it, Gemini merged

into SpeedLight, AMMO’s wholly owned subsidiary. As part of the deal, Mr. Urvan

became AMMO’s largest shareholder, joined its board, and became its Chief

Strategy Officer. Before long, the relationship soured.

      Now, Mr. Urvan is suing AMMO, SpeedLight, and nine individual AMMO

directors and officers (the “Individual Defendants” and, together with AMMO and

SpeedLight, the “AMMO Entities”).             All his claims stem from alleged

misrepresentations in the Merger Agreement. AMMO, in turn, is suing Mr. Urvan.

It claims misrepresentations as well as breaches of Mr. Urvan’s indemnity

obligations. Each side has moved to dismiss the other’s complaint. But neither

motion quite gets there.

      Indeed, all but one of the volleyed counts satisfies the required reasonable

conceivability threshold. The only deficient claim is Count II of Mr. Urvan’s

complaint. Through it, Mr. Urvan complains the Individual Defendants aided and

abetted AMMO and SpeedLight’s purported fraud. But it’s well-established that

officers and directors acting in their capacity as agents can’t abet their corporate

principal’s torts. So, Mr. Urvan’s Count II must be dismissed. Apart from that

                                        -1-
minor exception, final resolution of these parties’ competing claims will require a

fulsome inquiry into the facts.

                    I. FACTUAL & PROCEDURAL BACKGROUND2

    A. PARTIES AND RELEVANT ENTITIES

          Plaintiff/Counterclaim Defendant Steven F. Urvan was the ultimate owner of

GunBroker.com, a successful online retailer of firearms and related products.3

GunBroker was directly owned by IA Tech, LLC, which was owned by Gemini

Direct Investments, LLC.4           Mr. Urvan owned Gemini and its subsidiaries.5

Following the merger at issue here, Mr. Urvan became AMMO’s largest shareholder

and a member of its board.6

          Defendant/Counterclaim Plaintiff AMMO is a publicly traded Delaware

corporation headquartered in Arizona.7 At the time of the merger, its business

focused on the manufacture and sale of ammunition.8

          Defendant Speedlight is a Delaware limited liability company headquartered

2
    These facts are drawn from the parties’ respective complaints and are presumed to be true
solely for purposes of this opinion.
3
    Urvan’s Compl. ¶¶ 2, 27 (D.I. 1).
4
    Id. ¶¶ 2 n.2, 35.
5
    Id. ¶ 35 n.3.
6
    Id. ¶ 12.
7
    Id. ¶ 13.
8
    Id.

                                            -2-
in Arizona.9       AMMO formed Speedlight in April 2021 for the purpose of

consummating this merger and is Speedlight’s sole member.10

           Defendant Fred W. Wagenhals is a co-founder of AMMO. At the relevant

times, he was AMMO’s chairman of the board and CEO. He is a significant AMMO

shareholder, and he actively participated in negotiating and executing this merger.11

           Defendant Christopher D. Larson is another AMMO co-founder. He had been

the VP of Finance for AMMO and actively participated in the merger. In 2020, the

SEC barred Mr. Larson from holding an officer or director position in any public

company for five years based on his fraudulent business conduct.12 Mr. Urvan

alleges Mr. Larson was nonetheless a de facto officer and director of AMMO at the

relevant times.13

           Defendant John P. Flynn, a disbarred lawyer, was an AMMO VP who

actively participated in the merger.14 Mr. Flynn was disbarred in 2019.15 Mr. Urvan

alleges Mr. Flynn was nonetheless permitted to continue as de facto in-house counsel

9
     Urvan’s Compl. ¶ 14.
10
     Id.
11
     Urvan’s Compl. ¶ 15.
12
     Id. ¶ 5.
13
     Id. ¶ 16.
14
     Id. ¶ 17.
15
     Id. ¶ 91.

                                          -3-
to AMMO.16

         Defendant Jessica M. Lockett is a corporate attorney who had been a member

of AMMO’s board and an AMMO shareholder. She served on AMMO’s Audit

Committee. She, too, participated in the merger negotiations and approval.17

         Defendant Richard R. Childress is also an AMMO director and shareholder.

He was on AMMO’s Audit Committee and participated in the merger negotiation

and approval.18

         Defendant Harry S. Markley is another AMMO board member and

shareholder that participated in the merger negotiations.19

         Defendant Russell William Wallace, Jr. is, likewise, an AMMO board

member and shareholder. He was on AMMO’s Audit Committee and participated

in the merger negotiations and approval.20

         Defendant Robert J. Goodmanson was, at relevant times, AMMO’s president,

and a member of its board. He was an AMMO shareholder and was also employed

at an investment advisory firm that held a stake in AMMO. He, too, participated in

the merger negotiation and approval.21

16
     Id. ¶ 94.
17
     Id. ¶ 18.
18
     Id. ¶ 19.
19
     Id. ¶ 21.
20
     Id. ¶ 22.
21
     Id. ¶ 20.

                                         -4-
         Finally, Defendant Robert D. Wiley has been AMMO’s Chief Financial

Officer since 2019 and is an AMMO shareholder. He also participated in the merger

negotiation, execution, and approval.22

     B. THE PRE-MERGER EVENTS

         1. The Titon and Tenor Litigations

         Triton Value Partners, LLC performed services for GunBroker from 2006 to

2013.23 In 2017, it brought suit, alleging Mr. Urvan failed to pay it for services and

engaged in fraud to hide assets from creditors like Triton (the “Triton Litigation”).24

The Merger Agreement specifically identified cases related to this dispute as the

“Triton Matter.”25 Now, AMMO seeks indemnification for attorney’s fees it has

incurred from the Triton Litigation.26

         Tenor Capital Partners, LLC, initiated litigation in federal court after

Mr. Urvan, acting through GunBroker, allegedly failed to pay over $1 million in fees

(the “Tenor Litigation”).27 The Merger Agreement included the Tenor Litigation as

22
     Id. ¶ 23.
23
     AMMO’s Am. Compl. ¶ 15 (D.I. 60).
24
     Id. ¶¶ 16-17.
25
  AMMO Entities’ Opening Brief in Support of their Motion to Dismiss (Hereinafter “AMMO’s
Mot.”), Ex. 1 (hereinafter “MA”) § 1.56 (D.I. No. 36).
26
     AMMO’s Am. Compl. ¶¶ 81-84.
27
     Id. ¶¶ 18-20.

                                           -5-
“Other Litigation.”28 Following the merger, GunBroker lost at the trial level, and

Tenor was awarded $1.5 million in damages.29 As part of its appeal, GunBroker,

which by this time was owned by AMMO, had to post a $1.55 million appeal bond.30

AMMO and Mr. Urvan have disputed who is responsible for paying the premium on

the appeal bond.31 After AMMO filed this action, Mr. Urvan paid the $38,750 appeal

bond premium, but the parties still dispute the associated fees.32

         2. Ms. Hanrahan’s Whistleblower Complaint

         Prior to the merger, AMMO had legal problems of its own. Specifically, in

August 2019, Kathleen Hanrahan, a former AMMO executive and board member,

filed a whistleblower complaint with OSHA “alleging numerous financial,

accounting, and reporting violations at AMMO, including violations of SEC rules

and regulations.”33        She also claimed retaliation.34   In February 2021, OSHA

determined there was reasonable cause to believe AMMO had violated the Sarbanes-

Oxley Act.35

28
     MA § 1.38.
29
     AMMO’s Am. Compl. ¶ 46.
30
     Id. ¶ 47.
31
     Id. ¶¶ 48-54.
32
    See AMMO’s Brief Opposing Urvan’s Motion to Dismiss (hereinafter “AMMO’s Opp’n Br.”)
at 47 (D.I. No. 76).
33
     Urvan’s Compl. ¶ 8.
34
     Id. ¶ 67.
35
     Id. ¶ 68.

                                             -6-
           AMMO’s board formed a special committee to investigate Ms. Hanrahan’s

allegations.36 In contrast with OSHA’s findings both initially and on appeal, the

special committee found Ms. Hanrahan’s claims were unsubstantiated.37

Eventually—about ten months after the merger closed— Ms. Hanrahan filed a

federal lawsuit against AMMO based upon her whistleblower complaint.38 AMMO

settled with Ms. Hanrahan a few months later.39

           3. Mr. Urvan’s Efforts to Sell GunBroker

           With a $50 million payment under a financing agreement due on May 1, 2021,

Mr. Urvan began looking for a buyer for GunBroker in 2020.40 He first retained

Houlihan Lokey (“HL”) as Gemini’s advisor in that effort. The agreement between

Gemini and HL contained a tail provision that permitted HL to recover a fee if a

“qualifying sale” occurred within a set time after the engagement ended.41 The tail

provision was only triggered if, within one year after the HL agreement ended,

GunBroker was sold to a “Contact Party.”42 A “Contact Party” is defined as an

36
     Urvan’s Compl. ¶ 69.
37
     Id.
38
     Urvan’s Compl. ¶ 70.
39
     Id. ¶ 70.
40
     AMMO’s Am. Compl. ¶ 21.
41
     Id.
42
    Urvan’s Opening Brief in Support of his Motion to Dismiss AMMO’s Amended Complaint
(hereinafter “Urvan’s Mot.”), Ex 1 § 2 (D.I. 72).

                                           -7-
entity:

                 (i) Houlihan Lokey identified, contacted or with whom
                 Houlihan Lokey or the Company had substantive
                 discussions regarding a potential Transaction during the
                 term of this Agreement, or (ii) reviewed the information
                 memorandum or any other written materials prepared by
                 Houlihan Lokey or by the Company with the assistance of
                 Houlihan Lokey concerning GunBroker and/or any
                 proposed Transaction[.]43

AMMO does not allege in its Amended Complaint that it was a “Contact Party” or

that HL has ever sought a fee from Mr. Urvan or any related entity.

           Mr. Urvan also worked with Matthew Hayden to find a buyer.44 Mr. Hayden

introduced Mr. Urvan to “more than twenty” potential buyers for GunBroker and

provided him advice about the sale.45 In December 2020, Mr. Hayden introduced

Mr. Urvan to Maxim Group. LLC, which eventually led to the merger.46 Unlike HL,

Mr. Hayden has sought payment from Mr. Urvan.47 When Mr. Urvan didn’t pay,

Mr. Hayden sued him in Florida federal court.48

43
     Urvan’s Mot., Ex. 1 § 2.
44
     AMMO’s Am. Compl. ¶ 23.
45
     Id.
46
     AMMO’s Am. Compl. ¶ 24.
47
     Id. ¶ 30.
48
     Id.

                                           -8-
           4. The Verska Agreement

           Stephen Verska was a key Gemini employee.49 On April 30, 2021, the day

the merger closed, Mr. Urvan and Gemini signed a separate agreement with

Mr. Verska and Mr. Verska’s company, SharkDiver Consulting, Inc. (the “Verska

Agreement”).50 The Verska Agreement, which purports to be a severance agreement

releasing any claims Mr. Verska or SharkDiver might have against Mr. Urvan or

Gemini, promised to pay Mr. Verska $1 million per year for three years.51 Before

that, Mr. Verska’s annual salary had been $250,000 plus bonuses.52

           Mr. Urvan had negotiated for Mr. Verska’s continued employment at

GunBroker during the merger discussions.53         Accordingly, after the merger,

Mr. Verska stayed on as GunBroker’s Chief Technology Officer.54 AMMO alleges

that the undisclosed Mr. Verska Agreement was truly designed to secure

Mr. Verska’s loyalty to Mr. Urvan.55 AMMO claims that Mr. Urvan desired to use

Mr. Verska to retain control over GunBroker after it was sold to AMMO.56 It

49
     AMMO’s Am. Compl. ¶ 4.
50
     Id. ¶ 59.
51
     Id.
52
     AMMO’s Am. Compl. ¶ 56.
53
     Id. ¶ 57.
54
     Id. ¶ 58.
55
     Id.
56
     AMMO’s Am. Compl. ¶¶ 58, 64.

                                         -9-
buttresses that accusation by pointing to Mr. Verska’s post-merger insubordination

in favor of “Urvan era” GunBroker employees and Mr. Urvan’s discontinued

payments under the Verska Agreement once AMMO fired Mr. Verska.57 Mr. Verska

has since sued Mr. Urvan and Gemini in Georgia federal court to recover $2 million

purportedly still owed under the Verska Agreement.58

     C. THE MERGER AGREEMENT

           In January 2021, Mr. Urvan learned that AMMO was open to buying

GunBroker.59 Thereafter, Mr. Urvan met with some of AMMO’s key employees,

and negotiations ensued.60 During the negotiations, Mr. Urvan primarily engaged

with Messrs. Larson, Wagenhals, and Flynn.61 On April 19, 2021, in preparation for

the impending deal, AMMO formed Delaware limited liability company SpeedLight

as its wholly owned subsidiary.62

           Then, on April 30, 2021, the Merger Agreement was executed.63 Pursuantly,

Gemini merged with SpeedLight, and SpeedLight survived.64              In exchange,

57
     Id. ¶¶ 64-70.
58
     Id. ¶ 71.
59
     Urvan’s Compl. ¶ 28.
60
     Id. ¶¶ 29-41.
61
     Id. ¶ 33.
62
     Id. ¶¶ 43-44.
63
     Id. ¶ 45.
64
     Id.

                                          -10-
Mr. Urvan received $50 million in cash and up to 20 million shares of AMMO

common stock.65 He also became an AMMO board member and its Chief Strategy

Officer.66 Added to that, SpeedLight assumed $52,277,699.25 in outstanding debt

owed by IA Tech.67

         Numerous Merger Agreement provisions are implicated in this dispute. First,

Mr. Urvan raises four representations AMMO made in Section 5 of the Merger

Agreement.

         Section 5.7 provides in relevant part:

                 There is no claim, action, suit, proceeding, arbitration,
                 complaint, charge or investigation pending or to
                 [AMMO]’s knowledge, currently threatened in writing (a)
                 against [AMMO] or any officer, director or employee of
                 [AMMO] arising out of their employment or board
                 relationship with [AMMO]; (b) that questions the validity
                 of this Agreement or the right of [AMMO] to enter into it,
                 or to consummate the transactions contemplated by this
                 Agreement; or (c) to [AMMO]’s knowledge, that
                 reasonably would be expected to have, either individually
                 or in the aggregate, a Material Adverse Effect. Neither
                 [AMMO] nor, to [AMMO]’s knowledge, any of its
                 officers, directors or employees is a party or is named as
                 subject to the provisions of any order, writ, injunction,
                 judgment or decree of any court or government agency or
                 instrumentality (in the case of officers, directors or
                 employees, such as would affect [AMMO]).

65
     Urvan’s Compl. ¶ 46.
66
     Id. ¶ 50.
67
     Id. ¶ 47.

                                           -11-
      Section 5.11(b) provides in relevant part:
            None of [AMMO]’s directors, officers or employees, or
            any members of their immediate families, or any Affiliate
            of the foregoing are, directly or indirectly, indebted to
            [AMMO] or, to [AMMO]’s knowledge, have any (i)
            material commercial, industrial, banking, consulting,
            legal, accounting, charitable or familial relationship with
            any of [AMMO]’s customers, suppliers, service providers,
            joint venture partners, licensees and competitors . . . .

      Section 5.15(h) provides in relevant part:

             To [AMMO]’s knowledge, none of the Key Employees or
             directors of [AMMO] has been . . . (ii) convicted in a
             criminal proceeding or named as a subject of a pending
             criminal proceeding (excluding traffic violations and other
             minor offenses); (iii) subject to any order, judgment or
             decree (not subsequently reversed, suspended, or vacated)
             of any court of competent jurisdiction permanently or
             temporarily enjoining him or her from engaging, or
             otherwise imposing limits or conditions on his or her
             engagement in any securities, investment advisory,
             banking, insurance, or other type of business or acting as
             an officer or director of a public company; or (iv) found
             by a court of competent jurisdiction in a civil action or by
             the Securities and Exchange Commission or the
             Commodity Futures Trading Commission to have violated
             any federal or state securities, commodities, or unfair trade
             practices law, which such judgment or finding has not
             been subsequently reversed, suspended, or vacated.

      And Section 5.26 provides, in greater detail than is needed here, that

(1) AMMO complied with all NASDAQ rules and SEC filing requirements;

(2) AMMO’s SEC filings accurately and fairly presented AMMO’s financial

position; and (3) AMMO maintained an adequate system of internal controls over

its financial reporting to reasonably assure the reliability of its financial reporting.
                                          -12-
      AMMO, in turn, raises two of Mr. Urvan’s representations that AMMO now

contends were false. Specifically, in Merger Agreement Section 4.18(a), Mr. Urvan

represented in relevant part:

             To [Gemini]’s knowledge, none of [Gemini]’s or any
             [Gemini] Subsidiary’s employees is obligated under any
             contract (including licenses, covenants or commitments of
             any nature) or other agreement, or subject to any
             judgment, decree or order of any court or administrative
             agency, that would materially interfere with such
             employee’s ability to promote the interest of [Gemini] or
             a [Gemini] Subsidiary or that would conflict with
             [Gemini]’s or any [Gemini] Subsidiary’s business.

      Finally, Mr. Urvan represented in Section 4.27: “Except for Maxim Group

LLC, no broker, finder or investment banker is entitled to any brokerage, finder’s or

other fee or commission in connection with the transactions contemplated by this

Agreement or any Ancillary Document based upon arrangements made by or on

behalf of [Gemini].”

      AMMO also raises Mr. Urvan’s indemnification obligations under Section 9

of the Merger Agreement. The most relevant provisions to this dispute are Sections

9.5(a), (c), and (f). Section 9.5(a), which addresses “Third-Party Claims,” provides

in relevant part:

             If any Indemnified Party receives notice of the assertion or
             commencement of any Action made or brought by any
             Person who is not a party to this Agreement or an Affiliate
             of a party to this Agreement or a Representative of the
             foregoing (a “Third-Party Claim”) against such
             Indemnified Party with respect to which the Indemnifying
                                        -13-
Party is obligated to provide indemnification under this
Agreement, the Indemnified Party shall give the
Indemnifying Party reasonably prompt written notice
thereof, but in any event not later than fifteen (15) calendar
days after receipt of such notice of such Third-Party
Claim. The failure to give such prompt written notice shall
not, however, relieve the Indemnifying Party of its
indemnification obligations, except and only to the extent
that the Indemnifying Party forfeits rights or defenses by
reason of such failure. Such notice by the Indemnified
Party shall describe the Third-Party Claim in reasonable
detail, shall include copies of all material written evidence
thereof and shall indicate the estimated amount, if
reasonably practicable, of the Loss that has been or may
be sustained by the Indemnified Party. The Indemnifying
Party shall have the right to participate in, or by giving
written notice to the Indemnified Party, to assume the
defense of any Third-Party Claim at the Indemnifying
Party’s expense and by the Indemnifying Party’s own
counsel, and the Indemnified Party shall cooperate in good
faith in such defense . . . . The Indemnified Party shall
have the right to participate in the defense of any Third-
Party Claim with counsel selected by it subject to the
Indemnifying Party’s right to control the defense thereof.
The fees and disbursements of such counsel shall be at the
expense of the Indemnified Party, provided that if in the
reasonable opinion of counsel to the Indemnified Party,
(A) there are material legal defenses available to an
Indemnified Party that are different from or additional to
those available to the Indemnifying Party; or (B) there
exists a conflict of interest between the Indemnifying
Party and the Indemnified Party that cannot be waived, the
Indemnifying Party shall be liable for the reasonable fees
and expenses of counsel to the Indemnified Party in each
jurisdiction for which the Indemnified Party determines
counsel is required.

                            -14-
      Section 9.5(c), which addresses “Direct Claims,” provides in relevant part:

             Any Action by an Indemnified Party on account of a Loss
             which does not result from a Third-Party Claim (a “Direct
             Claim”) shall be asserted by the Indemnified Party giving
             the Indemnifying Party reasonably prompt written notice
             thereof, but in any event not later than thirty (30) days after
             the Indemnified Party becomes aware of such Direct
             Claim. The failure to give such prompt written notice shall
             not, however, relieve the Indemnifying Party of its
             indemnification obligations, except and only to the extent
             that the Indemnifying Party forfeits rights or defenses by
             reason of such failure. Such notice by the Indemnified
             Party shall describe the Direct Claim in reasonable detail,
             shall include copies of all material written evidence
             thereof and shall indicate the estimated amount, if
             reasonably practicable, of the Loss that has been or may
             be sustained by the Indemnified Party. The Indemnifying
             Party shall have thirty (30) days after its receipt of such
             notice to respond in writing to such Direct Claim. . . . If
             the Indemnifying Party does not so respond within such 30
             day period, the Indemnifying Party shall be deemed to
             have rejected such claim, in which case the Indemnified
             Party shall be free to pursue such remedies as may be
             available to the Indemnified Party on the terms and subject
             to the provisions of this Agreement.

      Last, Section 9.5(f), which addresses specific pre-existing claims, provides in

relevant part:

             Notwithstanding anything to the contrary in this Section
             9.5, [Mr. Urvan] shall have initial sole and exclusive
             control of the prosecution, defense and settlement of the
             Triton Matter and the [Tenor] Litigation in consultation
             with [AMMO], including, without limitation, the selection
             and termination of counsel with respect to such matter and
             all decisions related to the Triton Matter and/or the [Tenor]
             Litigation in good faith consultation with [AMMO] . . . .
             For the avoidance of doubt, neither [AMMO] nor any of
                                          -15-
                its Affiliates shall have the right to terminate any of the
                legal counsel currently handling the Triton Matter or [the
                Tenor] Litigation. Notwithstanding anything in this
                Agreement to the contrary, the parties agree legal counsel
                and strategy will be reviewed periodically and in good
                faith after six months from the Closing Date, and
                [Mr. Urvan] shall consult in good faith and work
                cooperatively together related to this matter.

     D. THE POST-MERGER EVENTS

           1. Mr. Urvan’s Proxy Battle

           As demonstrated by SEC filings cited by the AMMO Entities,68 Mr. Urvan

initiated a proxy contest in August 2022.69 In doing so, he sought to replace

AMMO’s entire board and to separate the legacy GunBroker business from

AMMO’s ammunition business.70 Mr. Urvan also wanted to replace AMMO’s then-

CEO, Mr. Wagenhals.71

           AMMO and Mr. Urvan settled the proxy contest in November 2022.72 The

settlement increased the size of the board to nine, with Mr. Urvan and his nominees

filling three of those seats.73 The agreement also called for a new four-member

68
   The Court may take judicial notice of these filings as explained below. See infra Section
V(A)(1).
69
     AMMO’s Mot., Ex. 5 (hereinafter, “Proxy Contest Settlement Agreement”) § 1(a) (D.I. 36).
70
     Proxy Contest Settlement Agreement, Ex. C.
71
     Id.
72
     See generally Proxy Contest Settlement Agreement.
73
     Proxy Contest Settlement Agreement § 1(b).

                                             -16-
committee to plan the succession of AMMO’s CEO.74 Mr. Urvan and one of his

nominees occupied two of those four positions.75

           2. Mr. Urvan’s Refusals to Indemnify

           Following the merger, the law firm Culhane Meadows PLLC represented

Mr. Urvan and AMMO in the Triton Litigation.76 In May 2023, Culhane Meadows

sent a letter to Mr. Urvan and AMMO explaining that it foresaw potential conflicts

of interest between the defendants.77 Specifically, the letter stated:

                [T]hough the Defendants’ interests remain aligned with
                respect to seeing that the Plaintiffs’ complaint is dismissed
                and that no liability is assessed against any Defendant,
                because AMMO, Inc. purchased GBI and its subsidiaries
                GunBroker and IA Tech (collectively “the AMMO
                Companies”), while Mr. Urvan retains ownership of TVPI
                and is an individually named defendant, certain situations
                could arise where the Defendants may have divergent
                interests, or inquire of their counsel seeking attorney-
                client privileges, that could result in a potential, future
                conflict. For example, we discussed with the parties’
                representatives the recent summary judgment ruling in the
                Federal Court action to which the Ammo Companies are
                not parties and [Mr.] Urvan’s inquiry about moving the
                Cobb Action into Federal Court through a potential TVPI
                bankruptcy petition where the statute of limitations
                defense might be better received (an inquiry CM could not
                address because of the potential impacts to the Ammo-
                Owned Parties); and other potential pretrial strategies or
                positions that could not be discussed under the cloak of

74
     Proxy Contest Settlement Agreement § 1(d).
75
     Id.
76
     AMMO’s Am. Compl. ¶ 35.
77
     Id.

                                             -17-
                 attorney-client privilege under a joint representation.
                 Additionally, we discussed the advantages of each party
                 being represented by separate counsel in terms of how the
                 evidence might be viewed by or presented to a jury,
                 separate (and thus additional) closing arguments and direct
                 and cross examinations, etc.78

So, Culhane Meadows said it would withdraw as AMMO’s counsel and suggested

that AMMO retain the existing co-counsel, Litchfield Cavo LLP, which would

correspondingly withdraw as Mr. Urvan’s counsel.79

           AMMO intended to follow that advice and retain Litchfield Cavo for itself.80

Relying on the provisions of Merger Agreement Section 9.5(a), AMMO sent

Mr. Urvan the $60,000 bill.81 But Mr. Urvan refused to pay.82 Indeed, Mr. Urvan

allegedly failed to take any action to facilitate the change in counsel, so Culhane

Meadows withdrew from the representation entirely, and AMMO was forced to

retain new counsel.83 Mr. Urvan hasn’t agreed to pay for that new counsel either.84

           Separately, and as referenced above, AMMO posted a $1.55 million appeal

78
     Urvan’s Mot., Ex. 4 at 1-2.
79
     Urvan’s Mot., Ex. 4 at 2; AMMO’s Am. Compl. ¶ 37.
80
     AMMO’s Am. Compl. ¶ 37.
81
     Id.
82
     AMMO’s Am. Compl. ¶ 38.
83
     Id. ¶¶ 39-41.
84
     Id. ¶ 42.

                                            -18-
bond in the Tenor litigation.85 The premium on that bond was $38,750.86 Though

Mr. Urvan initially said that bill was AMMO’s “problem to deal with,” he has since

remitted the premium.87 Unsatisfied, AMMO now seeks unpaid fees and interest

attributable to the appeal bond based on the Merger Agreement’s indemnity

provisions.88

     E. PROCEDURAL HISTORY

         Mr. Urvan filed his complaint against the AMMO Entities in April 2023.89

The AMMO Entities moved to dismiss it.90 Then, AMMO filed its own complaint.

The Court consolidated those two cases.91 And soon after, AMMO amended its

complaint.92         Mr. Urvan then moved to dismiss that amended complaint.93

Following full briefing, the Court heard oral argument and the competing dismissal

motions are now ready for resolution.

85
     Id. ¶¶ 47-48.
86
     Id. ¶ 49.
87
     Id. ¶ 50; AMMO’s Opp’n Br. at 46.
88
     AMMO’s Opp’n Br. at 47.
89
     Urvan’s Compl.
90
     AMMO’s Mot.
91
     Sept. 11, 2023 Judicial Action Form (D.I. No. 55).
92
     AMMO’s Am. Compl.
93
     Urvan’s Mot.

                                               -19-
                                   II. LEGAL STANDARD

        “When considering a Rule 12(b)(6) motion, the court (i) accepts as true all

well-pled factual allegations in the complaint, (ii) credits vague allegations if they

give the opposing party notice of the claim, and (iii) draws all reasonable inferences

in favor of the plaintiffs.”94 “Dismissal is inappropriate ‘unless the plaintiff would

not be entitled to recover under any reasonably conceivable set of circumstances.’”95

                             III. PARTIES’ CONTENTIONS

     A. AMMO ENTITIES’ MOTION TO DISMISS

        The list of the AMMO Entities’ contentions is long—attacking every claim

Mr. Urvan brings. Their first argument against is that Mr. Urvan’s entire complaint

is barred by laches.96 Mr. Urvan primarily responds to this challenge by arguing that

it is too fact dependent for this stage.97 He also emphasizes his claims are within the

three-year statute of limitations.98

        Next, the AMMO Entities contest this Court’s personal jurisdiction over the

Individual Defendants, saying the Individual Defendants haven’t had the

94
   Ont. Provincial Council of Carpenters’ Pension Tr. Fund v. Walton, 294 A.3d 65, 84 (Del. Ch.
2023) (citing Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Hldgs. LLC, 27 A.3d 531, 535 (Del.
2011)).
95
     Walton, 294 A.3d at 84 (citing Cent. Mortg., 27 A. 3d at 535).
96
     AMMO’s Mot. at 20-27.
97
    Urvan’s Brief Opposing the AMMO Entities’ Motion to Dismiss (hereinafter “Urvan’s Opp’n
Br.”) at 14-21 (D.I. 47).
98
     Urvan’s Opp’n Br. at 14-21.

                                               -20-
constitutionally required minimum contacts with Delaware.99 Mr. Urvan counters

that a recent United States Supreme Court decision obviates the need for contacts-

based due process analysis, so the applicable long-arm statutes are enough to confer

jurisdiction.100 He alternatively contends that the Individual Defendants’ use of

Delaware law in crafting this merger, and their high-level positions within a

Delaware entity, constitute sufficient contacts with Delaware to satisfy due

process.101

         Third, the AMMO Entities challenge the “falsity” and “justifiable reliance”

prongs of Mr. Urvan’s fraudulent inducement claims.102 He says in this regard that

the AMMO Entities merely present factual disputes that must be explored in

discovery.103

         The AMMO Entities’ motion next aims at Mr. Urvan’s aiding and abetting

count. They contend there was no underlying fraud, and add that Mr. Urvan hasn’t

plead “substantial assistance” with sufficient specificity.104 The AMMO Entities

also raise the intra-corporate conspiracy doctrine, saying officers and directors

99
      AMMO’s Mot. at 27-33.
100
      Urvan’s Opp’n Br. at 49-57 (citing Mallory v. Norfolk S. Ry. Co., 143 S. Ct. 2028 (2023)).
101
      Urvan’s Opp’n Br. at 57-61.
102
      AMMO’s Mot. at 34-44.
103
      Urvan’s Opp’n Br. at 23-29.
104
      AMMO’s Mot. at 45-52.

                                                -21-
cannot aid and abet their corporate principal.105 Mr. Urvan, of course, takes the

opposite position on the first two arguments.106 Regarding the intra-corporate

conspiracy doctrine, Mr. Urvan posits that it’s inapplicable because the Individual

Defendants were acting on personal motives instead of their roles as agents.107

         The AMMO Entities likewise oppose Mr. Urvan’s unjust enrichment count.

They suggest it fails because: (1) there is no lack of justification; (2) the written

contract governs the parties’ relationship; and (3) as to the Individual Defendants,

they were not directly enriched.108      Mr. Urvan counters that: (1) the alleged

wrongdoing removes any justification; (2) a contract that is the product of fraud can’t

control; and (3) there is a reasonable inference the Individual Defendants directly

profited from this merger.109

         Turning away from Delaware common law and toward the Arizona Securities

Act (the “ASA”), the AMMO Entities argue two of the three provisions Mr. Urvan

relies upon only apply to fraudulent schemes, not “misstatements and omissions.”110

Mr. Urvan retorts that the totality of the AMMO Entities’ alleged misconduct

105
      AMMO’s Mot. at 52-54.
106
      Urvan’s Opp’n Br. at 34-36.
107
      Id. at 36-37.
108
      AMMO’s Mot. at 59-60.
109
      Urvan’s Opp’n Br. at 46-48.
110
      AMMO Mot. at 54-55.

                                         -22-
amounted to a fraudulent scheme.111

         Regarding A.R.S. § 44-1991(A)(2)—a close analogue to Delaware’s common

law fraud—the AMMO Entities again claim there were no misrepresentations and

add that even if there were, they weren’t material to the transaction.112 Mr. Urvan

again disagrees with that position and says it is, at most, a factual dispute not

appropriate for this stage.113 The parties also disagree about the interplay between

the Merger Agreement’s anti-reliance clause and the ASA’s non-waiver provision

and lack of a reliance element.114

      B. MR. URVAN’S MOTION TO DISMISS

         Mr. Urvan’s motion is similarly comprehensive. He first attacks AMMO’s

two claims of fraudulent inducement—one regarding the “Finder’s Fee”

representation, the other regarding the “Material Agreements” representation.115 As

to both, Mr. Urvan says they weren’t false and he didn’t have knowledge of their

alleged falsity.116 He also contends that even if AMMO could prove its claims with

regard to the Finder’s Fee representation, AMMO would have no damages.117

111
      Urvan Opp’n Br. at 45-46.
112
      AMMO’s Mot. at 55-58.
113
      Urvan’s Opp’n Br. at 38-39.
114
      AMMO’s Mot. at 56-57; Urvan’s Opp’n Br. at 40-45.
115
      Urvan’s Mot. at 24-35.
116
      Id. at 25-28; 30-35.
117
      Id. at 28-30.

                                            -23-
AMMO, in essence, counterargues that each of Mr. Urvan’s defenses rest upon

disputed facts.118

         Like Mr. Urvan, AMMO restates its fraudulent inducement claims as

violations of the ASA.119          But, unlike Mr. Urvan, it cites only A.R.S. § 44-

1991(A)(2).120        To defeat that claim, Mr. Urvan says again he made no

misrepresentations.121         Mr. Urvan continues that the Gemini interests AMMO

bought are not “securities,” and so they aren’t governed by the ASA.122 AMMO

responds that the stock Mr. Urvan received in this bargain implicate the ASA, and

that it has adequately pled misrepresentations.123

         Finally, Mr. Urvan’s motion challenges AMMO’s indemnification claims.

Starting with the Triton Litigation, Mr. Urvan says it is exclusively governed by

Section 9.5(f), which doesn’t provide for reimbursement of attorney’s fees. 124 And

Mr. Urvan continues, that even if Section 9.5(a) did apply, there was no existing,

non-waivable conflict that would entitle AMMO to fees. 125 AMMO, in opposition,

118
      AMMO’s Opp’n Br. at 14-29.
119
      AMMO’s Am. Compl. ¶¶ 120-25.
120
      Id. ¶ 122.
121
      Urvan’s Mot. at 40.
122
      Id. at 36-40.
123
      AMMO’s Opp’n Br. at 34-36.
124
      Urvan’s Mot. at 42-45.
125
      Id. at 46-47.

                                            -24-
reads Section 9.5(f) as supplementing, not replacing, Section 9.5(a), and says the

Culhane Meadows letter triggered Section 9.5(a)’s the reimbursement provision.126

         Turning to the fees and interest relating to the Tenor Litigation’s now-paid

appeal bond premium, Mr. Urvan says AMMO did not fulfill its notice

obligations.127 AMMO contends additional notice wasn’t needed because this claim

was already well known to Mr. Urvan and he repudiated payment.128 AMMO adds

that, in any event, Mr. Urvan did not suffer the prejudice required to transfigure a

lack of notice into a defense under the Merger Agreement.129

         As for Count III’s fee-shifting claim, Mr. Urvan says AMMO’s request for

fees generated in this action is unripe, and he again argues a lack of notice.130

AMMO contends that Delaware courts routinely maintain fee-shifting claims, and

that its Complaint provided Mr. Urvan all the notice he is entitled to.131

126
      AMMO’s Opp’n Br. at 37-46.
127
      Urvan’s Mot. at 48-50.
128
      AMMO’s Opp’n Br. at 48-49.
129
      Id. at 49-50.
130
      Urvan’s Mot. at 50-52.
131
      AMMO’s Opp’n Br. at 50-53.

                                         -25-
                                        IV. DISCUSSION

      A. THE AMMO ENTITIES’ MOTION TO DISMISS MR. URVAN’S COMPLAINT

         1. The Court May Consider Certain Limited Evidence, Including SEC
            Filings and Court Records.

         To start, it is necessary to address the limits of the Court’s ability to consider

documents outside a complaint without transforming a motion to dismiss into one

for summary judgment. This is so because the AMMO Entities reference SEC

filings and court records from other litigation in support of their arguments.132 In

short, both types of documents may, via judicial notice, be considered at this stage.

         This Court will consider SEC filings at the motion to dismiss stage when they

“are not subject to reasonable dispute under Delaware Rule of Evidence 201.”133

SEC filings may also be considered if the movant “is not offering them for the truth

of the matter asserted.”134 Though the documents in Narrowstep did not satisfy those

criteria, it specifically distinguished “a situation in which a court takes judicial notice

of proxy disclosures, not to determine whether they are truthful, but as evidence of

whether certain information has or has not been disclosed.”135                  Just so here.

132
      See, e.g., AMMO’s Mot. at 5, 8.
133
    Smart Local Unions and Councils Pension Fund v. BridgeBio Pharma, Inc., 2022 WL
17986515, at *9 n.114 (Del. Ch. Dec. 29, 2022) (citing In re General Motors (Hughes) S’holder
Litig., 897 A.2d 162, 170 (Del. 2006)).
134
      Narrowstep, Inc. v. Onstream Media Corp., 2010 WL 5422405, at *6 (Del. Ch. Dec. 22, 2010).
135
      Narrowstep, 2010 WL 5422405, at *6.

                                               -26-
Accordingly, the SEC filings may be considered for that limited purpose and as the

integral facts are undisputed by Mr. Urvan.136

         Likewise, the AMMO Entities refer to some of Mr. Urvan’s filings in federal

litigation.137 These, too, may be considered. “This Court has repeatedly held federal

court decisions, orders, and filings judicially noticeable.”138 So, while the Court is

not yet at a factfinding stage and will thus not weigh any evidence,139 it need not

blind itself to the materials the AMMO Entities rely upon.

         2. Laches Does Not Bar Mr. Urvan’s Claims at this Stage.

         Turning to more substantive issues, the AMMO Entities claim Mr. Urvan’s

complaint is barred in its entirety by the doctrine of laches. “The equitable defense

of laches is based on the theory that upon a person’s acquiring knowledge of a wrong

affecting his rights, any unreasonable delay in asserting an equitable remedy will bar

such form of relief.”140 There are two elements to this defense: “(i) unreasonable

delay in bringing a claim by a plaintiff with knowledge thereof, and (ii) resulting

136
     Mr. Urvan also seeks to exclude AMMO’s code of conduct, which purportedly imputed
reporting requirements on employees (including Mr. Urvan), who believed AMMO was engaged
in unlawful practices. Urvan’s Opp’n Br. at 31 n.13. That code, though, is contained in AMMO’s
public SEC filings, and its contents are undisputed. See AMMO, Quarterly Report (Form 10-Q)
(Feb. 12, 2021) at Ex. 14.1. In any event, it has little bearing on the Court’s analysis.
137
      See AMMO’s Mot. at 8 n.5.
138
      In re Ebix, Inc. Stockholder Litig., 2016 WL 208402, at *10 (Del. Ch. Jan. 15, 2016).
139
      Goldstein v. Denner, 2022 WL 1671006, at * 55 (Del. Ch. May 26, 2022).
140
   Mellado v. ACPDO Parent Inc., 2023 WL 8086840, at *11 (Del. Ch. Nov. 21, 2023) (quoting
Skouras v. Admiralty Enters., Inc., 386 A.2d 674, 682 (Del. Ch. 1978)).

                                                -27-
prejudice to the defendant.”141 Neither of those fact-driven elements is conducive to

a determination at this stage.

          To demonstrate Mr. Urvan knew the bases of his claims well before bringing

suit, the AMMO Entities point to SEC disclosures related to the misconduct

Mr. Urvan now alleges—many of which predate the merger—as well as the more

robust information Mr. Urvan became privy to as an AMMO director.142 The

AMMO Entities then say Mr. Urvan’s delay was unreasonable because: (1) the

challenged representations had a ninety-day survival period; (2) AMMO’s code of

conduct, to which Mr. Urvan was bound, required immediate reporting of the types

of allegations Mr. Urvan now brings; and, (3) Mr. Urvan’s proxy challenge was an

additional opportunity for Mr. Urvan to have raised these allegations.143 As for

prejudice, the AMMO Entities point to AMMO’s costly efforts to integrate

GunBroker into its business, as well as the prejudice to AMMO shareholders who

invested in AMMO while Mr. Urvan was sitting on these claims.144

          Those facts may raise the specter of laches, but Mr. Urvan’s entitlement to

relief is not inconceivable. Reasonableness is inherently a fact-sensitive issue. Even

141
   Mellado, 2023 WL 8086840, at *11 (quoting Lebanon Cnty. Emps.’ Ret. Fund v. Collis, 287
A.3d 1160, 1194 (Del. Ch. 2022)).
142
      AMMO’s Mot. at 20-23.
143
      Id. at 24-25.
144
      Id. at 26.

                                          -28-
in the more factually nourished context of summary judgment, a laches defense is

“rarely granted.”145 Too, Mr. Urvan’s claims were brought within the analogous

statutes of limitation.146 “Delaware courts presume, in the absence of exceptional

circumstances, that an action filed within the analogous limitations period was

neither the product of unreasonable delay nor the cause of undue prejudice.”147 The

Court won’t disregard that presumption on only the limited facts now before it.

         3. The Claims Against AMMO and Speedlight:

             a. The Fraudulent Inducement Count is adequately pled.

         In Count I of his complaint, Mr. Urvan insists that AMMO and SpeedLight

fraudulently induced him to enter the Merger Agreement based on purported

misrepresentations contained in Merger Agreement Sections 5.7, 5.11, 5.15, and

5.26.148 This Count survives this stage.

         To support a claim for fraudulent inducement, a plaintiff must plead facts that

support an inference that:

                 (1) the defendant falsely represented or omitted facts that
                 the defendant had a duty to disclose; (2) the defendant
                 knew or believed that the representation was false or made
                 the representation with a reckless indifference to the truth;
                 (3) the defendant intended to induce the plaintiff to act or

145
      Meso Scale Diagnostics, LLC v. Roche Diagnostics GmbH, 62 A.3d 62, 79 (Del. Ch. 2013).
146
   The representations’ survival period expressly did not apply to fraud claims. Thus, it does not
operate as an analogue to a statute of limitations for Mr. Urvan’s claims. See MA § 9.9.
147
      Meso Scale, 62 A.3d at 79 (citing Whittington v. Dragon Grp., LLC, 991 A.2d 1, 9 (Del. 2009)).
148
      Urvan’s Compl. ¶¶ 128-35.

                                                -29-
                refrain from acting; (4) the plaintiff acted in justifiable
                reliance on the representation; and (5) the plaintiff was
                injured by its reliance.149

Additionally, to satisfy Rule 9(b), the complaint must allege: “(1) the time, place,

and contents of the false representation; (2) the identity of the person making the

representation; and (3) what the person intended to gain by making the

representations.”150 This is easily done when the challenged representations are

derived from a written contract.151

         The AMMO Entities concede that they have not challenged those elements r

the “Key Employees” representation in Section 5.15, instead relying on their laches

argument for that claim.152 That alone is enough to get this unified count through

the pleading stage.153 In any event, the AMMO Entities arguments are unpersuasive.

         The AMMO Entities broadly contend that Mr. Urvan wasn’t justified in

149
      Abry Partners V, L.P. v. F&W Acquisition LLC, 891 A.2d 1032, 1050 (Del. Ch. 2006).
150
   Abry Partners, 891 A.2d at 1050 (citing H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129, 145
(Del. Ch. 2003)).
151
   River Valley Ingredients, LLC v. Am. Proteins, Inc., 2021 WL 598539, at *4 (Del. Super. Ct.
Feb. 4, 2021) (quoting Prairie Cap. III, L.P. v. Double E Hldg. Corp., 132 A.3d 35, 62 (Del. Ch.
2015)).
152
   AMMO Entities’ Reply Brief in Further Support of their Motion to Dismiss Urvan’s Complaint
(hereinafter “AMMO’s Reply Br.”) at 14 n.8 (D.I. 62).
153
    inVentiv Health Clinical, LLC v. Odonate Therapeutics, Inc., 2021 WL 252823, at *4-6 (Del.
Super. Ct. Jan. 26, 2021) (“[A]t the pleading stage of a case, a trial judge is not a robed gardener
employing Rule 12(b)(6) as a judicial shear to prune individual theories from an otherwise
healthily pled claim or counterclaim.”); see also Envolve Pharm. Sols., Inc. v. Rite Aid Hdqtrs.
Corp., 2021 WL 855866, at *4 n.45 (Del. Super. Ct. Mar. 8, 2021) (“[I]t is not generally the Court’s
duty to dissect a single claim for either dismissal or rescue of its constituent theories of liability.”).

                                                  -30-
relying on the express contractual representations because he had access to

contradictory extra-contractual information. But “[a] buyer justifiably may rely on

contractual representations.”154 And as the AMMO Entities themselves recognize,

“[t]hrough the Anti-Reliance Provision, [Mr.] Urvan effectively disclaimed reliance

on extra-contractual representations.”155 Put differently, the parties agreed to rely

exclusively on the contents of the Merger Agreement’s representations. The AMMO

Entities are hard-pressed to now say that Mr. Urvan should have ignored those

representations in favor of outside information.

         The AMMO Entities’ representation-specific arguments regarding the falsity

element are likewise unavailing.         Beginning with Section 5.7’s “Litigation

Representation,” the AMMO Entities conflate distinct clauses within that

representation to limit Section 5.7’s scope to litigation that threatens the merger or

could give rise to a material adverse effect. In doing so, the AMMO Entities hope

to remove Ms. Hanrahan’s litigation from the Litigation Representation’s reach. But

Section 5.7 is not so limited.

         Section 5.7 lists three categories of litigation as within its scope. Section

5.7(a) covers litigation “against [AMMO] or any officer, director or employee of

154
    Aveanna Healthcare, LLC v. Epic/Freedom, LLC, 2021 WL 3235739, at *24 (Del. Super. Ct.
July 29, 2021).
155
      AMMO’s Mot. at 34.

                                          -31-
[AMMO] arising out of their employment or board relationship with [AMMO].”156

Section 5.7(b) contemplates litigation “that questions the validity of this Agreement

or the right of [AMMO] to enter into it, or to consummate the transactions

contemplated by this Agreement”157 And Section 5.7(c) discusses litigation “that

reasonably would be expected to have, either individually or in the aggregate, a

Material Adverse Effect.”158 This last option is set off with “or”.159 The AMMO

Entities aver that a litigation has to fall under both Section 5.7(a) and either 5.7(b)

or 5.7(c) to implicate this representation. Not so. The falsity of Section 5.7(a) is

enough to make the Litigation Representation false.

          The AMMO Entities next say Section 5.11’s “Related-Party Transaction

Representation” is inadequately pled under Rule 9(b) because Mr. Urvan’s

complaint based an integral assertion “on information and belief.”160 But the fact in

question is stated definitively elsewhere in Mr. Urvan’s complaint.161 The AMMO

Entities also suggest the disputed transaction was on market terms, making it

acceptable. But Section 5.11 has no qualifier that a related-party transaction must

156
      MA § 5.7(a).
157
      Id. § 5.7(b).
158
      Id. § 5.7(c).
159
      Id. § 5.7.
160
      AMMO’s Mot. at 39.
161
      Urvan’s Compl. ¶ 74.

                                         -32-
be unfair to AMMO to implicate the representation.162           The facts alleged by

Mr. Urvan, if proven, would make this representation untrue.

         Turning to the representations contained in Section 5.26, the AMMO Entities

raise factual issues about: (1) what AMMO—as opposed to its executives—was

required to report; (2) the accuracy of its financial statements; and, (3) the adequacy

of its internal controls.163 In this context, the AMMO Entities impermissibly seek to

use SEC filings to prove disputed facts. As discussed, the Court may properly notice

facts “not subject to reasonable dispute.”164 That does not permit a movant to

challenge a complaint’s factual allegations by relying on the truth of a public filing’s

contents.165 Taken as true, as they must in this posture, Mr. Urvan’s allegations

regarding the invalidity of AMMO’s SEC filings, financial statements, and internal

controls are a conceivable basis of fraudulent inducement. No more is required to

overcome a Rule 12(b)(6) motion.

         In sum, the uncontested falsity of Section 5.15 is enough to maintain Count I

in its entirety. Even if it weren’t, the AMMO Entities have not established that any

of Mr. Urvan’s fraudulent inducement theories are inconceivable. Accordingly, the

AMMO Entities’ motion is denied as to this Count.

162
      MA § 5.11(b)(i).
163
      AMMO’s Mot. at 40-44.
164
      Smart Local Unions, 2022 WL 17986515, at *9 n.114.
165
      Narrowstep, 2010 WL 5422405, at *6.

                                             -33-
            b. The Arizona Securities Act Count is adequately pled.

         Count III of Mr. Urvan’s complaint charges the AMMO Entities with

violations of ASA §§ 44-1991(A)(1)-(3). Those provisions make it unlawful to

(1) “[e]mploy any device, scheme or artifice to defraud”; (2) “[m]ake any untrue

statement of material fact, or omit to state any material fact necessary in order to

make the statements made, in the light of the circumstances under which they were

made, not misleading”; or (3) “[e]ngage in any transaction, practice or course of

business which operates or would operate as a fraud or deceit” in connection with

the sale of a security.166

         The AMMO Entities engage a three-fronted assault on Mr. Urvan’s statutory

claims.      First, they say the relevant misrepresentations are confined to those

expressed in the Merger Agreement, as opposed to extracontractual misstatements.

Second, they contend ASA Subsection 44-1991(A)(2) was not violated because Mr.

Urvan cannot prove a “material” misrepresentation. And third, they argue ASA

Subsections 44-1991(A)(1) and (A)(3) are inapplicable because those require a

fraudulent scheme in excess of discrete misrepresentations.          None of these

arguments warrant Count III’s dismissal.

         First, Golden v. ShootProof Holdings, LP167 instructs that anti-reliance and

166
      ARIZ. REV. STAT. ANN. §§ 44-1991(A)(1)-(3) (2021).
167
      2023 WL 2255953 (Del. Ch. Feb. 28, 2023).

                                             -34-
integration clauses may limit the scope of statutory claims even where reliance is not

an element of the statute, and the statute contains an anti-waiver provision.168 That

recent precedent considered a nearly identical statute and Mr. Urvan has offered no

compelling basis to diverge from its reasoning. In turn, Mr. Urvan might not be able

to base his ASA claims on extracontractual statements. Nevertheless, several of

Mr. Urvan’s ASA claims do find root in express contractual representations and thus

remain viable.

         The AMMO Entities’ argument regarding the materiality requirement is less

persuasive. They suggest that even if the representations Mr. Urvan now challenges

were false, that would not have stopped him from closing the deal.169 But Mr. Urvan

specifically pled that “[h]ad [he] known of the true state of facts concerning AMMO,

he would not have entered into the Merger Agreement or completed the Merger on

the terms set forth therein.”170 Once again, the AMMO Entities prematurely seek

resolution of a disputed fact.

         Mr. Urvan has a viable claim under A.R.S. § 44-1991(A)(2), so Count III

withstands the AMMO Entities’ motion.171 While the Court need dwell no further

on Mr. Urvan’s ASA claims, it is worth noting that Arizona federal courts have held

168
      Golden, 2023 WL 2255953, at *11-15, n.107.
169
      AMMO’s Mot. at 57-58.
170
      Urvan’s Compl. ¶ 149.
171
      See inVentiv Health, 2021 WL 252823, at *4-6; Envolve Pharm., 2021 WL 855866, at *4 n.45.

                                              -35-
“that liability under § 44–1991(A)(1) and (3) could not be premised solely on

assertions of misstatements and omissions.”172 To do so would conflate those two

subsections with (A)(2).173 That said, whether Mr. Urvan can prove fraud in excess

of misrepresentations is a question for another time.

             c. The Unjust Enrichment Count is adequately pled.

         The AMMO Entities challenge Mr. Urvan’s unjust enrichment charge in

Count V based on two primary theories. First, the AMMO Entities insist that they

committed no wrongdoing that made their enrichment unjust. For the reasons

detailed above, that cannot be decided at this stage. Second, they say the Merger

Agreement governs their relationship and so this quasi-contractual claim cannot go

forward. Despite the AMMO Entities’ argument, at this stage, the unjust enrichment

count survives as an alternative basis of relief.

         As this Court has explained, “[u]nder Delaware law, ‘[i]f a contract

comprehensively governs the parties’ relationship, then it alone must provide the

measure of the plaintiff’s rights and any claim of unjust enrichment will be

denied.’”174 Nevertheless, “the ‘contract itself is not necessarily the measure of [the]

172
   In re Allstate Life Ins. Co. Litig., 2013 WL 5161688, at *13 (D. Ariz. Sept. 13, 2013) (citing
Red River Res., Inc. v. Mariner Sys., Inc., 2012 WL 2507517, at *10 (D. Ariz. June 29, 2012)).
173
      In re Allstate, 2013 WL 5161688, at *13 (quoting Red River, 2012 WL 2507517, at *10).
174
    S’holder Representative Servs. LLC v. RSI Holdco, LLC, 2019 WL 2207452, at *8 (Del. Ch.
May 22, 2019) (alteration in original) (quoting RCS Creditor Tr. v. Schorsch, 2018 WL 1640169,
at *7 (Del. Ch. Apr. 5, 2018)).

                                              -36-
plaintiff’s right where the claim is premised on an allegation that the contract arose

from wrongdoing . . . and the [defendant] has been unjustly enriched by the benefits

flowing from the contract.’”175

         Where unjust enrichment serves as an alternative basis of relief, this Court

will not dismiss it. For example, in Great Hill Equity Partners IV, LP v. SIG Growth

Equity Fund I, LLLP,176 this Court explained that “if the Plaintiffs prevail on their

tort claims, unjust enrichment is unavailable, because an element of unjust

enrichment is lack of a remedy at law.”177 It continued, though, that if the plaintiffs

could show a wrongful enrichment at their expense but were “unable to implicate

the Moving Defendants in that fraud, unjust enrichment would be invoked.”178

Similarly, the Court in McPadden v. Sidhu stated, “[i]f plaintiff has pleaded and then

prevails in demonstrating that the same conduct results in both liability for breach of

. . . fiduciary duties and disgorgement via unjust enrichment, plaintiff then will have

to elect his remedies.”179

         Here, perhaps Mr. Urvan would have an adequate remedy at law if the Merger

Agreement was the product of fraud. But for now, it is at least conceivable that a

175
   S’holder Representative Servs., 2019 WL 2207452, at *8 (first and third alterations in original)
(quoting RCS Creditor Tr., 2018 WL 1640169, at *7).
176
      2014 WL 6703980 (Del. Ch. Nov. 26, 2014).
177
      2014 WL 6703980, at *28.
178
      Great Hill Equity Partners, 2014 WL 6703980, at *28.
179
      964 A.2d 1262, 1276 (Del. Ch. 2008).

                                               -37-
situation might arise where a tort-based remedy would not fully redress Mr. Urvan’s

alleged harm.180 The Court will not dismiss Count V until its inapplicability

becomes certain.

        4. The Claims Against the Individual Defendants:

          a. The Court has personal jurisdiction over the Individual
             Defendants.

        The AMMO Entities argue this Court lacks personal jurisdiction over the

Individual Defendants. As a preliminary matter, the Court has statutory jurisdiction

over the Individual Defendants pursuant to 10 Del. C. § 3114 and 6 Del. C. § 18-

109. The AMMO Entities’ argument on that point—or lack thereof—concedes as

much.     So, the remaining question is whether the constitutional due process

requirement is met. That is, whether “‘certain minimum contacts’ exist between the

defendant[s] and the forum state ‘such that the maintenance of the suit does not

offend traditional notions of fair play and substantial justice.’”181 Here, that standard

is met.

180
     For example, AMMO suggests it wouldn’t be able to satisfy a $140 million judgment, which
is the amount Mr. Urvan seeks. See AMMO’s Reply Br. at 12. So, it is at least possible that he
might seek damages from those Individual Defendants who benefitted from the merger but did not
themselves engage in tortious conduct.
181
    Illumina, Inc. v. Guardant Health, Inc., 2023 WL 1407716, at *14 (D. Del. Jan. 31, 2023)
(quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

                                            -38-
               i.   Mallory did not upend Delaware’s personal jurisdiction
                    jurisprudence.

         At the outset, Mr. Urvan’s argument regarding due process starts with a bold

proposition: “the historical two-prong test employed by Delaware courts to evaluate

whether they may exercise person jurisdiction over nonresident defendants is no

longer applicable when a consent statute is involved.”182 Mr. Urvan takes this

position based on Mallory v. Norfolk Southern Railway Co.,183 a June 2023 plurality

opinion from the United States Supreme Court. His stance, as of now, is incorrect.

         In Mallory, a divided Court subjected Norfolk Southern to Pennsylvania’s

jurisdiction based upon its much earlier holding in Pennsylvania Fire Insurance

Company of Philadelphia v. Gold Issue Mining & Mineral Company.184 The

Mallory Court explained that “Pennsylvania law is explicit that ‘qualification as a

foreign corporation’ shall permit state courts to ‘exercise general personal

jurisdiction’ over a registered foreign corporation, just as they can over domestic

corporations.”185 Then, harkening to Pennsylvania Fire, the Court ruled that “suits

premised on these grounds do not deny a defendant due process of law.”186 In other

words, a foreign corporation’s statutory consent to jurisdiction satisfies

182
      Urvan’s Opp’n Br. at 50.
183
      600 U.S. 122 (2023).
184
      243 U.S. 93 (1917).
185
      600 U.S. at 135 (quoting 42 PA. CONS. STAT. § 5301(a)(2)(i)).
186
      Mallory, 600 U.S. at 135.

                                               -39-
International Shoe’s due process requirement.

         Notably, the majority explicitly limited Mallory’s interpretation to

Pennsylvania’s unique statutory scheme.187 That scheme is atypically precise in

declaring that registering to do business constitutes consent to personal

jurisdiction.188 Delaware’s statute, in contrast, makes no such pronouncement.189

So, whether this state’s business registration requirements extract consent to

jurisdiction from registrants is a matter of statutory interpretation. Our Supreme

Court’s most recent guidance holds that they do not.

         In Genuine Parts, the Delaware Supreme Court faced this question head-on

in the light of the United States Supreme Court’s then-recent decision in Daimler

AG v. Bauman.190 The then-Chief Justice, writing for the majority, concluded,

“Delaware’s registration statutes must be read as a requirement that a foreign

corporation must appoint a registered agent to accept service of process, but not as

a broad consent to personal jurisdiction in any cause of action, however unrelated to

the foreign corporation’s activities in Delaware.”191                 This Court isn’t free to

187
      Id. at 135-36.
188
    Mallory v. Norfolk S. Ry. Co., 266 A.3d 542, 564 (Pa. 2021) (“[T]he precise issue presented in
this appeal may be peculiar to Pennsylvania. . . . [M]ost state statutes do not provide expressly that
the act of registering to do business constitutes a specific basis upon which a court may assert
general jurisdiction over all claims against a foreign corporation.”), vacated, 600 U.S. 122 (2023).
189
      Genuine Parts Co. v. Cepec, 137 A.3d 123, 142 (Del. 2016).
190
      137 A.3d at 125-26 (discussing Daimler AG v. Bauman, 571 U.S. 117 (2014)).
191
      Genuine Parts, 137 A.3d at 127.

                                                -40-
disregard that clear instruction.192

         The Court is cognizant that much of the reasoning in Genuine Parts was based

upon due process concerns now quelled by Mallory’s reinvigoration of Pennsylvania

Fire.193 But the opinion was also grounded in more routine principles of statutory

interpretation and guided by policy considerations.194 It’s not this Court’s place to

second-guess Genuine Parts’ careful legal construct simply because an outside view

of a single factor has been altered. Rather, only the Delaware Supreme Court may

revisit its own interpretation of the key Delaware statutes. Until then, Genuine Parts

controls.

              ii.    The Individual Defendants have sufficient minimum contacts to
                     confer personal jurisdiction.

         With the understanding that International Shoe’s due process test still applies,

the Individual Defendants’ contacts with Delaware satisfy it. How?

         Besides acting as officers and directors of a Delaware corporation, the

Individual Defendants—in their corporate roles—formed a new Delaware limited

liability company to effect the merger. Also, while Gemini itself was a Nevada

limited liability company, GunBroker—the true target of the acquisition—was “a

192
   In re Tesla Motors, Inc. S’holder Litig., 2020 WL 553902, at *6 (Del. Ch. Feb. 4, 2020) (“This
Court follows Supreme Court precedent . . . .” (citing Am. Int’l Grp., Inc. v. Greenberg, 965 A.2d
763, 818 (Del. Ch. 2009))).
193
      Genuine Parts, 137 A.3d at 138, 141-42.
194
      Id. at 139-41, 143-44.

                                                -41-
group of Delaware companies.”195 Moreover, the Merger Agreement is laden with

references to Delaware law and designates Delaware as the applicable forum and

source of law.          And the Individual Defendants’ alleged wrongs are directly

connected to their positions as Delaware officers and directors.            In sum, the

Individual Defendants can hardly be surprised at being required to defend their

actions in this state.

            Hazout v. Tsang Mun Ting supports personal jurisdiction here.196 The Hazout

defendant was the president, CEO, and director of a Canada-based Delaware

corporation.197 He served as the lead negotiator in the transfer of that Delaware

corporation to a Hong Kong-based group of investors.198 The series of key operative

agreements called for the application of Delaware law in a Delaware forum.199 After

the defendant kept $1 million of the plaintiff’s money without completing the

transfer, the plaintiff sued him in our Superior Court.200 The defendant insisted

Delaware had no basis for the exercise of personal jurisdiction over him.201

            In its due process analysis, the Supreme Court first noted that the defendant

195
      Urvan’s Compl. ¶ 2.
196
      134 A.3d 274 (Del. 2016).
197
      Hazout, 134 A.3d at 277.
198
      Id.
199
      Id.
200
      Id.
201
      Id.

                                             -42-
availed himself of Delaware law by being an officer and director of a Delaware

corporation.202 It continued, “[m]ore important, the claims against Hazout involve

his actions in his official capacity of negotiating contracts that involved the change

of control of a Delaware public corporation.”203 Too, the Court noted that the

relevant agreements “reflected the parties’ choice to use the law of Delaware as their

common language of commerce, and their understanding that litigation over later

contractual differences could ensue in Delaware.”204 For those reasons, the Court

concluded, “Hazout cannot fairly say he did not foresee that he would be subject to

litigation in Delaware over his conduct in connection with negotiating the Change

of Control Agreements.”205 The Hazout Court didn’t even consider it a close case.206

            The AMMO Entities’, in opposition, chiefly rely upon BAM International,

LLC v. MSBA Group Inc.207 There, the parties’ dispute centered on an escrow

agreement—not the merger of Delaware entities.208 The only real connection to

Delaware was the relevant individuals’ status as Delaware officers and the

202
      Hazout, 134 A.3d at 292.
203
      Id. at 293.
204
      Id.
205
      Hazout, 134 A.3d at 293-94.
206
      Id. at 292.
207
      2021 WL 5905878 (Del. Ch. Dec. 14, 2021).
208
      BAM, 2021 WL 5905878, at *3.

                                            -43-
agreement’s forum-selection clause.209              The Court there added, “the actions

allegedly giving rise to [the defendants’] liability were not taken as officers of [the

Delaware entity].”210         It described the escrow agreement as “a garden-variety

commercial contract, rather than one necessarily implicating Delaware interests.”211

That is notably distinct from the Delaware-focused Merger Agreement here.

            Due process is satisfied here. The merger at issue here took advantage of

Delaware law both in its preparation—forming SpeedLight as a Delaware limited

liability company—and its execution—referring extensively to Delaware law in the

terms of the Merger Agreement. To the extent the Individual Defendants were

involved in the negotiation, approval, and execution of this merger, they cannot

fairly claim they did not foresee potentially litigating in Delaware. Thus, as in

Hazout, requiring the Individual Defendants to defend themselves here “does not

‘offend traditional notions of fair play and substantial justice.’”212 Accordingly, this

Court’s exercise of personal jurisdiction over the Individual Defendants is proper.

               b. The Aiding and Abetting Claim is deficient.

            Notwithstanding this Court’s jurisdiction over the Individual Defendants,

Mr. Urvan’s common law aiding and abetting claim is untenable. It is barred by the

209
      Id. at *10.
210
      Id.
211
      BAM, 2021 WL 5905878, at *9.
212
      Hazout, 134 A.3d at 294 (quoting Int’l Shoe, 325 U.S. at 316).

                                                -44-
intra-corporate conspiracy doctrine. As this Court has explained:

                It is basic in the law of conspiracy that you must have two
                persons or entities to have a conspiracy. A corporation
                cannot conspire with itself any more than a private
                individual can, and it is the general rule that the acts of the
                agent are the acts of the corporation. Accordingly, it is
                entirely sensible that, as a general rule, agents of a
                corporation cannot conspire with one another
                or aid and abet each other’s torts. The only instance
                where this general rule will not apply is when a corporate
                officer steps out of her corporate role and acts pursuant to
                personal motives.213

         In the face of this principle, Mr. Urvan attempts to argue the Individual

Defendants were not truly acting as AMMO’s agents when they allegedly assisted

AMMO in defrauding him. He does so via a three-sentence argument suggesting

the Individual Defendants’ real motive in making the challenged representations was

their desire to hide their purported wrongdoing.214 But if a cover-up was the

Individual Defendants’ true intention, engaging in a significant merger and making

affirmative misrepresentations in the process was a poor way of going about it. The

Individual Defendants had at least two much safer options. First, they could have

simply not acquired GunBroker. Second, they could have declined to make any

representations as to these issues instead of risking the very litigation that is now

dredging up these unflattering facts. To the extent the Individual Defendants

213
    Anschutz Corp. v. Brown Robin Cap., LLC, 2020 WL 3096744, at *17 (Del. Ch. June 11, 2020)
(internal quotation marks and citations omitted).
214
      Urvan’s Opp’n Br. at 37.

                                             -45-
participated in these alleged misrepresentations, it seems apparent that they were

trying to help get AMMO a favorable deal, not hide misdeeds. So says Mr. Urvan

himself.

         In his complaint, Mr. Urvan alleged that “AMMO and SpeedLight engaged in

intentional fraud to induce Urvan to consummate the Merger.”215 That fraud is what

Mr. Urvan alleges the Individual Defendants countenanced.216 Even now, Mr. Urvan

argues:

                   [The AMMO Entities’] fraudulent scheme included efforts
                   to conceal other misconduct from [him], including
                   AMMO’s internal financial control weaknesses, insider
                   trading, and OSHA’s active investigation of the
                   Whistleblower Complaint. All of this was done for the
                   purpose of manipulating [him] into agreeing to a deal in
                   which a majority of the consideration he received was in
                   the form of AMMO equity, not cash.217

         It cannot be maintained that the fraud’s purpose was to get an unfairly

beneficial deal for AMMO but, at the same time, the people who put that deal

together had abandoned their corporate roles in order to benefit themselves. Because

the Court will not draw unreasonable inferences in the non-movant’s favor, the intra-

corporate conspiracy doctrine stands in the way of Count II.

215
      Urvan’s Compl. ¶ 137 (emphasis added).
216
      Id. ¶ 138.
217
      Urvan’s Opp’n Br. at 46.

                                               -46-
               c. The Unjust Enrichment Claim is adequately pled.

            The AMMO Entities make an argument against Mr. Urvan’s unjust

enrichment claim that is unique to the Individual Defendants. They say that any

benefit to the Individual Defendants is too attenuated to conceivably provide relief

to Mr. Urvan. At this stage, this argument is unavailing.

            The lone case the AMMO Entities cite for this point is OptimisCorp v.

Atkins.218 There, this Court recited that “[a]n enrichment ‘must not be speculative,

attenuated, or too indirect to support a relationship to the loss.’”219 The purpose of

that rule is to ensure the Court can accurately undo the unjust enrichment. 220 In

OptimisCorp, the plaintiff, after discovery, alleged a “butterfly effect[]” theory of

damages based on the defendants’ subsidiary’s competitor being harmed by the

defendants’ wrongful conduct.221 The plaintiff claimed that reduction in competition

necessarily benefitted the defendants.222 The circumstances and allegations here are

quite different.

            There is a reasonable inference that the directors and officers involved in this

218
      2023 WL 3745306 (Del. Ch. June 1, 2023).
219
   OptimisCorp, 2023 WL 3745306, at *25 (quoting LVI Grp. Invs., LLC v. NCM Grp. Hldgs.,
LLC, 2019 WL 7369198, at *31 (Del. Ch. Dec. 31, 2019)).
220
   OptimisCorp, 2023 WL 3745306, at *25 (quoting Vichi v. Koninklijke Philips Elecs. N.V., 62
A.3d 26, 61 (Del. Ch. 2012)).
221
      OptimisCorp, 2023 WL 3745306, at *25.
222
      Id.

                                              -47-
merger, most of whom were AMMO stockholders, received some quantifiable

benefit from the transaction. Of course, Mr. Urvan will need to prove that before he

can recover; but the fact that he hasn’t yet done so isn’t fatal. Greater factual

development is needed before ruling that there is no traceable connection between

the Individual Defendants’ allegedly unjust gains and Mr. Urvan’s losses.

   B. MR. URVAN’S MOTION TO DISMISS AMMO’S AMENDED COMPLAINT

      1. The Fraudulent Inducement Claims:

          a. The Material Agreements Representation Count is adequately
             pled.

      Count IV of AMMO’s amended complaint alleges that Section 4.18’s

“Material Agreements” representation was untrue because the Verska Agreement

was undisclosed. AMMO contends that the Verska Agreement divided Mr. Verska’s

loyalty and thus conflicted with Gemini’s post-closing operations. Mr. Urvan

responds that the Verska Agreement did not create obligations as contemplated by

Section 4.18. He continues that AMMO’s allegations as to the Verska’s Agreement

are speculative. And he concludes that he had no knowledge of any fraud. But none

of those airings gain him dismissal at this stage.

      As an initial matter, Mr. Urvan reads Section 4.18 too narrowly. It doesn’t

say that no employees have explicit obligations under a written contract that would

directly interfere with their role at AMMO. Instead, it says no Gemini employee “is

obligated under any contract (including licenses, covenants or commitments of any
                                         -48-
nature) or other agreement” in a way that would conflict with their duties to

AMMO.223         AMMO’s amended complaint alleges that there was an implicit

agreement between Mr. Verska and Mr. Urvan baked into the Verska Agreement

that Mr. Verska would promote Mr. Urvan’s personal interests. If AMMO proves

such an accord existed, it might well fit within Section 4.18’s broad language.

         Mr. Urvan’s argument that the existence of any such side agreement is

speculative is inefficacious at this point. Though AMMO might have an uphill battle

in proving this allegation, it is no doubt conceivable. At least three facts tend to

support a reasonable inference that Mr. Verska agreed to act at Mr. Urvan’s behest

in conflict with his duties to GunBroker’s new owner. First, the $1 million annual

payment under the Verska Agreement was quadruple Mr. Verska’s normal salary.

Second, Mr. Verska allegedly undertook actions that were inconsistent with

AMMO’s desires and that promoted the interest of “Urvan era” employees and

vendors. Third, when Mr. Verska was fired for insubordination, Mr. Urvan stopped

making payments under the Verska Agreement. Taken together, those facts raise a

reasonable inference that Mr. Urvan was truly paying for Mr. Verska’s servility so

that Mr. Urvan could surreptitiously influence GunBroker’s operations.

         Last, Mr. Urvan’s argument regarding knowledge is misaimed. It eyes what

Mr. Urvan knew about Mr. Verska’s activity post-closing—but that is not the target.

223
      MA § 4.18(a).

                                        -49-
The relevant knowledge is Mr. Urvan’s knowledge of the existence of his alleged

pre-closing agreement. If an undisclosed agreement between Mr. Urvan and Mr.

Verska existed, Mr. Urvan would necessarily have had knowledge of it.

         In sum, Mr. Urvan merely raises factual disputes about the truth of AMMO’s

allegations. While the evidence may ultimately vindicate him, deciding so isn’t the

Court’s role on a motion to dismiss. Instead, the question is whether AMMO’s

allegations, if proven, might conceivably give rise to relief. They could. So, the

answer to that question is yes.

            b. The Finder’s Fee Representation Count is adequately pled.

         Count V of AMMO’s amended complaint alleges Mr. Urvan lied in

Section 4.27’s “Finder’s Fee” representation. It claims that Mr. Urvan owed

undisclosed fees to HL and Mr. Hayden. Mr. Urvan first responds that AMMO’s

amended complaint alleged Mr. Urvan owed fees to HL and Mr. Hayden when

Section 4.27 only mentions fees owed by Gemini.224 He then argues that AMMO

failed to adequately plead that any fees were owed to HL or Mr. Hayden. Mr. Urvan

next suggests that AMMO didn’t sufficiently plead that Mr. Urvan knew about fees

owed to HL or Mr. Hayden. And last, Mr. Urvan says, even if fees were owed to

HL or Mr. Hayden, that did not damage AMMO. None of these arguments deliver

dismissal.

224
      See AMMO’s Am. Compl. ¶ 73.

                                         -50-
         At the outset, there appears some merit to Mr. Urvan’s argument regarding

the fees purportedly owed to HL. The HL agreement had specific requirements for

a tail fee. AMMO has not pled that those requirements were met. Moreover, the

fact that HL has not sought any fees in the years since the merger belies AMMO’s

argument that HL is entitled to a payment. That said, the failure of one theory

supporting a larger count isn’t decisive on a motion to dismiss.225

         Turning to the fees owed to Mr. Hayden, AMMO’s pleading that “the

representation failed to disclose that Mr. Urvan owed Mr. Hayden a finder’s fee,”226

does not necessitate dismissal. If Section 4.27 had read “Gemini owes no fee to a

broker, finder or investment banker,” then perhaps only pleading that Mr. Urvan

owed a fee would be deficient. But the actual language of Section 4.27 is “no broker,

finder or investment banker is entitled to any brokerage, finder’s or other fee or

commission.”227 In other words, the focus of this representation is on the entity to

which a fee is owed, not who owes the fee. Also, the representation contemplates

“arrangements made by or on behalf of [Gemini].”228 Based on that language,

Mr. Urvan owing a fee under arrangements made on Gemini’s behalf would violate

the representation. Seemingly, any arrangements Mr. Urvan made to sell Gemini

225
      See inVentiv Health, 2021 WL 252823, at *4-6; Envolve Pharm., 2021 WL 855866, at *4 n.45.
226
      AMMO’s Am. Compl. ¶ 73.
227
      MA § 4.27.
228
      Id. (emphasis added).

                                              -51-
would have been made on Gemini’s behalf.

            As for whether Mr. Urvan actually owes Mr. Hayden a fee, it is at least

reasonably conceivable. Mr. Hayden is currently litigating this very issue against

Mr. Urvan in federal court.229 At least some of Mr. Hayden’s claims in that action

are proceeding to trial.230 Though Mr. Urvan disputes Mr. Hayden’s claims, that

isn’t enough to shoulder Mr. Urvan’s inconceivability burden.

            About knowledge, Mr. Urvan suggests that even if Mr. Hayden’s post-merger

claim to a fee succeeds, Mr. Urvan inherently did not know about that payment

obligation pre-merger. If actual knowledge of falsity was required for fraudulent

inducement, Mr. Urvan’s argument might persuade; but a reckless disregard for truth

suffices.231 As the individual who engaged with Mr. Hayden,                   Mr. Urvan would

have had the facts necessary to determine whether Mr. Hayden was entitled to a fee.

Accordingly, it is conceivable that Mr. Urvan either knew or should have known that

Mr. Hayden would be owed a payment following the merger. Again, a motion to

dismiss is not the setting to decide factual disputes.

            Finally, Mr. Urvan alleges that AMMO failed to adequately232 plead damages.

229
      AMMO’s Am. Compl. ¶ 30.
230
      Id.
231
      Abry Partners, 891 A.2d at 1050.
232
    Urvan suggests some “lack of consensus within Delaware case law on whether fraud damages
must be pled with ‘particularity.’” Urvan’s Reply Brief in Further Support of his Motion to
Dismiss AMMO’s Amended Complaint at 14 n.11 (D.I. 82). Chancery Court Rule 9(b) provides
that “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall
                                               -52-
Not so. In multiple places in its amended complaint, AMMO alleged that it “would

not have closed the Merger on the terms it did had it known the truth.”233 In its

opposition brief, AMMO expounds that it could have pushed for a better deal had it

known about Mr. Urvan’s extensive efforts to sell Gemini and that it may have

reconsidered working with an individual who had trouble maintaining business

relationships.234 That is sufficient to state this claim.

         2. The Arizona Securities Act Count is adequately pled.

         In Count VI of AMMO’s amended complaint, AMMO brings a claim under

ASA § 44-1991(A)(2), which is the statutory equivalent of a fraudulent inducement

claim.      As one would expect, Mr. Urvan first contends there were no

misrepresentations in the Merger Agreement. That argument is no more persuasive

under this heading. Mr. Urvan’s only other argument is that Gemini was not a

“security” within the meaning of the statute because it was wholly owned by

AMMO.

         AMMO doesn’t contest that point. Instead, AMMO says that the alleged

be stated with particularly.” Ch. Ct. R. 9(b) (emphasis added). Our Supreme Court’s most recent
explication on this tells us, “[t]he factual circumstances that must be stated with particularity refer
to the time, place, and contents of the false representations; the facts misrepresented; the identity
of the person(s) making the misrepresentation; and what that person(s) gained from making the
misrepresentation.” Liborio III, L.P. v. Artesian Water Co., Inc., 2023 WL 6614194, at *10 (Del.
Oct. 11, 2023) (citation omitted). Notably, the elevated pleading standard is inapplicable to the
averment of damages.
233
      AMMO’s Am. Compl. ¶¶ 8, 118.
234
      AMMO’s Opp’n Br. at 30 n.12.

                                                 -53-
misrepresentations in the Merger Agreement were made “in connection with a

transaction . . . involving” the transfer of AMMO stock, 235 bringing the Merger

Agreement within the ASA’s reach.

         AMMO’s argument would be more easily accepted if it were contained in the

amended complaint. Instead, AMMO’s amended complaint only alleged that the

Gemini membership interests were securities. 236 Fortunately for AMMO, Court of

Chancery Rule 8 counsels forgiveness toward pleadings.237 The facts of the merger

detailed in AMMO’s amended complaint give adequate notice that securities were

involved. Moreover, Mr. Urvan can hardly claim he is prejudiced considering he is

bringing nearly identical statutory claims based on the same transaction. So, the

amended complaint’s imprecision does not warrant dismissal of Count VI.

         3. The Indemnification Claims:

            a. The Triton Litigation Count is adequately pled.

         AMMO seeks payment of its counsel fees from the Triton Litigation based on

Section 9.5(a) of the Merger Agreement.

         Mr. Urvan contests that obligation in two ways. First, he insists that only

235
      See ARIZ. REV. STAT. ANN. § 44-1991 (2021).
236
      See AMMO’s Am. Compl. ¶ 121.
237
    Ch. Ct. R. 8(f) (“All pleadings shall be so construed as to do substantial justice.”); see also In
re McDonald’s Corp. Stockholder Deriv. Litig., 289 A.3d 343, 375-76 (Del. Ch. 2023) (explaining
this Court’s relatively indulgent pleading standards).

                                                -54-
Section 9.5(f)—and not Section 9.5(a)—applies to the Triton Litigation. Second, he

says that the relevant requirement that “in the reasonable opinion of counsel to the

Indemnified Party . . . there exists a conflict of interest between the Indemnifying

Party and the Indemnified Party that cannot be waived” has not been met.

Mr. Urvan’s burden of demonstrating that AMMO’s interpretation of the relevant

provisions is unreasonable has not been met.

            Mr. Urvan’s suggestion that Section 9.5(f) unambiguously cancels out all of

the provisions of Section 9.5(a) with regard to the Triton Litigation is unconvincing.

Section 9.5(a)’s relevant language reads: “If any Indemnified Party receives notice

of the assertion or commencement of any Action made or brought by any Person

who is not a party to this Agreement or an Affiliate of a party to this Agreement or

a Representative of the foregoing (a “Third-Party Claim”) . . . .”238 The provision

then explains the applicable notice procedures.239 Mr. Urvan posits that “receiv[ing]

notice” is part of the definition of “Third-Party Claim,” meaning Third-Party Claims

must be initiated after the merger; but, even if that is itself a reasonable

interpretation, it is certainly not the only one. It’s also reasonable to interpret the

language to mean “Third-Party Claim” is simply shorthand for the defined type of

“Action”—i.e., one brought by a non-party. Under that reading, the Triton Litigation

238
      MA § 9.5(a).
239
      Id.

                                            -55-
would meet the definition of a Third-Party Claim.

         Next, Mr. Urvan proposes that Sections 9.5(a) and 9.5(f) are in conflict. In

his view then, only one or the other can apply to any single Action. Not so.

Mr. Urvan incorrectly suggests that a more specific provision in a contract entirely

displaces a general provision.         But that’s not the rule.     Rather, “[u]nder the

general/specific canon, ‘[s]pecific language in a contract controls over general

language, and where specific and general provisions conflict, the specific provision

ordinarily qualifies the meaning of the general one.’”240 So, the existence of Section

9.5(f) doesn’t nullify Section 9.5(a) with regard to the Triton Litigation. Rather, the

provisions should be read harmoniously and Section 9.5(f) might only trump Section

9.5(a) where there is true conflict.

         Nothing in Section 9.5(f) precludes AMMO from being represented in the

Triton Litigation. The only limitation was that AMMO could not “terminate any of

the legal counsel currently handling the Triton Matter.”241 But AMMO didn’t

terminate Culhane Meadows; the firm withdrew. Accordingly, it is reasonable to

interpret the Merger Agreement to allow AMMO to retain its own counsel for the

Triton Litigation pursuant to the terms of Section 9.5(a).

         The remaining question is whether a non-waivable conflict existed such that

240
    Crispo v. Musk, 2023 WL 7154477, at *5 (Del. Ch. Oct. 31, 2023) (alteration in original)
(quoting DCV Hldgs., Inc. v. ConAgra, Inc., 889 A.2d 954, 961 (Del. 2005)).
241
      MA § 9.5(f).

                                            -56-
Mr. Urvan’s obligations to pay AMMO’s counsel fees under Section 9.5(a) was

triggered. AMMO raises at least a reasonable inference of that.

         The relevant letter sent by Culhane Meadows discusses specific limitations on

that firm’s contemporaneous representation of both AMMO and Mr. Urvan based

upon their incompletely aligned interests.242 And, based on the contents of the letter,

Culhane Meadows didn’t give the parties the option to waive the conflict. Instead,

it said “we believe the most prudent action is to withdraw as counsel for the AMMO

Companies in the Cobb Action and permit them to be separately represented.”243

That raises a fair inference that “in the reasonable opinion of counsel to the

Indemnified Party . . . there exists a conflict of interest between the Indemnifying

Party and the Indemnified Party that cannot be waived.”244 Accordingly, Count I of

AMMO’s amended complaint is adequately pled.

             b. The Tenor Litigation Count is adequately pled.

         Count II of AMMO’s amended complaint seeks fees related to an appeal bond

in the Tenor Litigation. Mr. Urvan’s counter lacks merit. Despite already having

paid the principal amount that AMMO requested—months after the request and only

once AMMO filed suit— Mr. Urvan wants to avoid paying associated interest and

242
      See Urvan’s Mot., Ex. 4 at 1-2.
243
      Urvan’s Mot., Ex. 4 at 2.
244
      MA § 9.5(a).

                                          -57-
fees. His lone argument is that he received insufficient notice under Section 9.5(c).

          As a preliminary matter, the Tenor Litigation pre-existed the merger and was

expressly contemplated by the Merger Agreement’s indemnification provisions.245

Also, Section 9.5(c)’s notice requirements extend to the Direct Claim itself, not each

individual Loss sustained because of the Direct Claim.246

          In April 2023, AMMO contacted Mr. Urvan about the appeal bond premium

and sent Mr. Urvan the invoice and the related letter of credit.247 Mr. Urvan

disclaimed responsibility for the payment.248 After repeatedly seeking confirmation

from Mr. Urvan that he would pay, AMMO eventually paid the bill itself on

May 24, 2023.249 Then, after AMMO filed its amended complaint, Mr. Urvan

reimbursed the $38,750 premium in October 2023.250

          In essence, Mr. Urvan argues that AMMO needed to provide separate notice

of each cost it incurred related to the Tenor Litigation. But there’s nothing in

Section 9.5(c) that supports that view. To the contrary, the language that the notice

“shall indicate the estimated amount, if reasonably practicable, of the Loss that has

245
      Id. §§ 1.38, 9.2(e).
246
      Id. § 9.5(c).
247
      AMMO’s Am. Compl. ¶ 49.
248
      AMMO’s Am. Compl. ¶ 50.
249
      Id. ¶¶ 52-53.
250
      Urvan’s Mot., Ex. 6.

                                          -58-
been or may be sustained by the Indemnified Party” suggests a one-time notice.251

AMMO provided notice of the appeal bond costs in April 2023. Mr. Urvan didn’t

accept responsibility until October. So, even if the Indemnifying Party’s thirty-day

period to respond to the notice is a prerequisite to a lawsuit as Mr. Urvan contends,

that period expired.        Accordingly, Count II of AMMO’s amended complaint

survives Mr. Urvan’s challenge.

             c. The Fee-Shifting Count is adequately pled.

         Finally, there’s the issue of whether AMMO’s Count III claim for first-party

fee-shifting can survive. It can. Mr. Urvan first says this count must go because he

wasn’t given adequate notice under Section 9.5(c).252 Again, he fails.

         The enforcement costs that AMMO seeks under this count are being incurred

by this very litigation. Prior to this lawsuit commencing, there was nothing for

AMMO to provide notice of. What’s more, all of the relevant details required by

Section 9.5(c)’s notice provision are within Mr. Urvan’s knowledge as the

counterparty.

         Mr. Urvan’s other argument is just as feeble. In his view, this indemnification

claim is unripe and without the subject matter jurisdiction of this Court because

AMMO’s entitlement to fees is dependent on the outcome of this litigation. For this,

251
      MA § 9.5(a).
252
      Urvan’s Mot. at 52.

                                           -59-
Mr. Urvan relies primarily on a cramped read of LaPoint v. AmerisourceBergen

Corp.253 There, the Supreme Court held that indemnification claims “do not accrue

until the underlying claim is finally decided” but did so in a very different context.254

            In LaPointe, the plaintiff filed suit in the Court of Chancery for a breach of

contract in 2004. The claim did not fully resolve until 2007.255 Shortly after that

resolution, the prevailing party sought contractual indemnification.256 When the

request was rejected, the indemnitee sued in Superior Court.257 The Superior Court

ruled that the indemnification claim should have been brought during the Chancery

action and that the claim was outside the three-year statute of limitation because it

accrued in 2004.258 The Supreme Court held that waiting for the underlying

litigation to resolve did not render the indemnification claim time-barred.259 So,

LaPoint only stands for the proposition that a party is allowed to bring a subsequent

action for fee-shifting, not that it is disallowed from seeking fee-shifting in the initial

action.

253
      970 A.2d 185 (Del. 2009).
254
      LaPoint, 970 A.2d at 198.
255
      Id. at 189.
256
      Id.
257
      LaPoint, 970 A.2d at 189-90.
258
      Id. at 190-91.
259
      Id. at 197-98.

                                             -60-
          Mr. Urvan also cites Batty v. UCAR International Inc.260 There, this Court

dismissed an indemnification claim without prejudice, finding it premature.261 But

it appears from context that the Batty plaintiff was trying to obtain actual payment

on her indemnification claim before the case resolved.262

          Here, AMMO acknowledges it must await the end of this litigation to recover

on this Count.263 And, since Batty, this Court has regularly maintained fee-shifting

claims in the same action upon which they are dependent.264 There’s no reason to

depart from that approach here.265

          At bottom, the uncertainty concerns that undergird ripeness are weak when

the chief uncertainty is the resolution of the current litigation.266 Compared to the

obvious risk of wasteful litigation if AMMO is forced to file a separate action to

pursue its fees, it is better to keep Count III alive.

260
      2019 WL 1489082 (Del. Ch. Apr. 3, 2019).
261
      Batty, 2019 WL 1489082, at *9.
262
      See id. (“Batty argues that the phrase ‘in seeking’ in Section 9 creates a right to advancement.”).
263
      AMMO’s Opp’n Br. at 52.
264
    See LPPAS Representative v. ATH Hldg., 2022 WL 94610, at *1 (Del. Ch. Jan. 10, 2022); AB
Stable VIII v. Maps Hotels & Resorts One, 2020 WL 7024929, at *100 (Del. Ch. Nov. 30, 2020),
aff’d, 268 A.3d 198 (Del. 2021); Manti Hldgs. v. Authentix Acq., 2020 WL 4596838, at *9 (Del.
Ch. Aug. 11, 2020), aff’d, 261 A.3d 1199 (Del. 2021).
265
   Urvan’s postulation that the defendants in those post-Batty cases may not have raised ripeness
ignores the fact that the Court will raise a lack of subject matter jurisdiction sua sponte.
266
   See, e.g., Benefytt Techs., Inc. v. Capitol Specialty Ins. Corp., 2022 WL 16504, at *9 (Del.
Super. Ct. Jan. 3, 2022).

                                                   -61-
                           V. CONCLUSION

     For the reasons stated above, the AMMO Entities’ Motion to Dismiss is

GRANTED in part, DENIED in part, and Mr. Urvan’s Motion to Dismiss is

DENIED.

     IT IS SO ORDERED.

                                             /s/ Paul R. Wallace
                                             Paul R. Wallace, J.

                                  -62-