not have any commitments for financing and there can be no assurance that we will be able to secure sufficient financing to implement our business strategy and comply with our contractual commitments.
(emphasis added).Elsewhere in the report, Adrenalina states: “[w]e have not generated sufficient revenues tocover our operating expenses,” and “
[o]ur current financial condition has raised doubt regarding our ability to continue as a growing concern.”
4. Of course, Adrenalina did not disclose any of this to Ms. Gomez or herrepresentatives when it pitched the idea of a worldwide license just nine months earlier. Nordid they disclose it to the investing public. In its Annual Report, Adrenalina makes the startlingadmission: “
We are not in compliance with the reporting requirements as established by the rules and regulations promulgated by the Securities and Exchange Commission.
. . .We have not filed any required reports since the quarter ended September 30, 2008.” HadAdrenalina been forthcoming with its financial problems, Ms. Gomez would never have goneinto business with Adrenalina, or its Chairman- a man dubbed by the Wall Street Journal in2006 as “Worst CEO of the Year.”5. Over the past fourteen years, Ms. Gomez (now 21) has worked hard building animpressive career as an actress and singer. Her popularity and unblemished reputation havetranslated into one of the most sought after celebrity brands. To protect her valuable brand,the license expressly required that Adrenalina conduct its business “in a manner consistentwith the high reputation” of Ms. Gomez, and that it refrain from any conduct that might reflectnegatively on Ms. Gomez or her brand. The license also required that Adrenalina providesufficient capital to ensure payment of its bills, invest heavily in advertising, and employ “bestcommercially reasonable efforts” to maximize sales, marketing and distribution. Having failedto secure the necessary financing, Adrenalina could not, and did not, meet any of theseobligations.6. Specifically, in March of this year, Ms. Gomez learned for the first time ofAdrenalina
s financial problems when her representatives were contacted by a principalsupplier concerning monies owed by Adrenalina. That supplier has since sued Adrenalina for