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Innofone.com files complaint against Cogent Capital connected to equity swap transaction
By Sheri Kasprzak
New York, March 22 - Innofone.com, Inc. said it has filed a complaint in a U.S. district court against Cogent Capital Financial LLC; Cogent Capital Investments, LLC; Cogent Capital Group, LLC; Gregory L. Kofford; Mark W. Holden; and Investors Bank & Trust Co. to rescind a $50 million equity swap financing transaction completed in June 2006.
Innofone.com alleges that Cogent, the holders of the $50 million facility, led the company to believe that the Securities and Exchange Commission would approve the registration statement related to the equity securities associated with the swap transaction. The company is suing escrow agent Investors Bank & Trust because the agent is holding stocks, bonds and cash related to the transaction.
"The complaint alleges that during the negotiations of the swap transaction, the Cogent defendants emphatically assured the company that the commission [SEC] had approved these types of transactions before, that they had the experience to structure this transaction so that the commission would approve the registration of the swap transaction securities and that they had been successful on prior occasions," said a form 8-K Innofone filed with the SEC on Thursday.
"As of the date of the company's complaint, however, the commission has repeatedly refused to approve the registration of the swap transaction securities as a result of the serious questions about what the commission views as the fundamentally flawed structure and substance of the transaction."
The complaint was filed in the U.S. District Court for the Central District of California.
Innofone said in the 8-K that it hopes to rescind the transaction and is also seeking $25 million in damages.
Based in Santa Monica, Calif., Innofone.com develops internet protocol version 6 technologies used to upgrade the existing internet.
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