Party Statement: McCoy vs. Ambature LLC

On May 08, 2014 a Party Statement was filed involving a dispute between Mccoy, Connie, Mccoy, Wallace W, Wallace W Mccoy As Trustee Of The Wallace W Mccoy Trust, and Ambature Inc, Beyers, Joseph W, Gilbert, Douglas James, Mody, Neal, for Civil - Unlimited in the District Court of San Diego County.

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1 HOLLAND & KNIGHT LLP
Joel M. Athey (State Bar No. 214399)
2 Nicholas B. Melzer (State Bar No. 246356)
400 South Hope Street, 8th Floor
3 Los Angeles, California 90071
Tel.: 213.896.2400
4 Fax: 213.896.2450
E-mail: joel.athey@hklaw.com
5 nicholas.melzer@hklaw.com

6 Attorneys for Defendant NEAL MODY

7
SUPERIOR COURT OF THE STATE OF CALIFORNIA
8
FOR THE COUNTY OF SAN DIEGO, NORTH COUNTY BRANCH
9

10 WALLACE W. McCOY, Individually and as ) Case No. 37-2014-00014568-CU-NP-
Trustee of the WALLACE W. McCOY ) NC
11 TRUST, and CONNIE McCOY, )
0 The Honorable Earl H. Maas III
....
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0 0 15 MODY, and DOES 1 THROUGH 25, JUDGMENT OR, IN THE
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"< 14 Arizona State University's facilities for research and suggested
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s::!::u o:s 45 McCoy asked about the company's valuation, and they discussed 45
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(l)(l)0 the Round E fundraising valuation.
§""Ql 0 15
:c: ~ ;::!i Mody Deel., at ii 30.
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0 ...... 46 Shortly after the tour and this meeting, McCoy agreed to invest 46
0 N 17 $300,000 from the Wallace W. McCoy Trust (the "Trust") in
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18 Ambature's investment Round E.
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 62:2-74:10.
19
Melzer Deel., Exhibit D (Promissory Note signed by McCoy,
20 dated September 2010), at p. 1;

21 Melzer Deel., Exhibit E (SIA and Risk Factors signed by
McCoy, ultimately dated October 2010)
22
47 In or around October 2010, James McCoy, Joseph Beyers, Doug 47
23 Gilbert, and Mody met again with McCoy. At this meeting, the
primary point of discussion was Ambature' s development of its
24 technology. Mody and the others gave McCoy a progress report
25 and told McCoy that Ambature research was yielding promising
results. Mody, at the time the statements were made, believed
26 them to be true. He still believes the statements made at this
meeting were true.
27
Mody Deel., at ii 3 1.
28
10
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF
NEAL MODY' S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE

3 48 At or shortly after this meeting, McCoy invested an additional 48
$300,000 in Ambature from the Trust.
4
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 67: 22-25;
5 Melzer Deel., Exhibit F (Promissory Note, SIA, and Risk
6
Factors signed by McCoy, dated October 2010), at pp. 1-2.

7 49 In or around November 2010, Mody dined with McCoy and 49
James McCoy. James and Mody told McCoy that testing was
8 beginning to demonstrate a much-anticipated drop in resistance.
Mody believed those statements were true at the time he made
9 them in October of2010, and still believes them to be true.
10 Mody Deel., at if 32.

11 50 By approximately November 2010, Mody had heard via phone 50
scientists and employees "high fiving" in the lab in celebration
12 of positive test results. Doug Gilbert confirmed to Mody that he
13 had seen scientists and employees "high fiving" in the lab in
celebration of their positive test results. Mody relayed this to
14 McCoy. Mody also told McCoy his opinion that Ambature's
intellectual property supported the $60 million valuation being
15 placed on Ambature in its Series F financing.
16 Mody Deel., at iii! 33, 56;
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 99: 10-100: 19.
17

18 51 McCoy subsequently invested an additional $1,000,000 from the 51
Trust in Ambature's Series F convertible promissory note.
19
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 99:4-22;
20 Melzer Deel., Exhibits G (Convertible Promissory Notes and
SIA McCoy signed corresponding December 2010 investment).
21
52 McCoy also invested $100,000 in February 2011 and $400,000 52
22
in June of 2011 , both in Round F.
23 Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 83:8-23;
24 Melzer Deel., Exhibits H and I (Convertible Promissory Notes
and SIA McCoy signed corresponding with February 2011, and
25 June 2011 investments).
26

28
11
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF
NEAL MODY' S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE

3 53 Over the course of nine months, McCoy invested a total of 53
$2,100,000 in Ambature fundraising Rounds E and F.
4
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 83:22-24;
5 Melzer Deel., Exhibits D, E, F, G, H, and I (Convertible
Promissory Notes and SIA McCoy signed corresponding with
6
each of his five investments, dated September 2010, October
7 2010, December 2010, February 2011, and June 2011).

8 54 The terms of McCoy's investments in Ambature were all 54
governed by convertible promissory notes containing virtually
9 identical terms (with the exception of valuation, and conversion
rates, which changed from Round E to Round F).
10
Melzer Deel., Exhibits D, E, F, G, H, and I (Convertible
11 Promissory Notes and SIA McCoy signed corresponding with
each of his five investments, dated September 2010, October
12
2010, December 2010, February 2011, and June 2011).
13
55 In November 2010, Mrs. McCoy invested $23,000 in a separate 55
14 company called Wave Three Capital, which James McCoy had
created for the purpose of raising money from smaller investors
15 to invest in Ambature.
16 Melzer Deel., Exhibit C (Deposition of Connie McCoy ("Mrs.
McCoy Depo"), dated May 12, 2015), 10:1-14.
17
56 James McCoy created Wave Three Capital for the purpose of 56
18 raising money from smaller investors to invest in Ambature.
Mody had no communication with Mrs. McCoy regarding her
19
investment in Wave Three and the terms of her investment in
20 Wave Three are unknown to Mody. Mody also did not and does
not know the terms of Mrs. McCoy's investment in Wave Three.
21
Mody Deel., at iii! 35-37.
22
57 Mrs. McCoy subsequently invested another $10,000 directly in 57
23 Ambature during Round F.

24 Melzer Deel., Exhibit C (Mrs. McCoy Depo ), 10: 1-14.

28
12
SEPARATE STATEMENT OF UNDISPUTED MATER1AL FACTS IN SUPPORT OF
NEAL MODY'S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE

3 58 Again, Mody had no communication with Mrs. McCoy 58
regarding her investment in Ambature. Nor did he solicit any
4 investment from her for Ambature. Mody was, however,
familiar with the terms of the Round E and F Convertible
5
Promissory Notes, Subscription and Investment Agreements,
6 and Schedule 1 Risk Factors addendums.
Mody Deel., at iii! 38, 39.
7
59 The terms of Mrs. McCoy's direct investment in Ambature were 59
8
governed by a Series F Convertible Promissory Note materially
9 identical to those McCoy signed for his investments.
See Melzer Deel., Exhibits H and I (Convertible Promissory
10
Notes and SIA related to Series F investments).
11
60 Prior to investing, Mrs. McCoy also received a separate 60
12 prospectus from Wave Three outlining the risk factors of
investing: "Early stage business, like [Wave Three Capital LLC]
13 or Ambature, are often subject to risks not foreseen or fully
appreciated at the time. .... Neither is there any assurance that
14
the Company will ever be profitable."
15 Melzer Deel., Exhibit U (Document outlining risks of
investment received by Connie McCoy), at p. 1.
16
61 Each time they invested money in Ambature, McCoy and Mrs. 61
17
McCoy signed a Promissory Note and Subscription and
18 Investment Agreement.
See Melzer Deel., Exhibits D, E, F, G, H, and I (Convertible
19
Promissory Notes and SIA McCoy signed corresponding with
20 each of his five investments, dated September 2010, October
2010, December 2010, February 2011, and June 2011).
21
62 The Subscription and Investment Agreement ("SIA") contained 62
22 robust cautionary language, including admonitions that
Ambature was subject to "substantial risks of loss of
23
investment," that the investor must bear the "economic risk of
24 investment in the Subscribed Note for an indefinite period of
time," and that there is "no guarantee of any financial return of
25 or on the investment in the Subscribed Note."

26 See Melzer Deel., Exhibit E (Subscription and Investment
Agreement signed by Wallace McCoy), at pp. 1, 3-4.
27

28
13
SEPARA TE ST A TEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF
NEAL MODY'S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE

3 63 In signing the SIA, the McCoys represented that they could 63
"bear the economic risk" of the investment and could "afford a
4 complete loss of such investment."
5 See Melzer Deel., Exhibit E (Subscription and Investment
Agreement signed by Wallace McCoy), p. 2 (s. 2.l(c)).
6
64 Moreover, in signing the SIAs, the McCoys averred that they 64
7 had taken the opportunity to consult with their advisors,
including an attorney, regarding their investments.
8
See Melzer Deel., Exhibit E (Subscription and Investment
9 Agreement signed by Wallace McCoy)., at p. 2 (s.2.l(d)).
10
65 The SIA also contained an attachment providing a more fulsome 65
11 description of the investment risks.
See Melzer Deel., Exhibit E (Subscription and Investment
12 Agreement signed by Wallace McCoy), at pp. 9-12;
13 See also Melzer Deel., Exhibit U (Risk Factors document
received by Connie McCoy).
14
66 This document provided a non-exhaustive list and explanation of 66
15
specific risks, including: (i) the risk oflosing one's entire
16 investment; (ii) that Ambature is likely to incur significant,
ongoing operating losses; (iii) that Ambature's ongoing activity
17 will likely require a lot of additional funding; (iv) that Ambature
can make no assurances regarding future revenues or
18 profitability; and (v) that Ambature is operating in a complex
and complicated environment.
19
See Melzer Deel., Exhibit E (Subscription and Investment
20 Agreement signed by Wallace McCoy), at pp. 9-11;
21 See also Melzer Deel., Exhibit U (Risk Factors document
received by Connie McCoy) pp. 1-5.
22
67 McCoy also signed and reviewed an Investor Questionnaire that 67
23 assured Ambature he was an accredited investor who was
24 sufficiently "sophisticated" to "capably evaluate the merits and
risks of the prospective investment."
25 Melzer Deel., Exhibits J and K (Investor Questionnaires signed
by McCoy), at p. 2 of each.
26

28
14
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF
NEAL MODY'S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE

3 68 Moreover, at his deposition, McCoy affirmed again that he is 68
"reasonably sophisticated."
4
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 66:5-6.
5
69 McCoy was aware of all of this cautionary language each time 69
6 he signed the documents and invested in Arnbature.

7 Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 128:24-154:6.

8 70 McCoy testified under oath that he understood he was not 70
guaranteed a return on his Arnbature investment.
9
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 128:24-154:6.
10
71 Though the SIA advised him to do so, McCoy did not discuss 71
11 the risk of the investment with any advisor before signing any
Promissory Note or SIA, or Investor Questionnaire.
12
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 154:17-23.
13
72 Similarly, Mrs. McCoy testified under oath that she was aware 72
14 there was a "risk factor" in investing in Arnbature and that there
were documents explaining those risk factors.
15
Melzer Deel., Exhibit C (Mrs. McCoy Depo), 43:8-19.
16
73 Before McCoy made his first investment in Arnbature, he 73
17 testified he knew that "if Ambature could develop
superconductive materials or technologies at near room
18
temperature or room temperature that would be commercially
19 valuable."
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 109: 17-23.
20

21 74 But, McCly was also aware that he was "investing in a company 74
whose technology and business plan were in the developmental
22 stage."

23 Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 139:15-18.

24 75 McCoy understood that "in order for Arnbature to be successful 75
and to have sufficient money to pay back the money that the
25 trust loaned to Arnbature, they would have to ... persuade
potential customers to license products that were new and as yet
26 unproven."
27 Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 140:13-25.

28
15
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF
NEAL MODY'S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE

3 76 McCoy testified that Mody never represented to him that such 76
licensing agreements were a sure thing.
4
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 151:17-23;
5 Mody Deel., at if 42.
6
77 McCoy testified that Mody never told him "Ambature had any 77
7 licensing agreements lined up."
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 165:15-23;
8
Mody Deel., at if 43.
9
78 Mody never discussed with McCoy "how far into the future it 78
10 would be before they had a licensing agreement."
11 Melzer Deel., Exhibit A (McCoy Depo Vol. 1), 165:20-23;

12 Mody Deel., at if 44.

13 79 Mody never told McCoy "that Ambature was about to sign a 79
licensing agreement"
14
Melzer Deel., Exhibit A (McCoy Depo. Vol. 1), 168:15-18;
15 Mody Deel., at if 45.
16 Mody left Ambature's employ in July of 2011. He remained a
80 80
17 member of the Board until late 2012 or early 2013.
Mody Deel., at ifif 46-4 7.
18
81 In late 2011 , after Mody left Ambature's employ, McCoy 81
19
became dissatisfied with Ambature's management-in
20 particular, McCoy told Mody he was unhappy with what he saw
as slow progress and severance agreements for various
21 executives.

22 Mody Deel., at if 48.

23 82 Mody did not tell McCoy "none of the progress previously 82
reported by Ambature had actually been accomplished by
24 Ambature" and Mody never heard Gilbert tell McCoy anything
similar.
25
Mody Deel., at ifif 49-50.
26

28
16
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF
NEAL MODY'S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE

3 83 Various third parties, including NASA's JPL confirmed that 83
Ambature had made significant scientific progress.
4
Mody Deel., Exhibit 13 (Letter from JPL to Ambature);
5 Mody Deel., Exhibit 8 (Letter from Paladin Science and
Engineering to Ambature );
6
Mody Deel., Exhibit 10 (Letter from Orbital Sciences Space
7 Systems Group);
8 Mody Deel., Exhibit 15 (Letter from Quantum Design to
Ambature);
9
Mody Deel., Exhibit 7 (Ambature Results), at pp. 23-28.
10
84 In an email dated April 23, 2011, McCoy wrote that he had read 84
11 Ambature's patents and "believe[d] any investor would increase
his commitment (if he/she had the money)."
12
Mody Deel., Exhibit 1 (McCoy email regarding Ambature
13 patents).

14 85 In the same email, McCoy wrote: "The patents are [Ambature's] 85
selling tool. Use them!!"
15
Mody Deel., Exhibit 1 (McCoy email regarding Ambature
16 patents);
17 See also Mody Deel., Exhibit 3 (Email regarding test results).

18 86 While McCoy now claims he was told in October 2010 that 86
"none of the progress previously reported by Ambature had
19 actually been accomplished," McCoy kept trying to invest in
Ambature after that date.
20
Mezler Deel., Exhibit T (Term Sheet offered by Wallace
21 McCoy), at p.1;
22 Mezler Deel., Exhibit S (Email from Wallace McCoy);

23 Mody Deel, Exhibit 4 (Email from Wallace McCoy).

28
17
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF
NEAL MODY'S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE

3 87 Shortly thereafter, in November 2011 , McCoy offered to invest 87

4
$750,000 in Ambature pursuant to a term sheet he submitted to
the Board of Directors.
5 Mody Deel., at ifif 52-53 .
6 Mezler Deel., Exhibit T (Term Sheet offered by Wallace
McCoy), at p.1;
7
Mezler Deel., Exhibit S (Email from Wallace McCoy);
8 Mody Deel,. Exhibit 4 (Email from Wallace McCoy).
9
88 McCoy conceded under oath that he does not think that 88
10 "Ambature is not really attempting to develop materials or
processes that will achieve superconductivity."
11
Mezler Deel., Exhibit B (McCoy Depo. Vol. 2), 15: 10-13.
12
89 McCoy complained at his deposition "[t]hey've taken down $12 89
13 million worth of assets to zero through severance payments,
poor investments, bad corporate management, bad LLC
14 management, to the fact that there's nothing there."
15 Mezler Deel., Exhibit B (McCoy Depo. Vol. 2), 44:9-19.

16 90 McCoy believes that Ambature "had adequate capital if they ran 90
it right."
17
Mezler Deel., Exhibit A (McCoy Depo. Vol. 1), 141 :16-24.
18
91 McCoy testified that Ambature and its management just 91
19 "haven't been as successful at it or as quick as [he] would have
expected" and weren't "valid in what they were doing."
20
Mezler Deel., Exhibit B (McCoy Depo. Vol. 2), 15 :14-19.
21
92 To this day, McCoy owns 5,494,153 shares in Ambature, 92
22 approximately 8.5 % of the company.
23 Mody Deel., at if 54;

24 Mody Deel., Exhibit 9 (Conversion Cap Table), at pp. 3-4.

25 93 Mrs. McCoy owns 23,888 shares of Ambature. 93
Mody Deel., at if 55;
26
Mody Deel., Exhibit 9 (Conversion Cap Table), at pp. 3-4.
27

28
18
SEPARA TE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF
NEAL MODY'S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE

3 94 When pressed at his deposition, McCoy could not specifically 94
identify any other alleged misrepresentations by Mody.
4
Mezler Deel., Exhibit A (McCoy Depo. Vol. 1), 104:11-105:20.
5
95 Even ifthe statement that Mody believed he would be a 95
6 billionaire were not a matter of opinion, Mody believed it to be
true when he said it.
7
Mody Deel., at if 57.
8
96 Even if positive statements Mody made about Ambature were 96
9 not true, he believed them to be true at the time he made each
statement. In hindsight, he does not believe any statement he
10
made was untrue.
11 Mody Deel., at ifif 58-64.
12 97 Mody had a good faith basis to believe the value of Ambature's 97
intellectual property alone supported the company's Round F
13
valuation.
14 Mezler Deel., Exhibit P (The Brenner Group Valuation), at pp.
5-6.
15

16 98 Mody also believed his statement to McCoy that Ambature's 98
intellectual property alone would support a $60 million valuation
17 to be true when he said it.

18 Mody Deel., at ifif 56.

19 99 Mody never said anything to McCoy to cause him to believe that 99
lab space at ASU was being donated.
20
Mody Deel., at ifif 28-29.
21
100 Mody told McCoy that Ambature researchers were "high-fiving" 100
22 in the laboratory due to positive test results. This was an event
that Mody heard first-hand over the phone and confirmed with
23 Gilbert, who was present and witnessed it.
24 Mody Deel., at if 33.

28
19
SEPARATE STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF
NEAL MODY'S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE

3 101 Mody told McCoy that Ambature was making significant 101
progress towards it goals. It was reasonable for Mody to believe
4 this was true given that the progress in Ambature's research was
independently corroborated by reputable third parties, including
5 NASA's JPL.
6 Mody Deel., Exhibit 8 (Letter from Paladin Science and
Engineering to Ambature );
7
Mody Deel., Exhibit 10 (Letter from Orbital Sciences Space
8 Systems Group);

9 Mody Deel., Exhibit 13 (Letter from JPL to Ambature);
Mody Deel., Exhibit 15 (Letter from Quantum Design to
10
Ambature).
11
102 Mody believed every one of his statements regarding 102
12 Ambature' s progress to be true when he made them.

13 Mody Deel., at 'if'il 58-67.

14 103 McCoy is a wealthy, successful, sophisticated investor. 103
Melzer Deel., Exhibits J and K (Investment Questionnaires
15
signed by McCoy), at p. 2 of each.
16 Mody Deel., at 'if 24.
17 104 McCoy explicitly represented in the SIA of each Promissory 104
18 Note that he was an "accredited investor" with over $5,000,000
in trust.
19 Melzer Deel., Exhibits J and K (Investment Questionnaires
signed by McCoy), at p. 2 of each.
20

22
23

28
20
SEP ARA TE STA TEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF
NEAL MODY'S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE

3 105 McCoy also represented that he: 105

4 "could bear the economic risk of his .. . investment
in [Ambature] and can afford a complete loss of
5 such investment in [Ambature]. [McCoy] has (1)
sufficient liquid assets to pay the full amount of his
6 ... investment in [Ambature], (2) adequate means
of providing for his . . . current and reasonably
7 foreseeable needs and possible personal or
8 commercial contingencies, and (3) no present or
anticipated need for liquidity of his ... investment
9 in [Ambature]."

10 See Melzer Deel., Exhibit E (Promissory Note and SIA McCoy
signed), at p. 2 (s. 2.l(c)).
11 106
106 Mody was aware McCoy made these representations, believed
12 them to be true, and relied on them.

13 Mody Deel., at iii! 40-41.

107 Mody believed every representation he made to McCoy 107
14
regarding Ambature. Mody believed in Ambature and its
15 eventual success.
16 Mody Deel., at iii! 58-67.

17 108 Mody is one of the largest shareholders in Ambature. 108

18 Mody Deel., at if 8.;
Mody Deel. Exhibit 9 (Conversion Cap Table), pp. 3-4.
19
109 Mody's belief in Ambature as an investment was objectively 109
20
reasonable.
21 Mody Deel. Exhibit 8 (Letter from Paladin Science and
Engineering to Ambature);
22
Mody Deel. Exhibit 10 (Letter from Orbital Sciences Space
23 Systems Group);
24 Mody Deel. Exhibit 13 (Letter from JPL to Ambature);

25 Mody Deel. Exhibit 15 (Letter from Quantum Design to
Ambature).
26
27

28
21
SEPARATE STATEMENT OF UNDISPUTED MATERJAL FACTS IN SUPPORT OF
NEAL MODY'S MOTION FOR SUMMARY JUDGMENT/ADJUDICATION
1 UNDISPUTED MATERIAL FACTS RESPONSE AND
AND SUPPORTING EVIDENCE SUPPORTING
2 EVIDENCE
110
3 110 Confidential information memoranda in McCoy's possession,
dated prior to the majority of McCoy's investments, contain
4 robust cautionary language as well.
5 Melzer Deel., Exhibit N (4/1/10 Confidential Information
Memorandum), at pp. 2, 17.
6
Melzer Deel., Exhibit 0 (11/1/10 Confidential Information
7 Memorandum), at pp. 2, 17.

8
Adjudication Two: No triable issue of material fact exists as to whether Mody made any
9
actionable misstatements. He did not. And, and the time he made each and every alleged
10
misstatement, he believed them to be true, and had a reasonable basis for his belief.
11

12 RESPONSE AND
UNDISPUTED MATERIAL FACTS
AND SUPPORTING EVIDENCE SUPPORTING
13 EVIDENCE
14 1. Ambature works to develop extremely low resistance 1
15 ("ELR") materials that function at ambient temperatures - a
significant development in the field of superconductivity.
16 Declaration of Neal Mody ("Mody Deel."), filed
concurrently herewith, at if 2;
17
Declaration of Nicholas B. Melzer ("Melzer Deel."),
18 Exhibits N and 0 (Investor Education Materials), at p. 4.
19
2. When electricity is transmitted or conducted through most 2
20 materials, the current meets a certain amount of resistance.
Mody Deel., at if 4;
21
Melzer Deel., Exhibits N and 0 (Investor Education
22 Materials), at p. 4.

23 3. This resistance both slows down the speed at which 3
electricity is conducted and causes some of the transmitted
24
electricity to be lost.
25 Mody Deel., at if 4;
26 Melzer Deel. Exhibits N and 0 (Investor Educatio

Case Info

Judge

Earl H. Maas, III Track Judge’s New Case

Case No.

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Document Filed Date

June 26, 2015

Case Filing Date

May 08, 2014

County

Parties

Ambature Inc Defendant
Beyers, Joseph W Defendant
ERICKSON, BRIAN H Attorney for the Plaintiff
Gilbert, Douglas James Defendant
M, Athey Joel Attorney for the Defendant
MCCOY, CONNIE Plaintiff
McCoy, Wallace W Plaintiff
Mody, Neal Defendant
Spirra, Richard R Attorney for the Defendant
Wallace W McCoy as Trustee of the Wallace W McCoy Trust Plaintiff
Kevin Alexander Attorneys for Defendants
Nicholas Melzer Attorneys for Defendants

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Party Statement: McCoy vs. Ambature LLC

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