32. Plaintiffs are informed and believe that GEOTECH has sold the CWRN common
18 stock provided to GEOTECH as security for its investment for sums possibly greater than the
19 total amount of defendants' investment in the Joint Venture. Moreover, the warrant/option
20 obtained by defendants as additional security for the investment, which was redeemed by
21 Defendants at $0.005 per share, traded between May 5, 2010 and April 6, 2011, at between
22 approximately $0.005 at start and up to over $0.0265 per share. The potential return to
23 Defendants from trading 150,000,000 shares of CWRN common stock that was to be held as
24 security for the invested funds, if traded at $0.0265 per share, could have provided
25 $5,300,000.00 to Defendants. Plaintiffs have requested an accounting from Defendants
26 regarding any CWRN shares that were sold by Defendants, but Defendants have failed and
27 refused to provide such an accounting.
28
COMPLAINT
Page 8 of 28 Pages
33. Plaintiffs are informed and believe and based thereon allege that Defendants both
sold the CWRN shares provided as security and, by placing such a large volume of shares on the
public market within a short period of time, damaged the value of CWRN stock which is now
trading at approximately $0.0016 per share. The resulting reduction in the stock value of Cotton
& Western Mining, Inc. from approximately $ 115, 583,354 to approximately $6,978,618 may
have resulted, but without an accounting of when the security was sold, if it was sold, the value
change that might have resulted from trading up to 150,000,000 shares of stock within a defined
period, the damage resulting to Cotton & Western Mining, Inc. is subject to proof at trial.
34. The resulting damage to the asset value of Cotton & Western Mining, Inc. and
PAN AM from the defendants' failure to honor the requirements of the JVA and from
defendants' self-dealing, cannot be determined without analyzing additional information that is
in the possession of defendants, and is subject to proof at trial.
