INVENTURE FOODS, INC. Form SC 14D9/A Filed 2017-11-27

(Name, address and telephone number of person authorized to receive notices and communications

This Amendment No. 1 (this “Amendment”) to Schedule 14D-9 amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 originally filed with the Securities and Exchange Commission (the “SEC”) on November 15, 2017 (as amended from time to time, the “Schedule 14D-9”) originally filed by Inventure Foods, Inc., a Delaware corporation (the “Company” or “Inventure Foods”), relating to the tender offer by Heron Sub, Inc., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of Utz Quality Foods, LLC, a Delaware limited liability company (“Parent”), to purchase all of shares of the Company’s common stock, par value $0.01 per share, at a purchase price of $4.00 per share, net to the seller in cash, without interest thereon, but subject to any applicable tax withholding, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated November 15, 2017, and the related Letter of Transmittal, copies of which are attached as Exhibits (a)(1)(A) and (a)(1)(B), respectively, to the Tender Offer Statement on Schedule TO filed by Parent and Merger Sub with the SEC on November 15, 2017.

Except as otherwise set forth below, the information set forth in the Schedule 14D-9 remains unchanged and is incorporated herein by reference as relevant to the items in this Amendment. Capitalized terms used but not defined herein have the meanings ascribed to them in the Schedule 14D-9.

Item 8 of the Schedule 14D-9 is hereby amended and supplemented by adding the section below immediately following the last sentence of the paragraph under the heading “Item 8. Additional Information—Stockholder Approval of the Merger Not Required” on page 58 of the Schedule 14D-9.

On November 15, 2017, Inventure Foods filed the Schedule 14D-9 with the SEC in connection with the Offer.

On November 20, 2017, a purported stockholder of Inventure Foods filed an action in the United States District Court for the District of Arizona on behalf of a putative class of Inventure Foods stockholders against Inventure Foods and its directors, alleging violations of federal securities laws. The case is captioned Smith v. Inventure Foods, Inc., et al. (Case No. 2:17-cv-04256). The complainant alleges, among other things, that the Schedule 14D-9 omits material information necessary for Inventure Foods stockholders to make an informed decision regarding the Offer. The complainant seeks, among other things, either to enjoin the Offer or, should it be consummated, to award damages, as well as an award of the plaintiffs’ attorneys’ and experts’ fees in the action.

On November 21, 2017, four additional actions alleging violations of federal securities laws were filed by purported stockholders of Inventure Foods in the United States District Court for the District of Arizona against Inventure Foods and its directors. These actions, captioned Shaoul v. Inventure Foods, Inc., et al. (Case 2:17-cv-04261), Schoenfeld v. Inventure Foods, Inc., et al. (Case 2:17-cv-04273), Schoenfeld v. Inventure Foods, Inc., et al. (Case 2:17-cv-04274) and D&S Fraley Revocable Living Trust v. Inventure Foods, Inc., et al. (Case 2:17-cv-04277), allege claims similar to those in the Smith action, and seek similar relief. The complainant in the D&S Fraley Revocable Living Trust action further alleges, among other things, that the Board breached its fiduciary duties in connection with the Transactions by failing to maximize stockholder value.

On November 22, 2017, three additional actions alleging violations of federal securities laws were filed by purported stockholders of Inventure Foods in the United States District Court for the District of Arizona against Inventure Foods and its directors. These actions, captioned Chamat v. Inventure Foods, Inc., et al. (Case 2:17-cv-04294), Rubin v. Inventure Foods, Inc., et al. (Case 2:17-cv-04295) and Vana v. Inventure Foods, Inc., et al. (Case 2:17-cv-04296), allege claims similar to those in the Smith action, and seek similar relief. The complainant in the Vana action further alleges, among other things, that Parent and Merger Sub acted as control persons in aiding and abetting the alleged violations.

The outcome of this litigation cannot be predicted with certainty; however, the defendants deny any wrongdoing in connection with the Transactions and the Schedule 14D-9 and plan to defend vigorously against the claims set forth in these actions.

The foregoing descriptions are qualified in their entirety by reference to the complaints, copies of which are filed as Exhibits (a)(5)(E), (a)(5)(F), (a)(5)(G), (a)(5)(H), (a)(5)(I), (a)(5)(J), (a)(5)(K) and (a)(5)(L), respectively, to this Amendment and are incorporated by reference.

Additional lawsuits may be filed against Inventure Foods, Parent, Merger Sub or the Board in connection with the Transactions. If additional similar complaints are filed, absent new or different allegations that are material, the Company will not necessarily announce such additional filings.”

Item 9 of the Schedule 14D-9 is hereby amended and supplemented by adding the following exhibits thereto:

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Plaintiff Ian Smith (“Plaintiff”), on behalf of himself and the proposed Class defined herein, brings this class action suit for violations of Sections 14(e), 14(d)(4), and 20(a) of the Securities Exchange Act of 1934. In support of this Class Action Complaint, Plaintiff, by his attorneys, alleges upon information and belief, except for his own acts, which are alleged on knowledge, as follows:

Plaintiff brings this action on behalf of himself and the public stockholders of Inventure Foods, Inc. (“Inventure Foods” or the “Company”) against the Company and

Inventure Foods’s Board of Directors (collectively, the “Board” or the “Individual Defendants,” as further defined below) for violations of Sections 14(e), 14(d)(4), and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”), §§ 78n(d)(4), 78n(e) and 78t(a) respectively), and U.S. Securities and Exchange Commission (the “SEC”) Rules 14d-9 (17 C.F.R. § 240.14d-9) and SEC Regulation G, 17 C.F.R. 244.100 in connection with the proposed merger transaction (“Proposed Transaction”) between Inventure Foods and Heron Sub, Inc. (“Merger Sub”), a direct and wholly-owned subsidiary of Utz Quality Foods, LLC (“Parent”) (collectively, “Utz”).

1. On October 26, 2017, the Company announced that it had entered into an agreement and plan of merger (the “Merger Agreement”) with Utz, by which Utz will acquire all of the outstanding shares of Inventure Foods common stock through an all-cash tender offer at a purchase price of $4.00 per share (the “Tender Offer”).

2. The Tender Offer commenced on November 15, 2017, and the Company concurrently filed a 14D-9 on Schedule 14D-9 (the “14D-9”) with the SEC, recommending that the Company’s stockholders tender their shares for the Tender Offer price. The Tender Offer is set to expire on December 13, 2017.

3. Plaintiff alleges that the 14D-9 is materially false and/or misleading because, inter alia, it fails to disclose certain material internal financial information about the Company, relied on by the Individual Defendants to recommend the Proposed Transaction and by the Company’s financial advisor, Rothschild Inc. (“Rothschild”), to render an opinion that the Proposed Transaction is fair to Inventure Foods stockholders, which omissions render the 14D-9 incomplete and/or misleading.

4. In particular, the 14D-9 omits material information regarding: (i) certain of the Company’s financial projections and generally accepted accounting principles (“GAAP”) reconciliation of those projections; and (ii) the valuation analyses performed by Rothschild in support of its fairness opinion.

5. The failure to adequately disclose such material information constitutes a violation of §§ 14(e), 14(d)(4), and 20(a) of the Exchange Act, among other reasons, because Inventure Foods stockholders are entitled to such information in order to make a fully-informed decision regarding whether to tender their shares in connection with the Tender Offer.

6. For these reasons and as set forth in detail herein, the Individual Defendants have violated federal securities laws. Accordingly, Plaintiff seeks to enjoin the Proposed Transaction or, in the event the Proposed Transaction is consummated, recover damages resulting from the Individual Defendants’ violations of these laws. Judicial intervention is warranted here to rectify existing and future irreparable harm to the Company’s stockholders.

7. The claims asserted herein arise under §§ 14(e), 14(d)(4), and 20(a) of the Exchange Act, 15 U.S.C. § 78aa. The Court has subject matter jurisdiction pursuant to § 27 of the Exchange Act, 15 U.S.C. §78aa, and 28 U.S.C. § 1331 (federal question jurisdiction).

8. The Court has personal jurisdiction over each of the Defendants because each conducts business in and maintains operations in this District or is an individual who either is present in this District for jurisdictional purposes or has sufficient minimum contacts with this District as to render the exercise of jurisdiction by this Court permissible under traditional notions of fair play and substantial justice.

9. Venue is proper in this District under § 27 of the Exchange Act, 15 U.S.C. § 78aa, as well as pursuant to 28 U.S.C. § 1391, because Inventure Foods is headquartered in this District.

10. Plaintiff is, and has been at all relevant times, the owner of shares of Inventure Foods common stock.

11. Defendant Inventure Foods is a Delaware corporation with its principal executive offices located at 5415 East High Street, Suite 350, Phoenix, Arizona 85054. Inventure Foods’s common stock trades on the Nasdaq under the ticker symbol “SNAQ”.

12. Individual Defendant Terry E. McDaniel has served as Chief Executive Officer and as a director of the Company since 2008, and as Interim Chairman since 2017.

13. Individual Defendant Macon Bryce Edmonson has served as a director of the Company since 2006.

14. Individual Defendant Ashton D. Asensio has served as a director of the Company since 2006.

15. Individual Defendant Paul J. Lapadat has served as a director of the Company since 2013.

16. Individual Defendant Timothy A. Cole has served as a director of the Company since 2014.

17. Individual Defendant Joel D. Stewart has served as a director of the Company since 2017.

18. The Individual Defendants referred to in paragraphs 13-18 are collectively referred to herein as the “Individual Defendants” and/or the “Board.”

19. Plaintiff brings this action individually and as a class action on behalf of all holders of Inventure Foods stock who are being, and will be, harmed by Defendants’ actions described herein (the “Class”). Excluded from the Class are Defendants herein and any person, firm, trust, corporation, or other entity related to, controlled by, or

affiliated with, any Defendant, including the immediate family members of the Individual Defendants.

20. This action is properly maintainable as a class action under Federal Rule of Civil Procedure 23.

21. The Class is so numerous that joinder of all members is impracticable. According to the 14D-9, as of November 6, 2017, there were 19,827,000 shares issued and outstanding. On information and belief, these shares are held by thousands of beneficial holders who are geographically dispersed across the country.

22. There are questions of law and fact which are common to the Class and which predominate over questions affecting any individual Class member. The common questions include, inter alia, the following:

23. Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to the Class.

24. Plaintiff is an adequate representative of the Class, has retained competent counsel experienced in litigation of this nature, and will fairly and adequately protect the interests of the Class.

25. The prosecution of separate actions by individual members of the Class creates a risk of inconsistent or varying adjudications with respect to individual members of the Class, which could establish incompatible standards of conduct for Defendants.

26. Plaintiff anticipates that there will be no difficulty in the management of this litigation. A class action is superior to other available methods for the fair and efficient adjudication of this controversy.

27. Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class a whole.

28. Accordingly, Plaintiff seeks injunctive and other equitable relief on behalf of himself and the Class to prevent the irreparable injury that the Company’s stockholders will suffer absent judicial intervention and in the absent of injunctive relief, seeks to pursue a claim for damages.

29. Inventure Foods, Inc. is a marketer and manufacturer of specialty food brands in “better-for-you” and “indulgent categories” under a variety of company owned and licensed brand names, including Boulder Canyon Foods™, Jamba^®, Seattle’s Best Coffee^®, Rader Farms^®, TGI Fridays™, Nathan’s Famous^®, Vidalia Brands^®, Poore Brothers^®, Tato Skins^®, Willamette Valley Fruit Company™, Fresh Frozen™, Bob’s Texas Style^® and Sin In A Tin™.

30. On October 26, 2017, Inventure Foods and Utz issued a joint press release announcing the Proposed Transaction which stated the following, in relevant part:

PHOENIX and HANOVER, Pa., Oct. 26, 2017 (GLOBE NEWSWIRE) — Inventure Foods, Inc. (NASDAQ:SNAK) (“Inventure Foods” or the “Company”), a leading specialty food marketer and manufacturer, and Utz Quality Foods, LLC (“Utz”), the largest privately-held and family-managed branded salty snack manufacturer and marketer in the United States, today announced they entered into a merger agreement pursuant to which Utz has agreed to acquire all of the Company’s outstanding shares of common stock in an all-cash transaction.

Under the terms of the merger agreement, an indirect subsidiary of Utz will commence a tender offer to acquire all of the outstanding shares of the Company’s common stock at a price of $4.00 per share in cash, for a total purchase price of approximately $165 million, including the assumption of approximately $75 million of debt and debt-like items, net of cash, approximately $8 million of the Company’s estimated closing costs and approximately $3 million due to equity award holders. The acquisition is structured as an all-cash tender offer for all of the outstanding shares of Inventure Foods common stock, to be followed by a merger in which each remaining untendered share of Inventure Foods will be converted into the right to receive the same $4.00 per share cash price paid in the tender offer.

The transaction, which was unanimously approved by the Boards of both Inventure Foods and Utz, is subject to the tender of more than 50 percent of the fully diluted shares of Inventure Foods common stock, the receipt of certain regulatory approvals and other customary closing conditions. The transaction is not subject to a financing contingency and is expected to close by the end of the fourth quarter of 2017. The tender offer is expected to commence within ten business days.

“This transaction is the result of diligent analysis and thoughtful strategic deliberations by our Board of Directors and the result of the strategic and financial review we initiated in July 2016,” stated Terry McDaniel, Chief Executive Officer of Inventure Foods. “Our Board, with the advice of independent advisors, determined that this

transaction will deliver immediate and certain cash value to our stockholders and new opportunities for our snack brands.”

“We are tremendously excited about the opportunity to acquire Inventure Foods,” said Dylan Lissette, Chief Executive Officer of Utz Quality Foods. “The Company’s specialty snack food products and brands, as well as its geographic footprint, customer relationships and distribution strengths, are highly complementary to our business and we look forward to continuing Inventure’s strong heritage of innovation in both healthy and indulgent snacking. We have also been extremely impressed with the team at Inventure, and look forward to working together going forward.”

31. The Tender Offer appears inadequate in light of the Company’s financial performance and prospects for future growth in view of an announced initiatives to increase profits, including the sale of its frozen fruit business late in the third quarter. Indeed, the Tender Offer represents a 60% drop from the Company’s 52-week high of $10.04 per share.

32. Thus, it appears that Inventure Foods is well-positioned for financial growth, and that the Tender Offer fails to adequately compensate the Company’s shareholders. It is imperative that Defendants disclose the material information they have omitted from the 14D-9, discussed in detail below, so that the Company’s shareholders can properly assess the fairness of the Tender Offer for themselves and make an informed decision concerning whether to tender their shares.

33. On November 15, 2017, Inventure Foods filed the 14D-9 with the SEC in support of the Tender Offer. As alleged below and elsewhere herein, the 14D-9 contains material misrepresentations and omissions of fact that must be cured to allow Inventure Foods’s stockholders to make an informed decision with respect to the Tender Offer. Specifically, the 14D-9 omits material information regarding: (i) certain of the

Company’s financial projections and generally accepted accounting principles (“GAAP”) reconciliation of those projections; and (ii) the valuation analyses performed by the Company’s financial advisor, Rothschild, in support of its fairness opinion.

34. The 14D-9 discloses the value of non-GAAP metric Adjusted EBITDA that was utilized by the Board in the “Forecasts” and the “NOL Forecasts”, and defines Adjusted EBITDA as derived by adding to operating income depreciation, amortization and impairments, but fails to: (i) provide the value of the underlying line items (i) earnings, (ii) interest, (iii) taxes, (iv) depreciation, and (v) amortization.

35. Additionally, the 14D-9 fails to reconcile Adjusted EBITDA to its most comparable GAAP equivalent and disclose the projected GAAP equivalent measure resulting from the NOL Forecasts, e.g., net income. 14D-9, 48.

36. The 14D-9 discloses the Company performed a Liquidation and Restructuring Analysis (14D-9, 48-49) to assist the Board in reviewing strategic alternatives, but the 14D-9 fails to disclose any of the variables and assumptions underlying these forecasts including projections of (i) timing of a transaction or liquidation, (ii) results of operations for the fourth quarter of 2017, (iii) additional customer chargebacks and allowances, (iv) net liquidation value of inventory, (v) liquidation value of trade and other receivables, (vi) net liquidation value of assets of discontinued operations, (vii) liquidation value of other current assets, (viii) liquidation value of fixed assets, (ix) current and non-current liabilities, (x) liquidation value of trademarks and other intangibles; (xi) settlement payments to terminate the Company’s real estate lease obligations, (xii) settlement payments to terminate the Company’s obligations under its employment agreements, (xiii) settlement payments to terminate the Company’s production orders and letters of credit, (xiv) settlement payments to terminate

the Company’s obligations under its vendor contracts and (xv) legal, tax, accounting and related costs. 14D-9, 49.

37. The Company also prepared an Illustrative Chapter 7 Liquidation Analysis (14D-9, 50), to estimate recoveries in a Chapter 7 liquidation but failed to disclose the “unaudited book values as of September 2, 2017 and October 6, 2017, respectively, which, for purposes of this analysis, were assumed to be representative of the Company’s assets and liabilities at the commencement of a Chapter 7 liquidation process” on which these forecasts were based.

38. When a company discloses non-GAAP financial measures in a 14D-9, the Company must also disclose all projections and information necessary to make the non-GAAP measures not misleading, and must provide a reconciliation (by schedule or other clearly understandable method), of the differences between the non-GAAP financial measure disclosed or released with the most comparable financial measure or measures calculated and presented in accordance with GAAP. 17 C.F.R. § 244.100.

39. The SEC increased its scrutiny of the use of non-GAAP financial measures in communications with shareholders. The former SEC Chairwoman, Mary Jo White, stated that the frequent use by publicly traded companies of unique, company-specific non-GAAP financial measures (as Inventure Foods has included in the 14D-9 here), implicates the centerpiece of the SEC’s disclosures regime:

In too many cases, the non-GAAP information, which is meant to supplement the GAAP information, has become the key message to investors, crowding out and effectively supplanting the GAAP presentation. Jim Schnurr, our Chief Accountant, Mark Kronforst, our Chief Accountant in the Division of Corporation Finance and I, along with other members of the staff, have spoken out frequently about our concerns to raise the awareness of boards, management and investors. And last month, the staff issued guidance addressing a number of troublesome practices which can make non-GAAP disclosures misleading: the lack of equal or

greater prominence for GAAP measures; exclusion of normal, recurring cash operating expenses; individually tailored non-GAAP revenues; lack of consistency; cherry-picking; and the use of cash per share data. I strongly urge companies to carefully consider this guidance and revisit their approach to non-GAAP disclosures. I also urge again, as I did last December, that appropriate controls be considered and that audit committees carefully oversee their company’s use of non-GAAP measures and disclosures.1

40. The SEC has repeatedly emphasized that disclosure of non-GAAP projections can be inherently misleading, and has therefore heightened its scrutiny of the use of such projections.² Indeed, on May 17, 2016, the SEC’s Division of Corporation Finance released new and updated Compliance and Disclosure Interpretations (“C&DIs”) on the use of non-GAAP financial measures that demonstrate the SEC’s tightening policy.³ One of the new C&DIs regarding forward-looking information, such as financial projections, explicitly requires companies to provide any reconciling metrics that are available without unreasonable efforts. The SEC has consistently required companies to reconcile non-GAAP financial measures with their respective GAAP equivalents in the context of merger and tender offer transactions.

¹ Mary Jo White, Keynote Address, International Corporate Governance Network Annual Conference: Focusing the Lens of Disclosure to Set the Path Forward on Board Diversity, Non-GAAP, and Sustainability (June 27, 2016), https://www. 2 sec.gov/news/speech/chair-white-icgn-speech.html.

² See, e.g., Nicolas Grabar and Sandra Flow, Non-GAAP Financial Measures: The SEC’s Evolving Views, Harvard Law School Forum on Corporate Governance and Financial Regulation (June 24, 2016), https://corpgov.law.harvard.edu/2016/06/24/non-gaap-financial-measures-the-secs-evolving-views/; Gretchen Morgenson, Fantasy Math Is Helping Companies Spin Losses Into Profits, N.Y. Times, Apr. 22, 2016, http://www.nytimes.com/2016/04/24/business/fantasy-math-is-helping-companies-spin-losses-into-profits.html?r=0.

³ Non-GAAP Financial Measures, Compliance & Disclosure Interpretations, U.S. SECURITIES AND EXCHANGE COMMISSION (May 17, 2016), https://www.sec.gov/divisions /corpfin/guidance/ nongaapinterp.htm.

41. With respect to Rothschild’s Discounted Cash Flow Analysis (“DCF”), that was created in support of a fairness opinion presented to the Board and was a factor the 14D-9 discloses that Rothschild made adjustments to the Company’s standalone, unlevered, after-tax free cash flows (“unlevered free cash flows” or “UFCF”). 14D-9, 45. Rothschild calculated the estimated present value of Inventure Foods’s UFCF by discounting the Company’s terminal value and cash flow to present value using a discount rate range of 13.5% to 15.5%. However, the 14D-9 fails to disclose (i) the projected UFCF, (ii) the adjustments that were made, e.g., the adjustment made from the Company’s net debt), and Rothschild’s rationale for the adjustments made.

42. These key inputs are material to Inventure Foods shareholders, and their omission renders the summaries of Rothschild’s DCF valuation analysis incomplete and misleading. As a highly-respected professor explained in one of the most thorough law review articles regarding the fundamental flaws with the valuation analyses bankers perform in support of fairness opinions, in a discounted cash flow analysis a banker takes management’s forecasts, and then makes several key choices “each of which can significantly affect the final valuation.” Steven M. Davidoff, Fairness Opinions, 55 Am. U.L. Rev. 1557, 1576 (2006). Such choices include “the appropriate discount rate, and the terminal value…” Id. As Professor Davidoff explains:

There is substantial leeway to determine each of these, and any change can markedly affect the discounted cash flow value. . . . The substantial discretion and lack of guidelines and standards also makes the process vulnerable to manipulation to arrive at the “right” answer for fairness. This raises a further dilemma in light of the conflicted nature of the investment banks who often provide these opinions.

43. Clearly, shareholders would find the aforementioned information material since the Board’s unanimous recommendation that shareholders tender their shares in connection with the Proposed Transaction was based in part on the following:

The oral opinion of Rothschild, delivered to the Board on October 25, 2017, subsequently confirmed in writing, that, as of October 25, 2017, and on the basis of and subject to the qualifications, limitations and assumptions set forth therein, the Offer Price or the Merger Consideration, as applicable, payable to the holders of outstanding Shares (other than Excluded Shares (as defined below)) in the Offer and Merger pursuant to the Merger Agreement, was fair from a financial point of view to such holders[. . . .].

44. The above-referenced omitted information, if disclosed, would significantly alter the total mix of information available to Inventure Foods’s stockholders. Accordingly, based on the foregoing disclosure deficiencies in the 14D-9, Plaintiff seeks injunctive and other equitable relief to prevent the irreparable injury that Inventure Foods stockholders will suffer, absent judicial intervention, if Inventure Foods’s stockholders are required to decide whether or not to tender their shares without the above-referenced material misstatements and omissions being remedied.

45. Plaintiff incorporates each and every allegation set forth above as if fully set forth herein.

46. Section 14(e) of the Exchange Act provides that it is unlawful “for any person to make any untrue statement of a 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 are made, not misleading . . .” 15 U.S.C. § 78n(e).

47. As discussed above, Inventure Foods filed and delivered the 14D-9 to its stockholders, which Defendants knew, or recklessly disregarded, contained material omissions and misstatements described herein.

48. Defendants violated §14(e) of the Exchange Act by issuing the 14D-9 in which they made untrue statements of material facts or failed to state all material facts necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, in connection with the tender offer commenced in conjunction with the Proposed Transaction. Defendants knew or recklessly disregarded that the 14D-9 failed to disclose material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

49. The 14D-9 was prepared, reviewed and/or disseminated by Defendants. It misrepresented and/or omitted material facts, including material information about the consideration offered to stockholders via the tender offer, the intrinsic value of the Company, the Company’s financial projections, and Rothschild’s valuation analyses and resultant fairness opinion.

50. In so doing, Defendants made untrue statements of material fact and omitted material information necessary to make the statements that were made not misleading in violation of § 14(e) of the Exchange Act. By virtue of their positions within the Company and/or roles in the process and in the preparation of the 14D-9,

Defendants were aware of this information and their obligation to disclose this information in the 14D-9.

51. The omissions and misleading statements in the 14D-9 are material in that a reasonable stockholder would consider them important in deciding whether to tender their shares or seek appraisal. In addition, a reasonable investor would view the information identified above which has been omitted from the 14D-9 as altering the “total mix” of information made available to stockholders.

52. Defendants knowingly, or with deliberate recklessness, omitted the material information identified above from the 14D-9, causing certain statements therein to be materially incomplete and therefore misleading. Indeed, while Defendants undoubtedly had access to and/or reviewed the omitted material information in connection with approving the Proposed Transaction, they allowed it to be omitted from the 14D-9, rendering certain portions of the 14D-9 materially incomplete and therefore misleading.

53. The misrepresentations and omissions in the 14D-9 are material to Plaintiff, and Plaintiff will be deprived of his entitlement to make a fully informed decision if such misrepresentations and omissions are not corrected prior to the expiration of the Tender Offer.

54. Plaintiff repeats and realleges the preceding allegations as if fully set forth herein.

55. Defendants have caused the 14D-9 to be issued with the intention of soliciting stockholder support of the Proposed Transaction.

56. Section 14(d)(4) of the Exchange Act and SEC Rule 14d-9 promulgated thereunder require full and complete disclosure in connection with tender offers.

57. The 14D-9 violates § 14(d)(4) and Rule 14d-9 because it omits material facts, including those set forth above, which render the 14D-9 false and/or misleading.

58. Defendants knowingly, or with deliberate recklessness, omitted the material information identified above from the 14D-9, causing certain statements therein to be materially incomplete and therefore misleading. Indeed, while Defendants undoubtedly had access to and/or reviewed the omitted material information in connection with approving the Proposed Transaction, they allowed it to be omitted from the 14D-9, rendering certain portions of the 14D-9 materially incomplete and therefore misleading.

59. The misrepresentations and omissions in the 14D-9 are material to Plaintiff, and Plaintiff and Inventure Foods stockholders will be deprived of their entitlement to make a fully informed decision if such misrepresentations and omissions are not corrected prior to the expiration of the tender offer.

60. The misrepresentations and omissions in the 14D-9 are material to Plaintiff, and Plaintiff and Inventure Foods stockholders will be deprived of their entitlement to make a fully informed decision if such misrepresentations and omissions are not corrected prior to the expiration of the tender offer.

61. Plaintiff repeats and realleges the preceding allegations as if fully set forth herein.

62. The Individual Defendants acted as controlling persons of Inventure Foods within the meaning of Section 20(a) of the 1934 Act as alleged herein. By virtue of their positions as officers and/or directors of Inventure Foods and participation in and/or awareness of the Company’s operations and/or intimate knowledge of the false statements contained in the 14D-9, they had the power to influence and control and did influence and control, directly or indirectly, the decision making of the Company, including the content and dissemination of the various statements that plaintiff contends are false and misleading.

63. Each of the Individual Defendants was provided with or had unlimited access to copies of the 14D-9 alleged by Plaintiff to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause them to be corrected.

64. In particular, each of the Individual Defendants had direct and supervisory involvement in the day-to-day operations of the Company, and, therefore, is presumed to have had the power to control and influence the particular transactions giving rise to the violations as alleged herein, and exercised the same. The 14D-9 contains the unanimous

recommendation of the Individual Defendants to approve the Proposed Transaction. They were thus directly involved in the making of the 14D-9.

65. By virtue of the foregoing, the Individual Defendants violated Section 20(a) of the 1934 Act.

66. As set forth above, the Individual Defendants had the ability to exercise control over and did control a person or persons who have each violated Section 14(d) of the 1934 Act and Rule 14d-9, by their acts and omissions as alleged herein. By virtue of their positions as controlling persons, these Defendants are liable pursuant to Section 20(a) of the 1934 Act. As a direct and proximate result of Defendants’ conduct, Plaintiff is threatened with irreparable harm.

A. Ordering that this action may be maintained as a class action and certifying Plaintiff as the Class representative and Plaintiff’s counsel as Class counsel;

B. Enjoining Defendants and all persons acting in concert with them from proceeding with the Tender Offer or consummating the Proposed Transaction, unless and until the Company discloses the material information discussed above, which has been omitted from the 14D-9;

C. In the event Defendants consummate the Proposed Transaction, awarding damages to Plaintiff and the Class;

D. Awarding Plaintiff the costs of this action, including reasonable allowance for Plaintiff’s attorneys’ and experts’ fees; and

E. Granting such other and further relief as this Court may deem just and proper.

DECONCINI MCDONALD YETWIN

& LACY, P.C.

By: /s/Gary F. Urman

Gary F. Urman (AZ #11748)

2525 E. Broadway, Suite 200

Tucson, AZ 85716

Tel: (520) 322-5000

Fax: (520) 322-5585

Email: gurman@dmyl.com

FARUQI & FARUQI, LLP

James M. Wilson, Jr.

685 Third Avenue

New York, NY 10017

Tel: (212) 983-9330

Facsimile: (212 983-9331

Email: jwilson@faruqilaw.com

Counsel for Plaintiff

Plaintiff, Ralph Shaoul (“Plaintiff”), by and through his attorneys, alleges the following on information and belief, except as to the allegations specifically pertaining to Plaintiff, which are based on personal knowledge.

1. This action stems from a proposed transaction announced on October 26, 2017 (the “Proposed Transaction” or “Merger”), pursuant to which Inventure Foods, Inc.

(“Inventure” or the “Company”) will be acquired by Utz Quality Foods, LLC (“Utz” or “ Parent”), through Utz’s wholly owned subsidiary, Heron Sub, Inc. (“Merger Sub”) (Utz and Merger Sub are collectively referred to herein as “Utz”).

2. On October 25, 2017, Inventure’s Board of Directors (the “Board” or the “Individual Defendants”) caused the Company to enter into an Agreement and Plan of Merger (the “Merger Agreement”) with Utz. Pursuant to the terms of the Merger Agreement, Utz commenced a tender offer (the “Tender Offer”) to purchase all of the outstanding shares of Inventure common stock for $4.00 per share in cash (the “Offer Price”). The Tender Offer commenced on November 15, 2017 and is set to expire at 12:00 p.m., New York City time, on December 13, 2017.

3. On November 15, 2017, Defendants filed a Solicitation/Recommendation Statement on Form 14D-9 (the “Solicitation Statement” or “Solicitation”) with the United States Securities and Exchange Commission (“SEC”) in connection with the Proposed Transaction. As described herein, the Solicitation Statement omits material information with respect to the Proposed Transaction, which renders it false and misleading, in violation of Sections 14(d), 14(e), and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78n(d), 78n(e), 78t(a), and SEC Rule 14d-9, 17 C.F.R. § 240.14d-9(d) (“Rule 14d-9).

4. Plaintiff seeks to enjoin Defendants from taking any steps to consummate the Proposed Transaction or, in the event the Proposed Transaction is consummated, to recover damages resulting from the Defendants’ wrongdoing described herein.

5. This Court has subject matter jurisdiction over all claims asserted herein pursuant to Section 27 of the Exchange Act, 15 U.S.C § 78aa, and 28 U.S.C. § 1331, as Plaintiff alleges violations of Sections 14(d), 14(e), and 20(a) of the Exchange Act.

6. This Court has personal jurisdiction over all of the Defendants because each is either a corporation that conducts business in, and maintains operations within, this District, or is an individual who is either present in this District for jurisdictional purposes or has sufficient minimum contacts with this District so as to make the exercise of jurisdiction by this Court permissible under traditional notions of fair play and substantial justice.

7. Venue is proper under 28 U.S.C. § 1391 because Inventure maintains its principal executive offices in this District, each Defendant transacted business in this District, and a substantial portion of the transactions and wrongs complained of herein occurred in this District.

8. Plaintiff is, and has been continuously through all times relevant hereto, the owner of Inventure common stock.

9. Defendant Inventure is a Delaware corporation. The address for its principal executive offices is 5415 East High Street, Suite 350, Phoenix, Arizona 85054, and its common stock is listed and traded on The NASDAQ Stock Market under the symbol “SNAK.”

10. Defendant Terry McDaniel (“McDaniel”) has served as a Director and as the

Chief Executive Officer of the Company since May 2008 and as Chief Operating Officer (“COO”) from April 2006 to April 2008.

11. Defendant Timothy A. Cole was appointed as Inventure’s Interim Chairman of the Board in January 2017, and has served as a Director of the Company since May 2014.

12. Defendant Ashton D. Asensio (“Asensio”) has served as a Director of Inventure since February 2006.

13. Defendant Macon Bryce Edmonson (“Edmonson”) has served as a Director of Inventure since July 2006.

14. Defendant Paul J. Lapadat (“Lapadat”) has served as a Director of Inventure since May 2013.

15. Defendant Joel D. Stewart (“Stewart”) has served as a Director of Inventure since January 2017.

16. Defendants McDaniel, Cole, Asensio, Edmonson, Lapadat, and Stewart are collectively referred to as the “Individual Defendants.”

17. As described on its website, Inventure “is a marketer and manufacturer of specialty food brands in better-for-you and indulgent categories under a variety of Company owned and licensed brand names.” Those brand names include Jamba, TGI Fridays, Nathan’s Famous, and Seattle’s Best Coffee, among others. Inventure operates manufacturing facilities in Arizona, Indiana, Washington, Oregon, and Georgia.

issued the Solicitation Statement, which purports to contain a summary of the Proposed Transaction, but omits certain critical information, which renders portions of the Solicitation Statement materially incomplete and/or misleading, in violation of the Securities Act provisions discussed herein. As a result, Inventure’s shareholders lack material information necessary to allow them to make an informed decision concerning whether to tender their shares.

19. In particular, the Solicitation Statement contains materially incomplete and/or misleading information concerning, inter alia: the financial analyses performed by Inventure’s financial advisor, Rothschild Inc. (“Rothschild”), in support of its opinion that the Offer Price is fair to Inventure shareholders.

20. The Solicitation Statement states that in rendering its fairness opinion, Rothschild performed a Discounted Cash Flow Analysis (“DCF”). For this analysis, Rothschild calculated “the estimated present value of the standalone, unlevered, after-tax free cash flows that the Company was forecasted to generate . . . through the end of GY2018” based on management’s forecasts. Solicitation at 44-45. “Rothschild also calculated a range of estimated terminal values for the Company utilizing the terminal multiple methodology,” whereby it applied a range of last-twelve month period (“LTM”) terminal multiples of 11.0x to 13.0x to Inventure’s projected adjusted EBITDA. Id. at 45. The problem, however, is that the Solicitation Statement fails to disclose Inventure’s free cash flows, even though this is the very basis of Rothschild’s DFC analysis. Moreover, aside from a vague reference to Rothschild’s “professional judgment,” id., there is no disclosure concerning how Rothschild arrived at its terminal multiple range of 11.0x to

21. The Solicitation Statement goes on to note that “the cash flows and the terminal values were then discounted to present value using discount rates of 13.5% to 15.5% based on an estimate of the Company’s weighted average cost of capital [“WACC”] as of October 25, 2017, to derive a range of implied EVs [enterprise values] for the Company.” Id. at 45. The Solicitation Statement, however, fails to disclose any of the inputs Rothschild used to determine the WACC. This omitted information is material to Inventure shareholders in deciding whether to tender their shares, as the lack of disclosure of the inputs that were used by Rothschild in its DCF analysis, including the underlying inputs supporting Rothschild’s EV range, prevents shareholders from understanding the context of Rothschild’s figures or considering whether any of the inputs thereto or ranges derived therefrom are anomalous. Absent this information, Inventure shareholders are unable to determine whether the Proposed Transaction is indeed fair and in their best interest.

22. The Solicitation Statement also omits material information concerning the Selected Public Company Analysis. For this analysis, Rothschild reviewed the financial data of 14 public companies it considered “similar to the operations of one or more of the business lines of the Company” (the “Selected Public Companies”). Id. at 40. Based on this data, Rothschild calculated each Selected Public Company’s EV “as a multiple of the estimated revenue of such company” for certain future fiscal years, which Rothschild referred to as “EV/Sales.” Id. at 41. Based on the EV/Sales multiple calculated by Rothschild, and based on its professional judgment, Rothschild applied an illustrative range

of EV/Sales of 0.90x to 1.20x to the estimated sales of Inventure for FY2018. From this data, Rothschild ultimately reached an implied per share equity value reference range for Inventure of $1.75 to $3.50. Rothschild then applied to Inventure’s estimated sales for FY2019 the same 0.90x to 120x range of EV/Sales, and then subtracted from such implied EVs the estimated amount of Inventure’s net debt as of December 29, 2017. From this exercise Rothschild reached an implied per share equity value reference range for Inventure of $2.00 to $4.00.

23. The Solicitation Statement, however, does not disclose the EV/Sales multiples for each of the Selected Public Companies, which is the underpinning of Rothschild’s Selected Public Company Analysis conclusion. The real informative value of a financial advisor’s work is not in its ultimate conclusion, but in the inputs and valuation analyses that buttress that result. When a financial advisor’s endorsement of the fairness of a transaction is touted to shareholders (see id. at 35), the valuation methods used to arrive at that opinion, as well as the key inputs and multiples used in those analyses, must also be fairly disclosed.

24. The Solicitation Statements disclosure regarding Rothschild’s Selected Precedent Transactions Analysis fares no better. For this analysis, Rothschild analyzed the transaction value multiples for 23 selected transactions involving companies with business operations similar to Inventure’s. Rothschild reviewed the transaction value of each of the transactions and calculated the implied EV for the target company, based on a variety of metrics. Id. at 44. From this analysis, Rothschild derived an EV/Sales multiple for each transaction, which it defined as “the implied EV of the target company of the

selected transaction as a multiple of the revenue of the target company during the 12-month period ending closest to the date of announcement of the transaction for which such information was publicly available.” Id. From this multiple, Rothschild applied an illustrative range of EV/Sales of 0.90x to 1.65x to Inventure’s projected estimated revenue. Ultimately, Rothschild reached an implied per share equity value reference range for the Company of i) $1.25 to $5.25 per share for Inventure’s estimated revenue for the 12-month period ended on September 30, 2017 of approximately $112 million (“LTM sales”), and 2) $1.50 to $5.75 per share for the estimated revenue of the Company for FY2017 of approximately $116 million (“FY2017E sales”). There is a glaring omission, however: the Solicitation Statement never discloses the multiple of each specific transaction, despite the fact that each transaction multiple informed Rothschild when it reached its Selected Precedent Transaction equity value reference range. As previously noted, the real value of Rothschild’s work is not in its conclusion, but in the valuation analyses and inputs that underpin that result. It is those analyses that are crucial for shareholders evaluating the merits of the Merger.

25. Without the foregoing material disclosures, it is impossible for Inventure shareholders to fully understand and interpret Rothschild’s financial analyses or the fairness of the Offer Price when determining whether to tender their shares.

26. There are also several material omissions in the Solicitation Statement concerning the process surrounding the Merger.

27. For example, the Solicitation Statement notes that between August 22, 2016 and March 16, 2017, the Company entered into nondisclosure agreements (“NDAs”) with

44 potential transaction counterparties other than Utz. Id. at 17. However, descriptions concerning material terms in these NDAs are absent. Specifically, it is recounted that on August 5, 2016, the Board’s Transaction Committee instructed Rothschild to begin to solicit interest from certain potentially interested parties, subject to the execution of NDAs “with customary standstill provisions.” Id. at 16. The Solicitation Statement, however, fails to disclose whether the NDAs these other parties ultimately executed (which presumably had the referenced “customary” standstill provision) included “don’t-ask-don’t-waive” provisions and/or sunset provisions.

28. If the NDAs contained “don’t ask don’t waive” provisions, these other parties are likely prohibited from even contacting Inventure for the purpose of coming forward with a topping bid. Sunset provisions, on the other hand, set an effective time whereby the standstill prohibitions expire (e.g., upon Inventure’s entry into a definitive merger agreement with another buyer) and, depending on the nature and duration of the standstill period, could provide other parties with a “second bite at the apple” to submit a topping bid.

29. The omission of the details regarding these NDAs renders the Solicitation Statement materially misleading because it gives the impression that the counterparties who entered into negotiations with the Company prior to the signing of the Merger Agreement have the ability to come forward with a topping bid, when they may, in fact, be contractually prohibited from doing so. Thus, the omission of this information renders all references to the NDAs in the Solicitation Statement materially false and misleading.

30. Particularly, in this case, the Board approved Utz’s offer of $4.00 per share,

which was significantly less than other offers received during the sales process. For example, the Solicitation Statement notes that “Party F” submitted a preliminary indication of interest to acquire all Inventure outstanding stock at a range of $11.50 to $12.40 per share.¹ Like all other suitors who lost out to Utz, the Solicitation Statement fails to disclose whether Party F’s NDA had onerous standstill terms that would have restricted it from later coming forward with a topping bid.

31. Additionally, the Solicitation Statement fails to fully disclose Rothschild’s potential conflicts of interest. Specifically, it observes that “Rothschild and its affiliates are engaged in a wide range of financial advisory and investment banking activities” yet notes only that Rothschild, in the past two years, and aside from those services rendered to the Company in connection with the sales process, “did not provide financial advisory services to Parent [i.e. Utz] or the Company.” Id. at 46-47 (emphasis added). This begs the question of whether Rothschild recently provided any investment banking services to Utz. The existence of such services creates a potential that Rothschild could be biased in favor of Utz, rather than Inventure, which, unlike Inventure, will disappear upon consummation of the Merger. Yet the Solicitation Statement is silent on this issue of investment banking work.

32. Plaintiff brings this action as a class action pursuant to Fed. R. Civ. P. 23 on

¹ On January, 5, 2017, Party F withdrew from the process, stating that it “remained interested in a transaction with the Company but could not continue to actively evaluate an acquisition of the Company at that time due to internal issues that were not related to a potential transaction involving the Company.” Id. at 20.

behalf of himself and the other public shareholders of Inventure (the “Class”). Excluded from the Class are Defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any of the Defendants.

33. This action is properly maintainable as a class action for the following reasons:

34. The Class is so numerous that joinder of all members is impracticable. As of November 6, 2017, there were 19,827,000 shares of Inventure common stock outstanding, held by hundreds, if not thousands, of individuals and entities scattered throughout the country.

35. Questions of law and fact are common to the Class, including, among others: (i) whether Defendants have violated Sections 14(d), 14(e), and 20(a) of the Exchange Act in connection with the Proposed Transaction; and (ii) whether Plaintiff and the Class would be irreparably harmed if the Proposed Transaction is consummated as currently contemplated.

36. Plaintiff is an adequate representative of the Class, has retained competent counsel experienced in litigation of this nature, and will fairly and adequately protect the interests of the Class.

37. Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to the Class.

38. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for the

39. A class action is superior to other available methods for fairly and efficiently adjudicating this controversy.

40. Defendants have acted, or refused to act, on grounds generally applicable to the Class as a whole, and are causing injury to the entire Class. Therefore, preliminary and final injunctive relief on behalf of the Class as a whole is appropriate.

41. Plaintiff incorporates each and every allegation set forth above as if fully set forth herein.

42. Defendants have caused the Solicitation Statement to be issued with the intention of soliciting shareholder support of the Proposed Transaction.

43. Section 14(d)(4) of the Exchange Act and SEC Rule 14d-9 promulgated thereunder require full and complete disclosure in connection with tender offers. Specifically, Section 14(d)(4) provides, in pertinent part: “Any solicitation or recommendation to the holders of such a security to accept or reject a tender offer or request or invitation for tenders shall be made in accordance with such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.”

44. SEC Rule 14d-9(d), which was adopted to implement Section 14(d)(4) of the Exchange Act, provides, in pertinent part: “Any solicitation or recommendation to holders

of a class of securities referred to in section 14(d)(1) of the Act with respect to a tender offer for such securities shall include the name of the person making such solicitation or recommendation and the information required by Items 1 through 8 of Schedule 14D-9 (§ 240.14d-101) or a fair and adequate summary thereof.”

45. In accordance with Rule 14d-9, Item 8 of a Schedule 14D-9 requires a Company’s directors to: “Furnish such additional information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not materially misleading.”

46. The Solicitation Statement violates Section 14(d)(4) and Rule 14d-9 because it omits the material facts set forth above, which renders the Solicitation Statement false and/or misleading.

47. Defendants knowingly or with deliberate recklessness omitted the material information set forth above, causing the statements in the Solicitation Statement to be materially incomplete and/or misleading.

48. The omissions and incomplete and misleading statements in the Solicitation Statement are material in that a reasonable shareholder would consider them important in deciding whether to tender their shares. In addition, a reasonable investor would view such information as altering the “total mix” of information made available to shareholders.

49. As a direct and proximate result of Defendants’ unlawful course of conduct in violation of Section 14(d) of the Exchange Act and SEC Rule 14d-9, absent injunctive relief from the Court, Plaintiff and the other members of the Class have sustained and will continue to sustain irreparable injury by being denied the opportunity to make an informed

51. Plaintiff incorporates each and every allegation set forth above as if fully set forth herein.

52. Section 14(e) of the Exchange Act provides, in pertinent part: “It shall be unlawful for any person to make any untrue statement of a 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 are made, not misleading, or to engage in any fraudulent, deceptive, or manipulative acts or practices, in connection with any tender offer or request or invitation for tenders, or any solicitation of security holders in opposition to or in favor of any such offer, request, or invitation.”

53. Defendants prepared, reviewed, filed and disseminated the false and misleading Solicitation Statement to Inventure’s shareholders.

54. In doing so, Defendants knew or recklessly disregarded that the Solicitation Statement failed to disclose material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

55. The omissions and incomplete and misleading statements in the Solicitation Statement are material in that a reasonable shareholder would consider them important in deciding whether to tender their shares. In addition, a reasonable investor would view such information as altering the “total mix” of information made available to shareholders.

56. By virtue of their positions within the Company and/or roles in the process and in the preparation of the Solicitation Statement, Defendants were undoubtedly aware of this information and had previously reviewed it, including participating in the Merger negotiation and sales process and reviewing financial analyses purportedly summarized in the Solicitation Statement.

57. Defendants also knew that Plaintiff and the other members of the Class would rely upon the Solicitation Statement in determining whether to tender their shares.

58. As a direct and proximate result of Defendants’ unlawful course of conduct in violation of Section 14(e) of the Exchange Act, absent injunctive relief from the Court, Plaintiff and the other members of the Class have sustained and will continue to sustain irreparable injury by being denied the opportunity to make an informed decision as to whether to tender their shares.

60. Plaintiff incorporates each and every allegation set forth above as if fully set forth herein.

61. The Individual Defendants acted as controlling persons of Inventure within the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions as officers and/or directors of Inventure, and participation in and/or awareness of the Company’s operations and/or intimate knowledge of the false statements contained in the Solicitation Statement filed with the SEC, they had the power to influence and control

and did influence and control, directly or indirectly, the decision making of the Company, including the content and dissemination of the various statements which Plaintiff contends are false and misleading.

62. Each of the Individual Defendants were provided with or had unlimited access to copies of the Solicitation Statement and other statements alleged by Plaintiff to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause the statements to be corrected.

63. In particular, each of the Individual Defendants had direct and supervisory involvement in the day-to-day operations of the Company, and, therefore, is presumed to have had the power to control or influence the particular transactions giving rise to the securities violations alleged herein, and exercised the same. The Solicitation Statement contains the unanimous recommendation of each of the Individual Defendants to approve the Proposed Transaction. They were thus directly connected with and involved in the making of the Solicitation Statement.

64. By virtue of the foregoing, the Individual Defendants have violated Section 20(a) of the Exchange Act.

65. As set forth above, the Individual Defendants had the ability to exercise control over and did control a person or persons who have each violated Sections 14(d) and 14(e) of the Exchange Act, and Rule 14d-9, by their acts and omissions as alleged herein. By virtue of their positions as controlling persons, the Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act.

66. As a direct and proximate result of Individual Defendants’ conduct, Plaintiff

A. Ordering that this action may be maintained as a class action and certifying Plaintiff as the Class representative and Plaintiff’s counsel as Class counsel;

B. Preliminarily and permanently enjoining Defendants and all persons acting in concert with them from proceeding with, consummating, or closing the Tender Offer and/or Proposed Transaction;

C. Directing Defendants to account to Plaintiff and the Class for their damages sustained because of the wrongs complained of herein;

D. Awarding Plaintiff the costs of this action, including reasonable allowance for Plaintiff’s attorneys’ and experts’ fees; and

E. Granting such other and further relief as this Court may deem just and proper.


By:		/s/Andrew S. Friedman
		Andrew S. Friedman
		afriedman@bffb.com
		BONNETT FAIRBOURN FRIEDMAN & BALINT, P.C.
		2325 East Camelback Road, Suite 300
		Phoenix, AZ 85016
		Telephone: (602) 274-1100

		Carl L. Stine (pro hac vice to be filed)
		cstine@wolfpopper.com
		Adam J. Blander (pro hac vice to be filed)
		ablander@wolfpopper.com

WOLF POPPER LLP

845 Third Avenue

New York, New York 10022

Tel: 212-759-4600

Attorneys for Plaintiff

1. I have reviewed the complaint against Inventure Foods, Inc. (“lnventure”) and certain of its directors and officers. I have authorized the filing of a complaint and lead plaintiff motion on my behalf.

2. I am willing to serve as a representative party on behalf of the Class, including providing testimony at deposition and trial, if necessary.

3. I currently own 700 Inventure shares, which I bought on the following dates and for the following per share prices:

4. I did not purchase these securities at the direction of counsel, or in order to participate in any private action arising under the federal securities laws.

5. During the three-year period preceding the date of signing this certification, I have not sought to serve, and have not served, as a representative on behalf of a class in any private action arising under the federal securities laws.

6. I will not accept any payment for serving as a representative party on behalf of the Class except to receive a pro rata share of any recovery, or as ordered or approved by the Court, including the award to a representative party of reasonable costs and expenses, including lost wages relating to the representation of the Class.

Plaintiff Glenn Schoenfeld (“Plaintiff”), by his attorneys, alleges upon information and belief, except for his own acts, which are alleged on knowledge, as follows:

1. Plaintiff, a stockholder of Inventure Foods, Inc. (“Inventure” or the “Company”), brings this action against the members of Inventure’s Board of Directors collectively, the “Board” or the “Individual Defendants,” as further defined below) for violations of Section 14(d)(4), and Rule 14D-9 promulgated thereunder by the U.S. Securities and Exchange Commission (the “SEC”), and 20(a). Specifically, Defendants solicit the tendering of stockholder shares in connection with the sale of the Company to Utz Quality Foods, LLC (“Utz”) through a recommendation statement that omits material facts necessary to make the statements therein not false or misleading. Stockholders need this material information to decide whether to tender their shares or pursue their appraisal rights.

2. On October 25, 2017, the Company and Utz entered into a definitive agreement (“Merger Agreement”) under which Utz will acquire all of the outstanding common shares of Inventurc in an all-cash tender offer (the “Proposed Transaction”). If consummated, Inventure stockholders will receive $4.00 in cash per common share of Inventure. The Proposed Transaction has a value of approximately $165 million

3. On November 15, 2017, Utz filed a Form TO-T Tender Offer Statement announcing the commencement of its tender offer, set to expire at one minute after 11:59 P.M. New York City Time on December 13, 2017 (the “Tender Offer”).

4. Also on November 15, 2017, Defendants issued materially incomplete and misleading disclosures in the Schedule l4D-9 Solicitation/Recommendation Statement (the “Recommendation Statement”) filed with the United States Securities and Exchange Commission (“SEC”) in connection with the Proposed Transaction. The Recommendation Statement is deficient and misleading in that it fails to provide adequate disclosure of all material information related to the Proposed Transaction. The failure to adequately disclose such material information constitutes a violation of §§ 14(d)(4) and 20(a) of the Exchange Act as stockholders need such information in order to make a fully-informed decision regarding tendering their shares in connection with the Proposed Transaction about whether to tender their shares.

5. For these reasons and as set forth in detail herein, the Individual Defendants have violated federal securities laws. Accordingly, Plaintiff seeks to enjoin the Proposed Transaction or, in the event the Proposed Transaction is consummated, recover damages resulting from the Individual Defendants’ violations of these laws. Judicial intervention is warranted here to rectify existing and future irreparable harm to the Company’s stockholders

6. This Court has subject matter jurisdiction under 28 U.S.C. § 1331–32, pursuant to 15 U.S.C. § 78aa (federal question jurisdiction), as Plaintiff alleges violations of Sections 14(d)(4), and 20(a) of the Exchange Act and Rule 14d-9 promulgated thereunder.

7. The Court has personal jurisdiction over each of the Defendants because each either is a corporation that is incorporated under the laws of, conducts business in and maintains operations in this District or is an individual who either is present in this District for jurisdictional purposes or has sufficient minimum contacts with this District as to render the exercise of jurisdiction by this Court permissible under traditional notions of fair play and substantial justice.

8. Venue is proper in this District pursuant to 28 U.S.C. § 1391 because: (a) one or more of the Defendants either resides in or maintains executive offices here; (b) a substantial portion of the transactions and wrongs complained of herein occurred here; and (c) Defendants have received substantial compensation and other transfers of money here by doing business here and engaging in activities having an effect here.

9. Plaintiff is, and has been at all relevant times, the owner of Inventure common stock.

10. Inventure is a Delaware corporation that manufactures and markets snack foods under a variety of Company-owned and licensed brand names. The Company maintains its principal executive offices at 5415 East High Street, Suite 350, Phoenix, Arizona, 85054. Inventure common stock trades on the Nasdaq under the ticker symbol “SNAK.”

11. Defendant Ashton D. Asensio (“Asensio”) has served as a director of the Company since February 2006.

12. Defendant Timothy A. Cole (“Cole”) has served as a director of the Company since May 2014 and as Interim Chairman of the Board since January 2017.

13. Defendant Macon Bryce Edmonson (“Edmonson”) has served as a director of the Company since July 2006.

14. Defendant Terry E. McDaniel (“McDaniel”) has served as a director and the CEO of the Company since May 2008.

15. Defendant Paul J. Lapadat (“Lapadat”) has served as a director of the Company since May 2013.

16. Defendant Joel D. Stewart (“Stewart”) has served as a director of the Company since January 31, 2017.

17. Non-party Utz is a privately-held Delaware limited liability company that markets, manufactures, and distributes salty snacks in national and international markets. Utz maintains its principal executive offices at 900 High Street, Hanover, Pennsylvania, 17331.

18. Non-Party Heron Sub, Inc. is a Delaware corporation and wholly-owned subsidiary of Utz formed for the purpose of effectuating the Proposed Transaction.

19. On October 26, 2017, the Company and Utz issued a joint press release announcing the Proposed Transaction. The Press Release read in relevant part:

Quality Foods, LLC (“Utz”), the largest privately-held and family-managed branded salty snack manufacturer and marketer in the United States, today announced they entered into a merger agreement pursuant to which Utz has agreed to acquire all of the Company’s outstanding shares of common stock in an all-cash transaction.

As previously announced, on September 29, 2017, the Company entered into a Limited Waiver and Sixth Amendment to Credit Agreement (the “Sixth Amendment”) with BSP Agency, LLC, as agent (“BSP”), and the lenders (the “Lenders”) from time to time a party to the Credit Agreement (defined below), which further amended the Credit Agreement, dated as of November 18, 2015, among the Borrowers a party thereto, the Lenders, and BSP (as amended from time to time, the “Credit Agreement”). Under the terms of the Sixth Amendment, the Lenders agreed to, among other things, (i) a further extension from September 30, 2017 to October 31, 2017 of the temporary waiver of the requirement under the Credit Agreement to deliver audited financial statements without a going concern opinion, and (ii) a temporary waiver until October 31, 2017 of the financial covenants with which the Company was required to comply under the Credit Agreement.

As a result of this transaction, BSP and the other Lenders have agreed to further extend the temporary waivers from October 31, 2017 to January 15, 2018 pursuant to a Limited Waiver, Consent and Seventh Amendment to Credit Agreement (the “Seventh Amendment”), in order to give the Company sufficient time to complete the proposed transaction. Without this further extension of the temporary waivers beyond October 31st, the Company would have been in default of the EBITDA financial covenants under the Credit Agreement and the requirement to deliver audited financial statements without a going concern opinion. Pursuant to the Seventh Amendment, the Lenders have agreed to loan the Company up to an additional $5 million, which the Company may require to satisfy its expected operating expenses through December 31, 2017.

The Company is represented in this transaction by its financial advisor, Rothschild, and its legal counsel, DLA Piper LLP (US). Inventure retained Rothschild as its financial advisor in connection with a formal process to conduct a “strategic and financial review” of the Company in July 2016. Utz Quality Foods is represented in this transaction by its financial advisor, Stephens Inc., and its legal counsel, Cozen O’Connor.

20. On November 26, 2017, Inventure filed the materially misleading and incomplete Recommendation Statement with the SEC. Designed to convince stockholders

to tender their shares in favor of the Proposed Transaction, the Recommendation Statement is rendered misleading by the omission of critical information concerning the Company’s expected future value as a standalone entity as evidenced by the Company’s financial projections, the financial analysis underlying the fairness opinion provided by Rothschild, Inc.. (“Rothschild”), and the process ultimately leading to the Merger Agreement.

21. First, the Recommendation Statement discloses non-GAAP accounting metrics for projected Adjusted EBITDA over the years 2018-2022. However, providing this non-GAAP metrics without disclosing the line item metrics used to calculate it, or otherwise reconciling the non-GAAP projections to GAAP measures, makes the provided disclosures materially incomplete and misleading.

22. The Recommendation Statement fails to disclose the line items underlying Adjusted EBITDA necessary to reconcile EBITDA to GAAP measures, including interest.

23. The Recommendation Statement must disclose the necessary line items to reconcile these non-GAAP measures to well-understood GAAP financial metrics. Non-GAAP measures have no universally understood definition and vary widely between companies depending on the needs of management in promoting their own effect on Company performance.

24. Because of the non-standardized and potentially manipulative nature of non-GAAP measures, when a company discloses information in a Recommendation Statement that includes non-GAAP financial measures, the Company must also disclose comparable

GAAP measures and a quantitative reconciliation of forward-looking information. 17 C.F.R. § 244.100.

25. The Company routinely discloses the line items necessary to reconcile non-GAAP measures to GAAP in its quarterly and yearly financial reports. For example, in the Form 10-Q filed by the Company on November 9, 2017, the Company discloses line items necessary to reconcile Adjusted SG&A expenses to SG&A expenses.

26. Without disclosure of these reconciling metrics, the Recommendation Statement violates SEC regulations and materially misleads Inventure stockholders.

27. Furthermore, the Recommendation Statement omits management’s projections of unlevered, after-tax free cash flows, as used by Rothschild in performing an Illustrative Discounted Cash Flow Analysis, as well as the definition of unlevered, after-tax free cash flows used by Rothschild.

28. These projections were provided to Rothschild, and used by Rothschild, for the purpose of creating a fairness opinion that could then be used in soliciting stockholder approval of the Proposed Transaction. Because these analyses were presented to the Inventure stockholders as evidence of the fairness of the Proposed Transaction, the omission of the financial projections materially misleads those same stockholders as to the accuracy and value of the analyses.

29. The Recommendation Statement describes Rothschild’s fairness opinion and the various valuation analyses it performed in support of its opinion. However, the

description of Rothschild’s fairness opinion and analyses fails to include key inputs and assumptions underlying these analyses. Without this information, as described below, Inventure’s stockholders are unable to fully understand these analyses and, thus, are unable to determine what weight, if any, to place on Rothschild’s fairness opinion in determining how to cast their vote on the Proposed Transaction. This omitted information, if disclosed, would significantly alter the total mix of information available to Inventure’s stockholders.

30. With respect to Rothschild’s Selected Precedent Transactions Analysis, the Recommendation Statement fails to disclose the individual multiples for each of the selected transactions analyzed by Rothschild, as well as any benchmarking analyses Rothschild performed for Inventure in relation to the target companies. Without such information, lnventure’s stockholders are unable to determine how the multiples used in determining Inventure’s value compare to the other companies. As a result, stockholders are unable to assess whether Inventure utilized unreasonably low multiples thereby rendering the implied share price ranges set forth in the analyses misleading.

31. With respect to Rothschild’s Selected Public Company Analysis, the Recommendation Statement fails to disclose the individual multiples for each of the selected companies analyzed by Rothschild. Without such information, Inventure’s stockholders are unable to determine how the multiples used in determining Inventure’s value compare to the other companies. As a result, stockholders are unable to assess whether lnventure utilized unreasonably low multiples thereby rendering the implied share price ranges set forth in the analyses misleading.

32. With respect to Rothschild’s Illustrative Discounted Cash Flow Analysis, the Recommendation Statement fails to disclose the following key components used in their analysis: (i) Inventure’s terminal values; (ii) the inputs and assumptions underlying the calculation of the LTM terminal multiples of 11.0x to 13.0x used for Inventure; and (iii) the inputs and assumptions underlying the calculation of the discount rate range of 13.5% to 15.5% used for Inventure.

Material Omissions Regarding the Continued Compensation of Company Management

33. As disclosed in the Recommendation Statement, Steve Weinberger, the Company’s Chief Financial Officer, will cease to be employed at the time of the Merger’s consummation. However, Utz will then enter into a consulting agreement with Weinberger for four to six months, paying him a monthly consulting fee equal to his current monthly salary with the Company.

34. However, the Recommendation Statement does not disclose the details of any employment-related discussions and negotiations that occurred between Utz and Inventure executive officers, including who participated in all such communications, when they occurred, and their content. The Recommendation Statement further fails to disclose whether any of Utz’s prior proposals or indications of interest mentioned arrangements with Company management.

35. Communications regarding post-transaction employment and merger-related benefits during the negotiation of the underlying transaction must be disclosed to stockholders. This information is necessary for stockholders to understand potential

conflicts of interest of management and the Board, as that information provides illumination concerning motivations that would prevent fiduciaries from acting solely in the best interests of the Company’s stockholders.

36. As Chief Financial Officer, Weinberger was responsible for the financial projections provided to Rothschild to underlie its fairness opinion, and therefore held the utmost influence over the Board’s approval of the Proposed Transaction.

37. The omission of this information renders the statements in the “Background of the Offer and Merger” sections of the Recommendation Statement false and/or materially misleading in contravention of the Exchange Act.

38. Accordingly, Plaintiff seeks injunctive and other equitable relief to prevent the irreparable injury that Company stockholders will continue to suffer absent judicial intervention.

39. Plaintiff incorporates each and every allegation set forth above as if fully set forth herein.

40. Defendants have caused the Recommendation Statement to be issued with the intention of soliciting stockholder support of the Proposed Transaction.

41. Section 14(d)(4) of the Exchange Act and SEC Rule 14d-9 promulgated thereunder require full and complete disclosure in connection with tender offers.

42. The Recommendation Statement violates § 14(d)(4) and Rule 14d-9 because it omits material facts, including those set forth above, which render the Recommendation Statement false and/or misleading.

43. Defendants knowingly or with deliberate recklessness omitted the material information identified above from the Recommendation Statement, causing certain statements therein to be materially incomplete and therefore misleading. Indeed, while defendants undoubtedly had access to and/or reviewed the omitted material information in connection with approving the Proposed Transaction, they allowed it to be omitted from the Recommendation Statement, rendering certain portions of the Recommendation Statement materially incomplete and therefore misleading.

44. The misrepresentations and omissions in the Recommendation Statement are material to Plaintiff, and Plaintiff will be deprived of their entitlement to make a fully informed decision if such misrepresentations and omissions are not corrected prior to the expiration of the tender offer.

45. The omissions and incomplete and misleading statements in the Recommendation Statement are material in that a reasonable stockholder would consider them important in deciding whether to tender their shares or seek appraisal. In addition, a reasonable investor would view the information identified above which has

been omitted from the Recommendation Statement as altering the “total mix” of information made available to stockholders.

46. Plaintiff repeats and realleges the preceding allegations as if fully set forth herein.

47. The Individual Defendants acted as controlling persons of Inventure within the meaning of Section 20(a) of the 1934 Act as alleged herein. By virtue of their positions as officers and/or directors of Inventure and participation in and/or awareness of the Company’s operations and/or intimate knowledge of the false statements contained in the Recommendation Statement, they had the power to influence and control and did influence and control, directly or indirectly, the decision making of the Company, including the content and dissemination of the various statements that plaintiff contends are false and misleading.

48. Each of the Individual Defendants was provided with or had unlimited access to copies of the Recommendation Statement alleged by Plaintiff to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause them to be corrected.

49. In particular, each of the Individual Defendants had direct and supervisory involvement in the day-to-day operations of the Company, and, therefore,

is presumed to have had the power to control and influence the particular transactions giving rise to the violations as alleged herein, and exercised the same. The Recommendation Statement contains the unanimous recommendation of the Individual Defendants to approve the Proposed Transaction. They were thus directly involved in the making of the Recommendation Statement.

50. By virtue of the foregoing, the Individual Defendants violated Section 20(a) of the 1934 Act.

51. As set forth above, the Individual Defendants had the ability to exercise control over and did control a person or persons who have each violated Section 14(d) of the 1934 Act and Rule 14d-9, by their acts and omissions as alleged herein. By virtue of their positions as controlling persons, these defendants are liable pursuant to Section 20(a) of the 1934 Act. As a direct and proximate result of defendants’ conduct, Plaintiff is threatened with irreparable harm.

WHEREFORE, Plaintiff demands judgment against defendants jointly and severally, as follows:

(A) declaring that the Recommendation Statement is materially false or misleading;

(C) in the event that the transaction is consummated before the entry of this Court’s final judgment, rescinding it or awarding Plaintiff rescissory damages;

This automated JS-44 conforms generally to the manual JS-44 approved by the Judicial Conference of the United States in September 1974. The data is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. The information contained herein neither replaces nor supplements the filing and service of pleadings or other papers as required by law. This form is authorized for use only in the District of Arizona.

If any of this information is incorrect, please go back to the Civil Cover Sheet Input form using the Back button in your browser and change it. Once correct, save this form as a PDF and include it as an attachment to your case opening documents.

(D) directing that Defendants account to Plaintiff and the other members of the Class for all damages caused by them and account for all profits and any special benefits obtained as a result of their breaches of their fiduciary duties.

(E) awarding Plaintiff the costs of this action, including a reasonable allowance for the fees and expenses of Plaintiff’s attorneys and experts; and


WARD, KEENAN & BARRETT, P.C.
s/ Gerald Barrett
Gerald Barrett 2141 E. Camelback Rd., Suite 100
Phoenix, AZ 85016
Tel: 602-279-1717
Fax: 602-279-8908
Email: gbarrett@wardkeenanbarrett.com

LEVI & KORSINSKY, LLP
Donald J. Enright (to be admitted pro hac vice)
Elizabeth K. Tripodi (to be admitted pro hac vice) 1101 30th Street, N.W., Suite 115
Washington, DC 20007
Tel: (202) 524-4290
Fax: (202) 337-1567
Email: denright@zlk.com etripodi@zlk.com

Attorneys for Plaintiff

Plaintiff Glenn Schoenfeld (“Plaintiff”), on behalf of himself and all others similarly situated, by and through his attorneys, alleges the following upon information and belief, including investigation of counsel and review of publicly-available information, except as to those allegations pertaining to Plaintiff, which are alleged upon personal knowledge:

1. This is a class action brought by Plaintiff on behalf of himself and all other similarly situated public stockholders of Inventure Foods, Inc. (“Inventure” or the “Company”) against Inventure, Terry McDaniel, Timothy Cole, Ashton Asensio, Paul Lapadat, Macon Edmonson, and Joel Stewart, the members of the Inventure’s board of directors (collectively referred to as the “Board” or the “Individual Defendants,” and,

together with Inventure, the “Defendants”) for their violations of Sections 14(d)(4), 14(e), and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78n(d)(4), 78n(e), 78t(a), and U.S. Securities and Exchange Commission (“SEC”) Rule 14d-9, 17 C.F.R. §240.14d-9(d) (“Rule 14d-9”) and to enjoin the expiration of a tender offer (the “Tender Offer”) on a proposed transaction, pursuant to which Inventure will be acquired by Utz Quality Foods, LLC (“Utz”), through Heron Sub, Inc. (“Acquisition Sub”), a wholly-owned subsidiary of Utz (the “Proposed Transaction”).

2. On October 26, 2017, Inventure and Utz issued a joint press release announcing that they had entered into a definitive agreement (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, Acquisition Sub will commence a cash tender offer to acquire all of the issued outstanding shares of Inventure common stock for $4.00 per share (the “Offer Price”). The Proposed Transaction is valued at approximately $165 million.

3. On November 15, 2017, in order to convince Inventure stockholders to tender their shares, the Board authorized the filing of a materially incomplete and misleading Schedule 14D-9 Solicitation/Recommendation Statement (the “Recommendation Statement”) with the Securities and Exchange Commission (“SEC”). In particular, the Recommendation Statement contains materially incomplete and misleading information concerning: (i) financial projections for the Company; (ii) the valuation analyses performed by the Company’s financial advisor, Rothschild Inc. (“Rothschild”), in support of their fairness opinions; and (iii) the background process leading to the Proposed Transaction.

4. As discussed below, the Offer Price appears inadequate, and the process by which Defendants consummated the Proposed Transaction is fundamentally unfair to Plaintiff and the other common shareholders of Inventure. Indeed, Inventure’s closing price

on the day the Merger Agreement was executed amounts to a 10% premium over the Offer Price.

5. The Tender Offer is set to expire on December 13, 2017 at 11:59 PM, New York City time (the “Expiration Date”). It is imperative that the material information that has been omitted from the Recommendation Statement is disclosed to the Company’s stockholders prior to the forthcoming Expiration Date so they can properly determine whether to tender their shares.

6. For the reasons, and as set forth in detail herein, Plaintiff seeks to enjoy the Defendants from closing the Tender Offer or taking any steps to consummate the Proposed Transaction, unless and until the material information discussed below is disclosed to Inventure stockholders, or in the event the Proposed Transaction is consummated, to recover damages resulting from Defendants’ violations of the Exchange Act.

7. This Court has subject matter jurisdiction pursuant to Section 27 of the Exchange Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1331 (federal question jurisdiction) as Plaintiff alleges violations of 14(d)(4), 14(e) and 20(a) of the Exchange Act and SEC Rule 14d-9 promulgated thereunder pursuant to Section 27 of the Exchange Act, 15 U.S.C. § 78aa.

8. This Court has jurisdiction over the Defendants because each Defendant is either a corporation that conducts business in and maintains operations within this District, or is an individual with sufficient minimum contacts with this District so as to make the exercise of jurisdiction by this Court permissible under traditional notions of fair play and substantial justice.

9. Venue is proper in this District pursuant to 28 U.S.C. § 1391 because Plaintiff’s claims arose in this District, where a substantial portion of the actionable conduct

took place, where most of the documents are electronically stored, and where the evidence exists. Inventure is incorporated in Delaware and is headquartered in this District. Moreover, each of the Individual Defendants, as Company officers or directors, either resides in this District or has extensive contacts within this District.

10. Plaintiff is, and has been at all times relevant hereto, a common stockholder of Inventure.

11. Defendant Inventure is a Delaware corporation with its principal executive offices located at 5415 East High Street, Suite 350, Phoenix, Arizona 85054. The Company is a marketer and manufacturer of specialty food brands in better-for-you and indulgent categories under a variety of Company owned and licensed brand names, including Boulder Canyon Foods^TM, TGI Fridays^TM, Nathan’s Famous®, Vidalia Brands®, Poore Brothers®, and Tato Skins®, Bob’s Texas Style®. Inventure common stock is traded on the NASDAQ under the ticker symbol “SNAK.”

12. Defendant Terry McDaniel (“McDaniel”) has served as a director, the President, and the Chief Executive Officer of the Company since 2008.

13. Defendant Timothy Cole (“Cole”) has served as a director of the Company and the Interim Chairman of the Board since 2017.

14. Defendant Ashton Asensio (“Asensio”) has served as a director of the Company since 2006.

15. Defendant Paul Lapadat (“Lapadat”) has served as a director of the Company since 2013.

16. Defendant Macon Edmonson (“Edmonson”) has served as a director of the Company since 2006.

17. Defendant Joel Stewart (“Stewart”) has served as a director of the Company since 2017.

18. The defendants identified in paragraphs 11 through 16 are collectively referred to herein as the “Individual Defendants” and/or the “Board,” collectively with Inventure the “Defendants.”

19. Utz is the largest privately-held and family-managed branded salty snack company in the United States, producing a full line of products including potato chips, pretzels, cheese snacks, corn chips, tortillas, veggie stix/straws, popcorn, onion rings, pork skins, and more.

21. Plaintiff brings this class action pursuant to Fed. R. Civ. P. 23 on behalf of himself and the other public stockholders of Inventure (the “Class”). Excluded from the Class are Defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any Defendant.

23. Inventure is a marketer and manufacturer of specialty food brands in better-for-you and indulgent categories under a variety of Company owned and licensed brand names, including Boulder Canyon Foods^TM, TGI Fridays^TM, Nathan’s Famous®, Vidalia Brands®, Poore Brothers®, and Tato Skins®, Bob’s Texas Style®.

24. The Company operate in two segments: frozen products and snack products. The frozen products segment includes frozen fruits, fruit and vegetable blends, beverages, side dishes, and desserts for sale primarily to grocery stores, club stores, and mass merchandisers. All products sold under the frozen products segment are considered part of the healthy/natural food category. The snack products segment includes potato chips, kettle chips, potato crisps, potato skins, pellet snacks, sheeted dough products, popcorn, and extruded products for sale primarily to snack food distributors and retailers. The products sold under the Company’s snack products segment include products considered part of the indulgent specialty snack food category, as well as products considered part of the healthy/natural food category.

25. The Offer Price offered to Inventure’s shareholders in the Proposed Transaction is unfair and inadequate because, among other things, the intrinsic value of the Company’s common stock is materially in excess of the amount offered for those securities in the proposed acquisition given the Company’s prospects for future growth and earnings.

The Proposed Transaction will deny Class Members their right to fully share equitably in the true value of the Company.

26. For example, on May 8, 2017, Inventure announced its first quarter 2017 financial results. For the quarter, the Company reported net revenue of approximately $50 million for the first quarter. The Company’s snack segment net sales were up 5.1% to $26.2 million, which was an increase of $1.3 million as compared to the prior year period.¹ Defendant McDaniel commented on the favorable results from the Company’s snack segment, stating:

We believe the snack segment is well positioned for incremental increase to net revenue and gross margin improvement during 2017.

We are beginning to generate improved results across our business by evidence of the key areas of progress in the first quarter. The first quarter’s EBITDA shows significant improvement as compared to the last two quarters of 2017. Our management team and board of directors remain committed to increasing value for our shareholders as we move forward with our ongoing strategic and financial review.

27. The Company’s snack segment success continued into the second quarter of 2017. On August 5, 2017, the Company announced its second quarter 2017 financial results and reported that the snacks segment net revenue increased 11.6% year-over-year to `$30.7 million for the second quarter.

28. Steve Weinberger, the Company’s Chief Financial Officer (“CFO”), commented on the favorable results:

¹ Inventure Foods’ (SNAK) CEO Terry McDaniel on Q1 2017 Results – Earnings Call Transcript, SeekingAlpha (May 11, 2017), available at: https://seekingalpha.com/article/4072482-inventure-foods-snak-ceo-terry-mcdaniel-q1-2017-results-earnings-call-transcript?part=single.

As Terry mentioned consolidated gross profit increased 290 basis 19.7% compared to 16.8% for the same period last year. Again sequentially second quarter gross profit improved 250 basis points from 17.2% for the first quarter of this year. We saw gross profit improvement from both of our businesses versus last year 150 basis point improvements in snack and a 330 basis point improvement in frozen.

We’re finally back to where we need to be on the snack business. Our capacity issues are all result and we’re back at normal promotional levels. Adjusted net income from continuing operations was a positive $37,000 or $0.00 per diluted share which represents the sequential quarterly improvement from Q1 of this year where we reported a net loss of $2.6 million or an adjusted loss of $0.13 per diluted share.

Adjusted EBITDA was $4 million for the quarter compared to $3.7 million for the second quarter last year and sequentially it was an increase of $2.4 million versus the adjusted EBITDA in Q1 of this year. Adjusted SG&A expenses were flat to prior year but as a percentage of net revenues increased about 170 basis points attributable primarily to an increase in professional fees due to other legal expenses.

We continue to take steps to improve our balance sheet. During 2017 we reduced our debt by about $25 million primarily associated with the sale of our fresh frozen business. We continue to work closely with our lenders as we continue our strategic review and are very pleased with their level of support which resulted in a new bank amendment under our term loan that extends all financial governance and waivers in addition to providing additional liquidity. In summary we continue to make progress with business performance and our strategic review.²

29. Furthermore, the valuation analyses conducted by Rothschild in its fairness opinion, indicate that the value of Inventure’s stock has substantially greater potential than as represented by the Offer Price. For example, Rothschild’s Selected Precedent

² Inventure Foods’ (SNAK) CEO Terry McDaniel on Q2 2017 Results – Earnings Call Transcript, SeekingAlpha (August 5, 2017), available at: https://seekingalpha.com/article/4096962-inventure-foods-snak-ceo-terry-mcdaniel-q2-2017-results-earnings-call-transcript?part=single.

Transactions Analysis indicates a per share value range of $5.75 for the Company, under the LTM sales analysis, which illustrates that each share of lnventure stock has an inherent premium of approximately 143% over the $4.00 Offer Price, and a per share value range of $5.25 for the Company, under the FY2017E sales analysis, which illustrates that each share of Inventure stock has an inherent premium of approximately 132% over the Offer Price.

30. As seen, Rothschild’s financial analyses highlight just how grossly inadequate the Offer Price is because, among other things, the intrinsic value of the Company’s common stock is materially in excess of the amount offered for those securities in the proposed acquisition given the Company’s prospects for future growth and earnings. The Proposed Transaction will deny Class Members their right to fully share equitably in the true value of the Company.

31. On October 26, 2017, Inventure and Utz issued a joint press release announcing the Proposed Transaction. The press release stated, in relevant part:

PHOENIX, AZ and HANOVER, PA, October 26, 2017 (GLOBE NEWSWIRE) — Inventure Foods, Inc. (NASDAQ: SNAK) (“Inventure Foods” or the “Company”), a leading specialty food marketer and manufacturer, and Utz Quality Foods, LLC (“Utz”), the largest privately-held and family-managed branded salty snack manufacturer and marketer in the United States, today announced they entered into a merger agreement pursuant to which Utz has agreed to acquire all of the Company’s outstanding shares of common stock in an all-cash transaction.

approximately $75 million of debt and debt-like items, net of cash, approximately $8 million of the Company’s estimated closing costs and approximately $3 million due to equity award holders. The acquisition is structured as an all-cash tender offer for all of the outstanding shares of Inventure Foods common stock, to be followed by a merger in which each remaining untendered share of Inventure Foods will be converted into the right to receive the same $4.00 per share cash price paid in the tender offer.

“Lenders”) from time to time a party to the Credit Agreement (defined below), which further amended the Credit Agreement, dated as of November 18, 2015, among the Borrowers a party thereto, the Lenders, and BSP (as amended from time to time, the “Credit Agreement”). Under the terms of the Sixth Amendment, the Lenders agreed to, among other things, (i) a further extension from September 30, 2017 to October 31, 2017 of the temporary waiver of the requirement under the Credit Agreement to deliver audited financial statements without a going concern opinion, and (ii) a temporary waiver until October 31, 2017 of the financial covenants with which the Company was required to comply under the Credit Agreement.

With manufacturing facilities in Arizona and Indiana, Inventure Foods, Inc. (Nasdaq:SNAK) is a marketer and manufacturer of specialty food brands in better-for-you and indulgent categories under a variety of Company owned and licensed brand names,

including Boulder Canyon Foods^TM, TGI Fridays^TM, Nathan’s Famous®, Vidalia Brands®, Poore Brothers®, and Tato Skins®, Bob’s Texas Style®. For further information about Inventure Foods, please visit www.inventurefoods.com.

Founded in 1921, Utz® Quality Foods, LLC is the largest privately-held and family-managed branded salty snack company in the United States, producing a full line of products including potato chips, pretzels, cheese snacks, corn chips, tortillas, veggie stix/straws, popcorn, onion rings, pork skins and more. Its brands, which include Utz®, Golden Flake®, Zapp’s®, “Dirty”® Potato Chips, Good Health®, Bachman®, Bachman Jax®, Wachusett® and Snikiddy® among others, are distributed nationally and internationally through grocery, mass-merchant, club stores, convenience stores, drug stores and other channels. Based in Hanover, PA, Utz operates 10 facilities located in Pennsylvania, Colorado, Louisiana, Massachusetts and Alabama.³

32. To ensure that the Proposed Transaction is consummated, the Individual Defendants locked up the deal by agreeing to unfair “deal-protection” provisions in the Merger Agreement, effectively rendering the Proposed Transaction a fait accompli. For example, the Board agreed to: (i) a “no-shop” provision that prevents the Company from negotiating with or providing confidential Company information to competing bidders except under extremely limited circumstances; (ii) notify Utz no later than one (1) business day after receipt of a takeover proposal and provide Utz with the identity of the person making the takeover proposal and the material terms and conditions thereof; (iii) a “matching rights” provision that allows Utz four (4) business days to match any competing proposal in the unlikely event that one emerges; and (iv) a $5 million termination fee to be

³ Inventure Foods, Inc., Current Report (Form 8-K), at Exhibit 99.1 (Press Release, dated October 26, 2017) (Oct. 26, 2017).

paid to Utz if the Board agrees to accept a competing proposal. These provisions unfairly impede the Company’s public shareholders from receiving a superior offer.

33. On November 15, 2017, the Defendants filed a materially incomplete and misleading Recommendation Statement with the SEC and disseminated it to Inventure’s stockholders. The Recommendation Statement misrepresents or omits material information that is necessary for the Company’s stockholders to make an informed decision whether to tender their shares in connection with the Tender Offer.

34. Specifically, as set forth below, the Recommendation Statement fails to provide Company stockholders with material information or provides them with materially misleading information concerning: (i) financial projections for the Company; (ii) the valuation analyses performed by the Company’s financial advisor, Rothschild, in support of their fairness opinions; and (iii) the background process leading to the Proposed Transaction.

35. First, with respect to Certain Unaudited Prospective Financial Information of Investure Foods, the Recommendation Statement fails to provide material information concerning management’s projections that were relied upon by the Board in recommending that Company shareholders vote in favor of the Proposed Transaction.

36. The Recommendation Statement provides several non-GAAP financial metrics, including Adjusted EBITDA and Unlevered Free Cash Flows,⁴ but fails to disclose

⁴ Unlevered free cash flows are used to determine a company’s enterprise value. The unlevered free cash flow allows investors to ascertain the operating value of a company independent of its capital structure. This provides a greater degree of analytical flexibility and allows for a clearer picture of the value of the company overall. For this reason,

the line-item projections for the specific metrics, adjustments and/or inputs that are used to calculate these Non-GAAP financial measures or provide a reconciliation of the Non-GAAP measures to their most directly comparable GAAP financial measure, such as Net Income. Recommendation Statement 48.

37. The omissions from the above-referenced projections renders the financial projections included on pages 47 through 50 of the Recommendation Statement materially incomplete and misleading. If a recommendation statement discloses financial projections and valuation information, such projections must be complete and accurate. The question here is not the duty to speak, but liability for not having spoken enough. With regard to future events, uncertain figures, and other so-called soft information, a company may choose silence or speech elaborated by the factual basis as then known—but it may not choose half-truths.

38. At the very least, the Company must disclose the line item projections for the financial metrics that were used to calculate the non-GAAP measures. Such projections are necessary to make the non-GAAP projections included in the Recommendation Statement not misleading.

39. Moreover, Inventure regularly provides the line items used to calculate non-GAAP financial measures and/or reconciles non-GAAP financial measures to their most comparable GAAP measure in their earnings press releases prepared for investors. For example, the Company performed both a reconciliation of Adjusted EBITDA to its most comparable GAAP financial measure, Net Income, in addition to the line items used to calculate Adjusted EBITDA in its Third Quarter 2017 Financial Results, published on November 7, 2017:

unlevered free cash flows are routinely used to value a company, especially in merger contexts.

40. Furthermore, as seen above, there is a considerable difference between the non-GAAP financial measures utilized by the Company and their most comparable GAAP measure.

41. As a result, Defendants must provide Inventure shareholders with a reconciliation table of the non-GAAP measures to their most comparable GAAP measure or the line items used to calculate the non-GAAP financial measures disclosed in the Recommendation Statement in order to make the projections included on pages 47 through 50 of the Recommendation Statement not materially incomplete and misleading.

42. The Recommendation Statement describes Rothchild’s fairness opinion and the various valuation analyses it performed in support of its opinion. However, the description of Rothschild’s fairness opinion and analyses fails to include key inputs and assumptions underlying these analyses. Without this information, as described below, Inventure’s public stockholders are unable to fully understand these analyses and, thus, are unable to determine what weight, if any, to place on Rothschild’s fairness opinion in determining whether to tender their shares in favor of the Proposed Transaction. This

omitted information, if disclosed, would significantly alter the total mix of information available to Inventure’s stockholders.

43. With respect to Rothschild’s Illustrative Discounted Cash Flow Analysis, the Recommendation Statement fails to disclose: (i) the Company’s standalone, unlevered, after-tax free cash flows that it was expected to generate from the beginning of FY2017 through the end of FY2018; (ii) the Company’s range of estimated terminal values; (iii) the inputs and assumptions used to calculate the last-twelve-months (LTM) terminal multiples range of 11.0x to 13.0x; (iv) the inputs and assumptions used to calculate the range of discount rates of 13.5% to 15.5%; (v) the Company’s range of implied enterprise values (EVs); and (vi) the Company’s net debt (calculated as debt less cash and cash equivalents, in each case estimated as of December 29, 2017). Recommendation Statement 44-45.

44. These key inputs are material to Inventure’s common stockholders, and their omission renders the summary of Rothchild’s Illustrative Discounted Cash Flow Analysis incomplete and misleading. As a highly-respected professor explained in one of the most thorough law review articles regarding the fundamental. flaws with the valuation analyses bankers perform in support of fairness opinions, in a discounted cash flow analysis a banker takes management’s forecasts, and then makes several key choices “each of which can significantly affect the final valuation.” Steven M. Davidoff, Fairness Opinions, 55 Am. U.L. Rev. 1557, 1576 (2006). Such choices include “the appropriate discount rate, and the terminal value...” Id. As Professor Davidoff explains:

There is substantial leeway to determine each of these, and any change can markedly affect the discounted cash flow value. For example, a change in the discount rate by one percent on a stream of cash flows in the billions of dollars can change the discounted cash flow value by tens if not hundreds of millions of dollars... This issue arises not only with a discounted cash flow analysis, but with each of the other valuation techniques. This dazzling variability makes it difficult to rely, compare, or analyze the valuations underlying a fairness opinion unless full

disclosure is made of the various inputs in the valuation process, the weight assigned for each, and the rationale underlying these choices. The substantial discretion and lack of guidelines and standards also makes the process vulnerable to manipulation to arrive at the “right” answer for fairness. This raises a further dilemma in light of the conflicted nature of the investment banks who often provide these opinions.

45. With respect to Rothchild’s Selected Precedent Transactions Analysis, the Recommendation Statement fails to disclose the individual multiples Rothchild calculated for each of the transactions utilized. The omission of these multiples renders the summary of this analysis and the implied per share equity value ranges materially misleading. A fair summary of the Selected Precedent Transactions Analysis requires the disclosure of the individual multiples for each transaction; merely providing the range that a banker applied is insufficient, as Inventure shareholders are unable to assess whether the banker applied appropriate multiples, or, instead, applied unreasonably low multiples in order to drive down the implied share per price ranges.

46. Similar to the Rothchild’s Selected Precedent Transactions Analysis, the Selected Company Analysis also fails to disclose the individual multiples Rothchild calculated for each of the companies utilized. For the reasons mentioned above, omission of these multiples renders the summary of this analysis and implied per share equity value ranges materially misleading.

47. Similar to Rothchild’s Illustrative Discounted Cash Flow Analysis, the NOL Tax Savings Analysis fails to disclose: (i) the inputs and assumptions used to calculate the discount rates of 14.5%; and (ii) the Company’s gross federal net operating loss balance as of October 25, 2017. Recommendation Statement 45.

48. The Recommendation Statement also materially misleads stockholders as to the potential conflicts of interest faced by Inventure management and the Board.

It is expected that the employment of Steve Weinberger, the Chief Financial Officer of Inventure Foods, will terminate as of the Effective Time. [Utz] expects that the Surviving Corporation will enter into a consulting agreement with Mr. Weinberger following the closing of the Merger pursuant to which Mr. Weinberger would provide transition services to the Surviving Corporation for a period of four to six months after the closing of the Merger. Under such arrangement, Mr. Weinberger would be paid a monthly consulting fee equal to $27,500, which is his current monthly base salary with Inventure.

Recommendation Statement at 37. Yet, the Recommendation Statement completely fails to set forth any information concerning communications regarding post-transaction employment, the parties who participated in such conversation, and when such discussions took place.

50. Communications regarding post-transaction employment and merger-related benefits during the negotiation of the underlying transaction must be disclosed to stockholders. This information is necessary for stockholders to understand potential conflicts of interest of management and the Board, as that information provides illumination concerning motivations that would prevent fiduciaries from acting solely in the best interests of the Company’s stockholders.

51. The omission of this information renders the statements in the Effect of Merger Agreement on Employee Compensation and Benefits and the Background of the Offer and Merger Agreement; Reasons for Recommendation sections of the

Recommendation Statement false and/or materially misleading in contravention of the Exchange Act.

52. In sum, the omission of the above-referenced information renders the Recommendation Statement materially incomplete and misleading, in contravention of the Exchange Act. Absent disclosure of the foregoing material information prior to the expiration of the Proposed Transaction, Plaintiff and the other members of the Class will be unable to make a fully-informed decision regarding whether to vote in favor of the Proposed Transaction, and they are thus threatened with irreparable harm, warranting the injunctive relief sought herein.

(Against All Defendants for Violation of Section 14(e) of the Exchange Act and 17 C.F.R. § 244.100 Promulgated Thereunder)

53. Plaintiff incorporates each and every allegation set forth above as if fully set forth herein.

54. Section 14(e) of the Exchange Act provides that it is unlawful “for any person to make any untrue statement of a 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 are made, not misleading...” 15 U.S.C. §78n(e).

55. Defendants violated § 14(e) of the Exchange Act by issuing the Recommendation Statement in which they made untrue statements of material facts or failed to state all material facts necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, in connection with the tender offer commenced in conjunction with the Proposed Transaction. Defendants knew or recklessly disregarded that the Recommendation Statement failed to disclose material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

56. The Recommendation Statement was prepared, reviewed, and/or disseminated by Defendants. It misrepresented and/or omitted material facts, including material information about the consideration offered to stockholders via the tender offer, the intrinsic value of the Company, and potential conflicts of interest faced by certain Individual Defendants.

57. In so doing, Defendants made untrue statements of fact and/or omitted material facts necessary to make the statements made not misleading. Each of the Individual Defendants, by virtue of their roles as officers and/or directors, were aware of the omitted information but failed to disclose such information, in violation of Section 14(e). The Individual Defendants were therefore reckless, as they had reasonable grounds to believe material facts existed that were misstated or omitted from the Recommendation Statement, but nonetheless failed to obtain and disclose such information to shareholders although they could have done so without extraordinary effort.

58. The omissions and incomplete and misleading statements in the Recommendation Statement are material in that a reasonable stockholder would consider them important in deciding whether to tender their shares or seek appraisal. In addition, a reasonable investor would view the information identified above which has been omitted from the Recommendation Statement as altering the “total mix” of information made available to stockholders.

59. Defendants knowingly or with deliberate recklessness omitted the material information identified above from the Recommendation Statement, causing certain statements therein to be materially incomplete and therefore misleading. Indeed, while Defendants undoubtedly had access to and/or reviewed the omitted material information in connection with approving the Proposed Transaction, they allowed it to be omitted from the

Recommendation Statement, rendering certain portions of the Recommendation Statement materially incomplete and therefore misleading.

60. The misrepresentations and omissions in the Recommendation Statement are material to Plaintiff, and Plaintiff will be deprived of their entitlement to make a fully informed decision if such misrepresentations and omissions are not corrected prior to the expiration of the tender offer.

(Against all Defendants for Violations of Section 14(d)(4) of the Exchange Act and SEC Rule 14d-9, 17 C.F.R. § 240.14d-9)

61. Plaintiff incorporates each and every allegation set forth above as if fully set forth herein.

62. Defendants have caused the Recommendation Statement to be issued with the intention of soliciting stockholder support of the Proposed Transaction.

63. Section 14(d)(4) of the Exchange Act and SEC Rule 14d-9 promulgated thereunder require full and complete disclosure in connection with tender offers. Specifically, Section 14(d)(4) provides that:

Any solicitation or recommendation to the holders of such a security to accept or reject a tender offer or request or invitation for tenders shall be made in accordance with such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.

64. SEC Rule 14d-9(d), which was adopted to implement Section 14(d)(4) of the Exchange Act, provides that:

Information required in solicitation or recommendation. Any solicitation or recommendation to holders of a class of securities referred to in section 14(d)(l) of the Act with respect to a tender offer for such securities shall include the name of the person making such solicitation or recommendation and the

information required by Items 1 through 8 of Schedule 14D-9 (§ 240.14d-101) or a fair and adequate summary thereof.

65. In accordance with Rule 14d-9, Item 8 of a Schedule 14D-9 requires a Company’s directors to:

Furnish such additional information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not materially misleading.

66. The Recommendation Statement violates Section 14(d)(4) and Rule 14d-9 because it omits material facts, including those set forth above, which omissions render the Recommendation Statement false and/or misleading. Defendants knowingly or with deliberate recklessness omitted the material information identified above from the Recommendation Statement, causing certain statements therein to be materially incomplete and therefore misleading. Indeed, while Defendants undoubtedly had access to and/or reviewed the omitted material information in connection with approving the Proposed Transaction, they allowed it to be omitted from the Recommendation Statement, rendering certain portions of the Recommendation Statement materially incomplete and therefore misleading.

67. The misrepresentations and omissions in the Recommendation Statement are material to Plaintiff, and Plaintiff will be deprived of their entitlement to make a fully informed decision if such misrepresentations and omissions are not corrected prior to the expiration of the Tender Offer.

68. The misrepresentations and omissions in the Recommendation Statement are material to Plaintiff, and Plaintiff will be deprived of their entitlement to make a fully informed decision if such misrepresentations and omissions are not corrected prior to the expiration of the tender offer.

(Against the Individual Defendants for Violations of Section 20(a) of the Exchange Act)

69. Plaintiff incorporates each and every allegation set forth above as if fully set forth herein.

70. The Individual Defendants acted as controlling persons of Inventure within the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions as officers and/or directors of Inventure, and participation in and/or awareness of the Company’s operations and/or intimate knowledge of the incomplete and misleading statements contained in the Recommendation Statement, they had the power to influence and control and did influence and control, directly or indirectly, the decision making of the Company, including the content and dissemination of the various statements that Plaintiff contends are materially incomplete and misleading.

71. Each of the Individual Defendants was provided with or had unlimited access to copies of the Recommendation Statement by Plaintiff to be misleading prior to the date the Recommendation Statement was issued, and had the ability to prevent the issuance of the false and misleading statements or cause the statements to be corrected.

72. In particular, each of the Individual Defendants had direct and supervisory involvement in the day-to-day operations of the Company, and, therefore, is presumed to have had the power to control or influence the particular transactions giving rise to the Exchange Act violations alleged herein, and exercised the same. The Recommendation Statement at issue contains the unanimous recommendation of each of the Individual Defendants that shareholders tender their shares in the Tender Offer. They were thus directly involved in preparing this document.

73. In addition, as the Recommendation Statement sets forth, and as described herein, the Individual Defendants were involved in negotiating, reviewing, and approving

the merger agreement. The Recommendation Statement purports to describe the various issues and information that the Individual Defendants reviewed and considered. The Individual Defendants participated in drafting and/or gave their input on the content of those descriptions.

74. By virtue of the foregoing, the Individual Defendants have violated Section 20(a) of the Exchange Act.

75. As set forth above, the Individual Defendants had the ability to exercise control over and did control a person or persons who have each violated Sections 14(e) and 14(d)(4) and Rule 14d-9 by their acts and omissions as alleged herein. By virtue of their positions as controlling persons, these Defendants are liable pursuant to Section 20(a) of the Exchange Act. As a direct and proximate result of Individual Defendants’ conduct, Plaintiff and the Class will be irreparably harmed.

76. Plaintiff and the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury that Defendants’ actions threaten to inflict.

A. Declaring that this action is properly maintainable as a Class Action and certifying Plaintiff as Class Representative and his counsel as Class Counsel;

B. Enjoining Defendants and all persons acting in concert with them from closing the Tender Offer or consummating the proposed merger, unless and until the Company discloses the material information discussed above which has been omitted from the Recommendation Statement;

C. Directing the Defendants to account to Plaintiff and the Class for all damages sustained as a result of their wrongdoing;

D. Awarding Plaintiff the costs and disbursements of this action, including reasonable attorneys’ and expert fees and expenses; and

E. Granting such other and further relief as this Court may deem just and proper.


DECONCINI MCDONALD YETWIN & LACY, P.C.

By:		/s/ Gary F. Urman
		Gary F. Urman
		2525 E. Broadway Blvd., Suite 200
		Tucson, AZ 857l6-5300
		Attorneys for Plaintiff

		OF COUNSEL

		MONTEVERDE & ASSOCIATES PC
		Juan E. Monteverde
		The Empire State Building
		350 Fifth Avenue, Suite 4405
		New York, New York 10118
		Tel: 212-971-1341
		Fax: 212-202-7880
		Email: jmonteverde@monteverdelaw.com

I, Glenn Schoenfeld (“Plaintiff’’), declare, as to the claims asserted under the federal securities laws, that:

1. Plaintiff has reviewed a draft of the complaint and has authorized the filing of a complaint substantially similar to the one reviewed.

2. Plaintiff selects Monteverde & Associates PC and any firm with which it affiliates for the purpose of prosecuting this action as my counsel for purposes of prosecuting my claim against defendants.

3. Plaintiff did not purchase the security that is the subject of the complaint at the direction of Plaintiff’s counsel or in order to participate in any private action arising under the federal securities laws.

4. Plaintiff is willing to serve as a representative party on behalf of a class, including providing testimony at deposition and trial, if necessary.

5. Plaintiff sets forth in the attached chart all the transactions in the security that is the subject of the complaint during the class period specified in the complaint.

6. In the past three years, Plaintiff has not sought to serve nor has served as a representative party on behalf of a class in an action filed under the federal securities laws, unless otherwise specified below.

7. Plaintiff will not accept any payment for serving as a representative party on behalf of a class beyond Plaintiff’s pro rata share of any recovery, except such reasonable costs and expenses (including lost wages) directly relating to the representation of the Class as ordered or approved by the Court.

I declare under penalty of perjury under the laws of the United States that the foregoing information is correct to the best of my knowledge.

The completed cover sheet must be printed directly to PDF and filed as an attachment to the Complaint or Notice of Removal.

Plaintiff D&S Fraley Revocable Living Trust (“Plaintiff”), by its attorneys, on behalf of itself and those similarly situated, files this action against the defendants, and alleges upon information and belief, except for those allegations that pertain to it, which are alleged upon personal knowledge, as follows:

1. Plaintiff brings this stockholder class action on behalf of itself and all other public stockholders of Inventure Foods, Inc. (“Inventure” or the “Company”), against Inventure, and the Company’s Board of Directors (the “Board” or the “Individual

Defendants”)(collectively with the Company, the “Defendants”), for violations of Sections 14(d), 14(e) and 20(a) of the Securities and Exchange Act of 1934 (the “Exchange Act”), and for breaches of fiduciary duty as a result of Defendants’ efforts to sell the Company to Utz Quality Foods, LLC (“Parent”) and Heron Sub, Inc (the “Merger Sub” and collectively with Parent, “Utz”) as a result of an unfair process for an unfair price, and to enjoin a Tender Offer currently scheduled to expire on December 13, 2017 in which Utz will acquire each outstanding share of Inventure common stock for $4.00 per share in cash, with a total valuation of approximately $165 million (the “Proposed Acquisition”).

2. The terms of the Proposed Acquisition were memorialized in a October 25, 2017 filing with the Securities and Exchange Commission (“SEC”) on Form 8-K attaching the definitive Agreement and Plan of Merger (the “Merger Agreement”).

3. On November 15, 2017, Inventure filed a Solicitation/Recommendation Statement on Schedule 14D-9 (the “14D-9”) with the Securities and Exchange Commission (the “SEC”) in support of the Proposed Acquisition.

4. Defendants breached their fiduciary duties to the Company’s stockholders by agreeing to the Proposed Acquisition which undervalues Inventure and is the result of a flawed sales process. Post-closure, Inventure stockholders will be frozen out of seeing the return on their investment of any and all future profitability of Inventure.

5. Further, pursuant to the terms of the Merger Agreement, upon the consummation of the Proposed Acquisition, Company Board Members and executive officers will be able to exchange large, illiquid blocks of Company stock for massive payouts, in addition to receiving cash in exchange for all outstanding and unvested options and/or other types of restricted stock units. Moreover, certain Directors and other insiders will also be the recipients of lucrative change-in-control agreements, triggered upon the termination of their employment as a consequence of the consummation of the

Proposed Acquisition. Such large paydays upon the consummation of the Proposed Acquisition, have clearly tainted the motivations of the Board in approving it.

6. Finally, in violation of sections 14(d), 14(e) and 20(a) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and their fiduciary duties, Defendants caused to be filed the materially deficient 14D-9 on November 15, 2017 with the SEC in an effort to solicit stockholders to tender their Inventure shares in favor of the Proposed Acquisition. The 14D-9 is materially deficient and deprives Inventure stockholders of the information they need to make an intelligent, informed and rational decision of whether to tender their shares in favor of the Proposed Acquisition. As detailed below, the 14D-9 omits and/or misrepresents material information concerning, among other things: (a) the Company’s financial projections; and (b) the data and inputs underlying the financial valuation analyses that purport to support the fairness opinions provided by the Company’s financial advisor, Rothschild, Inc. (“Rothschild”).

7. Absent judicial intervention, the merger will be consummated, resulting in irreparable injury to Plaintiff and the Class. This action seeks to enjoin the Proposed Acquisition or, in the event the Proposed Acquisition is consummated, to recover damages resulting from violation of the federal securities laws by Defendants.

8. Plaintiff is a revocable living trust organized under the laws of the State of Oregon. Trustee for the Plaintiff, Donald L. Fraley, is a citizen of the State of Oregon. Plaintiff is, and at all times relevant hereto, has been an Inventure stockholder.

9. Defendant Inventure manufactures and markets healthy/natural and indulgent specialty snack food products in the United States and internationally. It operates in two segments, Frozen Products and Snack Products. The Company’s healthy/natural food products include Rader Farms frozen berries; Boulder Canyon kettle cooked potato chips; other snack and food items; Willamette Valley Fruit Company frozen berries; Fresh Frozen brand frozen vegetables; biscuits and other frozen snacks;

Jamba branded blend-and-serve smoothie kits; Seattle’s Best Coffee Frozen Coffee Blends branded blend-and-serve frozen coffee beverage; Sin In A Tin chocolate pate and other frozen desserts; and private label frozen fruits and healthy/natural snacks. The Company’s indulgent specialty snack food products include snack food under the T.G.I. Friday’s, Nathan’s Famous, and Vidalia brands; kettle cooked potato chips under the Poore Brothers and Bob’s Texas Style brands; and Tato Skins brand potato snacks. The Company also manufactures private label snack chip products for various grocery chains and natural stores, and co-pack products for other snack manufacturers. It markets its products through various channels, including grocery stores, natural food stores, mass merchandisers, drug and convenience stores, and club stores, as well as company-owned and third-party warehouses, direct store delivery, distribution centers, and other facilities. Inventure common stock is publicly traded on the NasdaqGS under the ticker symbol “SNAK”. Inventure is a Delaware corporation with its principal executive offices located at 5415 east High Street, Suite 350, Phoenix, AZ 85054.

10. Defendant Ashton D. Asensio (“Asensio”) has been a Director of the Company at all relevant times.

11. Defendant Timothy A. Cole (“Cole”) has been a director of the Company at all relevant times, and currently serves as the interim Chairman of the Board.

12. Defendant Macon Bryce Edmonson (“Edmonson”) has been a director of the Company at all relevant times.

13. Defendant Pal J. Lapadat (“Lapadat”) has been a director of the Company at all relevant times.

14. Defendant Terry McDaniel (“McDaniel “) has been a director of the Company at all relevant times, and currently serves as the Chief Executive Officer (“CEO”) of the Company.

15. Defendant Joel D. Stewart (“Stewart”) has been a director of the Company at all relevant times.

16. Defendants Asensio, Cole, Edmonson, Lapadat, McDaniel, and Stewart, identified in 10 - 15 are collectively referred to as the “Individual Defendants.”

17. Non-party Parent is a Delaware Limited Liability Company with its principal executive offices located at 900 High St., Hanover, PA 17331. Parent manufactures and markets snack foods in the United States and internationally. It offers potato chips, pretzels, cheese snacks, corn products, and popcorns. Parent offers its products through grocery stores, mass-merchants, club stores, convenience stores, drug stores, and other channels.

18. Non-party Merger Sub is a Delaware corporation and a direct wholly-owned subsidiary of Parent.

19. This Court has subject matter jurisdiction pursuant to Section 27 of the Exchange Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1331 (federal question jurisdiction) as Plaintiff alleges violations of Sections 14(d), 14(e) and Section 20(a) of the Exchange Act. This action is not a collusive one to confer jurisdiction on a court of the United States, which it would not otherwise have.

20. Personal jurisdiction exists over each defendant either because the defendant conducts business in or maintains operations in this District, or is an individual who is either present in this District for jurisdictional purposes or has sufficient minimum contacts with this District as to render the exercise of jurisdiction over defendant by this Court permissible under traditional notions of fair play and substantial justice.

21. Venue is proper in this District pursuant to 28 U.S.C. § 1391, because Inventure’s principal place of business is located in this District, and each of the Individual Defendants, as Company officers or directors, has extensive contacts within this District.

22. Plaintiff brings this action pursuant to Federal Rule of Civil Procedure 23, individually and on behalf of the stockholders of Inventure common stock who are being and will be harmed by Defendants’ actions described herein (the “Class”). The Class specifically excludes Defendants herein, and any person, firm, trust, corporation or other entity related to, or affiliated with, any of the Defendants.

24. By reason of the Individual Defendants’ positions with the Company as officers and/or directors, said individuals are in a fiduciary relationship with Inventure and owe the Company the duties of due care, loyalty, and good faith.

25. By virtue of their positions as directors and/or officers of Inventure, the Individual Defendants, at all relevant times, had the power to control and influence, and did control and influence and cause Inventure to engage in the practices complained of herein.

26. Each of the Individual Defendants are required to act with due care, loyalty, good faith and in the best interests of the Company. To diligently comply with these duties, directors of a corporation must:

27. In accordance with their duties of loyalty and good faith, the Individual Defendants, as directors and/or officers of Inventure, are obligated to refrain from:

28. Plaintiff alleges herein that the Individual Defendants, separately and together, in connection with the Proposed Acquisition, violated, and are violating, the fiduciary duties they owe to Inventure, Plaintiff and the other public stockholders of Inventure, including their duties of loyalty, good faith, and due care.

29. As a result of the Individual Defendants’ divided loyalties, Plaintiff and Class members will not receive adequate, fair or maximum value for their Inventure common stock in the Proposed Transaction.

30. Inventure manufactures and markets healthy/natural and indulgent specialty snack food products in the United States and internationally. It operates in two segments, Frozen Products and Snack Products.

31. The Company’s healthy/natural food products include Rader Farms frozen berries; Boulder Canyon kettle cooked potato chips; other snack and food items; Willamette Valley Fruit Company frozen berries; Fresh Frozen brand frozen vegetables; biscuits and other frozen snacks; Jamba branded blend-and-serve smoothie kits; Seattle’s Best Coffee Frozen Coffee Blends branded blend-and-serve frozen coffee beverage; Sin In A Tin chocolate pate and other frozen desserts; and private label frozen fruits and healthy/natural snacks.

32. The Company’s indulgent specialty snack food products include snack food under the T.G.I. Friday’s, Nathan’s Famous, and Vidalia brands; kettle cooked potato chips under the Poore Brothers and Bob’s Texas Style brands; and Tato Skins brand potato snacks.

33. The Company also manufactures private label snack chip products for various grocery chains and natural stores, and co-pack products for other snack manufacturers.

34. It markets its products through various channels, including grocery stores, natural food stores, mass merchandisers, drug and convenience stores, and club stores, as well as company-owned and third-party warehouses, direct store delivery, distribution centers, and other facilities.

35. Inventure’s most recent financial performance press release before the announcement of the proposed Acquisition indicated sustained and solid financial performance. For example, in an August 9, 2017, press release announcing its 2017 Q2 financial results, the Company noted such highlights as (i) an increase in snack segment

net revenues of 11.6%; (ii) an increase in the Boulder Canyon brand net revenues of 11.2% and a similar 9.4% increase in net revenues for the Boulder Canyon snack section; (iii) and a massive increase in snack private label net revenues of 34.5%.

36. Speaking on these tremendous results, Defendant and CEO McDaniel stated, “Our second quarter financial results reflect another sequential quarterly improvement in our operating and financial results and we are pleased with our continued progress.” McDaniel continued by noting the strength of the Company with the following, “The second quarter benefited from positive demand for our snack products as evidenced by the strength of the Boulder Canyon brand and premium private label sales growth, as well as an increase in both our snack and frozen segment gross profit margin as compared to the prior year.”

37. These positive financial results are not an anomaly, but rather, are indicative of a trend of continued financial success by Inventure. Looking further back, one can see evidence for this typical success. For example, in a May 11, 2017 press release announcing the Company’s 2017 Q1 financial results, Inventure reported such highlights as (i) an increase in snack segment net revenue of 5.1%; (ii) an increase in the Boulder Canyon brand net revenues of 15.3% and a similar 11.5% increase in net revenues for the Boulder Canyon snack section; and a huge increase in snack private label net revenues of 22.8%

38. Again, these results saw Defendant McDaniel praising the Company’s outstanding fiscal performance, stressing the “progress we made during the first quarter across key operational and financial areas of our business” and noting that the Company is focused on continuing to execute initiatives in the frozen and snack segments to “generate increased sales and profitability.”

39. Despite this upward trajectory and continually increasing financial results, the Individual Defendants have caused Inventure to enter into the Proposed Acquisition,

thereby depriving Plaintiff and other public stockholders of the Company the opportunity to reap the benefits of Inventure’s present and future success

40. The process deployed by the Individual Defendants was flawed and inadequate, and conducted out of the self-interest of the Individual Defendants.

41. Most notably the sales process initiated by the Company was hamstrung from the beginning by the Company’s decision to allow bidders to bid on and purchase a division of the Company piecemeal rather than seeking bids only for an acquisition of the Company as a whole. As a result, the Proxy states that the initial result of this scheme was that “no initial bid by any interested third party contemplated an acquisition of the entire Company.”

42. This thread continued throughout the entire sales process, with nearly all potentially interested third parties caveating their bids on the prior sale or non-inclusion of certain divisions of the Company, and with most bids contemplating purchases structured as sales of assets rather than an acquisition of Company stock. In fact, the Proposed Acquisition, was originally bid as a purchase of the Company’s remaining assets after two of its divisions had already been sold off to different buyers.

43. Moreover, this plan caused the sales process to drag on for a significant amount of time, resulting in several rounds of bidding that pushed the consideration offered lower and lower. The length of the process as a result of this plan also caused issues with the Company’s lines of revolving credit, necessitating several amendments to agreements with financial institutions during the course of the sales process, and likely further negatively impacting the consideration offered by interested third parties.

44. Additionally, it seems that Utz had initiated contact with the Company in July of 2015 to explore strategic alternatives, more than a year prior to the start of the formal sales process in August of 2016. At that time, the two companies entered into a mutual non-disclosure agreement (“NDA”) regarding a potential transaction. The 14D-9

is silent however, as to the exact nature of this NDA, if it contained any standstill provisions, and if so, their nature and under what circumstances the standstill would fall away. Furthermore, the 14D-9 is silent as to whether the later NDA entered into by Utz in August of 2016 was identical to the one entered into in July of 2015, and if as a result of the previous NDA and discussions therein, if Utz retained any competitive advantage in the sales process.

45. Moreover, the 14D-9 is not clear as to the nature of the standstill provisions contained in the NDAs distributed to the contacted third parties as part of the sales process, and under what conditions, if any, they would fall away.

46. It is also not clear, what, if any, power the so-called independent “Transaction Committee” of the Board actually had to make determinations regarding the sales process. The 14D-9 describes the Transaction Committee’s powers in ambiguous terms that do not adequately define if it actual had any power to make decisions related to the sales process, or if it was simply an advisory role with no real effect on the process.

47. Finally, it appears that the Board of Directors was in a state of flux throughout the entire sales process, with two former Directors resigning during the process, including the former Chairman of the Board David L. Meyers, who originally chaired the Transaction Committee. Moreover, Defendant Stewart, who was appointed to fill the vacancy left by Meyers, took the role at the behest of Luther King Capital Management Corporation (“Luther King”) after it filed a Schedule 13D in January 2017 announcing it had acquired 11% of outstanding Company stock.

48. On October 26, 2017, Inventure and Utz issued a joint press release announcing the Proposed Transaction. The press release stated, in relevant part:

Foods, LLC (“Utz”), the largest privately-held and family-managed branded salty snack manufacturer and marketer in the United States, today announced they entered into a merger agreement pursuant to which Utz has agreed to acquire all of the Company’s outstanding shares of common stock in an all-cash transaction.

strengths, are highly complementary to our business and we look forward to continuing Inventure’s strong heritage of innovation in both healthy and indulgent snacking. We have also been extremely impressed with the team at Inventure, and look forward to working together going forward.”

July 2016. Utz Quality Foods is represented in this transaction by its financial advisor, Stephens Inc., and its legal counsel, Cozen O’Connor”

49. Significantly, analyst expectations, synergies with Utz, and the Company’s financial prospects and opportunities for future growth establish the inadequacy of the merger consideration.

50. First, the compensation afforded under the Proposed Acquisition to Company stockholders significantly undervalues the Company. The proposed valuation does not adequately reflect the intrinsic value of the Company. Moreover, the valuation does not adequately take into consideration how the Company is performing, considering key net profit increases in many of its divisions reported in the recent quarters.

51. Notably, evidence of the extremely low value of the merger consideration is seen when it is compared with the value of Company stock less on October 12, 2017, than two weeks ago, when it was valued as high as $5.43 per share. This drop in less than a fourteen day time frame represents a loss to Plaintiff and other Company stockholders of more than 26.33%. In addition, with Company stock valued as high as $10.15 per share within the past year, the consideration in the Proposed Acquisition represents a loss to Company stockholders of more than 60.59% on their investments.

52. Next, analyst coverage indicates a high target above the deal price, with analysts setting a consensus price target for Inventure at $8.00 as recently as January 2017, or 100% the value being proffered in the Proposed Acquisition.

53. Additionally, Inventure’s future success is extremely likely, given the consistent increases in its net sales, and execution of its strategic plans as evidenced in its last two quarters of financial reports. Obviously, the opportunity to invest in such a company on the rise is a great coup for Utz, however it undercuts the foresight and investment of Plaintiff and all other public stockholders who have done the same.

54. In addition, the synergistic benefits to Utz cannot be ignored, and will bring a large windfall to Parent, as admitted by Utz CEO Dylan Lissette, Inventure’s “specialty snack food products and brands, as well as its geographic footprint, customer relationships and distribution strengths, are highly complementary to our business…” One would expect that such immense synergistic benefits would command a higher price, however the Company has clearly orchestrated the sales process to give Utz a bargain at the expense of Plaintiff and other public stockholders.

55. Moreover, post-closure, Inventure stockholders will be completely cashed out from any and all ownership interest in the Company, forever foreclosing them from receiving any future benefit in their investment as Inventure continues on its upward financial trajectory.

56. It is clear from these statements and the facts set forth herein that this deal is designed to maximize benefits for Utz at the expense of Inventure and Inventure stockholders, which clearly indicates that Inventure stockholders were not an overriding concern in the formation of the Proposed Acquisition.

57. The Merger Agreement contains certain provisions that unduly benefit Utz by making an alternative transaction either prohibitively expensive or otherwise impossible. Significantly, the Merger Agreement contains a termination fee provision that requires Inventure to pay up to $5 million to Utz if the Merger Agreement is terminated under certain circumstances. Moreover, under one circumstance, Inventure must pay this termination fee even if it consummates any Company Takeover Proposal (as defined in the Merger Agreement) within 9 months following the termination of the Merger Agreement. The termination fee will make the Company that much more expensive to acquire for potential purchasers. The termination fee in combination with other preclusive deal protection devices will all but ensure that no competing offer will be forthcoming.

58. The Merger Agreement also contains a “No Solicitation” provision that restricts Inventure from considering alternative acquisition proposals by, inter alia, constraining Inventure’s ability to solicit or communicate with potential acquirers or consider their proposals. Specifically, the provision prohibits the Company from directly or indirectly soliciting, initiating, proposing or inducing any alternative proposal, but permits the Board to consider an unsolicited bona fide “written Company Takeover Proposal” if it constitutes or is reasonably calculated to lead to a “Company Superior Proposal” as defined in the Merger Agreement.

59. Moreover, the Agreement further reduces the possibility of a topping offer from an unsolicited purchaser. Here, the Individual Defendants agreed to provide Utz information in order to match any other offer, thus providing Utz access to the unsolicited bidder’s financial information and giving Utz the ability to top the superior offer. Thus, a rival bidder is not likely to emerge with the cards stacked so much in favor of Utz.

60. These provisions, individually and collectively, materially and improperly impede the Board’s ability to fulfill its fiduciary duties with respect to fully and fairly investigating and pursuing other reasonable and more valuable proposals and alternatives in the best interests of the Company and its public stockholders.

61. Accordingly, the Company’s true value is compromised by the consideration offered in the Proposed Acquisition.

62. Inventure insiders are the primary beneficiaries of the Proposed Transaction, not the Company’s public stockholders. The Board and the Company’s executive officers are conflicted because they will have secured unique benefits for themselves from the Proposed Transaction not available to Plaintiff and the public stockholders of Inventure.

63. Certain insiders stand to receive massive financial benefits as a result of the Proposed Acquisition. Notably, Company insiders currently own large, illiquid portions

of Company stock that will be exchanged for cash upon the consummation of the Proposed Acquisition as follows:

64. Furthermore, upon the consummation of the Proposed Acquisition, each outstanding Company option, will be canceled and converted into the right to receive from the surviving corporation as cash equal to the product of (i) the number of vested Shares subject to such Option immediately prior to the Effective Time (including those whose vesting accelerates as of the Effective Time), and (ii) the excess, if any, of the Offer Price over the exercise or base price per share of Shares subject to such Option immediately prior to the Effective Time.

65. In addition upon the consummation of the Proposed Acquisition each restricted stock unit (“RSU”) or performance share units (“PSU”) to purchase Company stock will vest and be cancelled in exchange for cash, without interest and less any applicable withholding taxes, equal to the product of (i) the number of vested Shares subject to such PSU or RSU immediately prior to the Effective Time (including those whose vesting accelerates as of the Effective Time), and (ii) the Offer Price.

66. The below table outlines the large cash payouts to Company insiders in exchange for Company equity awards that will result from the consummation of the Proposed Acquisition:

67. Moreover, certain employment agreements with several Inventure officers or directors are entitled to severance packages should their employment be terminated under certain circumstances. These ‘golden parachute’ packages are significant, and will grant each director or officer entitled to them at the very least, hundreds of thousands of dollars, compensation not shared by Inventure’s common stockholders.

68. The following table sets forth the Golden Parachute compensation for certain Inventure directors and officers, as well as their estimated value payable:

69. Finally, at least one Company insider, Chief Financial Officer Steve Weinberger, will be retained by the surviving corporation post-close of the Proposed Acquisition in a consulting role, with a monthly consulting fee equal to nearly thirty thousand dollars. This tremendous payday for the Company CFO is not shared amongst Plaintiff and other public stockholders of the Company.

70. It is no wonder that, in light of the extremely lucrative profits for themselves, the Board allowed the Company to be sold far under its proper value in order to secure a quick sale.

71. Thus, while the Proposed Acquisition is not in the best interests of Inventure’s stockholders, it will produce lucrative benefits for the Company’s officers and directors.

72. On November 15, 2017, Inventure filed with the SEC a materially misleading and incomplete 14D-9 that failed to provide the Company’s stockholders with material information and/or provides them with materially misleading information critical to the total mix of information available to the Company’s stockholders concerning the financial and procedural fairness of the Proposed Acquisition.

Omissions and/or Material Misrepresentations Concerning the Sales Process leading up to the Proposed Acquisition

73. Specifically, the 14D-9 fails to provide material information concerning the process conducted by the Company and the events leading up to the Proposed Acquisition. In particular, the Proxy fails to disclose:

e. The specific nature of any employment contracts for current members of Company Management or the Board of Directors to retain their employment after the consummation of the Proposed Acquisition.

Omissions and/or Material Misrepresentations Concerning Inventure’s Financial Projections

74. The 14D-9 fails to provide material information concerning financial projections provided by Inventure’s management and relied upon by Rothschild in its analyses. Courts have uniformly stated that “projections … are probably among the most highly-prized disclosures by investors. Investors can come up with their own estimates of discount rates or [] market multiples. What they cannot hope to do is replicate management’s inside view of the company’s prospects.” In re Netsmart Techs., Inc. S’holders Litig., 924 A.2d 171, 201-203 (Del. Ch. 2007).

75. The 14D-9 provides projections for only three line items, Projected Net Sales, Projected Gross Profit and Projected Adjusted EBITDA. It fails to include any

free cash flow projections, which the 14D-9 explicitly states were used by Rothschild in its DCF Analysis. It also fails to include at least the following line items:

76. Significantly, the 14D-9 fails to provide a reconciliation of all non-GAAP to GAAP financial metrics. When a company discloses information in a proxy that includes non-GAAP financial metrics, such as Adjusted EBITDA, the company must also disclose comparable GAAP metrics and a quantitative reconciliation of the non-GAAP metrics to GAAP metrics. See 17 C.F.R. § 244.100 (requiring that the disclosure of material non-GAAP financial measures be accompanied by an identification and presentation of the most directly comparable GAAP measure, and a reconciliation of the non-GAAP measure to the comparable GAAP measure by a clearly understandable method). Indeed, the SEC has repeatedly emphasized that disclosure of unreconciled non-GAAP projections is inherently misleading, and has heightened its scrutiny of the use of such projections.

77. Without accurate projection data presented in the 14D-9, Plaintiff and other stockholders of Inventure are unable to properly evaluate the Company’s true worth, the

accuracy of Rothschild’s financial analyses, or make an informed decision whether to tender their Company stock in the Proposed Acquisition.

Omissions and/or Material Misrepresentations Concerning the Financial Analyses by Rothschild

78. In the 14D-9, Rothschild describes its respective fairness opinion and the various valuation analyses performed to render such opinion. However, the descriptions fail to include necessary underlying data, support for conclusions, or the existence of, or basis for, underlying assumptions. Without this information, one cannot replicate the analyses, confirm the valuations or evaluate the fairness opinions.

79. For example, the 14D-9 does not disclose material details concerning the analyses performed by Rothschild in connection with the Proposed Acquisition, including (among other things):

The Proxy fails to disclose the following: (i) whether Rothschild performed any benchmarking analysis for the selected companies; and (ii) the individual multiples for each of the selected companies utilized in the analysis

The Proxy fails to disclose the following: (i) whether Rothschild performed any benchmarking analysis for the selected transactions; (ii) the individual multiples for each of the selected transactions utilized in the analysis; and (iii) the transaction values for the transactions utilized in the analysis.

The Proxy fails to disclose the following: (i) the individual inputs and assumptions utilized by Rothschild to derive the discount rate range of 13.5%-15.5%; (ii) the WACC derived by Rothschild; (iii) the net debt of the Company as of December 29, 2017; (iv) the

The Proxy fails to disclose the following: (i) the WACC derived by Rothschild as of October 25, 2017; (ii) the basis for the assumption of 3% taxable income growth from the fiscal year of 2023 forward until the net operating loss balance is fully utilized; (iii) did Rothschild incorporate Inventure’s NOLs into the DCF analysis and, if so, why.

80. Without the omitted information identified above, Inventure’s public stockholders are missing critical information necessary to evaluate whether the proposed consideration truly maximizes stockholder value and serves their interests. Moreover, without the key financial information and related disclosures, Inventure’s public stockholders cannot gauge the reliability of the fairness opinion and the Board’s determination that the Proposed Acquisition is in their best interests.

82. The Individual Defendants have violated their fiduciary duties of care, loyalty and good faith owed to Plaintiff and the Company’s public stockholders.

83. By the acts, transactions and courses of conduct alleged herein, Defendants, individually and acting as a part of a common plan, are attempting to unfairly deprive Plaintiff and other members of the Class of the true value of their investment in Inventure.

84. As demonstrated by the allegations above, the Individual Defendants failed to exercise the care required, and breached their duties of loyalty and good faith owed to

the stockholders of Inventure by entering into the Proposed Transaction through a flawed and unfair process and failing to take steps to maximize the value of Inventure to its public stockholders.

85. Indeed, Defendants have accepted an offer to sell Inventure at a price that fails to reflect the true value of the Company, thus depriving stockholders of the reasonable, fair and adequate value of their shares.

86. Moreover, the Individual Defendants breached their duty of due care and candor by failing to disclose to Plaintiff and the Class all material information necessary for them to make an informed vote on whether to approve the Merger.

87. The Individual Defendants dominate and control the business and corporate affairs of Inventure, and are in possession of private corporate information concerning Inventure’s assets, business and future prospects. Thus, there exists an imbalance and disparity of knowledge and economic power between them and the public stockholders of Inventure which makes it inherently unfair for them to benefit their own interests to the exclusion of maximizing stockholder value.

88. By reason of the foregoing acts, practices and course of conduct, the Individual Defendants have failed to exercise due care and diligence in the exercise of their fiduciary obligations toward Plaintiff and the other members of the Class.

89. As a result of the actions of the Individual Defendants, Plaintiff and the Class will suffer irreparable injury in that they have not and will not receive their fair portion of the value of Inventure’s assets and have been and will be prevented from obtaining a fair price for their common stock.

90. Unless the Individual Defendants are enjoined by the Court, they will continue to breach their fiduciary duties owed to Plaintiff and the members of the Class, all to the irreparable harm of the Class.

91. Plaintiff and the members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be

fully protected from the immediate and irreparable injury which Defendants’ actions threaten to inflict.

93. Defendants have disseminated the 14D-9 with the intention of soliciting stockholders to tender their shares in favor of the Proposed Acquisition.

94. Section 14(e) of the Exchange Act provides that in the solicitation of shares in a tender offer, “[i]t shall be unlawful for any person to make any untrue statement of a 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 are made, not misleading[.]”

95. The 14D-9 was prepared in violation of Section 14(e) because it is materially misleading in numerous respects and omits material facts, including those set forth above. Moreover, in the exercise of reasonable care, Defendants knew or should have known that the 14D-9 is materially misleading and omits material facts that are necessary to render them non-misleading.

96. The Individual Defendants had actual knowledge or should have known of the misrepresentations and omissions of material facts set forth herein.

97. The Individual Defendants were at least negligent in filing a 14D-9 that was materially misleading and/or omitted material facts necessary to make the 14D-9 not misleading.

98. The misrepresentations and omissions in the 14D-9 are material to Plaintiff and the Class, and Plaintiff and the Class will be deprived of its entitlement to decide whether to tender its shares on the basis of complete information if such misrepresentations and omissions are not corrected prior to the expiration of the tender offer period regarding the Proposed Acquisition.

100. The Individual Defendants were privy to non-public information concerning the Company and its business and operations via access to internal corporate documents, conversations and connections with other corporate officers and employees, attendance at management and Board meetings and committees thereof and via reports and other information provided to them in connection therewith. Because of their possession of such information, the Individual Defendants knew or should have known that the 14D-9 was materially misleading to Company stockholders.

101. The Individual Defendants were involved in drafting, producing, reviewing and/or disseminating the materially false and misleading statements complained of herein. The Individual Defendants were aware or should have been aware that materially false and misleading statements were being issued by the Company in the 14D-9 and nevertheless approved, ratified and/or failed to correct those statements, in violation of federal securities laws. The Individual Defendants were able to, and did, control the contents of the 14D-9. The Individual Defendants were provided with copies of, reviewed and approved, and/or signed the 14D-9 before its issuance and had the ability or opportunity to prevent its issuance or to cause it to be corrected.

102. The Individual Defendants also were able to, and did, directly or indirectly, control the conduct of Inventure’s business, the information contained in its filings with the SEC, and its public statements. Because of their positions and access to material non-public information available to them but not the public, the Individual Defendants knew or should have known that the misrepresentations specified herein had not been properly disclosed to and were being concealed from the Company’s stockholders and that the 14D-9 was misleading. As a result, the Individual Defendants are responsible for the

accuracy of the 14D-9 and are therefore responsible and liable for the misrepresentations contained herein.

103. The Individual Defendants acted as controlling persons of Inventure within the meaning of Section 20(a) of the Exchange Act. By reason of their position with the Company, the Individual Defendants had the power and authority to cause Inventure to engage in the wrongful conduct complained of herein. The Individual Defendants controlled Inventure and all of its employees. As alleged above, Inventure is a primary violator of Section 14 of the Exchange Act and SEC Rule 14d-9. By reason of their conduct, the Individual Defendants are liable pursuant to section 20(a) of the Exchange Act.

WHEREFORE, Plaintiff demands injunctive relief, in its favor and in favor of the Class, and against the Defendants, as follows:

A. Ordering that this action may be maintained as a class action and certifying Plaintiff as the Class representatives and Plaintiff’s counsel as Class counsel;

C. In the event Defendants consummate the Proposed Acquisition, rescinding it and setting it aside or awarding rescissory damages to Plaintiff and the Class;

D. Declaring and decreeing that the Merger Agreement was agreed to in breach of the fiduciary duties of the Individual Defendants and is therefore unlawful and unenforceable;

E. Directing the Individual Defendants to exercise their fiduciary duties to commence a sale process that is reasonably designed to secure the best possible consideration for Inventure and obtain a transaction which is in the best interests of Inventure and its stockholders;

F. Directing defendants to account to Plaintiff and the Class for damages sustained because of the wrongs complained of herein;

G. Awarding Plaintiff the costs of this action, including reasonable allowance for Plaintiff’s attorneys’ and experts’ fees; and

H. Granting such other and further relief as this Court may deem just and proper.

Plaintiff hereby demands a jury on all issues which can be heard by a jury. DATED this 21^st day of November, 2017


		DECONCINI MCDONALD YETWIN & LACY, P.C.

By:		/s/ Gary F. Urman
		Gary F. Urman, Esquire
		2525 E. Broadway Blvd., Suite 200
		Tucson, AZ 85716-5300
		Telephone: (520) 322-5000
		Facsimile: (520) 322-5585
		gurman@dmyl.com
		Attorneys for Plaintiff

		OF COUNSEL

		BRODSKY & SMITH, LLC
		Evan J. Smith
		Marc L. Ackerman
		Two Bala Plaza, suite 510
		Bala Cynwid, PA 19004
		Telephone: (610) 667-6200
		esmith@brodskysmith.com
		mackerman@brodskysmith.com

Plaintiff Mauricio Chamat (“Plaintiff”), by his attorneys, alleges upon information and belief, except for his own acts, which are alleged on knowledge, as follows:

2. On October 25, 2017, the Company and Utz entered into a definitive agreement (“Merger Agreement”) under which Utz will acquire all of the outstanding common shares of Inventure in an all-cash tender offer (the “Proposed Transaction”). If consummated, Inventure stockholders will receive $4.00 in cash per common share of Inventure. The Proposed Transaction has a value of approximately $165 million

4. Also on November 15, 2017, Defendants issued materially incomplete and misleading disclosures in the Schedule 14D-9 Solicitation/Recommendation Statement (the “Recommendation Statement”) filed with the United States Securities and Exchange Commission (“SEC”) in connection with the Proposed Transaction. The Recommendation Statement is deficient and misleading in that it fails to provide adequate disclosure of all material information related to the Proposed Transaction. The failure to adequately disclose such material information constitutes a violation of §§ 14(d)(4) and 20(a) of the Exchange Act as stockholders need such information in order to make a fully-informed decision regarding tendering their shares in connection with the Proposed Transaction about whether to tender their shares.