SEC v. C-HEAR, INC.; and Adena Harmon, No. 3:26-cv-00547, Northern District of Texas (Feb. 20, 2026) — Complaint

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION
________________________________________________
SECURITIES AND EXCHANGE COMMISSION, )

)
Plaintiff, ) Civil Action No.

)
v.        )

)
C-HEAR, INC. and                                                               )  JURY TRIAL DEMANDED
ADENA HARMON,                               )

)
Defendants,                                                                 )

________________________________________________)

COMPLAINT

Plaintiff United States Securities and Exchange Commission (the “SEC” or

“Commission”), for its Complaint against Defendants C-Hear, Inc. (“C-Hear”) and Adena

Harmon (“Harmon”) alleges as follows:

NATURE OF THE ACTION

1. Between January 2019 and October 2023, Adena Harmon, acting as the Chief

Executive Officer and/or Chairman of software development company C-Hear, and other C-Hear

representatives solicited multiple investors to invest in C-Hear.  During these solicitations,

Harmon and the other C-Hear representatives made a series of materially misleading statements

and omissions, including omitting Harmon’s criminal background and falsely claiming that C-

Hear’s primary software product was in trials with third parties and that the federal government

had tried and was unable to hack into one of C-Hear’s products.

2. When investors invested, Harmon directed certain investors to transfer funds to

bank accounts that she represented were C-Hear bank accounts.  In reality, Harmon opened these

bank accounts for her own use without notifying the company.  Harmon misappropriated

3:26-cv-0547

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investor funds from the accounts, using the money to pay for personal expenses like luxury

shopping trips and to pay off a criminal restitution order.

3. Separately, Harmon solicited at least one C-Hear investor to invest in another

company that Harmon controlled, Elite Performance Data Labs, LLC (“Elite Performance”).

Harmon made misrepresentations to investors about Elite Performance’s business dealings,

falsely claiming that an acquisition by the Dallas Cowboys was imminent and that the Cowboys

had placed a multimillion-dollar order for Elite Performance’s products.  Harmon

misappropriated almost all of the Elite Performance investor funds, using the money to pay her

personal expenses, to pay for another business venture, and to pay C-Hear expenses.

4. Through their actions, Defendants violated, and unless enjoined will continue to

violate, the antifraud provisions of the federal securities laws as specified below.  The SEC

brings this action against Defendants seeking: (i) permanent injunctive relief; (ii) disgorgement

of ill-gotten gains from Harmon, plus prejudgment interest; and (iii) civil penalties.

DEFENDANTS

5. C-Hear, Inc. is a software development company that was headquartered in

Dallas, Texas, from January 2019 to October 2023 (the “Relevant Period”).  Its current principal

place of business is Austin, Texas.

6. Adena Harmon, recently resided in Fort Worth and Roanoke, Texas.  Harmon’s

current whereabouts are unknown, but upon information and belief she may be residing in

Paducah, Texas.  Harmon was a co-founder of C-Hear and served as its CEO from around

February 2019 to July 2022.  Harmon is also the founder, registered agent, and managing

member of Elite Performance, a now-defunct Texas limited liability company whose principal

place of business was at Harmon’s former residence in Fort Worth, Texas.

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JURISDICTION AND VENUE

7. The Commission brings this action pursuant to authority conferred upon it by

Sections 20(b) and 20(d) of the Securities Act [15 U.S.C. §§ 77t(b) and 77t(d)] and Sections

21(d) and 21(e) of the Exchange Act [15 U.S.C. §§ 78u(d) and 78u(e)].

8. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), and

22(a) of the Securities Act of 1933 [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)] and Sections 21(d),

21(e), and 27 of the Securities Exchange Act of 1934 [15 U.S.C. §§ 78u(d), (e), and 78aa].

9. Defendants offered and sold to investors C-Hear stock, which is a security under

Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b(a)(1)] and Section 3(a)(10) of the

Exchange Act [15 U.S.C. § 78c(a)(10)].  Harmon offered and sold to a C-Hear investor a

convertible loan agreement, which is a security because it is an investment contract and also a

note under Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act.

Harmon offered and sold to an investor Elite Performance limited liability membership interests,

which are securities because they are investment contracts.  The promissory note this same

investor executed in connection with his Elite Performance investments is a security because it is

an investment contract and also a note under Section 2(a)(1) of the Securities Act and Section

3(a)(10) of the Exchange Act.

10. In connection with the conduct described in this Complaint, Defendants, directly

or indirectly, made use of the mails or the means or instruments of transportation or

communication in interstate commerce by, among other means, soliciting and accepting

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investments via the Internet, transmitting investor contracts or notes via email, and accepting

investor deposits via mail, wire, or other electronic-funds transfer.

11. Venue is proper in this District pursuant to Section 20 of the Securities Act [15

U.S.C. § 77t] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  Defendants transacted

business in this District, and certain of the acts, practices, transactions, and courses of business

constituting violations of the securities laws alleged in this Complaint occurred within this

District.  C-Hear was based in Dallas until 2024, and Defendants solicited investors within this

district and executed investor agreements with investors within this district when they engaged in

at least some of the conduct alleged herein.

FACTUAL ALLEGATIONS

A. Harmon and C-Hear made false and misleading statements and omissions
to C-Hear Investors.

12.  Harmon and her co-founders formed C-Hear in September 2015 as a software

development company.  In 2019, C-Hear claimed that it had developed a small, software image

file and data container that also incorporated audio.  C-Hear called this technology “CHIF” (C-

Hear Intelligent Format).  C-Hear represented in its marketing materials to investors that its

technology could make websites more accessible to individuals with visual disabilities by

embedding images with audio describing the image.  C-Hear also claimed its data file could

replace video files in some social media marketing due to its much smaller file size.

13. After C-Hear got its first patent in early 2019, Harmon was appointed as CEO.

14. Over the next four years, Harmon and other C-Hear representatives solicited

investors to purchase C-Hear stock.  During some of these solicitations between approximately

February 2019 and February 2022, Harmon and the C-Hear representatives used marketing

materials, including a November 18, 2019 “C Hear, Inc. Business Plan” (“2019 Business Plan”)

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and/or a 2021 PowerPoint presentation titled “C-Hear Opportunity” (“2021 PowerPoint

Presentation”).  Harmon is listed as the author of the 2021 PowerPoint Presentation, and she was

C-Hear’s CEO and Chairman of the Board at the time of the creation and use of both the 2019

Business Plan and 2021 PowerPoint Presentation, both of which she approved and adopted by

choosing to share them with prospective investors.

15. Both of these documents describe Harmon as having worked in the social media

industry for more than 10 years, helping to promote non-profits and businesses.  The description

about Harmon also claims that the inspiration for C-Hear’s technology came from Harmon’s

desire to save her clients money on ads.

16. Despite promoting Harmon’s experience with non-profits, neither the 2019

Business Plan nor the 2021 PowerPoint Presentation revealed that Harmon had previously stolen

from several non-profits or that she had been convicted of numerous financial crimes, including

theft by check and uttering forged securities.  The documents similarly did not disclose that

Harmon had served prison time on multiple occasions for these crimes, or that she had an

outstanding criminal restitution order against her for restitution she still owed to two churches for

committing check fraud and stealing their money. The omissions relating to Harman’s criminal

background were important to investors, at least some of whom would not have invested had it

been disclosed.

17. In 2022, C-Hear pivoted to marketing its CHIF data file container as more secure

than other options—calling it the “armored car” of data containers.  When soliciting new

investments, C-Hear falsely claimed in its marketing materials, and Harmon and other C-Hear

representatives claimed in oral communications without any basis, that potential customers were

testing the CHIF.  For instance, in July 2022, C-Hear distributed a document entitled “Investor

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Package” to certain prospective investors describing the CHIF.  This Package stated that the

CHIF was “in trials with companies in cybersecurity, accessibility, intellectual property

protection, oil and gas, and so much more.”  In truth, there were no trials and no company had

tested the CHIF at that time.

18. C-Hear hired a new marketing consultant in January 2022.  Prior to joining C-

Hear, this consultant invested $43,000 in C-Hear in May 2021, after Harmon, who was the

current CEO, and others at C-Hear claimed that the CHIF was being tested by the federal

government and the federal government was unable to hack into it.

19. Upon joining C-Hear’s marketing department, this consultant determined by May

2022 that C-Hear was making claims that were not true, which included claims that the CHIF

was not hackable and that, in testing, the federal government had tried and failed to hack into the

CHIF.  This consultant advised the company to stop making these claims.  Regardless, C-Hear’s

Chief Operating Officer, who was also a member of its Board, continued to falsely tell

prospective investors as late as May 2023 that C-Hear was pitching the CHIF to the federal

government and that the federal government was unable to hack the CHIF.  Investors chose to

invest in C-Hear based on these misrepresentations.

20. Between January 2019 and October 2023, C-Hear raised more than $4.2 million

from at least 48 investors who purchased C-Hear stock.  C-Hear has never generated any revenue

and all investor funds have been depleted without any distributions to investors.

21. Harmon voluntarily stepped down as CEO in July 2022, though she stayed on as

Chairman of C-Hear’s Board and continued to be involved in investor communications until her

resignation from the Board in January 2023.

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B. Harmon misappropriated C-Hear investor funds.

22. C-Hear’s bylaws required all funds of the corporation “to be deposited to the

credit of the corporation in accounts that the Board may select.”  Despite this requirement,

Harmon, without the knowledge of C-Hear’s Board, opened two bank accounts in C-Hear’s

name in February 2022, listing only herself as the signatory.

23. From February 2022 to October 2022, Harmon directed three C-Hear investors to

deposit their investment funds totaling approximately $1,020,999 into the unauthorized bank

accounts.  All of these investors were led to believe that their funds would be used to support C-

Hear’s development of the CHIF and for the benefit of C-Hear.  The stock purchase agreements

purported to be between the individual investors and C-Hear, despite the fact that no other C-

Hear representatives or Board members knew about these transactions.

24. One investor (“Investor 1”) paid nearly $700,000 into these unauthorized

accounts.  Harmon directed him to deposit the funds into the unauthorized accounts after she

purported to sell him C-Hear stock in two transactions during 2022.

25. Later, in August 2022, Harmon convinced Investor 1 to enter into a purported

short-term $200,000 convertible loan agreement with C-Hear.  In return for loaning C-Hear

$200,000, the convertible loan agreement guaranteed Investor 1 16% interest over a three-month

term.  The convertible loan agreement also included terms for mandatory and optional

conversions to C-Hear stock upon certain financing events.  According to the agreement, the loan

proceeds were to “only be used in connection with furthering the Company’s development of the

C-Hear Intelligent Format file [CHIF] and related technology … and [was] not to be used or

otherwise allocated for any other venture, project or purpose.”  The note also included a

provision providing that the loan was secured by C-Hear’s interest in its products’ patents.

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26. Harmon was no longer the company’s CEO at the time she entered into the

convertible loan agreement on behalf of C-Hear, and C-Hear’s Board did not authorize the loan

agreement.  She similarly did not have authority to offer C-Hear’s interests in its patents as

security for the loan.  She never informed C-Hear’s Board of the convertible loan agreement.

27. Investor 1 was not in the regular business of purchasing and selling securities

when he entered into the convertible loan agreement and he had not invested in early-state

software technology companies before.

28. When C-Hear did not repay the convertible loan on schedule, Harmon gave

Investor 1 numerous excuses, including bank delays, for why C-Hear had not repaid the note.

Neither Harmon nor C-Hear ever repaid Investor 1 his principal or interest due under the

convertible loan agreement.

29. Of the total investor funds that Harmon directed to the unauthorized accounts

(approximately $1,020,999), Harmon misappropriated approximately $641,000 (or 63%).

Harmon used these funds to pay various personal expenses and to make payments unrelated to

C-Hear’s business, including satisfying her outstanding criminal restitution order, renting a large

luxury home for a year, buying furniture and luxury retail items, and making cash withdrawals.

30. In January 2023, Investor 1’s attorney contacted C-Hear’s leadership when he did

not receive the payment due pursuant to the convertible loan agreement.  However, C-Hear’s

representatives could not identify or locate Investor 1’s funds in C-Hear’s corporate bank

accounts.  Around this same time, Harmon resigned as Chairman of C-Hear’s Board.

C. Harmon made additional false misrepresentations and omissions regarding Elite
Performance and further misappropriated investor funds.

31. In 2020, while Harmon was CEO of C-Hear, she also claimed to run another

technology start-up company, Elite Performance.  Harmon approached at least two existing C-

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Hear investors about also investing in Elite Performance.  She told these two C-Hear investors

that Elite Performance had developed technology that could be embedded in helmets and jerseys

of professional athletes to collect data that would increase athletic performance.  In reality,

Harmon only had the idea for the technology—the product did not actually exist.

32. From July 2020 to September 2020, Harmon sold membership interests in Elite

Performance to at least one investor (“Investor 2”) in three separate transactions.  Harmon told

the investor that Elite Performance had developed certain technologies that it would attempt to

sell to professional sports organizations and broadcasting networks.

33. Harmon sent Investor 2 a limited liability company agreement (the “EP LLC

Agreement”) that included a table that showed that a list of members, including Harmon, had

each purportedly invested $275,000.  After Investor 2 invested, Harmon sent him another version

of the EP LLC Agreement that included an amended table reflecting Investor 2’s investment and

ownership interest in the company, but that also falsely represented that Harmon’s contribution

had increased to $625,000.  In reality, Harmon and the other listed members had only invested

$100 each.  Harmon never told Investor 2 this or that any investment dollar amounts listed in the

agreement included purported to just be “sweat equity” instead of actual dollars invested.

34. The EP LLC Agreement stated that its members would manage Elite

Performance, but the agreement specifically designated Harmon and another individual as the

managing members.  As a managing member, the agreement gave Harmon the power to act on

behalf of the company, to make all decisions with respect to the company’s business, and to take

all actions necessary to carry out such decisions.  In reality, Harmon alone controlled Elite

Performance.  Investor 2 was a passive investor and did not participate in any management

decisions regarding Elite Performance.

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35. Harmon misled Investor 2 by telling him that Elite Performance was engaged in

significant commercial discussions with the Dallas Cowboys.  She told him that she had

presented Elite Performance’s technology to the Cowboys and was negotiating with the

Cowboy’s leadership regarding a potential purchase of Elite Performance.  After hearing

Harmon’s misrepresentations, Investor 2 purchased membership interests in Elite Performance,

investing a total of $240,000 in two transactions, one in July 2020 ($175,000) and the other in

August 2020 ($65,000).  Before Investor 2’s second investment in August 2020, Harmon sent

him a text message falsely claiming that the Cowboys had placed a multi-million-dollar

equipment order with Elite Performance.

36. Harmon’s representations to Investor 2 were all false.  The Cowboys never

represented that they would purchase Elite Performance or place an order for Elite

Performance’s undeveloped technology.  Harmon only ever met once with a vice president of the

Cowboys around August 2020.  Harmon was aware after that meeting and by August 27, 2020,

at the latest, that the Cowboys were not interested in acquiring Elite Performance and did not

intend to place a large order for Elite Performance’s product, which did not exist.

37. On September 15, 2020, Harmon emailed Investor 2 and the two other individuals

that she falsely represented were Elite Performance members.  Harmon referred to ongoing

negotiations with the Cowboys and told Investor 2 that Elite Performance needed money to pay

lawyer’s fees and to create a demonstrative video highlighting Elite Performance’s technology to

give to sports broadcasting networks.  She told Investor 2 that a deal with the Cowboys was

imminent.  She did not disclose that the referenced technology was just an idea and had not been

developed, or that the Cowboys were not actually interested in purchasing Elite Performance or

placing a large order for its purported product.

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38. Based on Harmon’s representations, Investor 2 invested an additional $85,000 in

Elite Performance via a promissory note.  The note matured two weeks after its execution, had a

10% interest rate, and awarded Investor 2 with more stock in C-Hear as an incentive.  After

Investor 2 sent his funds, Harmon emailed Investor 2, thanking him and lamenting the cost of the

legal fees.  Harmon did not pay Investor 2 back after the two weeks passed. Instead, she told him

that the bank delayed payment, but that she could not visit the bank to inquire because she was

undergoing radiation treatments for cancer.

39. Of the total $405,000 investor funds in Elite Performance, Harmon

misappropriated almost all of it (99%) for personal expenses, cash withdrawals, C-Hear’s

expenses, and to pay individuals who were C-Hear investors and not members or employees of

Elite Performance.  Harmon also transferred at least $73,500 to a different tech startup company

that she controlled.

40. Elite Performance has forfeited its corporate existence and, upon information and

belief, is no longer operational.

FIRST CLAIM FOR RELIEF

Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and

Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]

Against Defendant Harmon

41. Plaintiff re-alleges and incorporates paragraphs 1 through 40 of this Complaint by

reference as if set forth verbatim in this Claim.

42. By engaging in the acts and conduct alleged herein, Defendant Harmon, directly

or indirectly, in connection with the purchase or sale of securities, by the use of a means or

instrumentality of interstate commerce, or of the mails, knowingly or with severe recklessness:

12

a. employed a device, scheme, or artifice to defraud; and/or

b. made an untrue statement of a material fact, or omitted to state a material fact

necessary in order to make the statements made, in light of the circumstances

under which they were made, not misleading; and/or

c. engaged in an act, practice, or course of business which operated or would

operate as a fraud or deceit upon any person.

43. By reason of the foregoing, Defendant Harmon has violated, and unless enjoined

will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5

thereunder [17 C.F.R. § 240.10b-5].

SECOND CLAIM FOR RELIEF

Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and
Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-5(b)]

Against Defendant C-Hear

44. Plaintiff re-alleges and incorporates paragraphs 1 through 40 of this Complaint by

reference as if set forth verbatim in this Claim.

45. By engaging in the acts and conduct alleged herein, Defendant C-Hear, directly or

indirectly, in connection with the purchase or sale of securities, by the use of a means or

instrumentality of interstate commerce, or of the mails, knowingly or with severe recklessness

made an untrue statement of a material fact, or omitted to state a material fact necessary in order

to make the statements made, in light of the circumstances under which they were made, not

misleading.

46. By reason of the foregoing, Defendant C-Hear has violated, and unless enjoined

will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-

5(b) thereunder [17 C.F.R. § 240.10b-5(b)].

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THIRD CLAIM FOR RELIEF

Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]

Against Defendant Harmon

47. Plaintiff re-alleges and incorporates paragraphs 1 through 40 of this Complaint by

reference as if set forth verbatim in this Claim.

48. By engaging in the acts and conduct alleged herein, Defendant Harmon, directly

or indirectly, in the offer or sale of securities, by the use of any means or instruments of

transportation or communication in interstate commerce or by use of the mails, has:

a. knowingly or with severe recklessness employed a device, scheme, or artifice to

defraud; and/or

b. knowingly, with severe recklessness, or negligently obtained money or property

by means of an untrue statement of a material fact or an omission to state a

material fact necessary in order to make the statements made, in light of the

circumstances under which they were made, not misleading; and/or

c. knowingly, with severe recklessness, or negligently engaged in a transaction,

practice, or course of business which operated or would operate as a fraud or

deceit upon the purchaser.

49. By reason of the foregoing, Defendant Harmon has violated, and unless enjoined

will continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].

14

FOURTH CLAIM FOR RELIEF

Violations of Section 17(a)(2) of the Securities Act [15 U.S.C. § 77q(a)]

Against Defendant C-Hear

50. Plaintiff re-alleges and incorporates paragraphs 1 through 40 of this Complaint by

reference as if set forth verbatim in this Claim.

51. By engaging in the acts and conduct alleged herein, Defendant C-Hear, directly or

indirectly, in the offer or sale of securities, by the use of any means or instruments of

transportation or communication in interstate commerce or by use of the mails, has knowingly,

with severe recklessness, or negligently obtained money or property by means of an untrue

statement of a material fact or an omission to state a material fact necessary in order to make the

statements made, in light of the circumstances under which they were made, not misleading.

52. By reason of the foregoing, Defendant C-Hear has violated, and unless enjoined

will continue to violate, Section 17(a)(2) of the Securities Act [15 U.S.C. § 77q(a)(2)].

PRAYER FOR RELIEF

WHEREFORE, the Commission respectfully requests that the Court enter a judgment:

1. Permanently enjoining Defendants from violating Section 17(a) of the Securities

Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5

thereunder [17 C.F.R. § 240.10b-5];

2. Permanently enjoining Defendants from directly or indirectly, including, but not

limited to, through any entity owned or controlled by them, participating in the issuance,

purchase, offer, or sale of any security; provided, however, that such injunction shall not prevent

Harmon from purchasing or selling securities for her own personal account;

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3. Ordering Harmon to disgorge all ill-gotten gains obtained as a result of the

violations alleged herein, plus prejudgment interest thereon, pursuant to Exchange Act Sections

21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; and

4. Ordering Harmon and C-Hear to pay civil penalties pursuant to Section 20(d) of

the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C.

§ 78u(d)(3)] for violations of the federal securities laws as alleged herein.

5. Imposing such other and further relief as the Court may deem just and proper.

Dated:  February 19, 2026   Respectfully submitted,

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION

/s/ Tyson M. Lies
Tyson Lies
Texas Bar No. 24087927
United States Securities and
Exchange Commission
Burnett Plaza, Suite 1900
801 Cherry Street, Unit 18
Fort Worth, TX  76102
Telephone:  (817) 978-1421
Facsimile:  (817) 978-4927
[email protected]

Attorneys for Plaintiff

	a. employed a device, scheme, or artifice to defraud; and/or
	b. made an untrue statement of a material fact, or omitted to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and/or
	c. engaged in an act, practice, or course of business which operated or would operate as a fraud or deceit upon any person.
	a. knowingly or with severe recklessness employed a device, scheme, or artifice to defraud; and/or
	b. knowingly, with severe recklessness, or negligently obtained money or property by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statements made, in light of the circumstances ...
	c. knowingly, with severe recklessness, or negligently engaged in a transaction, practice, or course of business which operated or would operate as a fraud or deceit upon the purchaser.

IN THE UNITED STATES DISTRICT COURT 
FOR THE NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 
________________________________________________ 
SECURITIES AND EXCHANGE COMMISSION, ) 

) 
Plaintiff, ) Civil Action No. 

) 
v.        ) 

)   
C-HEAR, INC. and                                                               )  JURY TRIAL DEMANDED 
ADENA HARMON,                               )  

) 
Defendants,                                                                 )

________________________________________________) 

COMPLAINT

Plaintiff United States Securities and Exchange Commission (the “SEC” or 

“Commission”), for its Complaint against Defendants C-Hear, Inc. (“C-Hear”) and Adena 

Harmon (“Harmon”) alleges as follows: 

NATURE OF THE ACTION 

1. Between January 2019 and October 2023, Adena Harmon, acting as the Chief

Executive Officer and/or Chairman of software development company C-Hear, and other C-Hear 

representatives solicited multiple investors to invest in C-Hear.  During these solicitations, 

Harmon and the other C-Hear representatives made a series of materially misleading statements 

and omissions, including omitting Harmon’s criminal background and falsely claiming that C-

Hear’s primary software product was in trials with third parties and that the federal government 

had tried and was unable to hack into one of C-Hear’s products. 

2. When investors invested, Harmon directed certain investors to transfer funds to

bank accounts that she represented were C-Hear bank accounts.  In reality, Harmon opened these 

bank accounts for her own use without notifying the company.  Harmon misappropriated 

3:26-cv-0547

Case 3:26-cv-00547-N     Document 1     Filed 02/19/26      Page 1 of 15     PageID 1



2 
 

investor funds from the accounts, using the money to pay for personal expenses like luxury 

shopping trips and to pay off a criminal restitution order.   

3. Separately, Harmon solicited at least one C-Hear investor to invest in another 

company that Harmon controlled, Elite Performance Data Labs, LLC (“Elite Performance”).  

Harmon made misrepresentations to investors about Elite Performance’s business dealings, 

falsely claiming that an acquisition by the Dallas Cowboys was imminent and that the Cowboys 

had placed a multimillion-dollar order for Elite Performance’s products.  Harmon 

misappropriated almost all of the Elite Performance investor funds, using the money to pay her 

personal expenses, to pay for another business venture, and to pay C-Hear expenses. 

4. Through their actions, Defendants violated, and unless enjoined will continue to 

violate, the antifraud provisions of the federal securities laws as specified below.  The SEC 

brings this action against Defendants seeking: (i) permanent injunctive relief; (ii) disgorgement 

of ill-gotten gains from Harmon, plus prejudgment interest; and (iii) civil penalties.  

DEFENDANTS 

5. C-Hear, Inc. is a software development company that was headquartered in 

Dallas, Texas, from January 2019 to October 2023 (the “Relevant Period”).  Its current principal 

place of business is Austin, Texas. 

6. Adena Harmon, recently resided in Fort Worth and Roanoke, Texas.  Harmon’s 

current whereabouts are unknown, but upon information and belief she may be residing in 

Paducah, Texas.  Harmon was a co-founder of C-Hear and served as its CEO from around 

February 2019 to July 2022.  Harmon is also the founder, registered agent, and managing 

member of Elite Performance, a now-defunct Texas limited liability company whose principal 

place of business was at Harmon’s former residence in Fort Worth, Texas. 

Case 3:26-cv-00547-N     Document 1     Filed 02/19/26      Page 2 of 15     PageID 2



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JURISDICTION AND VENUE 

7. The Commission brings this action pursuant to authority conferred upon it by 

Sections 20(b) and 20(d) of the Securities Act [15 U.S.C. §§ 77t(b) and 77t(d)] and Sections 

21(d) and 21(e) of the Exchange Act [15 U.S.C. §§ 78u(d) and 78u(e)]. 

8. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), and 

22(a) of the Securities Act of 1933 [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)] and Sections 21(d), 

21(e), and 27 of the Securities Exchange Act of 1934 [15 U.S.C. §§ 78u(d), (e), and 78aa]. 

9. Defendants offered and sold to investors C-Hear stock, which is a security under 

Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b(a)(1)] and Section 3(a)(10) of the 

Exchange Act [15 U.S.C. § 78c(a)(10)].  Harmon offered and sold to a C-Hear investor a 

convertible loan agreement, which is a security because it is an investment contract and also a 

note under Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act.  

Harmon offered and sold to an investor Elite Performance limited liability membership interests, 

which are securities because they are investment contracts.  The promissory note this same 

investor executed in connection with his Elite Performance investments is a security because it is 

an investment contract and also a note under Section 2(a)(1) of the Securities Act and Section 

3(a)(10) of the Exchange Act. 

10. In connection with the conduct described in this Complaint, Defendants, directly 

or indirectly, made use of the mails or the means or instruments of transportation or 

communication in interstate commerce by, among other means, soliciting and accepting 

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investments via the Internet, transmitting investor contracts or notes via email, and accepting 

investor deposits via mail, wire, or other electronic-funds transfer. 

11. Venue is proper in this District pursuant to Section 20 of the Securities Act [15 

U.S.C. § 77t] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  Defendants transacted 

business in this District, and certain of the acts, practices, transactions, and courses of business 

constituting violations of the securities laws alleged in this Complaint occurred within this 

District.  C-Hear was based in Dallas until 2024, and Defendants solicited investors within this 

district and executed investor agreements with investors within this district when they engaged in 

at least some of the conduct alleged herein. 

FACTUAL ALLEGATIONS 

A. Harmon and C-Hear made false and misleading statements and omissions                    
to C-Hear Investors. 

12.  Harmon and her co-founders formed C-Hear in September 2015 as a software 

development company.  In 2019, C-Hear claimed that it had developed a small, software image 

file and data container that also incorporated audio.  C-Hear called this technology “CHIF” (C-

Hear Intelligent Format).  C-Hear represented in its marketing materials to investors that its 

technology could make websites more accessible to individuals with visual disabilities by 

embedding images with audio describing the image.  C-Hear also claimed its data file could 

replace video files in some social media marketing due to its much smaller file size.     

13. After C-Hear got its first patent in early 2019, Harmon was appointed as CEO. 

14. Over the next four years, Harmon and other C-Hear representatives solicited 

investors to purchase C-Hear stock.  During some of these solicitations between approximately 

February 2019 and February 2022, Harmon and the C-Hear representatives used marketing 

materials, including a November 18, 2019 “C Hear, Inc. Business Plan” (“2019 Business Plan”) 

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and/or a 2021 PowerPoint presentation titled “C-Hear Opportunity” (“2021 PowerPoint 

Presentation”).  Harmon is listed as the author of the 2021 PowerPoint Presentation, and she was 

C-Hear’s CEO and Chairman of the Board at the time of the creation and use of both the 2019 

Business Plan and 2021 PowerPoint Presentation, both of which she approved and adopted by 

choosing to share them with prospective investors.   

15. Both of these documents describe Harmon as having worked in the social media 

industry for more than 10 years, helping to promote non-profits and businesses.  The description 

about Harmon also claims that the inspiration for C-Hear’s technology came from Harmon’s 

desire to save her clients money on ads.   

16. Despite promoting Harmon’s experience with non-profits, neither the 2019 

Business Plan nor the 2021 PowerPoint Presentation revealed that Harmon had previously stolen 

from several non-profits or that she had been convicted of numerous financial crimes, including 

theft by check and uttering forged securities.  The documents similarly did not disclose that 

Harmon had served prison time on multiple occasions for these crimes, or that she had an 

outstanding criminal restitution order against her for restitution she still owed to two churches for 

committing check fraud and stealing their money. The omissions relating to Harman’s criminal 

background were important to investors, at least some of whom would not have invested had it 

been disclosed. 

17. In 2022, C-Hear pivoted to marketing its CHIF data file container as more secure 

than other options—calling it the “armored car” of data containers.  When soliciting new 

investments, C-Hear falsely claimed in its marketing materials, and Harmon and other C-Hear 

representatives claimed in oral communications without any basis, that potential customers were 

testing the CHIF.  For instance, in July 2022, C-Hear distributed a document entitled “Investor 

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Package” to certain prospective investors describing the CHIF.  This Package stated that the 

CHIF was “in trials with companies in cybersecurity, accessibility, intellectual property 

protection, oil and gas, and so much more.”  In truth, there were no trials and no company had 

tested the CHIF at that time.  

18. C-Hear hired a new marketing consultant in January 2022.  Prior to joining C-

Hear, this consultant invested $43,000 in C-Hear in May 2021, after Harmon, who was the 

current CEO, and others at C-Hear claimed that the CHIF was being tested by the federal 

government and the federal government was unable to hack into it.    

19. Upon joining C-Hear’s marketing department, this consultant determined by May 

2022 that C-Hear was making claims that were not true, which included claims that the CHIF 

was not hackable and that, in testing, the federal government had tried and failed to hack into the 

CHIF.  This consultant advised the company to stop making these claims.  Regardless, C-Hear’s 

Chief Operating Officer, who was also a member of its Board, continued to falsely tell 

prospective investors as late as May 2023 that C-Hear was pitching the CHIF to the federal 

government and that the federal government was unable to hack the CHIF.  Investors chose to 

invest in C-Hear based on these misrepresentations. 

20. Between January 2019 and October 2023, C-Hear raised more than $4.2 million 

from at least 48 investors who purchased C-Hear stock.  C-Hear has never generated any revenue 

and all investor funds have been depleted without any distributions to investors. 

21. Harmon voluntarily stepped down as CEO in July 2022, though she stayed on as 

Chairman of C-Hear’s Board and continued to be involved in investor communications until her 

resignation from the Board in January 2023.    

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B. Harmon misappropriated C-Hear investor funds. 

22. C-Hear’s bylaws required all funds of the corporation “to be deposited to the 

credit of the corporation in accounts that the Board may select.”  Despite this requirement, 

Harmon, without the knowledge of C-Hear’s Board, opened two bank accounts in C-Hear’s 

name in February 2022, listing only herself as the signatory.   

23. From February 2022 to October 2022, Harmon directed three C-Hear investors to 

deposit their investment funds totaling approximately $1,020,999 into the unauthorized bank 

accounts.  All of these investors were led to believe that their funds would be used to support C-

Hear’s development of the CHIF and for the benefit of C-Hear.  The stock purchase agreements 

purported to be between the individual investors and C-Hear, despite the fact that no other C-

Hear representatives or Board members knew about these transactions.   

24. One investor (“Investor 1”) paid nearly $700,000 into these unauthorized 

accounts.  Harmon directed him to deposit the funds into the unauthorized accounts after she 

purported to sell him C-Hear stock in two transactions during 2022.   

25. Later, in August 2022, Harmon convinced Investor 1 to enter into a purported 

short-term $200,000 convertible loan agreement with C-Hear.  In return for loaning C-Hear 

$200,000, the convertible loan agreement guaranteed Investor 1 16% interest over a three-month 

term.  The convertible loan agreement also included terms for mandatory and optional 

conversions to C-Hear stock upon certain financing events.  According to the agreement, the loan 

proceeds were to “only be used in connection with furthering the Company’s development of the 

C-Hear Intelligent Format file [CHIF] and related technology … and [was] not to be used or 

otherwise allocated for any other venture, project or purpose.”  The note also included a 

provision providing that the loan was secured by C-Hear’s interest in its products’ patents. 

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26. Harmon was no longer the company’s CEO at the time she entered into the 

convertible loan agreement on behalf of C-Hear, and C-Hear’s Board did not authorize the loan 

agreement.  She similarly did not have authority to offer C-Hear’s interests in its patents as 

security for the loan.  She never informed C-Hear’s Board of the convertible loan agreement. 

27. Investor 1 was not in the regular business of purchasing and selling securities 

when he entered into the convertible loan agreement and he had not invested in early-state 

software technology companies before.  

28. When C-Hear did not repay the convertible loan on schedule, Harmon gave 

Investor 1 numerous excuses, including bank delays, for why C-Hear had not repaid the note.  

Neither Harmon nor C-Hear ever repaid Investor 1 his principal or interest due under the 

convertible loan agreement. 

29. Of the total investor funds that Harmon directed to the unauthorized accounts 

(approximately $1,020,999), Harmon misappropriated approximately $641,000 (or 63%).  

Harmon used these funds to pay various personal expenses and to make payments unrelated to 

C-Hear’s business, including satisfying her outstanding criminal restitution order, renting a large 

luxury home for a year, buying furniture and luxury retail items, and making cash withdrawals. 

30. In January 2023, Investor 1’s attorney contacted C-Hear’s leadership when he did 

not receive the payment due pursuant to the convertible loan agreement.  However, C-Hear’s 

representatives could not identify or locate Investor 1’s funds in C-Hear’s corporate bank 

accounts.  Around this same time, Harmon resigned as Chairman of C-Hear’s Board.   

C. Harmon made additional false misrepresentations and omissions regarding Elite 
Performance and further misappropriated investor funds. 

31. In 2020, while Harmon was CEO of C-Hear, she also claimed to run another 

technology start-up company, Elite Performance.  Harmon approached at least two existing C-

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Hear investors about also investing in Elite Performance.  She told these two C-Hear investors 

that Elite Performance had developed technology that could be embedded in helmets and jerseys 

of professional athletes to collect data that would increase athletic performance.  In reality, 

Harmon only had the idea for the technology—the product did not actually exist. 

32. From July 2020 to September 2020, Harmon sold membership interests in Elite 

Performance to at least one investor (“Investor 2”) in three separate transactions.  Harmon told 

the investor that Elite Performance had developed certain technologies that it would attempt to 

sell to professional sports organizations and broadcasting networks. 

33. Harmon sent Investor 2 a limited liability company agreement (the “EP LLC 

Agreement”) that included a table that showed that a list of members, including Harmon, had 

each purportedly invested $275,000.  After Investor 2 invested, Harmon sent him another version 

of the EP LLC Agreement that included an amended table reflecting Investor 2’s investment and 

ownership interest in the company, but that also falsely represented that Harmon’s contribution 

had increased to $625,000.  In reality, Harmon and the other listed members had only invested 

$100 each.  Harmon never told Investor 2 this or that any investment dollar amounts listed in the 

agreement included purported to just be “sweat equity” instead of actual dollars invested.   

34. The EP LLC Agreement stated that its members would manage Elite 

Performance, but the agreement specifically designated Harmon and another individual as the 

managing members.  As a managing member, the agreement gave Harmon the power to act on 

behalf of the company, to make all decisions with respect to the company’s business, and to take 

all actions necessary to carry out such decisions.  In reality, Harmon alone controlled Elite 

Performance.  Investor 2 was a passive investor and did not participate in any management 

decisions regarding Elite Performance. 

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35. Harmon misled Investor 2 by telling him that Elite Performance was engaged in 

significant commercial discussions with the Dallas Cowboys.  She told him that she had 

presented Elite Performance’s technology to the Cowboys and was negotiating with the 

Cowboy’s leadership regarding a potential purchase of Elite Performance.  After hearing 

Harmon’s misrepresentations, Investor 2 purchased membership interests in Elite Performance, 

investing a total of $240,000 in two transactions, one in July 2020 ($175,000) and the other in 

August 2020 ($65,000).  Before Investor 2’s second investment in August 2020, Harmon sent 

him a text message falsely claiming that the Cowboys had placed a multi-million-dollar 

equipment order with Elite Performance. 

36. Harmon’s representations to Investor 2 were all false.  The Cowboys never 

represented that they would purchase Elite Performance or place an order for Elite 

Performance’s undeveloped technology.  Harmon only ever met once with a vice president of the 

Cowboys around August 2020.  Harmon was aware after that meeting and by August 27, 2020, 

at the latest, that the Cowboys were not interested in acquiring Elite Performance and did not 

intend to place a large order for Elite Performance’s product, which did not exist. 

37. On September 15, 2020, Harmon emailed Investor 2 and the two other individuals 

that she falsely represented were Elite Performance members.  Harmon referred to ongoing 

negotiations with the Cowboys and told Investor 2 that Elite Performance needed money to pay 

lawyer’s fees and to create a demonstrative video highlighting Elite Performance’s technology to 

give to sports broadcasting networks.  She told Investor 2 that a deal with the Cowboys was 

imminent.  She did not disclose that the referenced technology was just an idea and had not been 

developed, or that the Cowboys were not actually interested in purchasing Elite Performance or 

placing a large order for its purported product. 

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38. Based on Harmon’s representations, Investor 2 invested an additional $85,000 in 

Elite Performance via a promissory note.  The note matured two weeks after its execution, had a 

10% interest rate, and awarded Investor 2 with more stock in C-Hear as an incentive.  After 

Investor 2 sent his funds, Harmon emailed Investor 2, thanking him and lamenting the cost of the 

legal fees.  Harmon did not pay Investor 2 back after the two weeks passed. Instead, she told him 

that the bank delayed payment, but that she could not visit the bank to inquire because she was 

undergoing radiation treatments for cancer. 

39. Of the total $405,000 investor funds in Elite Performance, Harmon 

misappropriated almost all of it (99%) for personal expenses, cash withdrawals, C-Hear’s 

expenses, and to pay individuals who were C-Hear investors and not members or employees of 

Elite Performance.  Harmon also transferred at least $73,500 to a different tech startup company 

that she controlled. 

40. Elite Performance has forfeited its corporate existence and, upon information and 

belief, is no longer operational.  

 
FIRST CLAIM FOR RELIEF 

 
Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and  

Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]  
 

Against Defendant Harmon 
 

41. Plaintiff re-alleges and incorporates paragraphs 1 through 40 of this Complaint by 

reference as if set forth verbatim in this Claim. 

42. By engaging in the acts and conduct alleged herein, Defendant Harmon, directly 

or indirectly, in connection with the purchase or sale of securities, by the use of a means or 

instrumentality of interstate commerce, or of the mails, knowingly or with severe recklessness:  

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a. employed a device, scheme, or artifice to defraud; and/or 

b. made an untrue statement of a material fact, or omitted to state a material fact 

necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading; and/or  

c. engaged in an act, practice, or course of business which operated or would 

operate as a fraud or deceit upon any person. 

43. By reason of the foregoing, Defendant Harmon has violated, and unless enjoined 

will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5]. 

SECOND CLAIM FOR RELIEF 
 

Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and  
Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-5(b)]  

 
Against Defendant C-Hear 

 
44. Plaintiff re-alleges and incorporates paragraphs 1 through 40 of this Complaint by 

reference as if set forth verbatim in this Claim. 

45. By engaging in the acts and conduct alleged herein, Defendant C-Hear, directly or 

indirectly, in connection with the purchase or sale of securities, by the use of a means or 

instrumentality of interstate commerce, or of the mails, knowingly or with severe recklessness 

made an untrue statement of a material fact, or omitted to state a material fact necessary in order 

to make the statements made, in light of the circumstances under which they were made, not 

misleading. 

46. By reason of the foregoing, Defendant C-Hear has violated, and unless enjoined 

will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-

5(b) thereunder [17 C.F.R. § 240.10b-5(b)]. 

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THIRD CLAIM FOR RELIEF 
 

Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)] 
 

Against Defendant Harmon 
 

47. Plaintiff re-alleges and incorporates paragraphs 1 through 40 of this Complaint by 

reference as if set forth verbatim in this Claim. 

48. By engaging in the acts and conduct alleged herein, Defendant Harmon, directly 

or indirectly, in the offer or sale of securities, by the use of any means or instruments of 

transportation or communication in interstate commerce or by use of the mails, has: 

a. knowingly or with severe recklessness employed a device, scheme, or artifice to 

defraud; and/or 

b. knowingly, with severe recklessness, or negligently obtained money or property 

by means of an untrue statement of a material fact or an omission to state a 

material fact necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and/or 

c. knowingly, with severe recklessness, or negligently engaged in a transaction, 

practice, or course of business which operated or would operate as a fraud or 

deceit upon the purchaser. 

49. By reason of the foregoing, Defendant Harmon has violated, and unless enjoined 

will continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

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FOURTH CLAIM FOR RELIEF 
 

Violations of Section 17(a)(2) of the Securities Act [15 U.S.C. § 77q(a)] 
 

Against Defendant C-Hear 
 

50. Plaintiff re-alleges and incorporates paragraphs 1 through 40 of this Complaint by 

reference as if set forth verbatim in this Claim. 

51. By engaging in the acts and conduct alleged herein, Defendant C-Hear, directly or 

indirectly, in the offer or sale of securities, by the use of any means or instruments of 

transportation or communication in interstate commerce or by use of the mails, has knowingly, 

with severe recklessness, or negligently obtained money or property by means of an untrue 

statement of a material fact or an omission to state a material fact necessary in order to make the 

statements made, in light of the circumstances under which they were made, not misleading. 

52. By reason of the foregoing, Defendant C-Hear has violated, and unless enjoined 

will continue to violate, Section 17(a)(2) of the Securities Act [15 U.S.C. § 77q(a)(2)]. 

PRAYER FOR RELIEF  
 

WHEREFORE, the Commission respectfully requests that the Court enter a judgment:  

1. Permanently enjoining Defendants from violating Section 17(a) of the Securities 

Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5]; 

2. Permanently enjoining Defendants from directly or indirectly, including, but not 

limited to, through any entity owned or controlled by them, participating in the issuance, 

purchase, offer, or sale of any security; provided, however, that such injunction shall not prevent 

Harmon from purchasing or selling securities for her own personal account; 

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3. Ordering Harmon to disgorge all ill-gotten gains obtained as a result of the 

violations alleged herein, plus prejudgment interest thereon, pursuant to Exchange Act Sections 

21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; and 

4. Ordering Harmon and C-Hear to pay civil penalties pursuant to Section 20(d) of 

the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. 

§ 78u(d)(3)] for violations of the federal securities laws as alleged herein.  

5. Imposing such other and further relief as the Court may deem just and proper. 

 
Dated:  February 19, 2026   Respectfully submitted, 

        
 

UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION 
 
 
/s/ Tyson M. Lies     
Tyson Lies 
Texas Bar No. 24087927 
United States Securities and  
Exchange Commission 
Burnett Plaza, Suite 1900 
801 Cherry Street, Unit 18 
Fort Worth, TX  76102 
Telephone:  (817) 978-1421 
Facsimile:  (817) 978-4927 
[email protected] 
 
Attorneys for Plaintiff 

 

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	a. employed a device, scheme, or artifice to defraud; and/or
	b. made an untrue statement of a material fact, or omitted to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and/or
	c. engaged in an act, practice, or course of business which operated or would operate as a fraud or deceit upon any person.
	a. knowingly or with severe recklessness employed a device, scheme, or artifice to defraud; and/or
	b. knowingly, with severe recklessness, or negligently obtained money or property by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statements made, in light of the circumstances ...
	c. knowingly, with severe recklessness, or negligently engaged in a transaction, practice, or course of business which operated or would operate as a fraud or deceit upon the purchaser.