A stockholder is suing Intec Pharma Ltd., Intec’s board of directors, and related entities over alleged violations of the Securities Exchange Act, per a Friday complaint filed in the District of Delaware regarding a proposed merger.
Plaintiff Craig Davidson is an owner of common stock of Intec, a biopharmaceutical company developing drug products based on its Accordion Pill platform that seeks to “improve the efficacy and safety” of drug products. On March 15, Intec’s board of directors executed a merger agreement with Intec Parent, Inc., Dillion Merger Subsidiary Inc., Domestication Merger Sub Ltd., and Decoy Biosystems Inc. The companies said in a news release that they are aiming for the merger to be executed in the third quarter of 2021, the complaint detailed. A registration statement with the Securities and Exchange Commission (SEC) followed on April 20.
Davidson alleged that the registration statement omitted information vital to investors, including financial projections, analyses performed by Intec’s financial adviser or company management, terms of the nondisclosure agreements executed by the company leading up to the merger agreement, and details on the “timing and nature of all communications” related to “post-transaction employment, directorships, and benefits,” according to the complaint.
“The omission of the above-referenced material information renders the Registration Statement false and misleading,” the complaint claimed. “The above-referenced omitted information, if disclosed, would significantly alter the total mix of information available to the Company’s stockholders.”
The plaintiff argued that the defendants’ alleged conduct is in violation of Sections 14(a) and 20(a) of the Securities Exchange Act; as a result, these purported violations threaten the plaintiff and other stockholders with “irreparable harm.”
Among monetary damages, Davidson also requested that the defendants be enjoined from pursuing the merger unless a remedied registration statement is propagated. If the defendants do execute the merger without correcting the alleged deficiencies in the statement, the plaintiff requested that the court set it aside.
Rigrodsky Law P.A. represents the plaintiff.