b'The court independently concluded that plaintiffshad been aware at the time of the offering that the CFO had not adequately alleged any materially misleadingplanned to resign by the end of 2018. The planned statements or omissions. As to defendants descriptiondeparture, however, had not been disclosed in IPCIs of the 5% cutoff in the CM-026 trial as strong PD-L1registration statement.expression, the court reiterated that plaintiffs failed toOn October 7, 2019, Alpha Capital filed a complaint, on allege facts sufficient to suggest that there was anybehalf of itself only, against the company and its CEO, industry standard as to the scope of the term strong.CFO, and Chief Operating Officer, alleging violations of Similarly, plaintiffs theory that defendants failure toSections 11, 12(a)(2), and 15 of the 1933 Act on the basis disclose the cutoff for CM-026 was misleading be- that the omission of the CFOs impending departure cause it led to investors to believe that the companyfrom the company allegedly made portions of the reg-was targeting a different category of patient than it wasistration statement detailing his employment materially (i.e., patients with higher PD-L1 expression) would havemisleading.required plaintiffs to show that a reasonable investor would have understood the term strong as mean- On June 18, 2020, the court largely denied defendants ing something different, which the complaint failed tomotion to dismiss. The court concluded that reading sufficiently allege. Further, the court rejected plaintiffsthe registration statement as a whole, the documents claim in the alternative that even if defendants had nodescription of the CFOs employment without disclosing duty to disclose the true cutoff for CM-026 at its onset,that he planned to resign could have suggested to a a duty to disclose developed during the clinical trialreasonable investor that the CFO planned to continue because the market increasingly recognized an indus- as a senior member of management. The court rejected try standard for strong PD-L1 expression. The courtdefendants arguments that they had no duty to dis-reasoned that defendants did not make any incompleteclose the departure, that even if the planned departure statements and fully described CM-026 using terms asrendered the statements misleading it was not material, defendants understood them, again, in the absence ofand that the registration statement cautioned investors any industry standard with respect to the term strong.that employees could terminate their employment at The court also concluded that defendants optimisticany time. Specifically, the court concluded that (1) once statements regarding the companys future were ICPI spoke about the CFOs significance to the compa-forward-looking or statements of opinion, and, there- ny, it was required to disclose knowledge of his looming fore, also were not actionable. resignation, (2) the impending resignation was not suffi-On October 29, 2020 plaintiffs appealed the districtciently unimportant to be immaterial as a matter of law, courts dismissal to the Second Circuit. The appeal isand (3) the registration statements cautionary language scheduled to be fully briefed by May 2021. about the at-will arrangement of the companys employ-ment did not adequately warn investors because the risk of a departure had already materialized. Alpha Capital Anstalt v. IntellipharmaceuticsAs to liability under Section 12(a)(2), defendants argued International Inc., Case No. 19-cv-9270that they were not statutory sellers as defined by the (DLC), 2020 WL 3318029 (S.D.N.Y.1933 Act. The court agreed with this argument as to June 18, 2020)the CEO, concluding that his solicitation for the offering Disclosure of Leadership Changes was limited, and therefore dismissed the Section 12(a)(2) claim against him. However, the court rejected IPCIs Intellipharmaceutics International Inc. (IPCI) is aargument that it was not a statutory seller because Toronto-based pharmaceutical company specializing inunderwriters purchased all of the securities in connec-the research, development, and manufacture of noveltion with the offering, holding that, pursuant to SEC Rule and generic controlled-release and targeted-release159A, the issuer of a stock offering is a statutory seller drugs. On September 20, 2018, IPCI filed a registrationfor purposes of Section 12(a)(2) regardless of the under-statement in preparation for a stock offering, the finalwriting method. Further, the court concluded that the version of which was declared effective on October 12,CFOs attendance at a meeting with plaintiff to solicit its 2018. On October 1, 2018, IPCI solicited Alpha Capitalinvestment supported the conclusion that the company Anstalt (Alpha Capital), an institutional investor, towas a statutory seller. invest in the offering, and ICPIs CFO met with AlphaDefendants answered the complaint on July 9, 2020, Capitals representatives approximately one week later.and the case is now in discovery. On January 15, 2021, Alpha Capital thereafter purchased over $1 billion inthe parties filed cross-motions for summary judgment.IPCIs securities. Three weeks after the offering, ICPIs CFO announced that he was resigning from the com-pany. In a conversation with Alpha Capitals service provider, IPCIs CEO acknowledged that the company 30'