According to the Complaint, on December 22, 2017, Tokai announced that it had entered into a Share Purchase Agreement under which the stockholders of Otic will become the majority owners of Tokai. Additionally, on January 31, 2017, Tokai entered into a stock purchase agreement (the “Tokai Stock Purchase Agreement”) with certain purchasers, who are either existing stockholders or employees of Otic, who have agreed to purchase 3,603,601 shares of Tokai common stock for $1.11 per share (the “Equity Financing”).
On April 7, 2017, Tokai filed a Definitive Proxy Statement on Schedule 14A with the SEC (the “Proxy”), in connection with the Proposed Transaction. The Complaint alleges the Proxy, which recommends that Tokai stockholders vote in favor of the Proposed Transaction, omits or misrepresents material information concerning, among other things: (i) Tokai management’s projections, including the projections utilized by the Company’s financial advisor, Wedbush Securities Inc. (“Wedbush”) in its financial analyses; (ii) the valuation analyses prepared by Wedbush in connection with the rendering of its fairness opinion; (iii) Wedbush’s potential conflicts of interest; and (iv) material information concerning the background of the process leading up to the Proposed Transaction.
This case was voluntarily dismissed on June 6, 2017.