Coda Octopus Group Inc (CODA)

[multivalue]

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Plaintiffs are a tiny minority of the Purchasers who acquired shares of common stock and
Warrants pursuant to the 2007 Securities Purchase Agreement (“SPA”). They concede that in
2010, at a time when the company was struggling financially and the Warrants held by all of the
Purchasers were “out of the money,” the company offered to amend the SPA and exchange the
outstanding Warrants for additional shares of common stock. Plaintiffs admit further that while
all the other Purchasers accepted that offer, they declined. Instead, they let their Warrants
expire. These facts are undisputed.
Plaintiffs further concede that they never contested either the propriety of the vote or the
validity of the amendment to the SPA. Nor did they protest either the other Purchasers’
exchange of their Warrants in return for additional shares of common stock or the subsequent
issuances made by the company pursuant to the amendment. Instead, they sat by in silence.
These facts are also undisputed.
Only now do they complain—years later, and long after the company, the majority
Purchasers, the other shareholders, and the market at large have all acted in reliance upon the
validity of the amendment, the Warrant exchange and the stock issuances. Now, they ask this
Court to reset the clock—but only for themselves and only to their advantage. They ask this
Court to resurrect their expired Warrants and to order new issuances of stock in amounts far in
excess of what the other Purchasers have received. In substantive effect, they ask this Court to Active 16597754.2 2
convert their tiny minority interest into a controlling majority, all to the detriment of the majority
Purchasers, as well as the company and the other shareholders.1

Plaintiffs’ demands violate both the plain language of the contract and established
principles of equity. Their Complaint should be dismissed.

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