Innovation Pharmaceuticals Inc (IPIX)

[Lemoncat]

It looks like he counts his wife, vested class A options, and "indirectly owned" in previous filings:

https://www.sec.gov/Archives/edgar/data/1355250/000135525011000019/def14c.htm

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Leo Ehrlich (5) C/O Cellceutix 18,247,284

1. "Beneficial Owner" means having or sharing, directly or indirectly (i) voting power, which includes the power to vote or to direct the voting, or (ii) investment power, which includes the power to dispose or to direct the disposition, of shares of the common stock of an issuer. The definition of beneficial ownership includes shares, underlying options or warrants to purchase common stock, or other securities convertible into common stock, that currently are exercisable or convertible or that will become exercisable or convertible within 60 days. Unless otherwise indicated, the beneficial owner has sole voting and investment power.

4. Leo Ehrlich, Chief Financial Officer and Director. Includes 8,745,002 shares of Cellceutix common stock held by Mr. Ehrlich and 6,000,000 vested options granted to him under the 2010 Equity Incentive Plan currently exercisable, and includes 3,502,282 shares of Cellceutix’s common stock held by the wife and child of Leo Ehrlich.

5. Includes 5,338,098 shares of Common Stock indirectly owned by certain of the Executive Officers and Directors as a group but excludes vested options to acquire approximately 12,000,000 additional shares of Common Stock by Executive Officers and Directors, as a group.

Are these "indirectly owned" shares held by the family? From the same link:

Barrett Ehrlich 2,058,134
Joshua Ehrlich 749,972
Elliot Ehrlich 1,597,858
*Daughter Ehrlich ~900,000??

Not sure, just trying to piece the info together. Were they minors at the time and would that give Leo voting control over the shares?


From your link https://www.sec.gov/files/form4data%2C0.pdf :

(i) Although for purposes of determining status as a ten percent holder, a person is deemed to beneficially own securities over which that person exercises voting or investment control see Rule 16a-1(a)(1)), for reporting transactions and holdings, a person is deemed to be the beneficial owner of securities if that person has the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the securities(“pecuniary interest”).
See Rule 16a-1(a)(2).
See also Rule 16a-8 for the application of the beneficial ownership definition to trust holdings and transactions.

(ii) Both direct and indirect beneficial ownership of securities shall be reported. Securities beneficially owned
directly are those held in the reporting person’s name or in the name of a bank, broker or nominee for the account of the reporting person. In addition, securities held as joint tenants, tenants in common, tenants by the entirety, or as community property are to be reported as held directly. If a person has a pecuniary interest, by reason of any contract, understanding or relationship (including a family relationship or arrangement), in securities held in the name of another person, that person is an indirect beneficial owner of the securities.
See Rule 16a-1(a)(2)(ii) for certain indirect beneficial ownerships.

I think the numbers you cite are strictly holdings of Leo Ehrlich. I think Beneficial Ownership/ Pecuniary Interest encompasses a broader definition. Shares held in his wife's name are obvious and in-the-money/vested options ("investment control") probably fit the bill. I don't have the expertise to sort it out completely. I surmise that he either meets the requirements or the definitions are fuzzy enough that he needs to disclose himself as a 10% holder to be safe.

I think we'd need the services of a securities accountant to figure it out. I'm inclined to say it's close enough that I have faith in the former CFO getting it right. That could be a mistake but these rules are not my forte.