Replies to post #238987 on Innovation Pharmaceuticals Inc (IPIX)

[loanranger]

"But does making them transaction triggering milestones in financial agreement have any bearing on materiality?"

I'll refrain from a simple yes or no because either could be misleading. Materiality in terms of non-public information is difficult to describe because of its subjective nature but there is a legal definition.

From the Code of Federal Regulations:
"Material. The term “material”, when used to qualify a requirement for the furnishing of information as to any subject, limits the information required to those matters as to which an average prudent investor ought reasonably to be informed before buying or selling any security of the particular company."
https://www.law.cornell.edu/cfr/text/17/270.8b-2

Since the milestones were defined in a Material Definitive Agreement filing they would likely be viewed as material information for the purposes of Regulation Fair Disclosure. Meaning that if one was to be met or declined and the Company revealed that information to one they would have to reveal it to all (Milton Bradley version).
I earlier suggested that the BTD may have already been received without us hearing about it. If IPIX told Aspire, for example, that that had occurred, they would have to make the information public. There IS NO language imposing a confidentiality restriction on Aspire in the latest agreement...there was in the $30M agreement (interesting that there was also a change in the short sale terms). I'm quite sure that there would be such language in most if not all the "approaching 20 NDA's". IPIX is allowed by law to provide material non-public information to a party that owes them a "duty of confidence" without triggering the tell one tell all requirement.

I BELIEVE that they could receive the BTD and not announce that if the rest of the triggering criteria...the $.50 share price...was unmet. "Materiality" isn't the criteria there. There's a difference between what a company must do by law and what a company should do in the interest of transparency.


That leaves this questioned unanswered and that's probably just as well:
If the Company received a BTD or successfully completed the Prurisol trial (and there was a common understanding as to what that meant) or received a non-designation letter or "failed" the P trial, would that information be considered material if it WASN'T a defined term in a material definitive agreement? That answer would be a lot less clear.

I think that should tell you that context is important when it comes to materiality as contemplated by the Fair Disclosure rules as your question suggests.

These are just my own impressions..I'm DEFINITELY NOT a securities attorney.