On Thursday a case was filed in the Eastern District of Virginia by investor Michelle DeLuca as a class action against Instadose Pharma Corporation and its CEO Terry Wiltshire. The case alleges that false filings and other documents resulted in securities violations.
The complaint explained that corporation was originally known as Mikrocoze Inc. and was focused on selling furniture for small spaces. After the resignation of the then-treasurer, the corporation participated in a “Business Combination” merger under Canadian law with Instadose Canada, a corporation that focuses on selling pharmaceutical grade agricultural products including cannabis.
The plaintiffs accuse the defendants of failing to conduct proper due diligence regarding the impacts of a transnational merger on the company as well as failing to conduct proper due diligence regarding the state of Instadose Canada’s business including impermissible trading activities.
In July 2021, shortly after the announced merger, which included an announcement that key members of Instadose Canada would be part of the new board of the merged Instadose company, the same key members were accused of quasi-criminal fraud by the Ontario Securities Commission. The investigation into the criminal activities resulted in trading in the stock being halted and after trading resumed a massive drop in the stocks value.
The plaintiffs are suing for violations of Sections 10(b) and 20(a) of the Exchange act as well as violations of rule 10b-5 for all documents leading up to the merger proposal as well as all documents filed during the merger process. The plaintiffs are represented by Cohen Milstein Sellers & Toll PLLC and Pomerantz LLP