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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

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MAT eVentures Inc.,

Plaintiff CLASS ACTION COMPLAINT FOR VIOLATION OF THE

—against— FEDERAL SECURITIES LAW

KOTHA SEKHARAM, and - ----. JURY TRIAL DEMANDED and GEOPHARMA, INC., Di .1•:T.T

Defendants

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This class action is brought to recover dam faU *fht, piikhL,ed the securities

of GeoPharma, Inc. ("GeoPharma" or "the Company") on December 1, 2004 (the "Class Period"),

subsequent to the dissemination by defendants of materially false information on

JURISDICTION AND VENUE

1 The claims asserted herein arise under and pursuant to

the Exchange Act, (15 U.S.C. §§ 78j(b) and 78t(a)), and Rule 10 l4

C.F.R. §240.10b-5).

2. This Court has jurisdiction over the subject matter ofh

the Exchange Act (15 U.S.C. §78aa) and 28 U.S.C. § 1331.

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ñtIant to §27 of

3. Venue is proper in this Judicial District pursuant to §27 of the Exchange Act, 15

U.S.C. § 78aa and 28 U.S.C. § 1391(b). Many of the acts and transactions alleged herein, including

the preparation and dissemination of materially false and misleading information, occurred in

substantial part in this Judicial District.

4. In connection with the acts, conduct and other wrongs alleged in this complaint,

defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,

including but not limited to, the United States mails, interstate telephone communications and the

facilities of the national securities exchange.

PARTIES

5. Plaintiff MAT eVentures Inc. as set forth in the accompanying certification,

incorporated by reference herein, purchased GeoPharma stock at artificially inflated prices during

the Class Period and has been damaged thereby.

6. Defendant GeoPharma manufactures and distributes private label dietary

supplements, over-the-counter (OTC) drugs, pharmaceuticals and health and beauty care products

for companies worldwide under two companies: Innovative Health Products, Inc. and Belcher

Pharmaceuticals, Inc. Innovative Health Products specializes in the development and manufacture

of nutritional supplements. Belcher Pharmaceuticals, Inc is a Food and Drug Administration-

registered drug development and manufacturing facility for generic and OTC drugs. On May 18,

2004, the Company changed its name from Innovative Companies, Inc. to GeoPharma, Inc.

7. Defendant Kotha Sekharam is the Company's President and its principal spokesman.

8. During the Class Period, Defendant Sekharam as senior executive officer and director

of GeoPharma was privy to non-public information concerning its business, finances, products,

markets and present and future business prospects via access to internal corporate documents,

conversations and connections with other corporate officers and employees, attendance at

management and Board of Directors meetings and committees thereof and via reports and other

information provided to them in connection therewith. Because of his possession of such

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information, the Defendant Sekharam knew or recklessly disregarded the fact that adverse facts

specified herein had not been disclosed to, and were being misrepresented to the investing public.

9. As an officer and controlling person of a publicly-held company whose securities

were and are registered with the SEC pursuant to the Exchange Act, and which were publicly traded

and governed by the provisions of the federal securities laws, the Defendant Sekharam had a duty

to disseminate accurate and truthful information promptly with respect to the Company's financial

condition and performance, and product development, and to correct any previously-issued

statements which had become materially misleading or untrue, so that the market price of the

Company's publicly-traded securities would be based upon truthful and accurate information.

Defendant Sekharam misrepresentations and omissions during the Class Period violated these

specific requirements and obligations.

PLAINTIFF'S CLASS ACTION ALLEGATIONS

10. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or otherwise

acquired the securities of GeoPharma on December 1, 2004, subsequent to the dissemination by

defendants of the materially false information as alleged herein (the "Class Period"), and who were

damaged thereby. Excluded from the Class are defendants, the officers and directors of the

Company, members of their immediate families and their legal representatives, heirs, successors or

assigns and any entity in which defendants have or had a controlling interest.

11. The members of the Class are so numerous that joinder of all members is imprac-

ticable. Throughout the Class Period, GeoPharma 's securities were actively publicly traded. While

the exact number of Class members is unknown to Plaintiff at this time and can only be ascertained

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through appropriate discovery, Plaintiff believes that there are hundreds of members in the proposed

Class. Record owners and other members of the Class may be identified from records maintained

by GeoPharma or its transfer agent and may be notified of the pendency of this action by mail, using

the form of notice similar to that customarily used in securities class actions.

12. Plaintiffs claims are typical of the claims of the members of the Class, as all

members of the Class are similarly affected by defendants' wrongful conduct in violation of federal

law that is complained of herein.

13. Plaintiff will fairly and adequately protect the interests of the members of the Class

and has retained counsel competent and experienced in class and securities litigation.

14. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

a whether the federal securities laws were violated by defendants' acts as alleged

herein;

b whether statements made by defendants to the investing public during the

Class Period misrepresented material facts about the business, operations and products of

GeoPharma; and

c to what extent the members of the Class have sustained damages and the

proper measure of damages.

15. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the

damages suffered by individual Class members may be relatively small, the expense and burden of

individual litigation make it impossible for members of the Class to individually redress the wrongs

done to them. There will be no difficulty in the management of this action as a class action.

SUBSTANTIVE ALLEGATIONS

16. On July 13, 2004, the Company issued a press release on the PR Newswire entitled,

"GeoPharma Reports Success in Clinical Studies on Oral Mucositis Drug for Cancer Patients." That

press release stated, in relevant part:

Belcher Pharmaceuticals, Inc, a wholly owned subsidiary of GeoPharma, Inc. (Nasdaq: GORX), has completed a double blind clinical study to evaluate the efficacy of their patent-pending drug for mucositis in cancer patients. Administration of their drug, MF5232, significantly improved the efficacy parameters with all ratings scales in the patients.

Mucositis is the inflammation of the mucosa in the mouth. It occurs as a side effect of chemotherapy and radiation. According to the National Cancer Institute, oral mucositis occurs in almost all patients receiving radiation for head and neck malignancies, in more than 75 percent of bone marrow transplant recipients, and in nearly 40 percent of patients receiving chemotherapy. Patients with reduced immune response, such as HIV/AIDS may also face this condition. Currently, no effective treatment for mucositis is available. Approximately 400,000 patients in the United States experience mucositis and the market potential is estimated to be at $300 million to $500 million.

"We are excited about the results of this study and we are exploring all the options available to move to the next phase of the development at a faster pace,' stated Dr. Kotha Sekharam, Geopharma President and inventor of this drug. "In addition, since the drug is developed with natural ingredients, no side effects are expected."

19. Given the large number of patients afflicted with cancer-related mucositis, and the

large market, it would be highly important for any Company—especially one of GeoPharma's size,

to be able to introduce a new patented drug for use by these patients. Such a drug would sell at high

prices, like any new drug, and be available by prescription only, like any new drug.

20. The "drug" described in the press release dated July 13, 2004 as MF5232 was later

renamed by GeoPharma as "Mucotrol."

21. On December 1, 2004, GeoPharma issued a press release on the PR Newswire

entitled, "GeoPharma, Inc. receives FDA Approval for Mucotrol (TM); Manages Mucositis Caused

By Radiation and Chemotherapy Required in Cancer Treatment." That press release stated, in

relevant part:

LARGO, Fla., Dec. 1 /PRNewswire-FirstCall/ -- GeoPharma, Inc. (Nasdaq: GORX - News) today announced that Belcher Pharmaceuticals, Inc., a wholly-owned subsidiary of GeoPharma, Inc. has received approval from the United States Food and Drug Administration ("FDA') for Mucotrol(TM), a prescription product for the management of oral mucositis I stomatitis.

Mucositis is a painful inflammation of the mucosa of the mouth that may occur due to radiation or chemotherapy. Mucositis afflicts approximately 40% of patients receiving cancer chemotherapy and 75% percent of bone marrow transplant recipients as well as 100% of patients receiving radiotherapy for cancer of the head and neck. It is estimated that approximately 300,000 cancer patients in the U.S. suffer from mucositis associated with cancer treatments. Based on this, the estimated U.S. oncology market potential for Mucotrol(TM) sales are between $75 million and $300 million per annum and the estimated global market is between $250 million and $1 billion per annum.

Belcher is planning to introduce Mucotrol(TM) directly to Oncologists. Simultaneously, Belcher has initiated discussions with potential strategic partners. "This patent pending formula is another example of our company's focus on niche areas and also of successful completing projects leading to marketable products," says Dr. Kotha Sekharam, inventor and the President of GeoPharma, Inc.

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22. Based on this news GeoPharma stock soared as much as 153% to $11.25 in early

trading on December 1 after the company issued the press release.

23. Inquiries by financial reporters immediately after the press release was released soon

revealed, however, several disturbing facts. First among these was that "Mucotrol" is not a

prescription drug, and indeed is not a drug at all. It is classified by the FDA as a "device", and

therefore is much less attractive from a marketing perspective than a new drug to treat this affliction.

Moreover, the Company's apparent success in getting a new drug approved--a daunting task for any

company—was illusory. Devices, under FDA guidelines, do not require FDA approval or testing.

Rather, they can be marketing so long as the FDA can confirm that they are substantially equivalent

to other similar devices already being marketed. The GeoPharma press release also, it was

uncovered, did not include the additional comments from the agency that the finding "does not mean

that the FDA has made a determination of whether your device complies with other requirements

of the [Food and Drug Administration Act]."

24. Defendant Sekharam, who is familiar with the difference between a device and a

prescription drug failed to explain when questioned by reporters why Mucotrol has been described

as a drug. Indeed, he admitted under questioning that there was no active drug ingredient in

Mucotrol.

25. Based on these revelations, GeoPharma stock, which trades on the NASDAQ

SmallCap market, was immediately halted for trading. Trading volume during the few hours

following the false and misleading press release was 42 million shares. From a high of$l 1.25, the

stock declined after adverse revelations filtered into the market, and the stock closed at a $6.81 per

share when trading was halted. On December 2, 2004, GeoPharma issued a further press release in

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which it stated, among other things, "that it could not estimate revenues from the distribution of the

device, stepping back from claims in the original release that Mucotrol could have potential sales

of $75 million to $300 million per year in the United States and between $250 million and $1 billion

per year globally. It also recanted the claim that Mucotrol was drug, which claim had first been

made in the July 13, 2004 press release, and never thereafter corrected.

FIRST CLAIM

Violation Of Section 10(b) Of

The Exchange Act Against And Rule lOb-S

Promulgated Thereunder Against All Defendants

26. Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein.

27. During the Class Period, defendants carried out a plan, scheme and course of conduct

which was intended to and, throughout the Class Period, did: (i) deceive the investing public,

including Plaintiff and other Class members, as alleged herein; and (ii) cause Plaintiff and other

members of the Class to purchase GeoPharma securities at artificially inflated prices. In furtherance

of this unlawful scheme, plan and course of conduct, defendants, and each of them, took the actions

set forth herein.

28. Defendants (a) employed devices, schemes, and artifices to defraud; (b) made untrue

statements of material fact and/or omitted to state material facts necessary to make the statements

not misleading; and (c) engaged in acts, practices, and a course of business which operated as a fraud

and deceit upon the purchasers of the Company's securities in an effort to maintain artificially high

market prices for GeoPharma securities in violation of Section 10(b) of the Exchange Act and Rule

lOb-S. All defendants are sued either as primary participants in the wrongful and illegal conduct

charged herein or as controlling persons as alleged below.

29. Defendants, individually and in concert, directly and indirectly, by the use, means or

instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal adverse material information about the business, operations

and future prospects of GeoPharma as specified herein.

30. These defendants employed devices, schemes, and artifices to defraud, while in

possession of material adverse non-public information and engaged in acts, practices, and a course

of conduct as alleged herein in an effort to assure investors of GeoPharma value and performance

and continued substantial growth, which included the making of, or the participation in the making

of, untrue statements of material facts and omitting to state material facts necessary in order to make

the statements made about GeoPharma and its business operations and future prospects in the light

of the circumstances under which they were made, not misleading, as set forth more particularly

herein, and engaged in transactions, practices and a course of business which operated as a fraud and

deceit upon the purchasers of GeoPharma securities during the Class Period.

31. The defendants had actual knowledge of the misrepresentations and omissions of

material facts set forth herein, or acted with reckless disregard for the truth in that they failed to

ascertain and to disclose such facts, even though such facts were available to them. Such defendants'

material misrepresentations and/or omissions were done knowingly or recklessly and for the purpose

and effect of concealing GeoPharma operating condition and future business prospects from the

investing public and supporting the artificially inflated price of its securities.

32. As a result of the dissemination of the materially false and misleading information

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and failure to disclose material facts, as set forth above, the market price of GeoPharma securities

was artificially inflated during the Class Period. In ignorance of the fact that market prices of

GeoPharma publicly-traded securities were artificially inflated, and relying directly or indirectly on

the false and misleading statements made by defendants, or upon the integrity of the market in which

the securities trades, and/or on the absence of material adverse information that was known to or

recklessly disregarded by defendants but not disclosed in public statements by defendants during the

Class Period, Plaintiff and the other members of the Class acquired GeoPharma securities during the

Class Period at artificially high prices and were damaged thereby.

33. At the time of said misrepresentations and omissions, Plaintiff and other members

of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff and the other

members of the Class and the marketplace known the truth regarding the problems that GeoPharma

was experiencing, which were not disclosed by defendants, Plaintiff and other members of the Class

would not have purchased or otherwise acquired their GeoPharma securities, or, if they had acquired

such securities during the Class Period, they would not have done so at the artificially inflated prices

which they paid.

34. By virtue of the foregoing, defendants have violated Section 10(b) of the Exchange

Act, and Rule 10b-5 promulgated thereunder.

35. As a direct and proximate result of defendants' wrongful conduct, Plaintiff and the

other members of the Class suffered damages in connection with their respective purchases and sales

of the Company's securities during the Class Period.

SECOND CLAIM Violation Of Section 20(a) Of

The Exchange Act Against the Defendant Sekharam

36. Plaintiff repeats and realleges each and every allegation contained above as if fully

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set forth herein.

37. Defendant Sekharam acted as a controlling person of GeoPharma within the meaning

of Section 20(a) of the Exchange Act as alleged herein. By virtue of his high-level position, and

knowledge of the Company's operations and knowledge of the false statements disseminated to the

investing public, Defendant Sekharam had the power to influence and control and did influence and

control, directly or indirectly, the decision-making of the Company, including the content and

dissemination of the various statements which Plaintiff contends are false and misleading.

Defendant Sekharam had unlimited access to copies to the Company's reports, press releases, public

filings and other statements alleged by Plaintiff to be misleading prior to and/or shortly after these

statements were issued and had the ability to prevent the issuance of the statements or cause the

statements to be corrected.

38. As set forth above, GeoPharma and the Defendant Sekharam each violated Section

10(b) and Rule lOb-5 by their acts and omissions as alleged in this Complaint. By virtue of their

positions as controlling persons, the Defendant Sekharam are liable pursuant to Section 20(a) of the

Exchange Act. As a direct and proximate result of defendants' wrongful conduct, Plaintiff and other

members of the Class suffered damages in connection with their purchases of the Company's

securities during the Class Period.

WHEREFORE, Plaintiff prays for relief and judgment, as follows:

1. Determining that this action is a proper class action, designating Plaintiff as Lead

Plaintiff and certifying Plaintiff as a class representative under Rule 23 of the Federal Rules of Civil

Procedure and Plaintiff's counsel as Lead Counsel;

2. Awarding compensatory damages in favor of Plaintiff and the other Class

members against all defendants, jointly and severally, for all damages sustained as a result of

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defendants' wrongdoing, in an amount to be proven at trial, including interest thereon;

3. Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

this action, including counsel fees and expert fees; and

4. Such other and further relief as the Court may deem just and proper.

JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury.

Dated: New York, New York December 2, 2004

PASKOWITZ & ASSOCIATE&_

By: Laurence D. Paskowitz (LP 7324) 60 East 42nd Street 46th Floor New York, NY 10165 (212) 685-0969 (tel.) (212) 685-2306 (fax)

and

ROY JACOBS & ASSOCIATES Roy L. Jacobs (RLJ 0286) 60 East 42nd Street 46th Floor New York, NY 10165 212-867-1156 212-504-8343 (Fax)

Attorneys for Plaintiff

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