(Against All Defendants for Violations of Section 14(a) of the Exchange Act and   17 C.F.R. § 244.100 Promulgated Thereunder)   (Against All Defendants for Violations of Section 14(a) of the Exchange Act and   Rule 14a-9 Promulgated Thereunder)   (Against the Individual Defendants for Violations   of Section 20(a) of the Exchange Act)   1.pdf.  See also The Spectranetics Corp., SEC Staff Comment Letter 1 (July 18, 2017) (“Item 4.  The Solicitation or Recommendation Certain Spectranetics Forecasts, page 39 . . . [P]rovide the  reconciliation  required  under  Rule  100(a)  of  Regulation  22.  Plaintiff brings this class action pursuant to Fed. R. Civ. P. 23 on behalf of himself  and the other public shareholders of Neon (the “Class”).  Excluded from the Class are Defendants  herein and any person, firm, trust, corporation, or other entity related to or affiliated with any  Defendant.   24.  Neon is a clinical-stage immune-oncology company and a leader in the field of  neoantigen-target therapies, dedicated to transforming the treatment of cancer by directing the  immune system towards neoantigens.   26.  Neon is well-positioned for financial growth and the Merger Consideration fails to  adequately compensate the Company’s shareholders.  It is imperative that Defendants disclose the  material information they have omitted from the F-4, discussed in detail below, so that the  Company’s shareholders can properly assess the fairness of the Merger Consideration for  themselves and make an informed decision concerning whether or not to vote in favor of the  Proposed Transaction.   27.  If the false and/or misleading F-4 is not remedied and the Proposed Transaction is  consummated, Defendants will directly and proximately have caused damages and actual  economic loss (i.e. the difference between the value to be received as a result of the Proposed  Transaction and the true value of their shares prior to the merger), in an amount to be determined  at trial, to Plaintiff and the Class.  II.  The Materially Incomplete and Misleading F-4    29.  A company’s financial forecasts are material information a board relies on to  determine whether to approve a merger transaction and recommend that shareholders vote to  approve the transaction.  Here, the F-4 discloses that “in connection with the exploration of  strategic alternatives as described in this proxy statement/prospectus, including the proposals from  BioNTech, Neon management prepared certain non-public, unaudited projections of financial  performance for Neon for the fiscal years ending December 31, 2020 through 2044, or the  Management Projections, based on its view of the prospects of Neon, and risk-adjusted these  projections for Neon’s principal programs consisting of (i) Neon’s two lead T cell programs, NEO- PTC-01, or PTC, and NEO-STC-01, or STC, and, together with PTC, the T cell Therapies, and (ii)  Neon’s two vaccine programs, NEO-PV-01, or PV, and NEO-SV-01, or SV, and, together with  PV, the Vaccines.” F-4 210. The F-4 also discloses projections for the fiscal years ending  December 31, 2045 through 2050, which represent extrapolations by Duff & Phelps. Id.   30.  When soliciting proxies from shareholders, a company must furnish the  information found in Schedule 14A (codified as 17 C.F.R. § 240.14a-101).  Item 14 of Schedule  14A sets forth the information a company must disclose when soliciting proxies regarding mergers  and acquisitions.  In regard to financial information, companies are required to disclose “financial  information required by Article 11 of Regulation S-X[,]” which includes Item 10 of Regulation S- K.  See Item 14(7)(b)(11) of 17 C.F.R. § 240.14a-101.     32.  In order to facilitate investor understanding of the Company’s financial projections,  the SEC provides companies with certain factors “to be considered in formulating and disclosing  such projections[,]” including:  (i) When management chooses to include its projections in a Commission filing,  the disclosures accompanying the projections should facilitate investor  understanding of the basis for and limitations of projections. In this regard investors  should be cautioned against attributing undue certainty to management’s  assessment, and the Commission believes that investors would be aided by a  statement indicating management’s intention regarding the furnishing of updated  projections. The Commission also believes that investor understanding would be  enhanced by disclosure of the assumptions which in management’s opinion are  most significant to the projections or are the key factors upon which the financial  results of the enterprise depend and encourages disclosure of assumptions in a  manner that will provide a framework for analysis of the projection.  (ii) Management also should consider whether disclosure of the accuracy or  inaccuracy of previous projections would provide investors with important insights  into the limitations of projections. In this regard, consideration should be given to  presenting the projections in a format that will facilitate subsequent analysis of the  reasons for differences between actual and forecast results. An important benefit  may arise from the systematic analysis of variances between projected and actual  results on a continuing basis, since such disclosure may highlight for investors the  most significant risk and profit-sensitive areas in a business operation.  17 C.F.R. § 229.10(b)(3) (emphasis added).   33.  Here, Neon’s shareholders would clearly find complete and non-misleading  financial projections material in deciding how to vote, considering that the Board specifically  relied on the financial forecasts in reaching its decision to, among other things, approve the Merger  Agreement and the transactions contemplated by it. F-4 208-09.   35.  The F-4 discloses that “in connection with the exploration of strategic alternatives  as described in this proxy statement/prospectus, including the proposals from BioNTech, Neon  management prepared certain non-public, unaudited projections of financial performance for Neon  for the fiscal years ending December 31, 2020 through 2044, or the Management Projections,  based on its view of the prospects of Neon, and risk-adjusted these projections for Neon’s principal  programs consisting of (i) Neon’s two lead T cell programs, NEO-PTC-01, or PTC, and NEO- STC-01, or STC, and, together with PTC, the T cell Therapies, and (ii) Neon’s two vaccine  programs, NEO-PV-01, or PV, and NEO-SV-01, or SV, and, together with PV, the Vaccines.” Id.  at 210. The F-4 also discloses projections for the fiscal years ending December 31, 2045 through  2050, which represent extrapolations by Duff & Phelps. Id   36.  The F-4 goes on to disclose, inter alia, Neon’s forecasted values for projected non- GAAP (Generally Accepted Accounting Principles) financial metrics for 2020 through 2050 for  (1) EBITDA, (2) Earnings Before Interest and Taxes, (3) Net Operating Profit After Tax, and (4)  Free Cash Flow, but fails to provide (i) the line items used to calculate these non-GAAP metrics  or (ii) a reconciliation of these non-GAAP projections to the most comparable GAAP measures.   Id. at 213.   38.  The F-4 defines Free Cash Flow as “Neon’s free cash flow before interest payments  and is calculated as earnings before interest, taxes, depreciation and amortization, less capital  expenditures, less increases in net working capital and less tax expense.” Id. at 213 n.2.  Nevertheless, the F-4 fails to reconcile Free Cash Flow to its most comparable GAAP measure or  disclose the line items used to calculate Free Cash Flow, rendering the F-4 materially false and/or  misleading.  Id. at 213.   39.  The F-4 fails to define Earnings Before Interest and Taxes, reconcile Earnings  Before Interest and Taxes to its most comparable GAAP measure or disclose the line items used  to calculate it, rendering the F-4 materially false and/or misleading. Id.   40.  Similarly, the F-4 fails to define Net Operating Profit After Tax, reconcile Net  Operating Profit After Tax or disclose the line items used to calculate it, rendering the F-4  Materially false and/or misleading. Id.   41.  Thus, the F-4’s disclosure of these non-GAAP financial forecasts provides an  incomplete and materially misleading understanding of the Company’s future financial prospects  and the inputs and assumptions for which those prospects are based upon.  It is clear that those  inputs and assumptions were in fact forecasted and utilized in calculating the non-GAAP measures  disclosed and relied on by the Board to recommend the Proposed Transaction in violation of  Section 14(a) of the Exchange Act.   43.  As such, this information must be disclosed in order to cure the materially  misleading disclosures regarding both the financial projections developed by the Company as well  as the projections relied upon by the Company’s financial advisors.  The Financial Projections Violate Regulation G   44.  The SEC has acknowledged that potential “misleading inferences” are exacerbated  when the disclosed information contains non-GAAP financial measures1 and adopted Regulation  G2 “to ensure that investors and others are not misled by the use of non-GAAP financial  measures.”3     46.  Moreover, the SEC has publicly stated that the use of non-GAAP financial  measures can be misleading.5   Former SEC Chairwoman Mary Jo White has stated that the  frequent use by publicly traded companies of unique company-specific non-GAAP financial  measures (as Neon included in the F-4 here) implicates the centerpiece of the SEC’s disclosures  regime:  In too many cases, the non-GAAP information, which is meant to supplement the  GAAP information, has become the key message to investors, crowding out and  effectively supplanting the GAAP presentation. Jim Schnurr, our Chief Accountant,  Mark Kronforst, our Chief Accountant in the Division of Corporation Finance and  I, along with other members of the staff, have spoken out frequently about our  concerns to raise the awareness of boards, management and investors.  And last  month, the staff issued guidance addressing a number of troublesome practices  which can make non-GAAP disclosures misleading: the lack of equal or greater  prominence for GAAP measures; exclusion of normal, recurring cash operating  expenses; individually tailored non-GAAP revenues; lack of consistency; cherry- picking; and the use of cash per share data.  I strongly urge companies to carefully  consider this guidance and revisit their approach to non-GAAP disclosures.  I also  urge again, as I did last December, that appropriate controls be considered and that  audit committees carefully oversee their company’s use of non-GAAP measures  and disclosures.6     48.  Compliance with Regulation G is mandatory under Section 14(a), and non- compliance constitutes a violation of Section 14(a).  Thus, in order to bring the F-4 into compliance  with Regulation G, Defendants must provide a reconciliation of the non-GAAP financial measures  to their respective most comparable GAAP financial measures.  7    Available at https://www.sec.gov/Archives/edgar/data/1442596/000110465916089133/  filename1.htm.  8    Available at https://www.sec.gov/Archives/edgar/data/1442596/000000000016062042/  filename1.pdf.   9   Available at https://www.sec.gov/Archives/edgar/data/1266719/000114420411046281/  filename1.htm.  See also Actel Corporation, SEC Staff Comment Letter 2 (Oct. 13, 2010)  (“Opinion of Actel’s Financial Advisor, page 24 . . . This section includes non-GAAP financial  measures.  Please revise to provide the disclosure required by Rule 100 of Regulation G.”),  available at https://www.sec.gov/Archives/edgar/data/907687/000000000010060087/filename   62.  Section 14(a)(1) of the Exchange Act makes it “unlawful for any person, by the use  of the mails or by any means or instrumentality of interstate commerce or of any facility of a  national securities exchange or otherwise, in contravention of such rules and regulations as the  Commission may prescribe as necessary or appropriate in the public interest or for the protection  of investors, to solicit or to permit the use of his name to solicit any [F-4] or consent or  authorization in respect of any security (other than an exempted security) registered pursuant to  section 78l of this title.”  15 U.S.C. § 78n(a)(1).   63.  As set forth above, the F-4 omits information required by SEC Regulation G, 17  C.F.R. § 244.100, which independently violates Section 14(a).  SEC Regulation G, among other  things, requires an issuer that chooses to disclose a non-GAAP measure to provide a presentation  of the “most directly comparable” GAAP measure and a reconciliation “by schedule or other  clearly understandable method” of the non-GAAP measure to the “most comparable” GAAP  measure.  17 C.F.R. § 244.100(a).    64.  The failure to reconcile the non-GAAP financial measures included in the F-4  violates Regulation G and constitutes a violation of Section 14(a).   66.  Plaintiff incorporates each and every allegation set forth above as if fully set forth  herein.   67.  SEC Rule 14a-9 prohibits the solicitation of shareholder votes in registration  statements that contain “any statement which, at the time and in the light of the circumstances  under which it is made, is false or misleading with respect to any material fact, or which omits to  state any material fact necessary in order to make the statements therein not false or misleading[.]”   17 C.F.R. § 240.14a-9(a).    68.  Regulation G similarly prohibits the solicitation of shareholder votes by “mak[ing]  public a non-GAAP financial measure that, taken together with the information accompanying that  measure . . . contains an untrue statement of a material fact or omits to state a material fact  necessary in order to make the presentation of the non-GAAP financial measure . . . not  misleading.”  17 C.F.R. § 244.100(b) (emphasis added).     69.  Defendants have issued the F-4 with the intention of soliciting shareholder support  for the Proposed Transaction.  Each of the Defendants reviewed and authorized the dissemination  of the F-4, which fails to provide critical information regarding, amongst other things, the financial  projections for the Company.    71.  The Individual Defendants knew or were negligent in not knowing that the F-4 is  materially misleading and omits material facts that are necessary to render it not misleading.  The  Individual Defendants undoubtedly reviewed and relied upon the omitted information identified  above in connection with their decision to approve and recommend the Proposed Transaction.   72.  The Individual Defendants knew or were negligent in not knowing that the material  information identified above has been omitted from the F-4, rendering the sections of the F-4  identified above to be materially incomplete and misleading.     73.  The Individual Defendants were, at the very least, negligent in preparing and  reviewing the F-4.  The preparation of a registration statement by corporate insiders containing  materially false or misleading statements or omitting a material fact constitutes negligence.  The  Individual Defendants were negligent in choosing to omit material information from the F-4 or  failing to notice the material omissions in the F-4 upon reviewing it, which they were required to  do carefully as the Company’s directors.  Indeed, the Individual Defendants were intricately  involved in the process leading up to the signing of the Merger Agreement and the preparation of  the Company’s financial projections.     74.  Neon is also deemed negligent as a result of the Individual Defendants’ negligence  in preparing and reviewing the F-4.   75.  The misrepresentations and omissions in the F-4 are material to Plaintiff and the  Class, who will be deprived of their right to cast an informed vote if such misrepresentations and  omissions are not corrected prior to the vote on the Proposed Transaction.   77.  Plaintiff incorporates each and every allegation set forth above as if fully set forth  herein.   78.  The Individual Defendants acted as controlling persons of Neon within the meaning  of Section 20(a) of the Exchange Act as alleged herein.  By virtue of their positions as directors  and/or officers of Neon, and participation in and/or awareness of the Company’s operations and/or  intimate knowledge of the incomplete and misleading statements contained in the F-4 filed with  the SEC, they 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 that Plaintiff contends are materially incomplete and misleading.   79.  Each of the Individual Defendants was provided with or had unlimited access to  copies of the F-4 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.   81.  In addition, as the F-4 sets forth at length, and as described herein, the Individual  Defendants were involved in negotiating, reviewing, and approving the Merger Agreement.  The  F-4 purports to describe the various issues and information that the Individual Defendants  reviewed and considered.  The Individual Defendants participated in drafting and/or gave their  input on the content of those descriptions.   82.  By virtue of the foregoing, the Individual Defendants have violated Section 20(a)  of the Exchange Act.   83.  As set forth above, the Individual Defendants had the ability to exercise control  over and did control a person or persons who have each violated Section 14(a) and Rule 14a-9 by  their acts and omissions as alleged herein.  By virtue of their positions as controlling persons, these  Defendants are liable pursuant to Section 20(a) of the Exchange Act.  As a direct and proximate  result of Individual Defendants’ conduct, Plaintiff and the Class will be irreparably harmed.  I.  The Proposed Transaction   