Ocata Shareholder Majority Rejects Astellas Offer As Woefully Inadequate

| About: Ocata Therapeutics, (OCAT)

Summary

Ocata Stem Cell Technologies positioned to create superior value through continued execution of multi-agency pivotal trial strategy.

Majority of shareholders oppose two offers now entering third offer, indicating a clear consensus.

Current offer only slightly exceeds cash and tax write-off value and gives no value to 4 therapies developed now entering Phase 1 to pivotal trials with remarkable results.

Ocata Therapeutics majority shareholders (NASDAQ: OCAT) have again, after this third offer, indicated that its Board of Directors has erred in its unanimous recommendation for the solicited tender offer by Astellas to acquire all of the outstanding shares of Ocata Therapeutics and, in consultation with its financial and legal advisors, determined that the offer substantially undervalues the company, favors insiders, and does not adequately compensate shareholders for Ocata's phenomenal growth prospects. The offer also exposes Ocata shareholders to significant and offer-timely irrational selling of Ocata's stock by short-sellers (previously identified and investigated by attorneys as "Mako", a type of shark found in the Pacific). Majority shareholders rejection of the second offer indicate that it is no coincidence that market-value based "80%+ premium" boastings of the past offers by Astellas in SEC documents and the troubling corporate appraisal values by Jeffries, underwriter, closely followed a bear raid on the stock. Astellas has been in circle-swimming negotiations with Ocata for well over a year, and should be aware that the price of the stock was historically much higher than when they struck with the offer bite. Accordingly, the majority shareholders have NOT tendered any of their shares to Astellas, and many have rescinded any previously tendered shares by contacting their brokerages in a simple transaction.

In the offer by Astellas to Ocata shareholders, the amount of $8.50 per share is defined as a substantial premium to market value of the stock on that day of the offering, ignoring completely that the value only one year prior to the offer was 12.30 at its peak. In a classical sense, a premium is defined as approximately 20% higher than the two year high in a given stock during a buyout offer period. Thus a buyer is giving a "premium for any and all shares purchased", not just a premium for a minority of traded volume bought during a rapid and timely bear raid that drove prices irrationally low. In that time period Ocata has successfully filed many patents, established strong financial ties, conducted vision-saving clinical trials with excellent safety and preliminary efficacy data, and published many scientific breakthrough articles in world-class top peer-reviewed journals, most of which are released in press at the Ocata shareholder web site. (See here for more information.)

Meanwhile the shareholder majority has relentless focused on capitalizing the company through these trying times while its executive officers have struggled or failed. Simply stated, Ocata shareholders and scientific team have an outstanding track record of value creation and our future is bright, because its majority shareholders and scientists have stayed the course. Concomitantly, Ocata business management has often failed in its duties to maximize company value, and having recommended this offer contradicts even their own recent estimates of its value.

Astellas' offer not only fails to reflect Ocata's outstanding track record of value creation through scientific publications and clinical developments with RPE therapy, it also undervalues its compelling prospects for long-term shareholder value through the development of stem cell treatments for Crohn's disease, multiple sclerosis, and lupus nephritis; Ocata having recently received key grant funding for potentially several millions of dollars from the National Institute of Health (NIH), the world's leader in identifying promising science, to develop these technologies.

Management and directors owe the shareholders a fiduciary duty to maximize the value of the corporation and therefore the shares. Because a unanimous decision by management and the board of directors to accept this offer fails to reflect the present and future value of these technologies, majority shareholders maintain for a third time the position that management may have breached this lawful duty. Management does not have a fiduciary duty to protect short-sellers, no matter how big their firm.

Most importantly, Ocata owners and shareholders have an ethical duty and business entitlement to remind management to do the jobs they are paid to do, and continue with the trials to help those in need of these critical therapies. In fact, if management had responsibly and timely continued a multi-agency approach to developing the RPE therapy, as was originally intended by the scientific and shareholder communities, EMA could have already approved the clinical trial for SMD and needy children could have already been undergoing vision-restoration!

After consideration of Astellas' offer, Ocata's primary authorities, also called shareholder majority, concluded that the offer substantially undervalues the strength of Ocata's business, operations, and future growth opportunities. The majority are confident in the assessment in this world class technology platform and believe that it would be foolish to sell prior to efficacy data from pivotal trials, yet again, for a third time. Majority authorities are as "excited" about owned technologies as Astellas is to own it, and invite Astellas to be honest, forthright, and complete in their assessment of shareholder rights, with respect to traditional market premium being defined as a minimum of 20% over the two-year high. If Astellas truly wants to pay a premium, that range starts at $14.75 per share. Anything less is rhetorical bottom-dwelling ambush capturing a tongue-and cheek snap-bear raid that rapidly drove prices artificially low in spite of company successes. Astellas has a good track record and may not be aware of the American market tradition of the 20% designation of premium, and are heretofore informed thereof.

Disclosure: I am/we are long OCAT.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Ocata Therapeutics, OCAT and Astellas (ALPMY) Forward-Looking Statements Certain statements in this press release are forward-looking statements. These statements relate to future events or the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company shareholders or its industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential" or other comparable terminology. The Company shareholders have based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company shareholders believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company shareholders control, including future actions that may be taken by Ocata shareholders in furtherance of its unsolicited proposal. Additional Information and Where to Find It This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. The offer commenced by Astellas has filed a solicitation/recommendation statement on Schedule 14D-9 with the Securities and Exchange Commission ("SEC"). Security holders are urged to read the solicitation/recommendation statement and other relevant materials if and when they become available because they will contain important information. These documents may be obtained (when available) without charge at the SEC's website or at //ir.ocata.com/sec-filings/content/0001193125-16-436354/d131414dsctota.htm Also available are SBIR NIH grant information at //NIH.gov