According to the docket posted, on July 21, 2000, the plaintiffs filed a motion to amend the Judgment dismissing the case without prejudice in favor of the defendants. On October 10, 2000, the Court entered the Order withdrawing the Judgment and granting in part and denying in part the motion to amend the Judgment. That same day, the Court entered another Order dismissing the plaintiffs’ complaint without prejudice as to refilling. On October 19, 2000, the Court entered the Final Judgment and Order of Dismissal with prejudice.
As previously reported by the Company's FORM 10-K for the fiscal year ended June 30, 2000, the Company and other defendants filed motions to dismiss the suit on February 7, 2000. On July 20, 2000, the U.S. District Court entered its order dismissing plaintiffs' claims against the Company and the other defendants. The case was dismissed without prejudice. The Plaintiffs have the right to file an amended complaint.
The original complaint charges Pervasive and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that after its initial public offering in September 1997, Pervasive stock traded in the $9-$15 range as Pervasive's revenue and earnings showed little growth in the first two quarters it reported as an independent company. By October 1998, the Company's stock price was trading at just $8.50 per share.
The Company then began to move its focus more to Internet-related tools and saw its stock price increase to above $18 per share. On July 15, 1999, Pervasive reported strong revenues and earnings and strong networking revenues. In a conference call after the release, Pervasive management discussed its new product ("Tango"), its new focus on Internet-related products and touted the Company's prospects. As a result of defendants' statements, Pervasive's stock price was inflated during the Class Period. Top officers of Pervasive took advantage of these inflated share prices, selling 492,250 shares for proceeds of $11 million over the next two weeks following these statements. By October 1999, Pervasive's stock was trading at as high as $38 per share. However, Pervasive's business and prospects were not nearly as favorable as defendants had represented. On October 21, 1999, Pervasive issued a press release announcing its 1stQ F2000 results. Later that day, Pervasive held a conference call and admitted that its results for the 2ndQ F2000, ended December 31, 1999, would be much worse than earlier represented and that costs of the development of Tango-related sales would cause losses in F2000 instead of forecasted profits of $.50. On these shocking disclosures, Pervasive's stock price declined $24-1/16 to $12 per share on enormous volume of 11.8 million shares, a 67% decline in one day.