According to the Company’s FORM 10-K For The Fiscal Year Ended December 31, 2002, the Company filed a motion to dismiss this complaint and, on March 28, 2001, the suit was dismissed with prejudice. On April 25, 2001, plaintiffs appealed the decision to dismiss the suit to the United States Court of Appeals for the Second Circuit. On January 28, 2003, the United States Court of Appeals for the Second Circuit affirmed the dismissal of this action in its entirety.
The original Complaint alleges that Ilife, certain of its officers and directors, ING Baring Furman Selz LLC, Warburg Dillon Read LLC, and KPMG LLP violated section 11 of the Securities Act of 1933 and that certain defendants violated section 10(b) of the Securities Exchange Act of 1934. In particular, it is alleged, among other things, that the Registration Statement and Prospectus were materially false and misleading because it failed to disclose the massive loss for the March 1999 quarter, even though that quarter had ended 43 days before the Offering, it misrepresented the true financial condition of the Company as of the effective date, it misrepresented the use of proceeds of the Offering, and it failed to disclose the stockholder deficit as of the effective date of the Offering. The Complaint alleges that as a result of these material misstatements and omissions, Ilife's stock price was artificially inflated throughout the Class Period.