According to the Company’s FORM 10-Q For the Quarterly Period Ended June 30, 2002, starting on June 15, 2001, several stockholder class action complaints were filed in the United States District Court for the Southern District of New York against iPrint, two of our former officers and/or directors, and several investment banking firms that served as underwriters of our March 2000 initial public offering. The cases, which were brought purportedly on behalf of all persons who purchased our common stock between March 7, 2000 and December 6, 2000, have been consolidated. Plaintiffs electronically served an amended complaint on or about April 19, 2002. The Company is aware that similar allegations have been made in lawsuits relating to more than 300 other initial public offerings conducted in 1999 and 2000. Those cases have been consolidated for pretrial purposes. Defendants’ time to respond to the complaints has been stayed pending a plan for further coordination.
The complaint charges defendants with violations of Sections 10(b) and 20(a)of the Securities Exchange Act of 1934 (and Rule 10b-5 promulgated thereunder) and Sections 11 and 15 of the Securities Act of 1933, for issuing a Registration Statement and Prospectus (the "Prospectus") that contained material misrepresentations and/or omissions. The Prospectus was issued in connection with the iPrint IPO. The complaint alleges that the Prospectus was false and misleading because it failed to disclose (i) the Underwriter Defendants agreement with certain investors to provide them with significant amounts of restricted iPrint shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase iPrint shares in the after-market at pre-determined prices.