According to the docket, a Stipulation of Settlement was filed by Saf T Lok on February 4, 2005. A settlement amount of $1,200,000 in cash was established. On June 29, 2005, the Court entered the Order granting in part and denying in part the motion for attorney’s fees and expenses. Plaintiff's counsel was awarded (20%) which is $240,000, in attorney's fees and $114,494.29 in expenses from the Gross Settlement Fund. The case was closed.
As summarized by the Notice of Pendency dated February 16, 2005, on September 13, 2002, a Consolidated Amended Class Action Complaint was filed. Motions to dismiss the Consolidated Complaint were filed by all Defendants. The Court dismissed the Consolidated Complaint on July 3, 2003, but granted leave to replead. Lead Plaintiff filed his Second Consolidated Amended Class Action Complaint on August 4, 2003, and then on September 17, 2003, with leave of Court, filed the Third Consolidated Amended Class Action Complaint (the “Third Consolidated Amended Complaint”). Defendants moved to dismiss the Third Consolidated Amended Complaint on October 24, 2003, which the Court denied in an Order dated March 3, 2004. Defendants answered the hird Consolidated Amended Complaint on March 31, 2004. The parties thereafter engaged in settlement discussions and to that end, met in New York City on June 28, 2004 to attend a day-long mediation session with the assistance of former federal Judge Nicholas Politan. The parties continued settlement discussions with the assistance of former Judge Politan after the mediation until the settlement described in this notice was achieved. On October 29, 2004, the bankruptcy court for the Western District of Pennsylvania entered an order approving the use of the proceeds of Saf T Lok’s directors’ and officers’ liability policy to fund the Individual Defendants’ contribution to the Settlement.
The original Complaint alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by
issuing a series of material misrepresentations to the market between April 14,
2000 and April 16, 2001, thereby artificially inflating the price of Saf T Lok
securities. Throughout the Class Period, as alleged in the complaint,
defendants filed materially false and misleading financial statements with the
U.S. Securities & Exchange Commission, which, among other things, did not
comply with Generally Accepted Accounting Principles. Specifically, at the
start of the Class Period, defendants disclosed that the Company had terminated
its exclusive consumer market distribution agreement with United Safety Action,
Inc. ("USA") and that the Company itself would now be permitted to market its
products to retail customers. The complaint alleges that the financial
statements filed by defendants failed to disclose, among other things, that (1)
a catalog retailer had previously obtained Company products from USA at a
sharply reduced price and was now selling these products at extremely low
prices, thereby limiting the market opportunity for the Company; (2) the
Company's earnings, assets and shareholder equity were overstated by at least
$3.2 million; and (3) the Company's inventories were not stated at the lower of
cost or market, as represented. When this information was finally disclosed on April 16, 2001, the last day of the Class Period, the stock price of Saf T Lok fell to under $0.30 per share. Subsequently, on May 15, 2001, the Company's securities were delisted from the NASDAQ Small Cap Market and are currently traded on the OTC (Over The Counter) Bulletin Board.
NOTE: Saf T Lok filed for bankruptcy protection on May 22, 2002.