According to the Company’s FORM 10-K For the fiscal year ended January 31, 2005, on February 19, 2004, the lead plaintiff filed a notice of appeal to the United States Court of Appeals for the First Circuit from the memorandum and order granting the motion to dismiss all claims in their entirety. On February 8, 2005, the United States Court of Appeal dismissed this appeal.
As summarized by the same SEC filing, six purported securities class action lawsuits, all alleging nearly identical claims, were filed in the United States District Court for the District of Massachusetts. On April 3, 2003, the Court consolidated these complaints into one action captioned: In re SeaChange International, Inc., et al. Securities Litigation, Civil Action No. 02-12116-DPW. On May 16, 2003, the plaintiffs filed a consolidated and amended class action complaint (the “Complaint”). On July 18, 2003, SeaChange and the individual defendants filed a motion to dismiss all claims in their entirety, with prejudice. The lead plaintiff’s opposition to the motion to dismiss was filed on September 12, 2003, and the defendants’ reply memorandum was filed on October 8, 2003. A hearing on the motion to dismiss took place on January 16, 2004. On February 6, 2004, Judge Woodlock of the United States District Court for the District of Massachusetts issued a memorandum granting the motion to dismiss all claims asserted against the Company and the individual defendants, and an order of dismissal was entered by the court on February 9, 2004.
The original Complaint allege that the registration statement and prospectus issued by SeaChange in connection with its stock offering completed on January 31, 2002 contained statements that were materially inaccurate. Specifically, the Complaint alleges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 by issuing a false and misleading prospectus on or about January 29, 2002. As alleged in the Complaint, at all relevant times, SeaChange purported to be a leading developer, manufacturer and marketer of video storage systems which purportedly automate the management and distribution of video streams, such as movies and other feature presentations and advertisements. The Complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that the Company was unable to compete effectively due to its inability to provide server systems large enough to meet the needs of cable companies located in major metropolitan areas and that the Company's products were dependent on technology, developed and patented by a key competitor, as to which SeaChange did not have proprietary rights.