According to SEC documents, HealthTronics Surgical Services, Inc. ("HealthTronics" or the Company) provides of non-invasive and minimally invasive medical devices and surgical services for certain urologic and orthopaedic conditions.

The original Complaint charges 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 materially false and misleading statements to the market, and by failing to disclose material information that Plaintiffs contend Defendants had a duty to disclose, between January 4, 2000 and July 25, 2003. Specifically, the Complaint alleges that Defendants made material misrepresentations and/or omitted to make material disclosures during the Class Period concerning the efficacy, testing and market acceptance of OssaTron(R), its leading product for the treatment of heel pain. Among other things, the Complaint charges, Defendants failed to disclose that some of the Company's own tests failed to support Defendants' statements that OssaTron(R) was more effective, safer and less costly than alternative, non-surgical treatments for heel pain. In addition, the Complaint alleges that Defendants misrepresented the market acceptance of OssaTron(R) because Defendants knew, or were severely reckless in disregarding at the time these statements were made, that serious questions existed among the medical community concerning the effectiveness of extracorporeal shock wave treatment (ESWT) for heel pain, which in turn raised serious issues as to whether insurance carriers and other third party payors would cover OssaTron(R) procedures. As a result, and because the Company was experiencing difficulty in its billing and collection department, which further made insurance reimbursement difficult to obtain, the Complaint claims, the Company's January 28, 2003 earnings projections lacked any reasonable basis in fact when made.

The Complaint further alleges that when Defendants finally acknowledged that the OssaTron(R) product was not being absorbed by the market as they had previously claimed, the market's reaction to the disclosures was swift and severe. On July 28, 2003, the market price of HealthTronics common stock tumbled over 26% in unusually heavy trading. Indeed, the price of HealthTronics common stock dropped from a high of $17.60 per share during the Class Period to as low as $7.76 per share on July 28, 2003.

As summarized by a court docket, on April 5, 2004, the Court entered the Order appointing lead Plaintiff and co-lead Counsel. On June 3, 2004, Plaintiffs filed a Consolidated Amended Complaint, and on August 20, 2004, Defendants responded by filing a motion to dismiss the Complaint. Plaintiffs filed their opposition to Defendants' motion on October 21, 2004. Pursuant to the Stipulation of Settlement dated September 9, 2005, the parties agreed to settle the litigation for $2,285,000 on behalf of those who purchased HealthTronics common stock between January 4, 2000 and July 28, 2003. A settlement hearing was scheduled for December 1, 2005.

By the Order and Final Judgment entered on December 2, 2005, and signed by U.S. District Judge Clarence Cooper, the settlement is approved as fair, reasonable and adequate. The action is dismissed with prejudice. Further, the Plan of Allocation is approved and Plaintiffs’ Counsel is awarded 33% of the Settlement Fund in fees, and $87,879.74 in reimbursement of expenses.