On April 26, 2007, the Court entered the Order and Final Judgment of Dismissal with Prejudice, signed by U.S. District Judge Reginald C. Lindsay. According to the Order, the settlement is approved as fair, reasonable and adequate. The Court dismisses the action with prejudice. Plaintiffs’ Counsel is awarded 33% of the settlement fund and $86,531 for attorney fees and expenses.
According to a press release dated October 2, 2006, Ibis Technology Corporation announced that it has reached an agreement in principle to settle the consolidated securities class action litigation pending in the United States District Court of Massachusetts against the Company and its President and CEO. The settlement is subject to negotiation and execution of a formal settlement agreement and to final Court approval. The proposed settlement provides for a payment to the plaintiffs of $1.9 million, which amount will be funded entirely by the Company's insurance carrier.
In a press release dated May 31, 2006, the U.S. District Court for the District of Massachusetts granted in part and denied in part a company's motion to dismiss class action securities fraud allegations against it, ruling that the shareholders' adequately pled scienter with regard to their allegations that the company fraudulently overstated its earnings. The district court dismissed the shareholders' claims with regard to the allegations that the company overstated its prospects for booking orders for its products. Shareholders of Ibis Technology Corp. sued Ibis for securities fraud violations for overstating its prospects for booking orders for i2000 implanter machines by the end of the year 2003. The shareholders also claimed that Ibis failed to reduce the value of its small wafer production line in its books. …The district court ruled that the shareholders adequately pled scienter with regard to the $11 million overstatement in Ibis' books because the facts showed that Ibis was in a cash crunch, laid-off large numbers of its workforce and needed immediate cash to remain viable. However, as to the predictions of sales of the i2000, the district court ruled that the claim was not adequately pleaded.
On March 4, 2004, a complaint was filed against Ibis Technology Corporation and its senior executive officer and Chairman, civil action no. 04-CV-10446. On July 6, 2004, the various purported lawsuits were consolidated into this action and titled, "In Re: Ibis Technology Corporation Securities Litigation."
Several purported shareholder class action lawsuits have been filed against defendants Ibis Technology Corporation and its senior executive officer and Chairman charging defendants violated the Exchange Act by issuing material misrepresentations concerning Ibis' new generations SIMOX-SOI implanter, that Ibis had orders from Japanese wafer manufacturers and that Ibis would close prior to December 31, 2003.
Specifically, the complaint alleges that defendant misrepresented the carrying value of the smaller size wafers production line on Ibis' financial statements. On December 15, 2003, defendants filed a Form 8-K with the SEC admitting that there would be no sales of i2000 implanters in Q4 2003 from the Japanese wafer manufacturers and that they now expected to receive order(s) for one to three i2000 implanters sometime in 2004 but that the timing of the orders "is very difficult to predict because the sales require the purchaser to enter into a license agreement with a third party." Defendants further admitted that Ibis would record a "material charge" due to the impairment of its smaller size production equipment. In reaction to the announcement, the price of Ibis' common stock fell from a $51.40 per share close on December 12 to a close of $13.20 per share on December 15, 2003 and a closing price of $10.37 on December 16, 2003, on extraordinary high combined volume of 4.4 million shares, almost 50% of the outstanding shares of Ibis common stock.