On December 29, 2005, the plaintiff filed a notice of appeal from the November 30, 2005 Order dismissing the complaint with prejudice. As of August 2, 2007, the appeal is still pending in the U.S. Court of Appeals for the Third Circuit.
On August 18, 2004, the Court entered the Order granting the motion to appoint counsel and lead plaintiff. On January 5, 2005, the defendants filed motions to dismiss the complaint. On November 30, 2005, the Court entered the Order and Opinion by U.S. District Judge Dennis M. Cavanaugh granting the motions to dismiss and dismissing the complaint with prejudice.
The complaint alleges that Sel-Leb, certain of its officers and directors, and the Company's independent accountants violated the federal securities laws by issuing materially false and misleading public statements regarding the Company's financial results. Specifically, Sel-Leb and certain of its officers and directors are alleged to have violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by filing an annual report on Form 10KSB with the SEC for fiscal year 2001 that reported $443,669 in earnings, when in fact the Company incurred a loss for that year. The Company and the individual defendants also allegedly made numerous positive statements about Sel-Leb's anticipated record revenues for fiscal year December 31, 2002, when in fact the Company was incurring losses for that year.
Sel-Leb's common stock traded as high as $4.00 per share during the time period relevant to the complaint. However, when the truth about Sel-Leb's deteriorating business condition was revealed, the Company's shares became worthless.