Silicon Storage Technology, Inc. ("Silicon Storage" or the Company) produces flash memory semiconductor devices for the digital consumer and Internet computing markets.

Several purported shareholder class action lawsuits have been filed alleging that Defendants Silicon Storage and one or more of its officers and/or directors violated federal securities laws by issuing false or misleading public statements, which had the effect of artificially inflating the market price of the Company's securities. Specifically, the Complaint alleges that Silicon Storage concealed the following facts: that its sales and margins were being materially impacted by Macronix and Intel actively lowering their average selling prices; that Silicon Storage was not on track to achieve its profitability projections; and that its gross margin projections were overstated.

The Complaint further alleges that on December 20, 2004, Silicon Storage issued a press release announcing that "its revenue in the fourth quarter is expected to be between $102 and $108 million versus previous guidance of $120 to $130 million. Due to current market conditions, the company expects to record an inventory charge of between $20 and $25 million for excess inventory and to write certain products down to their current estimated market values." As result of this news, Silicon Storage shares fell from a close of $7.01 per share on December 20, 2004, to close at $5.99 per share on December 21, 2004, on unusually high trading volume.

According to the Company’s FORM 10-K for the fiscal year ended December 31, 2006, in January and February 2005, multiple putative shareholder class action Complaints were filed against SST and certain directors and officers alleging insider trading and manipulation of stock prices, in the United States District Court for the Northern District of California, following Company’s announcement of anticipated financial results for the fourth quarter of 2004. On March 24, 2005, the putative class actions were consolidated under the caption In re Silicon Storage Technology, Inc., Securities Litigation, Case No. C 05 00295 PJH (N.D. Cal.). On May 3, 2005, the Honorable Phyllis J. Hamilton appointed the "Louisiana Funds Group," consisting of the Louisiana School Employees' Retirement System and the Louisiana District Attorneys' Retirement System, to serve as lead Plaintiff and the law firms of Pomeranz Haudek Block Grossman & Gross LLP and Berman DeValerio Pease Tabacco Burt & Pucillo to serve as lead Counsel and liaison Counsel, respectively, for the class. Lead Plaintiff filed a Consolidated Amended Class Action Complaint on July 15, 2005, which the Court dismissed with leave to amend on March 10, 2006. Plaintiff filed a second amended Complaint on May 1, 2006, again seeking unspecified damages for alleged violations of federal securities laws during the period from April 21, 2004 to December 20, 2004. The Company responded with a motion to dismiss on June 19, 2006. On March 9, 2007, the Court issued an Order granting the Company’s motion to dismiss, with prejudice, and on March 12, 2007 entered a judgment that Plaintiffs take nothing and the action be dismissed on the merits. Lead Plaintiff filed a notice of appeal but did not follow through and by stipulation, the suit was dismissed.