On September 10, 2008, a notice of appeal was entered with the court to appeal the United States Court of Appeals for the Second Circuit. On August 18, 2008, an Opinion and Order was entered granting Defendants' Motions to Dismiss the First Amended Complaint.
According to a press release dated August 19, 2008, Medis Technologies Ltd. (NASDAQ:MDTL) today announced that Hon. Paul A. Crotty, United States District Judge for the Southern District of New York, has granted defendants' motion to dismiss a putative class action initiated against Medis and its CEO, among others. The Court also ordered the case to be closed. Medis had vigorously denied any allegations of wrongdoing, and is gratified by the federal court's dismissal of the action.
On May 23, 2007, a stipulation and Order was filed. According to the Order, the plaintiffs were given sixty days from the date of the order is entered to appoint lead plaintiff, lead counsel and for the amendment of the complaint. At the same time, the defendants were also given sixty days to respond to the amended complaint. On June 22, 2007, a motion to appoint the Medis Investor Group to serve as lead plaintiff was filed. As a result, the court entered an Order on July 17, 2008 granting the Medis Investor Group to serve as lead plaintiff and the Rosen Law firm as lead counsel. However, an amended complaint against Medis Technologies, LTD. was filed by several individuals on September 10, 2007. On November 22, 2007, a motion to dismiss was filed by Medis Technologies, LTD.
According to a press release dated April 23, 2007, the complaint charges that Medis and certain of its present officers and senior management violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing materially false and misleading statements about certain "Commercial Sales" it claimed to have made to Microsoft. In other words, the complaint alleges that Medis misrepresented the nature of an agreement to sell its products to Microsoft.
More specifically, the Complaint alleges that on April 13, 2007 the Company issued a press release announcing that it has begun "commercial sales" of its 24/7 fuel cell Power Packs to Microsoft and that the first shipment of Power Packs were made that day. This announcement caused the Company's stock to dramatically rise on April 13, 2007. Company CEO and Chairman Robert K. Lifton stated the moment was "historic."
Later that day, the Company issued additional information about the Microsoft deal through its business development manager Andrew Udis, as reported by the publication Inside Greentech. Mr. Udis indicated that the products were "branded" by Microsoft, that the products would be sold around the world by Microsoft, and that the ultimate unit commitment was expected to be in the "millions."
On April 17, 2007, after market close, it was reported by certain media outlets that according to a Microsoft spokesperson, Microsoft only purchased a "small amount" of Medis' products, the products were not Microsoft branded, that Microsoft had no intention to sell them to consumers but rather distribute them free at an upcoming event. Nor did Microsoft have any plans for development of the product.
The Complaint alleges that these subsequent adverse disclosures concerning Medis' purported deal with Microsoft caused the Company's stock to fall.
NOTE: The lawsuit was filed on behalf of purchasers of Medis Technologies, Ltd. common stock, Medis call options, and sellers of Medis put options during the Class Period.