Orion Energy Systems, Inc. ("Orion" or the Company) is a manufacturer of efficient lighting and energy systems to businesses. The Prospectus for its IPO described a Company that was quickly growing revenues from existing product lines, and briefly described product line extensions. After the close of trading on February 6, 2008, Orion revealed that revenues in its current fiscal quarter would decline as the Company took aggressive measures to promote a ``new business model,'' a change in focus that is alleged not to have been adequately disclosed or described in the IPO Prospectus. During the February 6, 2008 conference call, Orion executives, including the CEO, appeared unable to explain to the satisfaction of securities analysts this surprising news about the business model change on the heels of the IPO, or its impact on revenues.

According to a press release dated February 11, 2008 with respect to the IPO, Orion realized over $78 million in proceeds, while its Chief Executive Officer and family sold 600,000 shares for proceeds of approximately $7 million. On February 6, 2008, just weeks after its IPO, Orion revealed the news stated above concerning the Company, which completely surprised analysts and investors, and caused the stock to drop approximately 43%, to a price of $8.51 per share.

The Complaint charges Orion, certain of its officers and directors and the underwriters who sponsored the IPO with violation of the federal securities laws by issuing a Registration Statement and Prospectus in connection with the IPO which was materially false or misleading due to omissions. The law generally imposes strict liability on Defendants responsible for a materially false Registration Statement and Prospectus, including for purchases made in the open market after the IPO; no fraud need be proved to recover.

According to the Company’s FORM 10-Q For the Quarterly Period Ended September 30, 2009, in February and March 2008, three class action lawsuits were filed in the United States District Court for the Southern District of New York against the Company, several of its officers, all members of its then existing board of directors, and certain underwriters relating to the Company’s December 2007 IPO. The Plaintiffs claim to represent those persons who purchased shares of the Company’s common stock from December 18, 2007 through February 6, 2008. The Plaintiffs allege, among other things, that the Defendants made misstatements and failed to disclose material information in the Company’s IPO registration statement and prospectus. The Complaints allege various claims under the Securities Act of 1933, as amended. The Complaints seek, among other relief, class certification, unspecified damages, fees, and such other relief as the court may deem just and proper. On August 1, 2008, the court-appointed lead Plaintiff filed a consolidated amended Complaint in the United States District Court for the Southern District of New York. On September 15, 2008, the Company and the other director and officer Defendants filed a motion to dismiss the consolidated Complaint, and the underwriters filed a separate motion to dismiss the consolidated Complaint on January 16, 2009. After oral argument on August 19, 2009, the Court granted in part and denied in part the motions to dismiss. The Plaintiff filed a second consolidated amended Complaint on September 4, 2009, and the Defendants filed an answer to the Complaint on October 9, 2009.

On September 17, 2010, a Settlement Agreement was executed by the parties in this case.

On January 14, 2010, the Court issued an Order Preliminarily Approving Settlement and Providing for Notice for this case.