On July 21, 2011, plaintiffs filed a securities class action suit against the defendant for violations of Sections 10(b) and 20(a) f the Exchange Act based on restatements of financial results.
On May 17, 2010, the Company filed with the Securities and Exchange Commission a Quarterly Report on Form 10-Q for the quarter ended March 31, 2010. On May 17, 2010, the Company issued a press release, detailing its results for that quarter. In both the 10-Q and the press release, the Company included unaudited financial statements for the quarter. The Company included these first quarter, 2010, results in two registrations statements that became effective in late June, 2010. The Company disseminated financial results, too, for the second and third quarters of 2010 by press releases dated August 4, 2010 and November 11, 2010 respectively and Quarterly Reports on Forms 10-Q dates August 6, 2010 and November 12, 2010.
On April 15, 2011, however, the Company filed with the SEC a Current Report on Form 8-K, disclosing that it had erred "in recording certain transactions in the Company's previously filed unaudited consolidated financial statements" for the first three quarters of 2010, ended March 31, 2010, June 30, 2010 and September 30, 2010. As a result, the Company warned that investors should no longer rely on those financial statements.
In that Form 8-K, the Company summarized the effects of its "errors," restating diluted net income per share from $0.10 to $0.01 for the first quarter of 2010, net loss per diluted share of $0.11 to $0.22 for the second quarter of 2010, and diluted net income per share of $0.04 to $0.01 for the third quarter of 2010.
On the announcement of these results, the price of Zoo common stock plummeted
34.3% from an April 15, 2010 close of $4.40 per share to an April 18, 2010 close of $2.89 on unusually high volume of 1.045 million shares traded.
On October 19, 2011, the Court issued an Order appointing the Lead Plaintiff and approving the Lead Counsel.
On December 12, 2011, the Lead Plaintiff filed an Amended Complaint for violations of the federal securities laws.
On July 26, 2012, the Court issued an order granting the Defendants' motion to dismiss and closing this matter.