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Case Status:    DISMISSED    
On or around 10/10/2012 (Stipulation and order of dismissal (voluntary dismissal))

Filing Date: December 19, 2011

China Medical Technologies, Inc. develops and manufactures medical devices.

According to a press release dated December 19, 2011, Defendants made false and/or misleading statements that violated federal securities laws.

Specifically, the Complaint alleges that the Defendants mislead and/or failed to disclose that: (1) the Company’s acquisition of a Target Company was from a third party seller connected to the Company’s Chairman; (2) the Company overpaid approximately $20 million to acquire the Target Company; (3) the Company’s acquisition involved the use of fraudulent shell companies; (4) the Target Company was suffering operating losses prior to the acquisition; (5) the Company overstated accounts receivables in order to inflate sales and net income; (6) the Company’s reported profit margins were inflated; and (7) as a result of the foregoing, the Company’s statements were materially false and misleading at all relevant times.

On December 6, 2011, a research group published an analyst report revealing, in part, that the Company’s Chief Executive Officer was embezzling money through sham acquisitions, the Company’s reported profits and net income were inflated as they were inconsistent with comparable competitors, and the majority of the Company’s account receivables were in excess of 120 days, indicating that its reported revenues were inflated. On this news, the Company’s shares declined $0.81 per share, or nearly 24%, to close on December 6, 2011 at $2.57 per share, on unusually heavy trading volume.

On December 13, 2011, the Company disclosed that it intends to implement a debt restructuring plan to improve its balance sheet. On this news, shares declined $0.43 per share, or nearly 13%, to close on December 13, 2011 at $2.87 per share, on unusually heavy trading volume.

On October 10, 2012, a stipulation and order Of dismissal without prejudice was filed pursuant to Federal Rule of Civil Procedure 41 (a)(l)(A)(ii) that dismissed all claims asserted by Plaintiffs against all Defendants without prejudice. This voluntary dismissal is not the product of a settlement between Plaintiffs and Defendants.

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