According to the law firm press release, SemiLEDs is a holding company for its wholly-and majority-owned subsidiaries and joint ventures that collectively develop, manufacture and sell high performance light emitting diode (“LED”) chips and components that are used primarily in general lighting applications, including street lights and commercial, industrial and residential lighting.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s operations and business. Specifically, defendants failed to disclose: (i) that the Company was experiencing known, but undisclosed, pricing pressures for its products which were reasonably likely to have a material adverse effect on SemiLEDs’ future revenues and operating income; (ii) that known events or uncertainties, including the reduction in demand for the Company’s products, the likely (and ultimate) loss of a large customer, and the decline in the value of the Company’s inventory, were reasonably likely to cause SemiLED’s financial information not to be indicative of future operating results; (iii) that the Company’s disclosure controls were materially deficient and its representations concerning them were materially false and misleading; (iv) that the certifications issued by defendants associated with the Company’s disclosure controls were materially false and misleading; and (v) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, and its then current business and future financial prospects.
On July 10, 2011, SemiLEDs issued a press release announcing its financial results for its 2011 third quarter ended May 31, 2011. For the quarter, the Company reported revenue of $5.6 million, down 43% from the previous year’s third quarter, and a net loss of $5.1 million, or $0.19 per diluted common share. The Company’s results for the quarter were adversely impacted by a $1.1 million inventory charge during the quarter, an amount equal to more than 7% of the value of the Company’s total inventory at February 28, 2011. In reaction to this news, SemiLEDs’ stock price fell nearly 11%, or $0.71 per share, to close at $5.87 per share on July 12, 2011.
An amended complaint was filed on November 15, 2013.
This case was voluntarily dismissed on February 21, 2014.