According to the Complaint, CafePress operates an e-commerce platform enabling customers to create, buy, and sell various customized and personalized products worldwide.
On or about June 10, 2011, CafePress filed a registration statement with the SEC on Form S-1. Thereafter, the Company repeatedly amended the Form S-1, including on or about March 28, 2012, when CafePress filed with the SEC the final Form S-1/A (collectively, the "Registration Statement") for the IPO. On or around March 29, 2012, the Company filed with the SEC its Prospectus (the "Prospectus"), which forms part of the "Registration Statement" that was declared effective on March 28, 2012.
The Complaint alleges that the Registration Statement failed to disclose that the Company was being negatively impacted by known trends affecting its small shop customers. Specifically, the Company failed to disclose that its core business derived from small shop customers, whose business is largely dependent on Internet search traffic derived from search algorithms for customers, was increasingly eroding because the small shop customers were being negatively impacted by the complexity and competitiveness of the marketplace. Therefore, the Registration Statement was negligently prepared and, as a result, contained untrue statements of material facts or omitted to state other facts necessary to make the statements made not misleading, and was not prepared in accordance with the rules and regulations governing their preparation.
On October 22, 2013, this action was remanded to the Superior Court of the State of California for the County of San Mateo.