What Is This Case About?

Apyx manufactures electrosurgical products and technologies. The Company offers electrosurgical pencils and accessories, desiccators, generators, and electrodes.

On April 17, 2019, a class action complaint was filed in the Court, styled Pritchard v. Apyx Medical Corporation, et al., 8:19-cv-00919-SCH-AEP. By Order dated July 16, 2019, the Court appointed Gregory P. Mouton as Lead Plaintiff and his selection of Glancy Prongay & Murray LLP as Lead Counsel and the Desmond Law Firm, P.C. as liaison counsel were approved and appointed by the Court.

On September 3, 2019, Plaintiffs filed and served their Amended Class Action Complaint (the “Complaint”) asserting claims against all Defendants under Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, and against the Individual Defendant under Section 20(a) of the Exchange Act. Among other things, the Complaint alleged that Defendants made materially false and misleading statements about, among other things, Apyx’s investigational new device exemption (“IDE”) study and the results thereof, which formed the basis of an application submitted to the FDA, known as a 510(k) application. The Complaint further alleged that the prices of Apyx publicly-traded securities were artificially inflated as a result of Defendants’ allegedly false and misleading statements, and declined when the truth was revealed.

On October 3, 2019, Defendants moved to dismiss the Complaint and attached fourteen exhibits thereto. On November 4, 2019, Plaintiffs filed their opposition to Defendants’ motion to dismiss.

On November 6, 2019, Defendants moved for leave to file a reply in further support of their motion to dismiss. That same day, Plaintiffs filed their opposition to Defendants’ motion for leave to file a reply. On November 8, 2019, the Court denied Defendants’ motion for leave to file a reply.

On March 11, 2020, the Court denied Defendants’ motion to dismiss.

Shortly thereafter, the Parties agreed to mediate this Action before Jed Melnick, Esq. of JAMS, a nationally recognized mediator. In advance of that session, the Parties provided to Mr. Melnick, and exchanged, detailed mediation statements and exhibits, which addressed the issues of liability and damages.

On May 1, 2020, Defendants filed and served their answer to the Complaint.

On June 4, 2020, Lead Counsel and Defendants’ Counsel participated in a full-day mediation session before Mr. Melnick. The mediation session culminated in an agreement in principle to settle the Action for $3,000,000 for the benefit of the Settlement Class, subject to the negotiation of the terms of the Stipulation and approval by the Court. Based on the investigation and mediation of the case and Plaintiffs’ direct oversight of the prosecution of this matter and with the advice of their counsel, each of the Plaintiffs has agreed to settle the Action pursuant to the terms and provisions of the Stipulation, after considering, among other things, (a) the substantial financial benefit that Plaintiffs and the other members of the Settlement Class will receive under the proposed Settlement; and (b) the significant risks and costs of continued litigation and trial.

Defendants are entering into the Stipulation solely to eliminate the uncertainty, burden and expense of further protracted litigation. Each of the Defendants denies any wrongdoing, and the Stipulation shall in no event be construed or deemed to be evidence of or an admission or concession on the part of any of the Defendants, or any other of the Defendants’ Releasees (defined in ¶35 of the Notice), with respect to any claim or allegation of any fault or liability or wrongdoing or damage whatsoever, or any infirmity in the defenses that the Defendants have, or could have, asserted. Similarly, the Stipulation shall in no event be construed or deemed to be evidence of or an admission or concession on the part of any Plaintiff of any infirmity in any of the claims asserted in the Action, or an admission or concession that any of the Defendants’ defenses to liability had any merit.

On July 21, 2020, the Court preliminarily approved the Settlement, authorized the Postcard Notice to be mailed to potential Settlement Class Members and the Notice to be posted online and mailed to potential Settlement Class Members upon request, and scheduled the Settlement Hearing to consider whether to grant final approval to the Settlement.