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According to the complaint, Natus Medical designs, manufactures and markets newborn care and neurology healthcare products and services worldwide. On October 16, 2015, Natus Medical announced that its Argentinian subsidiary had entered into a three-year supply contract with the Ministry of Health of Venezuela (the “Ministry of Health”) pursuant to which the company would receive $232.5 million, including $69 million in prepayments “expected” during the first quarter of 2016, ending March 31, 2016 (the “Supply Contract”).
The complaint alleges that the Supply Contract was not as the defendants had publicly portrayed it. Specifically, the complaint alleges that the defendants did not disclose: (i) that the Venezuelan government had failed to make tens of millions of dollars in prepayments to Natus Medical, which were required to have been paid beginning in October 2015; (ii) that Natus Medical had no means to effectively enforce its rights under the Supply Contract, as Venezuela was the exclusive forum for dispute resolution; (iii) that Natus Medical’s receipt of revenues pursuant to the Supply Contract was contingent on the outcome of Venezuelan elections; (iv) that the Supply Contract was subject to foreign currency exchange risks; (v) that the Supply Contract did not have the economic benefits or certitude that defendants had represented; and (vi) that as a result of the foregoing, Natus Medical was not on track to achieve the increased guidance provided by defendants and such guidance lacked a reasonable basis.
Further, the complaint alleges that as a result of the defendants’ false and misleading statements, Natus Medical stock traded at artificially inflated prices during the Class Period, and that certain of the company’ssenior executives immediately cashed in, including the two individual defendants, James B. Hawkings and Jonathan A. Kennedy, who alone collectively sold more than $10.7 million worth of Natus Medical stock.
According to the complaint, on January 11, 2016, Natus Medical issued a press release announcing a purported “delay” in the payments from the Ministry of Health. Following this news, the price of Natus Medical common stock declined, falling from its close of $43.20 per share on January 8, 2016 to close at $38.25 per share on January 11, 2016, a decline of almost $5 per share, or 11%. On April 4, 2016, Natus Medical issued a press release pre-announcing its preliminary first quarter 2016 results. The release disclosed that “[r]evenue for the first quarter of 2016 [was] expected to be approximately $87.5 million versus previous guidance of $91.5 million to $92.5 million, excluding revenue from the Venezuela Ministry of Health contract.” Following this news, the price of Natus Medical stock declined, falling from its close of $39.64 per share on April 1, 2016 to close at $31.84 per share on April 4, 2016, a decline of $7.80 per share, or nearly 20%.
If you are a member of the class described above, you may no later than March 31, 2017 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will will adequatley represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at email@example.com.
Kessler Topaz Meltzer & Check, LLP
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