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The medical device industry is characterized by frequent claims and litigation, and we are and may become subject to various claims, lawsuits and proceedings in the ordinary course of our business.
−Removed: Such claims include claims by current or former employees, distributors and competitors, claims concerning the marketing and promotion of our products and product liability claims.
+Added: Such claims may include claims by current or former employees, distributors and competitors, claims concerning the marketing and promotion of our products and product liability claims.
We are involved in a number of legal actions relating to the use of our Helium Plasma technology.
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However, in the event that damages exceed the aggregate coverage limits of our policies or if our insurance carriers disclaim coverage, we believe it is possible that costs associated with these claims could have a material adverse impact on our consolidated results of operations, financial position or cash flows.
−Removed: In addition, as previously disclosed with the U.S.
−Removed: Securities and Exchange Commission on the Company’s Report on Form 8-K filed April 26, 2019, on April 17, 2019, a complaint (the “Complaint”) was filed in the United States District Court for the Middle District of Florida by plaintiff Kyle Pritchard, individually and on behalf of all others similarly situated against the Company and Charles D.
−Removed: Goodwin (“Goodwin”), the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors, alleging certain violations of the Securities Exchange Act of 1934, as amended.
−Removed: On July 16, 2019, the Court appointed a lead plaintiff for the putative class and approved the lead plaintiff’s selection of counsel.
−Removed: On or about September 3, 2019, Plaintiff filed an amended complaint (the “Amended Complaint”) with the Court.
+Added: On April 17, 2019, a complaint (the “Complaint”) was filed in the United States District Court for the Middle District of Florida, against the Company and Charles D.
+Added: Goodwin, the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors, alleging certain violations of the Securities Exchange Act of 1934, as amended.
+Added: On July 16, 2019, the Court appointed lead plaintiff for the putative class and approved the lead plaintiff’s selection of counsel.
+Added: On September 3, 2019, lead plaintiff filed an amended complaint (the “Amended Complaint”) with the Court.
The Amended Complaint seeks class action status on behalf of all persons and entities that acquired the Company’s securities between December 21, 2018 and April 1, 2019, and alleges violations by the Company and Goodwin of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended and Rule 10b-5 thereunder, primarily related to certain public statements concerning the Premarket Notification 510(k) submission made to the US Food and Drug Administration for a new indication for the Company’s J-Plasma® technology for use in dermal resurfacing procedures.
−Removed: The Amended Complaint seeks an unspecified amount of compensatory damages, an award of interest, reasonable attorneys’ fees, expert fees and other costs, and equitable relief as the court may deem just and proper.
−Removed: On October 3, 2019, the Company and Goodwin filed a Motion to Dismiss the Amended Complaint.
−Removed: Plaintiff’s opposition to the motion to dismiss was served on November 4, 2019.
−Removed: On March 11, 2020, the Court issued an order denying the Company’s motion to dismiss.
−Removed: The Company intends to vigorously defend its interests against the allegations contained in the complaint.
−Removed: Although the ultimate outcome of this matter cannot be determined with certainty, the Company believes that the allegations stated in the Amended Complaint are entirely without merit.
−Removed: The Company and Goodwin intend to defend themselves vigorously in the suit.
−Removed: In the opinion of management, such claims are adequately covered by insurance, however, in the event that damages exceed the aggregate coverage limits of our policy or if our insurance carriers disclaim coverage, we believe it is possible that costs associated with this claim could have a material adverse impact on our consolidated earnings, financial position or cash flows.
−Removed: We initially accrued $500,000 for defense costs and upon the denial of the motion to dismiss, we accrued an additional $500,000, which is our insurance deductible related to the matter.
−Removed: $820,000 of the $1,000,000 is still accrued as of March 31, 2020.
+Added: On October 3, 2019, defendants filed a motion to dismiss the Amended Complaint, and on March 11, 2020, the Court denied that motion.
+Added: On July 10, 2020, the parties executed a settlement agreement, which is subject to Court approval.
+Added: The Court preliminarily approved the settlement on July 21, 2020.
+Added: The settlement agreement provides for the dismissal of the action with prejudice.
+Added: At June 30, 2020, approximately $670,000 of the $1,000,000 insurance deductible is unpaid and is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheet.
+Added: During July 2020, substantially all of the unpaid deductible was paid.
We accrue a liability in our consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.