Several class actions have been filed against personal protection and safety equipment manufacturer Abatix Corporation (Nasdaq:ABIX) and certain of its officers and directors by stockholders who purchased the company's common stock between 5:05 p.m. Eastern Standard Time on April 14, 2004, and 8:24 a.m. EST on April 21, 2004. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

The action alleges that on April 14, 2004, at 5:05 p.m. EST, Abatix issued a press release announcing it had entered into an agreement with Goodwin Group, LLC, for the exclusive rights to distribute Goodwin Group’s RapidCool line of products worldwide. In the release, Abatix claimed that RapidCool “actually removes heat from fire, metal, wood, skin, and other surfaces—fires are suppressed with less water and manpower; skin treated with the FDA approved RapidCool burn cream heals more quickly; trees and other combustibles treated with RapidCool refuse to ignite; expensive tool components in the industrial segment that are treated with RapidCool generally have an extended life.” Moreover, in the release, defendant Terry Shaver claimed that “RapidCool is part of our growth strategy. The exclusive distribution rights to this product line are exciting because it has the potential to be revolutionary. We are beginning the process of third party testing that will remove any questions as to the efficacy of the product.” In reaction to this release, the price per share of Abatix common stock on the following day skyrocketed 214.5%, or $11.39, from the closing price of $5.31 on April 14, 2004 to a closing price of $16.70 on April 15, 2004.

Unbeknownst to investors, Abatix’s claims were materially false and misleading. On April 19, 2004, the NASDAQ Stock Market issued a press release announcing that as of 9:26 a.m. EST, trading of Abatix common stock was halted at $16.70 per share, its closing price on April 15, 2004, while the NASDAQ investigated Abatix’s agreement with Goodwin Group. On April 21, 2004, Abatix issued a press release at 8:24 a.m. EST in which the defendants “clarified” that: (1) the RapidCool burn cream is not FDA approved; (2) Abatix failed to verify the efficacy and uniqueness of the RapidCool products; (3) Abatix had only conducted limited due diligence prior to entering into the agreement with Goodwin Group; (4) Abatix failed to verify whether Goodwin Group had been assigned the patents on the RapidCool products and therefore, whether Goodwin Group was authorized to enter into the exclusive distribution agreement with Abatix; (5) Abatix failed to verify the ownership of any patent applications filed with respect to the RapidCool product line; and (6)neither Abatix nor Goodwin Group have ever sold any RapidCool products. On April 21, 2004, once trading of Abatix stock on NASDAQ resumed, the price of Abatix stock plummeted as fast and as far as it had risen in reaction to the April 14, 2004, press release, falling $6.93, or 41.4%, from its halted price of $16.70 per share to close at $9.77.

If you purchased securities issued by Abatix during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by June 22, 2004. 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 your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve as you in this action, or you may choose to do nothing, and remain in the class as a silent member.