MILWAUKEE, Dec. 22, 2004 (PRIMEZONE) -- Ademi &O'Reilly, LLP (http://www.ademilaw.com/cases/Tripath.php) today announced that it has commenced a class action lawsuit in the United States District Court for the Northern District of California on behalf of purchasers of Tripath Technology, Inc. ("Tripath") (NASDAQ:TRPH) common stock during the period between January 29, 2004 and October 22, 2004 (the "Class Period").
If you wish to serve as lead plaintiff, you must move the Court by January 4, 2005. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Guri Ademi at 866-264-3995 or via e-mail at gademi@ademilaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.ademilaw.com/cases/Tripath.php. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Tripath and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Tripath develops and supplies digital amplifiers for three markets based on proprietary technology, called Digital Power Processing (DPP).
The complaint alleges that starting in September of 2003, Tripath announced that it would be introducing a "revolutionary" architecture platform for digital audio amplifiers, which it labeled as "Godzilla." Following this announcement, for nearly a year, Tripath consistently reiterated the potential of Godzilla and the Company's on-schedule execution of its strategy to market and manufacture Godzilla. In fact, Tripath was not close to a single sale of Godzilla during 2004. Additionally, throughout the Class Period, Tripath's financial results were false and misleading because of improper revenue recognition and because of inadequate and deficient internal controls, resulting in the resignation of its independent auditor.
On October 22, 2004, Tripath announced that it might have to restate its financial statements for the second quarter of 2004, that it was reducing its guidance for the third quarter of 2004 by $4-$4.5 million, and that its former independent accountants, BDO Seidman, LLP, had resigned after issuing a letter "asserting material weaknesses in Tripath's internal controls concerning the effectiveness of Tripath's Audit Committee and Tripath's ability to estimate distributor sales returns in accordance with SFAS no. 48."
Market reaction was swift and negative, with the price of Tripath common stock falling 49%, from its closing price of $1.52 on October 22, 2004 to close at $0.77 per share on its next trading day, October 25, 2004. The closing price of Tripath shares on October 22, 2004, represented a $7.07, or 90%, decline from its Class Period high of $7.84 reached on January 29, 2004.