Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 1 of 20
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`Robert V. Prongay (SBN 270796)
` rprongay@glancylaw.com
`Charles Linehan (SBN 307439)
` clinehan@glancylaw.com
`Pavithra Rajesh (SBN 323055)
` prajesh@glancylaw.com
`GLANCY PRONGAY & MURRAY LLP
`1925 Century Park East, Suite 2100
`Los Angeles, California 90067
`Telephone: (310) 201-9150
`Facsimile: (310) 201-9160
`
`Attorneys for Plaintiff
`
`
`
`VIRON BRYAN NGOSIOK, Individually and
`on Behalf of All Others Similarly Situated,
`
`Plaintiff,
`
`v.
`
`PULSE BIOSCIENCES, INC., DARRIN
`UECKER, and SANDRA A. GARDINER,
`
`Defendant.
`
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
` Case No.
`
`CLASS ACTION COMPLAINT FOR
`VIOLATIONS OF THE FEDERAL
`SECURITIES LAWS
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`CLASS ACTION COMPLAINT
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 2 of 20
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`Plaintiff Viron Bryan Ngosiok (“Plaintiff”), individually and on behalf of all others
`similarly situated, by and through his attorneys, alleges the following upon information and belief,
`except as to those allegations concerning Plaintiff, which are alleged upon personal knowledge.
`Plaintiff’s information and belief is based upon, among other things, his counsel’s investigation,
`which includes without limitation: (a) review and analysis of regulatory filings made by Pulse
`Biosciences, Inc. (“Pulse” or the “Company”) with the United States (“U.S.”) Securities and
`Exchange Commission (“SEC”); (b) review and analysis of press releases and media reports
`issued by and disseminated by Pulse; and (c) review of other publicly available information
`concerning Pulse.
`
`NATURE OF THE ACTION AND OVERVIEW
`1.
`This is a class action on behalf of persons and entities that purchased or otherwise
`acquired Pulse securities between January 12, 2021 and February 7, 2022, inclusive (the “Class
`Period”). Plaintiff pursues claims against the Defendants under the Securities Exchange Act of
`1934 (the “Exchange Act”).
`2.
`Pulse is a bioelectric medicine company. Its only commercial product is the CellFX
`System which uses the Company’s proprietary Nano-Pulse Stimulation technology (“NPS”) to
`treat a variety of applications. In February 2021, Pulse received clearance from the U.S. Food and
`Drug Administration (“FDA”) of the CellFX System for dermatologic procedures requiring
`ablation and resurfacing of the skin.
`3.
`In October 2020, Pulse initiated its investigational device exemption (“IDE”) study
`to evaluate the treatment of sebaceous hyperplasia lesions using the CellFX System. The data from
`this study was intended to support a 510(k) submission to expand the indication for use of the
`CellFX System to treat sebaceous hyperplasia lesions.
`4.
`On February 8, 2022, before the market opened, Pulse announced that the U.S.
`Food and Drug Administration (“FDA”) concluded there was insufficient clinical evidence to
`support the Company’s 510(k) submission to expand the label for the CellFX System to treat
`sebaceous hyperplasia. Among other things, the FDA found “that the Company had not met the
`primary endpoints of the sebaceous hyperplasia FDA-approved IDE study.”
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`CLASS ACTION COMPLAINT
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 3 of 20
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`5.
`On this news, the Company’s share price fell $3.74, or over 34%, to close at $7.12
`per share on February 8, 2022, on unusually heavy trading volume.
`6.
`Throughout the Class Period, Defendants made materially false and/or misleading
`statements, as well as failed to disclose material adverse facts about the Company’s business,
`operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the IDE
`study evaluating the use of the CellFX System to treat sebaceous hyperplasia lesions failed to meet
`its primary endpoints; (2) that, as a result, there was a substantial risk that the FDA would reject
`Pulse’s 510(k) submission seeking to expand the label for the CellFX System to treat sebaceous
`hyperplasia lesions; and (3) that, as a result of the foregoing, Defendants’ positive statements
`about the Company’s business, operations, and prospects were materially misleading and/or
`lacked a reasonable basis.
`7.
`As a result of Defendants’ wrongful acts and omissions, and the precipitous decline
`in the market value of the Company’s securities, Plaintiff and other Class members have suffered
`significant losses and damages.
`
`JURISDICTION AND VENUE
`8.
`The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange
`Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17
`C.F.R. § 240.10b-5).
`9.
`This Court has jurisdiction over the subject matter of this action pursuant to 28
`U.S.C. § 1331 and Section 27 of the Exchange Act (15 U.S.C. § 78aa).
`10.
`Venue is proper in this Judicial District pursuant to 28 U.S.C. § 1391(b) and
`Section 27 of the Exchange Act (15 U.S.C. § 78aa(c)). Substantial acts in furtherance of the
`alleged fraud or the effects of the fraud have occurred in this Judicial District. Many of the acts
`charged herein, including the dissemination of materially false and/or misleading information,
`occurred in substantial part in this Judicial District. In addition, the Company’s principal executive
`offices are located in this District.
`11.
`In connection with the acts, transactions, and conduct alleged herein, Defendants
`directly and indirectly used the means and instrumentalities of interstate commerce, including the
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 4 of 20
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`United States mail, interstate telephone communications, and the facilities of a national securities
`exchange.
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`PARTIES
`12.
`Plaintiff Viron Bryan Ngosiok, as set forth in the accompanying certification,
`incorporated by reference herein, purchased Pulse securities during the Class Period, and suffered
`damages as a result of the federal securities law violations and false and/or misleading statements
`and/or material omissions alleged herein.
`13.
`Defendant Pulse is incorporated under the laws of Delaware with its principal
`executive offices located in Hayward, California. Pulse’s common stock trades on the NASDAQ
`exchange under the symbol “PLSE.”
`14.
`Defendant Darrin Uecker (“Uecker”) was the Company’s Chief Executive Officer
`(“CEO”) at all relevant times.
`15.
`Defendant Sandra A. Gardiner (“Gardiner”) was the Company’s Chief Financial
`Officer (“CFO”) at all relevant times.
`16.
`Defendants Uecker and Gardiner (collectively the “Individual Defendants”),
`because of their positions with the Company, possessed the power and authority to control the
`contents of the Company’s reports to the SEC, press releases and presentations to securities
`analysts, money and portfolio managers and institutional investors, i.e., the market. The
`Individual Defendants were provided with copies of the Company’s reports and press releases
`alleged herein to be misleading prior to, or shortly after, their issuance and had the ability and
`opportunity to prevent their issuance or cause them to be corrected. Because of their positions and
`access to material non-public information available to them, the Individual Defendants knew that
`the adverse facts specified herein had not been disclosed to, and were being concealed from, the
`public, and that the positive representations which were being made were then materially false
`and/or misleading. The Individual Defendants are liable for the false statements pleaded herein.
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 5 of 20
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`SUBSTANTIVE ALLEGATIONS
`Background
`17.
`Pulse is a bioelectric medicine company. Its only commercial product is the CellFX
`System which uses the Company’s proprietary Nano-Pulse Stimulation technology (“NPS”) to
`treat a variety of applications. In February 2021, Pulse received clearance from the U.S. Food and
`Drug Administration (“FDA”) of the CellFX System for dermatologic procedures requiring
`ablation and resurfacing of the skin.
`18.
`In October 2020, Pulse initiated a pivotal study to evaluate the treatment of
`sebaceous hyperplasia lesions using the CellFX System. The data from this study was intended to
`support a 510(k) submission to expand the indication for use of the CellFX System to treat
`sebaceous hyperplasia lesions.
`
`Materially False and Misleading
`Statements Issued During the Class Period
`The Class Period begins on January 12, 2021.1 On that day, Pulse announced
`19.
`updates on the CellFX regulatory and clinical study progress. The press release stated, in relevant
`part:
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` Completed all treatments in the Company’s previously announced pivotal
`comparison study to evaluate the treatment of sebaceous hyperplasia (SH)
`using the CellFX System, with the planned specific indication 510(k)
`submission as early as the end of the first quarter of 2021.
`20.
`On February 22, 2021, Pulse announced its fourth quarter and full year 2020
`financial results in a press release that stated, in relevant part:
`Recent Highlights
` Received U.S. Food and Drug Administration (FDA) clearance for the
`CellFX® System for dermatologic procedures requiring ablation and
`resurfacing of the skin
`
` Received CE mark approval for the CellFX System
`
`Initiated the CellFX System Controlled Launch program in the U.S. and
`Europe, including system implementations and completion of the first
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`1 Unless otherwise stated, all emphasis in bold and italics hereinafter is added.
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 6 of 20
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`procedures performed by participating Key Opinion Leader (KOL) aesthetic
`dermatologists
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` Continued preparation to make an FDA 510(k) submission for a
`sebaceous hyperplasia (SH) specific indication for the CellFX System as
`early as the end of the first quarter of 2021
`21.
`On March 12, 2021, Pulse filed its annual report on Form 10-K for the period
`ended December 31, 2020 (the “2020 10-K”). Therein, the Company stated:
`Sebaceous Hyperplasia
`SH is a common, benign condition of sebaceous glands in adults of middle age or
`older. SH occurs when the sebaceous glands become enlarged, creating small,
`shiny, yellowish lesions or bumps, usually 2-4 millimeters in diameter and typically
`on the face. In a 2019 study conducted with U.S. dermatologists (n=304),
`physicians reported seeing on average 42 patients per week with SH, with 65% left
`untreated due to the lack of desirable outcomes with traditional treatment methods
`(e.g., electrocautery).
`Results from our research have demonstrated that NPS has a unique ability to
`clear cellular structures located within the dermis of the skin, such as enlarged
`sebaceous glands that cause SH, without damaging the dermal foundation,
`making it a potentially unique and highly effective treatment modality for SH
`lesions and similar targets residing deeper within the dermis of the skin.
`In our multi-center clinical studies to date, we have treated more than 1,000 SH
`lesions in more than 260 patients. As studies are ongoing, results to date indicate
`that NPS technology is effective for the treatment of SH. Over 80% of treated SH
`lesions were rated clear or mostly clear by investigators at the 60-day post
`treatment follow-up evaluation. In our latest study in which we evaluated whether
`the use of lower energy settings would maintain efficacy, results demonstrated that
`lower NPS energy levels maintained high efficacy while improving overall
`cosmetic effects, as well as higher patient satisfaction, compared to our first
`studies.
`In January 2021, we completed all treatments in an IDE pivotal study to compare
`the safety and efficacy of
`the CellFX System
`to a comparator group,
`Electrodessication for the treatment of SH lesions, with the planned specific
`indication 510(k) submission as early as the end of the first quarter of 2021.
`We believe that the successful treatment of SH lesions reflects a valuable
`commercial opportunity for our CellFX System in an area of unmet need and
`substantiates the unique ability of NPS pulses to penetrate the dermis and clear
`deeper cellular structures without damaging the surrounding dermis.
`22.
`Under “Risks Related to Product Development,” the 2020 10-K stated, in relevant
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`part:
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`Clinical development involves a lengthy and expensive process with an uncertain
`outcome, and results of earlier studies and trials may not be predictive of future
`trial results.
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 7 of 20
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`Clinical testing is expensive and can take many years to complete, and its outcome
`is inherently uncertain. Failure or delay can occur at any time during the clinical
`trial process. Success in nonclinical studies and early feasibility clinical studies
`does not ensure that expanded clinical trials that will be used to support regulatory
`submissions will be successful. These setbacks have been caused by, among other
`things, nonclinical findings made while clinical trials were underway, and safety or
`efficacy observations made in clinical trials, including previously unreported
`adverse events. Even if our clinical trials are completed, the results may not be
`sufficient to obtain regulatory approval or clearance for our product candidates.
`*
`*
`*
`In February 2021, we received a 510(k) clearance from the U.S. FDA for our
`CellFX System for dermatologic procedures requiring ablation and resurfacing of
`the skin. Following this general dermatologic indication, we plan to pursue specific
`indications for the CellFX System, starting with an indication for the treatment of
`SH lesions. This will require an additional 510(k) submission, as will each
`subsequent indication, and will likely be based on comparative clinical data.
`However, the failure to obtain further 510(k) clearances may add significant time
`and expense to our regulatory clearance process, may delay our ability to
`generate revenue, and may have a negative impact on our stock price. We may
`not be able to obtain the necessary clearances or approvals necessary to market
`our CellFX System for specific indications or such approvals or clearances may
`be unduly delayed, which could harm our business. If the FDA rejects our 510(k)
`submissions for specific indications, we may be required to obtain FDA approval
`through the de novo pathway, which will require additional time and resources,
`including the need to conduct more clinical studies to demonstrate safety and
`effectiveness of our candidate device.
`(First emphasis in original.)
`23.
`On May 10, 2021, Pulse announced its first quarter 2021 financial results in a press
`release. During the related conference call, Defendant Uecker stated, in relevant part:
`First, specific indications for the treatment of sebaceous hyperplasia, a small benign
`lesion that develops primarily on the face and currently lacks acceptable treatment
`options with desirable aesthetic outcomes. During the first quarter, we concluded
`follow-up of 60 patients in an FDA IDE approved comparative study, comparing
`the use of the CellFX System against electrodessication, treat sebaceous
`hyperplasia, and began the data analysis process. While we plan to file the 510(k)
`by this time, we are still completing the necessary steps to do so.
`This IDE approved study FDA requested a number of safety and efficacy
`endpoints, including a blinded independent review by three dermatologists using
`photographic images of the treated lesions. The process of developing this blinded
`photographic review can only occur after all the patient follow-up is completed,
`and its subsequent analysis continues. We anticipate having the analysis completed
`this quarter and expect to pursue a 510(k) submission at that time.
`24.
`On August 9, 2021, Pulse announced its second quarter 2021 financial results in a
`press release. During the related conference call, Defendant Uecker stated, in relevant part:
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 8 of 20
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`First, specific indications for the treatment of sebaceous hyperplasia, a small benign
`lesion that develops primarily on the face and currently lacks acceptable treatment
`options with desirable aesthetic outcomes. During the first quarter, we concluded
`follow-up of 60 patients in an FDA IDE approved comparative study, comparing
`the use of the CellFX System against electrodessication, treat sebaceous
`hyperplasia, and began the data analysis process. While we plan to file the 510(k)
`by this time, we are still completing the necessary steps to do so.
`This IDE approved study FDA requested a number of safety and efficacy
`endpoints, including a blinded independent review by three dermatologists using
`photographic images of the treated lesions. The process of developing this blinded
`photographic review can only occur after all the patient follow-up is completed,
`and its subsequent analysis continues. We anticipate having the analysis completed
`this quarter and expect to pursue a 510(k) submission at that time.
`25.
`On November 15, 2021, Pulse announced its third quarter 2021 financial results in
`a press release. During the related conference call, Defendant Uecker stated: “We completed the
`FDA approved IDE study for the treatment of sebaceous hyperplasia earlier in the year and
`recently finalized all of the necessary analysis. We are pleased to report that 510(k) will be
`submitted this week to FDA.”
`26.
`The above statements identified in ¶¶ 19-25 were materially false and/or
`misleading, and failed to disclose material adverse facts about the Company’s business,
`operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the IDE
`study evaluating the use of the CellFX System to treat sebaceous hyperplasia lesions failed to meet
`its primary endpoints; (2) that, as a result, there was a substantial risk that the FDA would reject
`Pulse’s 510(k) submission seeking to expand the label for the CellFX System to treat sebaceous
`hyperplasia lesions; and (3) that, as a result of the foregoing, Defendants’ positive statements
`about the Company’s business, operations, and prospects were materially misleading and/or
`lacked a reasonable basis.
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`Disclosures at the End of the Class Period
`27.
`On February 8, 2022, before the market opened, Pulse announced that the U.S.
`Food and Drug Administration (“FDA”) concluded there was insufficient clinical evidence to
`support the Company’s 510(k) submission to expand the label for the CellFX System to treat
`sebaceous hyperplasia. Among other things, the FDA found “that the Company had not met the
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 9 of 20
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`primary endpoints of the sebaceous hyperplasia FDA-approved IDE study.” Specifically, the
`Company’s press release stated, in relevant part:
`The Company submitted a 510(k) in December 2021 to add the treatment of
`sebaceous hyperplasia to the CellFX System’s indications for use in the United
`States. On February 5, 2022, the Company received an Additional Information
`(“AI”) letter from the FDA in response to the 510(k) submitted. In the AI letter, the
`FDA stated it did not believe the Company provided sufficient clinical evidence at
`this time to support the expanded indication for use, and that the Company had not
`met the primary endpoints of the sebaceous hyperplasia FDA-approved IDE
`study. The Company anticipates meeting with the FDA to discuss the contents of
`the AI letter and potential next steps, which may require additional clinical data and
`potentially a new 510(k) submission. The AI letter is a standard part of the 510(k)
`review process and places the review on hold until the Company responds within
`180 days of the request in the AI letter. Based on FDA guidance, the Company
`believes its meeting with the FDA will take place in Q1 2022.
`28.
`On this news, the Company’s share price fell $3.74, or over 34%, to close at $7.12
`per share on February 8, 2022, on unusually heavy trading volume.
`CLASS ACTION ALLEGATIONS
`29.
`Plaintiff brings this action as a class action pursuant to Federal Rule of Civil
`Procedure 23(a) and (b)(3) on behalf of a class, consisting of all persons and entities that
`purchased or otherwise acquired Pulse securities between January 12, 2021 and February 7, 2022,
`inclusive, and who were damaged thereby (the “Class”). Excluded from the Class are Defendants,
`the officers and directors of the Company, at all relevant times, members of their immediate
`families and their legal representatives, heirs, successors, or assigns, and any entity in which
`Defendants have or had a controlling interest.
`30.
`The members of the Class are so numerous that joinder of all members is
`impracticable. Throughout the Class Period, Pulse’s shares actively traded on the NASDAQ.
`While the exact number of Class members is unknown to Plaintiff at this time and can only be
`ascertained through appropriate discovery, Plaintiff believes that there are at least hundreds or
`thousands of members in the proposed Class. Millions of Pulse shares were traded publicly during
`the Class Period on the NASDAQ. Record owners and other members of the Class may be
`identified from records maintained by Pulse or its transfer agent and may be notified of the
`pendency of this action by mail, using the form of notice similar to that customarily used in
`securities class actions.
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 10 of 20
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`31.
`Plaintiff’s claims are typical of the claims of the members of the Class as all
`members of the Class are similarly affected by Defendants’ wrongful conduct in violation of
`federal law that is complained of herein.
`32.
`Plaintiff will fairly and adequately protect the interests of the members of the Class
`and has retained counsel competent and experienced in class and securities litigation.
`33.
`Common questions of law and fact exist as to all members of the Class and
`predominate over any questions solely affecting individual members of the Class. Among the
`questions of law and fact common to the Class are:
`(a)
`whether the federal securities laws were violated by Defendants’ acts as
`alleged herein;
`whether statements made by Defendants to the investing public during the
`(b)
`Class Period omitted and/or misrepresented material facts about the business, operations, and
`prospects of Pulse; and
`(c)
`to what extent the members of the Class have sustained damages and the
`proper measure of damages.
`34.
`A class action is superior to all other available methods for the fair and efficient
`adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the
`damages suffered by individual Class members may be relatively small, the expense and burden of
`individual litigation makes it impossible for members of the Class to individually redress the
`wrongs done to them. There will be no difficulty in the management of this action as a class
`action.
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`UNDISCLOSED ADVERSE FACTS
`35.
`The market for Pulse’s securities was open, well-developed and efficient at all
`relevant times. As a result of these materially false and/or misleading statements, and/or failures
`to disclose, Pulse’s securities traded at artificially inflated prices during the Class Period. Plaintiff
`and other members of the Class purchased or otherwise acquired Pulse’s securities relying upon
`the integrity of the market price of the Company’s securities and market information relating to
`Pulse, and have been damaged thereby.
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 11 of 20
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`36.
`During the Class Period, Defendants materially misled the investing public, thereby
`inflating the price of Pulse’s securities, by publicly issuing false and/or misleading statements
`and/or omitting to disclose material facts necessary to make Defendants’ statements, as set forth
`herein, not false and/or misleading. The statements and omissions were materially false and/or
`misleading because they failed to disclose material adverse information and/or misrepresented the
`truth about Pulse’s business, operations, and prospects as alleged herein.
`37.
`At all relevant times, the material misrepresentations and omissions particularized
`in this Complaint directly or proximately caused or were a substantial contributing cause of the
`damages sustained by Plaintiff and other members of the Class. As described herein, during the
`Class Period, Defendants made or caused to be made a series of materially false and/or misleading
`statements about Pulse’s financial well-being and prospects. These material misstatements and/or
`omissions had the cause and effect of creating in the market an unrealistically positive assessment
`of the Company and its financial well-being and prospects, thus causing the Company’s securities
`to be overvalued and artificially inflated at all relevant times. Defendants’ materially false and/or
`misleading statements during the Class Period resulted in Plaintiff and other members of the Class
`purchasing the Company’s securities at artificially inflated prices, thus causing the damages
`complained of herein when the truth was revealed.
`LOSS CAUSATION
`38.
`Defendants’ wrongful conduct, as alleged herein, directly and proximately caused
`the economic loss suffered by Plaintiff and the Class.
`39.
`During the Class Period, Plaintiff and the Class purchased Pulse’s securities at
`artificially inflated prices and were damaged thereby. The price of the Company’s securities
`significantly declined when the misrepresentations made to the market, and/or the information
`alleged herein to have been concealed from the market, and/or the effects thereof, were revealed,
`causing investors’ losses.
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`SCIENTER ALLEGATIONS
`40.
`As alleged herein, Defendants acted with scienter since Defendants knew that the
`public documents and statements issued or disseminated in the name of the Company were
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 12 of 20
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`materially false and/or misleading; knew that such statements or documents would be issued or
`disseminated to the investing public; and knowingly and substantially participated or acquiesced
`in the issuance or dissemination of such statements or documents as primary violations of the
`federal securities laws. As set forth elsewhere herein in detail, the Individual Defendants, by
`virtue of their receipt of information reflecting the true facts regarding Pulse, their control over,
`and/or receipt and/or modification of Pulse’s allegedly materially misleading misstatements and/or
`their associations with the Company which made them privy to confidential proprietary
`information concerning Pulse, participated in the fraudulent scheme alleged herein.
`APPLICABILITY OF PRESUMPTION OF RELIANCE
`(FRAUD-ON-THE-MARKET DOCTRINE)
`41.
`The market for Pulse’s securities was open, well-developed and efficient at all
`relevant times. As a result of the materially false and/or misleading statements and/or failures to
`disclose, Pulse’s securities traded at artificially inflated prices during the Class Period. On
`February 8, 2021, the Company’s share price closed at a Class Period high of $44.27 per share.
`Plaintiff and other members of the Class purchased or otherwise acquired the Company’s
`securities relying upon the integrity of the market price of Pulse’s securities and market
`information relating to Pulse, and have been damaged thereby.
`42.
`During the Class Period, the artificial inflation of Pulse’s shares was caused by the
`material misrepresentations and/or omissions particularized in this Complaint causing the damages
`sustained by Plaintiff and other members of the Class. As described herein, during the Class
`Period, Defendants made or caused to be made a series of materially false and/or misleading
`statements about Pulse’s business, prospects, and operations. These material misstatements and/or
`omissions created an unrealistically positive assessment of Pulse and its business, operations, and
`prospects, thus causing the price of the Company’s securities to be artificially inflated at all
`relevant times, and when disclosed, negatively affected the value of the Company shares.
`Defendants’ materially false and/or misleading statements during the Class Period resulted in
`Plaintiff and other members of the Class purchasing the Company’s securities at such artificially
`inflated prices, and each of them has been damaged as a result.
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`CLASS ACTION COMPLAINT
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 13 of 20
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`43.
`At all relevant times, the market for Pulse’s securities was an efficient market for
`the following reasons, among others:
`(a)
`Pulse shares met the requirements for listing, and was listed and actively
`traded on the NASDAQ, a highly efficient and automated market;
`(b) As a regulated issuer, Pulse filed periodic public reports with the SEC
`and/or the NASDAQ;
`Pulse regularly communicated with public investors via established market
`(c)
`communication mechanisms, including through regular dissemination of press releases on the
`national circuits of major newswire services and through other wide-ranging public disclosures,
`such as communications with the financial press and other similar reporting services; and/or
`(d)
`Pulse was followed by securities analysts employed by brokerage firms who
`wrote reports about the Company, and these reports were distributed to the sales force and certain
`customers of their respective brokerage firms. Each of these reports was publicly available and
`entered the public marketplace.
`44.
`As a result of the foregoing, the market for Pulse’s securities promptly digested
`current information regarding Pulse from all publicly available sources and reflected such
`information in Pulse’s share price. Under these circumstances, all purchasers of Pulse’s securities
`during the Class Period suffered similar injury through their purchase of Pulse’s securities at
`artificially inflated prices and a presumption of reliance applies.
`45.
`A Class-wide presumption of reliance is also appropriate in this action under the
`Supreme Court’s holding in Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 (1972),
`because the Class’s claims are, in large part, grounded on Defendants’ material misstatements
`and/or omissions. Because this action involves Defendants’ failure to disclose material adverse
`information regarding the Company’s business operations and financial prospects—information
`that Defendants were obligated to disclose—positive proof of reliance is not a prerequisite to
`recovery. All that is necessary is that the facts withheld be material in the sense that a reasonable
`investor might have considered them important in making investment decisions. Given the
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`CLASS ACTION COMPLAINT
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`Case 3:22-cv-00959-SK Document 1 Filed 02/16/22 Page 14 of 20
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`importance of the Class Period material misstatements and omissions set forth above, that
`requirement is satisfied here.
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`NO SAFE HARBOR
`46.
`The statutory safe harbor p