b'On September 8, 2020, plaintiffs filed a notice of theirmotions to be appointed lead plaintiff in July 2020, and intent to stand on the second amended complaintthe court has not yet selected a lead plaintiff.and an outline of allegedly misleading statements. On October 28, 2020, Defendants renewed their motion to dismiss the operative complaint, on the basis that theAlperstein v. Sona Nanotech Inc., et al., complaint fails to plead (1) an actionable misstatement,Case No. 20-cv-11405 (MCS) (C.D. Cal. 2020) because the statements at issue are all either protectedCOVID-19 Test Approval Prospectsby the PSLRAs safe harbor, puffery, or historical finan-cial data, (2) a strong inference of scienter, or (3) lossSona Nanotech Inc. (Sona) is a Canadian nanotech-causation. The defendants motion is fully briefed as ofnology company engaged in researching and develop-January 11, 2020, and remains pending. ing gold nanorod products for diagnostic testing and medical treatment applications. On July 2, 2020, Sona Wasa Medical Holdings v. Sorrentoissued a press release announcing positive results for a rapid detection COVID-19 antigen test the company Therapeutics, Inc. et al., Case No.was developing, disclosing that laboratory validation 3:20-cv-00966 (AJB) (S.D. Cal.)reflected a test sensitivity of 96% and test specificity COVID-19 Antibody Breakthrough of 96%. The press release also disclosed that follow-ing consultation with FDA, Sona planned to complete Sorrento Therapeutics, Inc. (Sorrento) is a biopharma- clinical evaluation studies, the results of which were ceutical company based in California that researchesexpected by the end of July 2020. The press release human therapeutic antibodies for the treatment ofstated that after receiving the results of clinical studies, cancer, inflammation, and metabolic and infectious dis- the company would make final submissions to regula-eases. On May 8, 2020, Sorrento announced a collabo- tory authorities, including by seeking an EUA from FDA ration with Mount Sinai Health System to generate anti- and preliminary approval from Canadian regulators. On body products to serve as a protective shield againstAugust 6, 2020, the company disclosed that the results SARS-CoV-2 coronavirus infection (COVID-19). Onof its clinical evaluation studies had been delayed due May 15, 2020, Sorrento announced it had discovered anto ethics review board approvals and study modifica-antibody demonstrating 100% inhibition of COVID-19,tions, and were expected within two weeks. On news and its CEO labeled the breakthrough a cure. Onof the delay, Sonas stock price fell $3.09 per share, or this news, Sorrento shares increased 158% to close atmore than 34%. On October 29, 2020, the company $6.76, and reached a high of $10 (a 281% increase) bydisclosed that it had received notice from FDA that its May 18, 2020. In the subsequent days, however, severalEUA was not a priority and would not be issued at that media companies published articles questioning thetime. That day, Sonas stock price fell another $2.77 per validity of Sorrentos claims about a COVID-19 cure.share, or more than 48%. On November 25, 2020, Sona On May 20, 2020, Hindenburg Research issued aissued a press release disclosing that the company report calling Sorrentos claims sensational and toohad withdrawn its application for an Interim Order (IO) good to be true. Per Hindenburgs report, Mount Sinaiauthorization from Canadas health regulator, in order researchers even noted that Sorrentos announce- to obtain more clinical data to support the application. ment was very hyped. But that same day, SorrentosSonas stock price thereafter fell another $1.56 per CEO insisted in an interview that the antibody wasshare, over 67%, to close at $0.74.the real deal. However, on May 22, 2020, BioSpaceOn December 17, 2020, a Sona Nanotech investor filed published an article reporting that Sorrento officersa putative class action complaint against Sona and two stated in an interview they had not previously said theof its officers, asserting claims under Sections 10(b) antibody was a cure, instead framing it as potentiallyand 20(a) and Rule 10b-5 of the 1934 Act. The com-a cure. Sorrento shares closed that day at $5.07, downplaint alleges that Sonas positive statements about its 49.4% from its May 18 high. COVID-19 antigen test were misleading because they On May 26, 2020 and June 11, 2020, investors filedfailed to disclose that (1) Sona could not reasonably putative class actions against Sorrento and two of itsreceive results from field studies within one month, (2) officers for violations of Sections 10(b) and 20(a) anddata gathered over such a short period could not rea-Rule 10b5 of the 1934 Act. Plaintiffs allege that defen- sonably support an EUA or IO, and (3) the antigen test dants made misleading statements (1) reflecting thatwould not meet the criteria for an EUA or IO.Sorrentos finding was a cure for COVID-19, when itThe statutory lead plaintiff process is currently under-was not, and (2) disclosing 100% inhibition but omit- way. Lead plaintiff motions are expected to be filed in ting that the initial finding of inhibition in an in vitro virusFebruary 2021.infection would not necessarily translate to success or safety in persons. Several putative class members filed 60'