February 12, 2021 - An amended consolidated complaint was filed.

August 17, 2020 - An investor in shares of Chembio Diagnostics, Inc. (NASDAQ: CEMI) filed a lawsuit in the U.S. District Court for the Eastern District of New York over alleged violations of Federal Securities Laws by Chembio Diagnostics, Inc. in connection with certain allegedly false and misleading statements made between April 1, 2020 and June 16, 2020.

Hauppauge, NY based Chembio Diagnostics, Inc., together with its subsidiaries, develops, manufactures, and commercializes point-of-care (POC) diagnostic tests that are used to detect or diagnose diseases. Chembio Diagnostics, Inc. reported that its annual Total Revenue rose from $33.4 million in 2018 to $34.46 million in 2019, and that its Net Loss increased from $7.86 million in 2018 to $13.67 million in 2019. Shares of Chembio Diagnostics, Inc. (NASDAQ: CEMI) declined from $11.50 per share in August 2018 to as low as $2.25 per share on March 15, 2020.

In April 2020, Chembio Diagnostics, Inc’s Dual Path Platform (“DPP”) COVID-19 antibody test was among the first such tests to be granted Emergency Use Authorization (“EUA”) by the U.S. Food and Drug Administration (“FDA”). The plaintiff alleges that Defendants represented that the Company’s Dual Path Platform (“DPP”) COVID-19 serological point-of-care test for the detection of IgM and IgG antibodies aided in determining current or past exposure to the COVID-19 virus, that its test provides high sensitivity and specificity, and was 100% accurate. Shares of Chembio Diagnostics, Inc. (NASDAQ: CEMI) reached as high as $14.90 per share on April 20, 2020. The plaintiff claims that on May 11, 2020, Defendants took advantage of Chembio’s inflated stock price, closing a public offering of approximately 2.6 million shares of Chembio stock at $11.75 per share for gross proceeds of approximately $30.8 million.

However, then, on June 16, 2020, after the market closed, the U.S. Food and Drug Administration (“FDA”) issued a press release disclosing that it had revoked the Company’s Emergency Use Authorization (“EUA”) for the Company’s DPP COVID-19 Igm/IgG System “due to performance concerns with the accuracy of the test” and because “data submitted by Chembio as well as an independent evaluation of the Chembio test at NCI showed that this test generates a higher than expected rate of false results and higher than that reflected in the authorized labeling for the device.” Shares of Chembio Diagnostics, Inc. (NASDAQ: CEMI) declined to as low as $3.51 per share on June 17, 2020.

According to the complaint the plaintiff alleges on behalf of purchasers of Chembio Diagnostics, Inc. (NASDAQ: CEMI) common shares between April 1, 2020 and June 16, 2020, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between April 1, 2020 and June 16, 2020 the Company failed to disclose that, the Company’s Dual Path Platform (“DPP”) COVID-19 test did not provide high-quality results and there were material performance concerns with the accuracy of the test such that it was not reasonable to believe that the test may be effective in detecting antibodies against SARS-CoV-2; and as a result, there was a material risk to public health from the false test results.