Aqua Metals' Shocking Disclosures Spark Securities Class Action
WASHINGTON, DC (December 26, 2017) — U.S. Market Advisors Law Group PLLC announces that a securities class action has been filed Aqua Metals, Inc. (NASDAQ: AQMS). The class action is on behalf of investors who acquired Aqua Metals’ securities between May 19, 2016 – November 9, 2017.
Investors with losses have until February 13, 2018 to ask the Court to appoint you as Lead Plaintiff for the class. The Lead Plaintiff is a representative for absent members of the class. Investors do not need to seek appointment as Lead Plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action. Contact USMA Law Group to discuss this action.
Aqua Metals, Inc. is engaged in the business of recycling lead through a process that the Company developed and named AquaRefining. The Company’s AquaRefining process focuses on providing for the recycling of lead acid batteries (LABs) and the production of lead.
Allegations Against Aqua Metals
The Complaint alleges, throughout the Class Period, Defendants failed to disclose: (1) that Aqua Metals’ breaking and separating process was facing substantial obstacles due to AquaRefining’s need for a much higher degree of separation than is normal in the industry; (2) that the Company’s breaking and separating process was not operating reliably or efficiently; (3) that the breaking and separating obstacles and issues were negatively impacting the Company’s output; (4) that the Company’s four “operating modules” were being used primarily for experimentation, rather than production; (5) that module operators were assisting with lead removal; (6) that, as a result of the foregoing, the ramp up of the Company’s recycling process was being significantly hindered and delayed; and (7) that, as a result of the foregoing, Defendants’ statements about Aqua Metals’ business, operations, and prospects, were materially false and/or misleading and/or lacked a reasonable basis.
On May 9, 2017, after the market closed, Aqua Metals issued a press release entitled “Aqua Metals Provides First Quarter 2017 Corporate Update.” Therein, the Company stated that it was “currently in the process of scaling up production of AquaRefined lead to 120 tons/day by the end of 2017.”
On the same day, the Company held a conference call to discuss its Q1 2017 results. On the call, Defendant Stephen R. Clarke (“Clarke”), the Chairman and Chief Executive Officer (“CEO”) of Aqua Metals, stated that the Company experienced some “issues” and “challenges” as it ramped up its recycling process. Specifically, Clarke stated that “it took longer than we planned to get the breaking and separation up and running” since the Company’s AquaRefining process “needed to achieve [a] much higher degree of separation than is normal in this industry.” Another challenge was that the Company “needed to rethink and rework the input conveyor to the breaker to upgrade it to support the higher feed rates that we want to achieve to manage 160 tons a day of lead production.”
On this news, the Company’s stock price fell $4.34 per share, or 26%, to close at $12.31 per share on May 10, 2017, on unusually heavy trading volume.
On August 9, 2017, after the market closed, Aqua Metals issued a press release entitled “Aqua Metals Provides Second Quarter 2017 Corporate Update.” Therein, the Company revealed that it was “currently in the process of scaling up AquaRefining operations to include 16 modules by the end of 2017,” but made no mention of “120 tons/day” as it did in its Q1 2017 press release.
On the same day, the Company held a conference call to discuss its Q2 2017 results. On the call, Clarke stated that “AquaRefining works. We’ve got four modules operating now.” Clarke also disclosed that the Company was considering “operat[ing] the overall facility with an output of less than 120 tons a day” in order to optimize profitability. Clarke further disclosed that, contrary to the Company’s earlier representation that breaking and separation were “up and running,” in fact, the Company had made and installed improvements such that “breaking and separation is now operational,” and “breaking and separation is operating reliably.”
On this news, the Company’s stock price fell $2.56 per share, or 23.6%, to close at $8.31 per share on August 10, 2017, on unusually heavy trading volume.
On October 23, 2017, the Company issued a press release entitled “Aqua Metals Provides Update on Plant’s Operations.” Therein, the Company stated that “[f]our modules are assembled, commissioned and are being used to determine the optimal operating parameters, including electrolyte pH, lead concentration, operating temperature, electrolyte flow rate and free acid levels.” However, the Company disclosed that Aqua Metals had only “produced small quantities of AquaRefined lead during the commissioning process” and that “under certain conditions, the operators would need to periodically assist the lead removal.” The Company further stated that “Aqua Metals’ production process has multiple stages prior to AquaRefining, including battery breaking, separation, desulphurization, and electrolyte production” and disclosed that it was “in the process of synchronizing all of these stages, which is critical to maximizing efficiency, optimizing working procedures and minimizing waste.”
On this news, the Company’s stock price fell $0.96 per share, or 17.9%, to close at $4.41 per share on October 23, 2017, on unusually heavy trading volume. The stock price continued to decline on the following day, falling $0.40 per share, or 9.1%, to close at $4.01 per share on October 24, 2017, on unusually heavy trading volume.
On November 9, 2017, after the market closed, Aqua Metals issued a press release entitled “Aqua Metals Provides Third Quarter 2017 Corporate Update.” Therein, the Company revealed that it “faced . . . many challenges as [it] worked to ramp up production.”
On the same day, the Company held a conference call to discuss its Q3 2017 results. On the call, Clarke revealed that “the four operating modules are being used to . . . accelerate updates aimed at providing a level of robustness suitable for operating by third parties with non-specialist operators,” and to “map out operating parameters and performance over the full range of operating conditions.” An analyst asked Clarke about the “utilization rate” of the four modules. Clarke responded by stating that “[w]e’re not providing individual tonnage per day, utilization rates or any of that data.” Clarke also stated on the call that “the battery breaker is now running consistently seven days a week.” An analyst asked “how many tons per day are you guys currently running through the battery breaking system and through the entire process?” Clarke responded: “No. At this time we have provided all the color that we’re willing to provide at this point.”
On this news, the Company’s stock price fell $0.08 per share, or 2.1%, to close at $3.71 per share on November 10, 2017. The stock price continued to decline on the following trading days, falling $0.13 per share (3.5%) on November 13, 2017, and $0.58 per share (16.2%) on November 14, 2017, to close at $3.00 per share on November 14, 2017.
About USMA Law Group
U.S. Market Advisors Law Group PLLC is a national law firm based in Washington, D.C. The firm represents investors worldwide in U.S. securities class action lawsuits.
Contact
David P. Abel
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