US lead-acid battery recycling start-up Aqua Metals has been accused of “misleading” investors about its technology in the latest setback for the beleaguered company.
The claim comes just weeks after Aqua Metals— which is “retrofitting” equipment to tackle production problems— was told it faced a probe into “possible violations of federal securities laws”.
Now shareholder rights law firm Robbins Arroyo has confirmed investors have filed a class action complaint against Aqua Metals, alleging that officials “ignored unresolved deficiencies in the company’s AquaRefining technology”.
California-based Robbins Arroyo said on 2 January the class action complaint is on behalf of all purchasers of Aqua Metals securities between 19 May 2016 and 9 November 2017 “for alleged violations” of the US Securities Exchange Act by Aqua Metals’s officers and directors.
The complaint alleges that “throughout the latter half of 2016 and early 2017, Aqua Metals continued to tout the positive impact of its AquaRefining, its budding relationships with other battery suppliers, and the possibility of expansion”.
Aqua Metals officials “began to reveal deficiencies” with the AquaRefining technology in May 2017— but “hid from investors that the company was unprofitable because it was unable to generate revenue from its core business”, the complaint says.
“On 23 October 2017, Aqua Metals revealed that it was only producing ‘small quantities’ of lead,” according to the complaint. “Then, on 9 November, Aqua Metals reported a net loss of $6.3 million, compared to a net loss of $3.5m for the previous year’s comparable quarter, disclosing that it was still overcoming ‘significant challenges’. As news of Aqua Metals’ troubles became public, the company’s stock fell nearly 82%, eventually closing at $3.00 per share on 14 November,” the complaint. Aqua Metals’ stock has since fallen even further, closing at $2.10 per share on 28 December.”
Aqua Metals, which is seeking to commercialise a water-based recycling process, did not respond to BBB’s invitation to comment on the latest claims.
The company admitted last November that it was “significantly behind schedule” with production as it posted further losses.
In December, New York-based law firm Levi & Korsinsky said it had launched an investigation into Aqua Metals concerning unspecified “possible violations of federal securities laws”.
The move came as Aqua Metals started modifying its AquaRefining modules that it said had “experienced a condition in which recovered lead hangs up on the modules’ exit chutes”.
