Aqua Metals, Inc.
- Company Name
- Aqua Metals, Inc.
- Stock Symbol
- Class Period
- May 19, 2016 to November 9, 2017
- Motion Deadline
- February 13, 2018
- Northern District of California
The complaint charges Aqua Metals and certain of its officers with violations of the Securities Exchange Act of 1934. Aqua Metals engages in the business of recycling lead through a novel process called “AquaRefining,” focusing its efforts on developing and testing the process, developing a business plan, raising working capital and developing its initial lead acid battery, or LAB, recycling facility in the Tahoe Regional Industrial Center in McCarran, Nevada.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations and prospects, including that Aqua Metals’ breaking and separating process was not operating reliably or efficiently and was facing substantial obstacles due to the Company’s need for a much higher degree of separation than is normal in the industry, which was negatively impacting the Company’s output. In addition, the Company’s four “operating modules” were being used primarily for experimentation rather than production, and under certain conditions, the module operators had to assist with lead removal, which was significantly hindering and delaying the ramp-up of the Company’s recycling process. As a result of defendants’ false statements and/or omissions, Aqua Metals securities traded at artificially inflated prices during the Class Period, with its stock price reaching as high as $22 per share.
On May 9, 2017, Aqua Metals held a conference call to discuss its first quarter 2017 results. On the call, defendant Stephen R. Clarke (“Clarke”), the Company’s Chairman and CEO, stated that “it took longer than we planned to get the breaking and separation up and running.” On this news, the price of Aqua Metals stock fell $4.34 per share, or 26%, to close at $12.31 per share on May 10, 2017. On August 9, 2017, the Company held a conference call to discuss its second quarter 2017 results, during which Clarke disclosed that the Company had made and installed improvements such that “breaking and separation is now operational” and was “operating reliably.” On this news, the price of the Company’s stock fell $2.56 per share, or over 23%, to close at $8.31 per share on August 10, 2017.
On October 23, 2017, the Company issued a press release disclosing 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.” On this news, the price of Aqua Metals stock fell $0.96 per share, or nearly 18%, to close at $4.41 per share on October 23, 2017. Finally, on November 9, 2017, after the market closed, Aqua Metals issued a press release revealing that it “faced . . . many challenges as [it] worked to ramp up production.” On this news, the price of the Company’s stock fell another $0.08 per share, or 2%, to close at $3.71 per share on November 10, 2017.