N.S. tech company carries on in face of security probe, class action

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The Nova Scotia advanced technology company that trades on the Nasdaq is reducing an investor lawsuit it launched this week.

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The class action, filed Monday in a New York court, accused Dartmouth-based Meta Materials Inc. of making false and misleading claims about its products, which drove its share price up.

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Meta Materials stock has fallen since it began public trading on Thursday from $16.77 in July last year to $2.48.

“These types of lawsuits are unfortunately a common occurrence for companies with stock listed on public exchanges in the United States,” Mel Rusinak, corporate affairs manager at Meta Materials, said in an email to businesshala News.

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“With the lawsuit filed now, it will be months before a principal plaintiff is appointed to represent the class and before we have an opportunity to respond.

“We believe that the lawsuit is without merit and intend to vigorously defend against it.”

None of the claims contained in the lawsuit have been tested in court.

The lawsuit was filed by Rosen Law Firm, which specializes in investor actions.

In the days since, other US law firms have issued public calls for investors seeking to join the suit.

Circled by lawyers, company executives are showing off their wares at the massive Consumer Electronics Show in Las Vegas this week.

Meta Materials is developing advanced coatings it says could make solar power more efficient, protect pilots from laser glare and improve reception of 5G cellular signals when applied to windows on buildings. Meta Materials is also trying to develop wireless sensing medical devices.

The company disclosed in November that it was being investigated by the Enforcement Branch of the Securities and Exchange Commission.

reverse merger

In September, it was given a subpoena ordering it to produce, among other things, documents and information related to the deal, which led to it being made public on the Nasdaq.

“The company is cooperating and intends to continue to cooperate with the SEC’s investigation,” Meta said in its third-quarter report released on November 15.

It became listed following a reverse merger with publicly traded Texas company Torchlight Energy Resources. In a reverse merger, a private company buys a public one, then has shares of the new business listed for public trading.

A scathing report from Miami investment firm Kerrisdale Capital came less than a month after the SEC investigation was uncovered. The firm is “shorting” the stock, meaning it makes money if the share price falls.

It described Meta as “a ‘photonics’ company that is an optical illusion… a $1 billion market cap company whose business is absolutely nothing: no real revenue, no promising technology, Underdeveloped product, no track record achievements.”

Rusinak declined to respond to the claims in the Kerrisdale report.

NS made $100M. Make

An investor has appeared.

When Meta Materials was listed on the Nasdaq in July — with share prices soaring — Nova Scotia Crown Corporation InnovaCorp sold its initial $3.1 million investment in the company and made $104 million in profit.

In total, more than $20 million has been announced in various forms of government aid to Meta Content, mostly from federal agencies. However, not all projects have progressed.

In 2017, Sustainable Development Technology Canada approved $5.4 million in funding “to develop a novel manufacturing process for nanostructured solar coatings in Halifax”.

But the solar-powered vehicle technology project never materialized. The agency told businesshala News on Thursday that Meta Materials did not move forward and did not meet its first milestone.

“Apart from the initial disbursements to start the project in 2018, the majority of the $5.4 million has not been awarded to the company,” spokeswoman Jenmarie Bannigan said in an email.

ACOA says company is ‘in good standing’

The Atlantic Canada Opportunities Agency has put in the largest amount of government funding – $6.8 million.

It says that every project goes through hard work.

“Meta Materials Inc. is in good standing with the agency. It would be inappropriate for ACOA to provide further comment,” ACOA spokesman Jay Witherby said in response to businesshala News.

The Business Development Bank has invested $5 million in Meta Materials through a convertible debenture that can be converted into shares.

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