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NS tech company continues to face security investigation and class action lawsuit

NS tech company continues to face security investigation and class action lawsuit

A Nova Scotia tech company that trades on the Nasdaq downplays an investor lawsuit launched against it this week.

The class action lawsuit filed in New York court on Monday accuses Dartmouth-based Meta Materials Inc. of making false and misleading claims about its products that have inflated its share price.

Meta Materials stock has plunged since going public last year, from $ 16.77 in July to $ 2.48 on Thursday.

“These types of lawsuits are unfortunately commonplace for companies whose shares are publicly traded in the United States,” Mel Rusinak, chief executive officer of Meta Materials, said in an email to CBC News.

“With the lawsuit just filed, it will be months before a lead plaintiff is appointed to represent the class and before we have a chance to respond.

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

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

Meta Materials Founding CEO George Palikaras wears a pair of metaAIR goggles in Dartmouth, Nova Scotia in 2018. (Fadila Chater / The Canadian Press)

The complaint was filed by the Rosen law firm, which specializes in investor actions.

In the days that followed, other US law firms launched public appeals to investors interested in joining the lawsuit.

As lawyers go round in circles, company officials are exhibiting their products this week at the giant Consumer Electronics Show in Las Vegas.

Meta Materials is developing advanced coatings that it says can make solar energy more efficient, protect pilots from laser glare, and improve reception of 5G cellular signals when applied to building windows. Meta Materials is also trying to develop medical devices for wireless detection.

The company revealed in November that it was under investigation by the enforcement arm of the Securities and Exchange Commission.

Reverse merger

In September, he was served with a summons requiring him to produce, among other things, documents and information relating to the agreement that led to him being made public on the Nasdaq.

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

It went public after a reverse merger with the Texan listed company Torchlight Energy Resources. In a reverse merger, a private company buys out a public company and then has shares of the new company listed for public trade.

The disclosure of the SEC investigation was followed less than a month later by a dazzling report from Miami-based investment firm Kerrisdale Capital. The company “sells short” the stock, which means it makes money if the stock price goes down.

He described Meta as “a ‘photonics’ business that is just an optical illusion … achievements.”

Rusinak declined to respond to the allegations of the Kerrisdale report.

NS made $ 100 million

An investor has imposed himself.

When Meta Materials was listed on the Nasdaq in July – with stock prices soaring – Nova Scotia crown corporation InnovaCorp sold its initial $ 3.1 million investment in the business and made 104 million dollars in profits.

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

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

But the solar-powered vehicle technology project never got off the ground. The agency told CBC News on Thursday that Meta Materials had not moved forward and had not taken its first step.

“Other than a preliminary disbursement to launch the project in 2018, the majority of the $ 5.4 million funding has not been provided to the company,” spokeswoman Janemary Banigan said in an e- mail.

ACOA says company is “in good standing”

The Atlantic Canada Opportunities Agency has invested the most government money – $ 6.8 million.

He says every project goes through rigorous due diligence.

“Meta Materials Inc. is in good standing with the agency. It would be inappropriate for ACOA to comment further, ”ACOA spokesperson Jay Witherbee said in a response to CBC News.

The Business Development Bank also invested $ 5 million in Meta Materials through a convertible debenture convertible into shares.

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