That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. ![]() On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. It doesn’t seem like it has much more room to fall. MMAT stock has declined almost 80% over the past six months and is currently trading at 21 cents per share. The 8-K filing does say that SEC staff has recommended a civil enforcement action against the Wells Notice recipients. It also doesn’t mean that the SEC has determined wrongdoing on behalf of Meta Materials, Palikaras and Brda. Granted, a Wells Notice doesn’t mean that the SEC will file any charges. Specifically, the Wells Notice received by the Company states that the proposed action would allege violations of Section 17(a) of the Securities Act Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B) and 14(a) of the Exchange Act of 1934 and Rules 10b-5 and 14a-9 thereunder and Regulation FD.”įor further context, Section 17(a) of the Securities Act of 1933 “makes it unlawful to ’employ any device, scheme, or artifice to defraud’, ‘obtain money or property’ by using material misstatements or omissions, or to ‘engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.'”Ĭornell Law School notes that it is closely linked to Section 10b of the Securities Exchange Act of 1934 and SEC Rule 10b-5, both of which are often employed by investors making claims of fraud. Roth Capital Partners is serving as the financial adviser to Torchlight, while Hamilton Clark is acting as the financial adviser to Metamaterial.“The Wells Notices each state that the SEC staff has made a preliminary determination to recommend that the SEC file a civil enforcement action against the recipients alleging violations of certain provisions of the U.S. An entity held by Torchlight Chairman Gregory McCabe also provided a $1.5 million bridge loan. Torchlight said it has loaned $500,000 to Metamaterial and has agreed to loan an additional $500,000 to the systems engineering company within five days of signing the proposed deal. Torchlight's management team will remain in an advisory role centered on divesting the company's legacy oil and gas business. Metamaterial CEO George Palikaras will be the CEO of the combined entity, while a new CFO will be appointed. If the deal is completed, the combined company's board of directors will have seven members. Under the proposed agreement, Metamaterial will become a subsidiary of Torchlight, with Metamaterial shareholders owning a 75% interest in the combined company, and Torchlight former equity holders owning the remaining 25%. ![]() Metamaterial develops technologies that are designed to enhance the use of light and other energy forms. Torchlight said in a news release that the agreement is part of the company's shift toward becoming a global clean technology company following a slowdown in the oil and gas market brought on by the coronavirus pandemic. 21 said it has signed a nonbinding letter of intent to offload its oil and gas assets within the first half of 2021 and to acquire 100% of materials and systems engineering company Metamaterial Inc.
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