Recent Securities Litigations
Energy Recovery Inc. Common Stock (NASDAQ: ERII)
According to the Complaint, Energy Recovery, Inc. develops and manufactures energy recovery devices for oil and gas, chemical and water industries. Its leading technology is the VorTeq hydraulic pump system. In 2015, Energy Recovery entered into a 15-year licensing agreement with Schlumberger Technology Corp. (“Schlumberger”) for the exclusive use of VorTeq. Under the terms of the licensing agreement, Schlumberger paid $75 million exclusivity fee and was to pay an additional $50 million milestone payments in 2016.
The Complaint alleges that Energy Recovery made false and misleading statements to the public throughout the Class Period and failed to disclose that: (i) the Company and Schlumberger had different strategic perspectives regarding commercialization of VorTeq (ii) which created substantial risk of early termination of the Company’s exclusive licensing agreement with Schlumberger; (iii) accordingly, the revenue guidance and expectations of future license revenue was false and lacked reasonable basis; and (iv) as a result, Defendants’ public statements were materially false and misleading at all relevant times or lacked a reasonable basis and omitted material facts.