Pomerantz LLP Appointed Co-Lead Counsel in Axiom Holdings, Inc. Securities Litigation
On September 12, 2017, Pomerantz LLP was appointed co-lead counsel in a class action lawsuit against Axiom Holdings, Inc. (“Axiom” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 17-cv-04756, is on behalf of a class consisting of investors who purchased or otherwise acquired Axiom securities, seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
Axiom Holdings, Inc. is an independent power producer and real estate developer that develops, builds, owns & operates power generation plants and hotels. Axiom continues to leverage its global partnerships with real estate owners and hydropower developers and expand its asset portfolio through acquisition and development of identified pipeline.
On October 10, 2016, Axiom Holdings, Inc. entered into a Share Exchange Agreement (the “Agreement”) with CJC Holdings, Ltd. (together with its subsidiaries, “CJC”), a Hong Kong corporation, and the two shareholders of CJC, Hu Dengyang and Yang Chuan (collectively, the “CJC Shareholders”). CJC, through its subsidiaries, operates and constructs hydropower electric generation stations located in China with two in operation, a third under construction and a fourth in the planning stage and slated for operation in 2019. In addition, CJC, through its subsidiaries, operates two hotels in China.
Pursuant to the Agreement, Axiom was to acquire all of the issued and outstanding shares of CJC from the CJC Shareholders in exchange for the issuance to the CJC Shareholders of 200,000,000 shares of the Company’s common stock.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Axion lacked control over the merger process sufficient to ensure that the Agreement with CJC would be completed; (ii) accordingly, the Agreement with CJC was never completed; (iii) the Company’s issuance of shares to the CJC Shareholders was thus improper; and (iv) as a result of the foregoing, Axiom’s public statements were materially false and misleading at all relevant times.
On June 19, 2017, Axiom issued a press release disclosing that the Company had identified discrepancies related to prior news announcements in response to a subpoena from the Securities and Exchange Commission. The following day, Axiom issued a second press release, advising investors that “it now appears the merger was never completed” and advising investors that it would rescind the shares that were issued to the CJC Shareholders in connection with the merger.
On this news, Axiom’s share price fell $0.44, or 37.93% over two trading days, to close at $0.72 on June 20, 2017.