| Company: | Host America Corporation |
| Ticker Symbol: | NASD: CAFE |
| Class Period: | July 12, 2005 to July 22, 2005 |
| Date Filed: | Aug-08-05 |
| Lead Plaintiff Deadline: | Oct-07-05 |
| Court: | District, CT |
| Allegations: |
A securities fraud class action lawsuit in the United States District Court for the District of Connecticut, on behalf of shareholders who purchased or otherwise acquired the securities of Host America Corporation ("Host America" or the "Company") (Nasdaq:CAFE) between July 12, 2005 and July 22, 2005, inclusive (the "Class Period").
Host America provides food service management, energy management conservation, and pre-employment background screening. The company operates in four divisions: Host America Business Dining, Lindley Food Service (Lindley), SelectForce, and GlobalNet Energy Investors (GlobalNet). The GlobalNet division markets, sells, and installs control panels and other electrical energy saving devices to commercial and industrial users.
From May 12, 2004 to June 15, 2005, the Company often announced agreements to install their LightMasterPlus product or perform other energy saving services for various companies. The Company claims that the LightMasterPlus "efficiently runs your lighting systems by reducing kilowatt consumption yet maintaining visible light. It also allows for fully automated dimming or accent lighting throughout your building."
On July 12, 2005, the first day of the Class Period, Host America filed a Form 8-K with the SEC, and issued a press release titled "Host America's Energy Division Announces Wal-Mart Transaction Ten Store First-Phase for LightMasterPlus." Market reaction to this announcement, unlike reactions to previous announcements in 2004 and 2005 regarding potential contracts for installing LightMasterPlus, was drastic. Trading volume increased from 41,000 trades on July 11, 2005, to 13,813,100 on July 12, 2005. Furthermore, the Company's stock, which opened at $4.25 on July 12, 2005 prior to the announcement, closed at $6.35, after reaching a high of $7.47. Over the next eight trading days, volume reached a high of approximately 32,569,600 shares on July 18, 2005, and the Company's stock price reached a high of $16.88 on July 19, 2005.
The above statements in the July 12, 2005 Form 8-K and press release were false and misleading because they misrepresented the nature of the "Wal-Mart Transaction" as one whereby the Company had a firm commitment by Wal-Mart to purchase the Company's LIGHTMasterPlus for installation in Wal-Mart stores. The true facts which were not disclosed are that Wal-Mart was not a customer of the Company's in connection to purchasing the LightMasterPlus and that the "Wal-Mart Transaction" was limited to a test installation unrelated to any commitment by Wal-Mart to install the LightMasterPlus in any of its facilities on a permanent basis. In fact, Wal-Mart had made no commitment to purchase or install the LightMasterPlus outside of the test installation. As a result, defendants had no basis for stating that the test installation was a "first-phase roll-out" or that "the next phase will involve a significant number of stores." Moreover, defendants lacked any basis for stating that the Wal-Mart test installation was a "major event for our company." In fact, such test installations in the past had resulted in no future customer relationship and no actual purchases of the LightMasterPlus by the party solicited for the test demonstration.
On July 22, 2005, trading of Host America securities was halted, pending SEC review. In halting trading, the SEC cautioned brokers, dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information, and any information subsequently issued by the company," the SEC statement read. At the time trading was halted, Host America stock was priced at $13.92 per share, down from $16.88 on July 19, 2005.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
At LawyersandSettlements.com, it is our goal to keep you informed about important legal cases and settlements. We are dedicated to helping you resolve your legal complaints.
Host America provides food service management, energy management conservation, and pre-employment background screening. The company operates in four divisions: Host America Business Dining, Lindley Food Service (Lindley), SelectForce, and GlobalNet Energy Investors (GlobalNet). The GlobalNet division markets, sells, and installs control panels and other electrical energy saving devices to commercial and industrial users.
From May 12, 2004 to June 15, 2005, the Company often announced agreements to install their LightMasterPlus product or perform other energy saving services for various companies. The Company claims that the LightMasterPlus "efficiently runs your lighting systems by reducing kilowatt consumption yet maintaining visible light. It also allows for fully automated dimming or accent lighting throughout your building."
On July 12, 2005, the first day of the Class Period, Host America filed a Form 8-K with the SEC, and issued a press release titled "Host America's Energy Division Announces Wal-Mart Transaction Ten Store First-Phase for LightMasterPlus." Market reaction to this announcement, unlike reactions to previous announcements in 2004 and 2005 regarding potential contracts for installing LightMasterPlus, was drastic. Trading volume increased from 41,000 trades on July 11, 2005, to 13,813,100 on July 12, 2005. Furthermore, the Company's stock, which opened at $4.25 on July 12, 2005 prior to the announcement, closed at $6.35, after reaching a high of $7.47. Over the next eight trading days, volume reached a high of approximately 32,569,600 shares on July 18, 2005, and the Company's stock price reached a high of $16.88 on July 19, 2005.
The above statements in the July 12, 2005 Form 8-K and press release were false and misleading because they misrepresented the nature of the "Wal-Mart Transaction" as one whereby the Company had a firm commitment by Wal-Mart to purchase the Company's LIGHTMasterPlus for installation in Wal-Mart stores. The true facts which were not disclosed are that Wal-Mart was not a customer of the Company's in connection to purchasing the LightMasterPlus and that the "Wal-Mart Transaction" was limited to a test installation unrelated to any commitment by Wal-Mart to install the LightMasterPlus in any of its facilities on a permanent basis. In fact, Wal-Mart had made no commitment to purchase or install the LightMasterPlus outside of the test installation. As a result, defendants had no basis for stating that the test installation was a "first-phase roll-out" or that "the next phase will involve a significant number of stores." Moreover, defendants lacked any basis for stating that the Wal-Mart test installation was a "major event for our company." In fact, such test installations in the past had resulted in no future customer relationship and no actual purchases of the LightMasterPlus by the party solicited for the test demonstration.
On July 22, 2005, trading of Host America securities was halted, pending SEC review. In halting trading, the SEC cautioned brokers, dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information, and any information subsequently issued by the company," the SEC statement read. At the time trading was halted, Host America stock was priced at $13.92 per share, down from $16.88 on July 19, 2005.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
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