Cohen Milstein Sellers & Toll PLLC is conducting an investigation to determine whether Active Power, Inc. (“Active Power” or the “Company”) and certain of its officers and directors made false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
A class action lawsuit was filed in the U.S. District Court for the Western District of Texas by another law firm on behalf of purchasers of the common stock of Active Power, Inc. (NASDAQ: ACPW) between April 30, 2013 and September 5, 2013, inclusive (the “Class Period”).
The complaint alleges that Active Power and certain of its officers and directors (“Defendants”) made false and misleading statements concerning the Company’s relationship with Digital China Information Service Company Limited (“Digital China”), a Fortune China 100 company, and concerning the Company’s future outlook.
The claims in this case arise from the Company’s recent admission that, contrary to its announcement at the start of the Class Period that it had entered into a distribution relationship with Digital China, China’s largest IT solutions provider, in fact it had entered into an agreement with a different, wholly unrelated entity and as a result, would not achieve the financial guidance it issued during the Class Period. The Class Period ends on September 5, 2013, when the Company retracted its third quarter guidance, primarily due to lower sales in China, explaining in part that:
“The lower than expected sales in China are due to disappointing results from the company’s distribution relationship in China.
The company previously announced in error that a partnership agreement with Digital China Information Service Company Limited was entered into on April 30, 2013.
However, the company’s previously announced agreement in China is with Qiyuan Network System Limited, which the company’s management discovered is neither an affiliate nor a subsidiary of Digital China Information Service Company Limited.”
The price of Active Power shares fell from $3.50 to $3.02 on September 6.