Alliance MMA Responds To Lawsuit
Fightful.com received a press release in regards a lawsuit filed against publicly traded MMA organization Alliance MMA.
Alliance MMA, Inc. ("Alliance MMA" or the "Company") (NASDAQ: AMMA), a professional mixed martial arts (MMA) company, announced today that a shareholder has filed a lawsuit against the Company and two of its current officers in the United States District Court for the District of New Jersey, under the caption Shapiro v. Alliance MMA, Inc., No. 1:17-cv-2583 (D.N.J.). The lawsuit alleges violations of the federal securities laws and purports to seek damages on behalf of a class of all shareholders who purchased the Company’s common stock pursuant or traceable to the Company’s initial public offering. The Company believes that the lawsuit is without merit and intends to vigorously defend against it. “Securities claims like this are often pursued by opportunistic lawyers when there is a drop in stock price,” stated CEO Paul K. Danner, III. “The law firm of King & Spalding LLP has been engaged to help us fight back, and we plan to file a motion to dismiss this lawsuit.”
Just before the lawsuit was filed, the promotion filed an 8-K with the Securities & Exchange Commission (SEC) because certain financial claims by Alliance MMA “should no longer be relied upon because of an error in recognizing as compensation transfers of common stock by an affiliate of the Company to individuals who were at the time of transfer, or subsequently became, officers, directors or consultants of the Company.” The plaintiff, Eric Shapiro, claims he and other class members suffered significant losses due to defendants “wrongful acts and omissions.”
According to report by Bloody Elbow, the filings are a cause for concern because “the SEC Form 12b-25 is usually a red flag for investors, indicating that something is not right with a company. It either means that management is incapable of ensuring that basic tasks are performed or that the company is experiencing major financial trouble.”
