NEW YORK-Ultralife Batteries Inc., a Newark, N.J., company developing lithium-ion solid-polymer rechargeable batteries for portable electronic devices, was sued Aug. 3 by investors alleging it failed to disclose adequately delays in production capacity expansion.
Ultralife stock, which trades on the Nasdaq National Market, had posted a 52-week high of $20.37 per share and a 52-week low of $7.91 as of Aug. 6. Early in the trading day Aug. 6, its share price was $8.25, up 50 cents from the previous day.
Ultralife sold a secondary stock offering of 2.5 million shares at $12.50 apiece in early May.
Besides developing advanced rechargeables for portable electronics, including wireless telephones, Ultralife also produces nine-volt disposable lithium batteries with a 10-year useful life to power smoke detectors and other consumer and military devices.
The company announced June 11 that demand for its nine-volt batteries was setting a sales record for Ultralife, but “manufacturing has not been able to ramp up to planned production rates as quickly as anticipated.”
Consequently, the company said it expects to post fourth-quarter losses greater than the 15-cents-per-share loss reported for the same period of fiscal year 1997. Fourth-quarter and year-end results are to be released late this month.
It was this announcement that triggered the shareholder lawsuit, filed in the U.S. District Court for the District of New Jersey by the law firm of Cohen, Milstein, Hausfeld & Toll, Washington, D.C.
Covering the period between April 30 and June 12, the complaint alleges the company’s prospectus for the add-on stock sale “misrepresented and failed to disclose” the fact that Ultralife could not add production capacity fast enough to meet demand for its nine-volt disposable lithium batteries.
On June 12, the day after Ultralife’s announcement about production problems, its stock price dropped to $8.19 per share from its $10 price just prior to June 11, the complaint said.
