GlobeNewswire Inc | Sep 16, 2020 03:00PM EDT

September 16, 2020

NEW YORK, Sept. 16, 2020 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of investors that purchased Energy Recovery, Inc. (NASDAQ: ERII) common stock between August 2, 2017 and June 29, 2020 (the Class Period). Investors have until September 21, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

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On October 19, 2015, the Company announced that it has signed a fifteen-year deal with Schlumberger Technology Corp. (Schlumberger), which gave Schlumberger the exclusive right to the use of the Companys VorTeq technology (the Schlumberger Licensing Agreement). Under the terms of the Schlumberger Licensing Agreement, Schlumberger paid $75 million exclusivity fee and was to pay an additional $50 million milestone payments in 2016. The terms also dictated that Schlumberger would pay continuing annual royalties for the duration of the license agreement, subject to the satisfaction of certain key performance indicators.

On June 29, 2020 not even five years into the Schlumberger License Agreement the Company issued a press release, announcing the termination of the licensing agreement with Schlumberger, citing to different strategic perspectives as to the path to VorTeq commercialization. The Company further announced that following the termination, no further payments will be made by either party and that Energy Recovery will now be fully responsible for commercialization of the VorTeq technology globally.

This news caused a sharp decline in the price of Energy Recovery shares, which fell 15.8%, to close at $7.59 on June 30, 2020. Several securities analysts downgraded Energy Recoverys rating and significantly lowered the Companys price target. As one analyst commented, [the Company] should have been able to perceive in advance and then explicitly warn about the significant, and likely rising, odds of this outcome.

The complaint, filed on July 21, 2020, alleges that throughout the Class Period defendants made materially false and misleading statements, and failed to disclose material adverse facts about the Companys business, operations, and financial health. Specifically, defendants made false and/or misleading statements and failed to disclose to investors that: (i) the Company and Schlumberger had different strategic perspectives regarding commercialization of VorTeq; (ii) which created substantial risk of early termination of the Companys exclusive licensing agreement with Schlumberger; (iii) accordingly, the revenue guidance and expectations of future license revenue was false and lacked reasonable basis; and (iv) as a result, defendants public statements were materially false and misleading at all relevant times or lacked a reasonable basis and omitted material facts.

If you purchased Energy Recovery common stock during the Class Period, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Melissa Fortunato or Marion Passmore by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.

About Bragar Eagel & Squire, P.C.:Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.

Contact Information:Bragar Eagel & Squire, P.C.Melissa Fortunato, Esq.Marion Passmore, Esq.(212) 355-4648investigations@bespc.comwww.bespc.com