NEW YORK, April 28, 2014 /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of Axesstel, Inc. ("Axesstel" or the "Company") (OTC: AXST) (CUSIP: 05459T101). Investors are advised to contact Robert S. Willoughby at [email protected] or 888-476-6529, ext. 237.
The investigation concerns whether Axesstel and certain of its officers and/or directors have violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
On June 13, 2013, the Company disclosed a change in the Company's sales leadership following the resignation of Axesstel's Chief Marketing Officer ("CMO") and provided investors updated information about the Company's anticipated second quarter performance and full year 2013 outlook. Specifically, the Company disclosed that it was anticipating a weak second quarter due to slower demand in Europe, product launches in Africa that were delayed to the second quarter as a result of minor warranty issues, and a slower than expected rollout of the Company's new products in 2013. Axesstel indicated that revenues for the second quarter would fall substantially below first quarter revenue of $10.1 million, and may be as low as $2 million. Additionally, the Company indicated that the Company's Chief Executive Officer ("CEO") would be taking over the CMO's responsibilities.
On this news, shares of Axesstel declined $0.30 per share, nearly 30%, to close at $0.71 per share on June 13, 2013, on unusually heavy volume.
On October 17, 2013, the Company disclosed that it had terminated Axesstel's CEO and that the Company's revenues for the third quarter of 2013 were approximately $300,000, well short of the Company's initial expectations. Moreover, Axesstel disclosed that the Company's accounts receivables included approximately $9 million of sales to customers in Africa, which remained uncollected. The Company indicated that it was evaluating various alternatives for collection, including reserves against the accounts or in some cases retaking possession of the product as inventory, and attempting to resell the product to third parties.
On this news, shares of Axesstel declined $0.15 per share, or 60%, to close at $0.10 per share on October 18, 2013, on unusually heavy volume.
On March 31, 2014, the Company revealed that Axesstel's management had concluded that the previously issued financial statements contained in the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2013, June 30, 2013, and September 30, 2013, should no longer be relied upon because of errors in those financial statements related to the recognition of revenue from sales to two customers in the first quarter of 2013.
On this news, shares of Axesstel declined $0.01 per share, over 9%, to close at $0.10 per share on April 1, 2014, on unusually heavy volume.
The Pomerantz Firm, with offices in New York, Chicago, San Diego, and Florida, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
Robert S. Willoughby
SOURCE Pomerantz LLP