A class action lawsuit was filed against Nano Nuclear Energy Inc. (NNE) by Levi & Korsinsky on August 9, 2024. The plaintiffs (shareholders) alleged that they bought NNE stock at artificially inflated prices between May 8, 2024 and July 18, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Nano Nuclear Energy stock during that period can click here to learn about joining the lawsuit.
Nano Nuclear is a tech-enabled nuclear energy company. Its offerings include portable microreactor technology, nuclear fuel fabrication, nuclear fuel transportation, and nuclear industry consulting services.
The company’s claims about gaining approval for commercialization and timelines for commercial operations are at the heart of the complaint.
Nano Nuclear Energy’s Misleading Claims
According to the lawsuit, Nano Nuclear and two of its senior officers and/or directors (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the potential receipt of necessary regulatory approvals and timeline for commercialization from SEC filings and related material.
For instance, in a regulatory filing dated June 20, 2024, NNE stated that it was consulting with the Idaho National Laboratory (INL) for the design, construction, and commission of its own commercial nuclear fuel fabrication facility. NNE added that it had applied to the DOE (Department of Energy) to advance this facility and was supported by the INL, with the INL staff reviewing and editing the submission for the approval of the facility.
Similarly, on July 11, 2024, NNE stated that it was identifying locations for a test bed reactor site for conducting testing experiments using nuclear material for both microreactors. In the same prospectus, NNE mentioned that the company has communicated with the U.S. Nuclear Regulatory Commission (or NRC) and DOE about the status of its microreactor designs and the estimated internal timelines for microreactor developments.
To summarize, subsequent events (discussed below) revealed that NNE and its executives were misleading investors about the timeline and commercial prospects of its nuclear reactor products.
Plaintiffs’ Arguments
The plaintiffs maintain that the Defendants deceived investors by lying and withholding critical information about the company’s business practices and prospects during the Class Period. Importantly, the Defendants are accused of misleading investors about the potential timeline, regulatory receipts, and commercial prospects of its nuclear reactor offerings.
The information became clear on July 19, 2024, when a Hunterbrook Media report falsified all of NNE’s claims. The report cited an industry expert, who called NNE’s timeline “frankly laughable.” The report also mentioned a former chair of the U.S. Nuclear Regulatory Commission, who said that NNE’s claims were not possible since competitors with more expertise and resources have taken 15-20 years for similar projects.
Furthermore, the report claimed that the the U.S. Nuclear Regulatory Commission does not list NNE among the companies that have pre-applied for the nuclear reactor that NNE claims to have done. The NRC public affairs officer was also quoted as being unaware of any such pre-application. NNE shares plunged 17.3% following Hunterbrook’s report.
To conclude, Nano Nuclear Energy allegedly misled investors about the company’s product timeline and commercialization prospects. Since the release of the report, NNE stock has declined 35.8%, causing massive damage to shareholder returns.
