NEW YORK, Sept. 28, 2005 (PRIMEZONE) -- Murray, Frank & Sailer LLP wishes to announce that those who invested in Host America Corporation ("Host America" or the "Company") (Pink Sheets:CAFE); (Pink Sheets:CAFEW) between July 12, 2005 and July 22, 2005, inclusive (the "Class Period"), have until Friday, October 7, 2005 to move for lead plaintiff appointment in the class action lawsuit filed in the United States District Court for the District of Connecticut. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi, Christopher S. Hinton or Bradley P. Dyer of Murray, Frank & Sailer LLP.
After a significant independent investigation, Murray, Frank & Sailer LLP filed the first of several class action lawsuits against Host America on August 8, 2005 alleging that the July 12, 2005 Form 8-K and press release were false and misleading. A copy of the complaint and initial notice can be obtained at http://www.murrayfrank.com/CM/NewCases/NewCases280.asp.
On July 12, 2005, the first day of the Class Period, Host America filed a Form 8-K with the SEC, and issued a press release titled "Host America's Energy Division Announces Wal-Mart Transaction Ten Store First-Phase for LightMasterPlus." Market reaction to this announcement, unlike reactions to previous announcements in 2004 and 2005 regarding potential contracts for installing LightMasterPlus, was drastic. Trading volume increased from 41,000 trades on July 11, 2005, to 13,813,100 on July 12, 2005. Furthermore, the Company's stock, which opened at $4.25 on July 12, 2005 prior to the announcement, closed at $6.35, after reaching a high of $7.47. Over the next eight trading days, volume reached a high of approximately 32,569,600 shares on July 18, 2005, and the Company's stock price reached a high of $16.88 on July 19, 2005.
The complaint alleges that the statements made in the July 12, 2005 Form 8-K and press release were false and misleading because they misrepresented the nature of the "Wal-Mart Transaction" as one whereby the Company had a firm commitment by Wal-Mart to purchase the Company's LightMasterPlus for installation in Wal-Mart stores. The true facts which were not disclosed are that Wal-Mart was not a customer of the Company's in connection to purchasing the LightMasterPlus and that the "Wal-Mart Transaction" was limited to a test installation unrelated to any commitment by Wal-Mart to install the LightMasterPlus in any of its facilities on a permanent basis. In fact, Wal-Mart had made no commitment to purchase or install the LightMasterPlus outside of the test installation. As a result, defendants had no basis for stating that the test installation was a "first-phase roll-out" or that "the next phase will involve a significant number of stores." Moreover, defendants lacked any basis for stating that the Wal-Mart test installation was a "major event for our company." In fact, such test installations in the past had resulted in no future customer relationship and no actual purchases of the LightMasterPlus by the party solicited for the test demonstration.
On July 22, 2005, trading of Host America securities was halted, pending SEC review. At the time trading was halted, Host America stock was priced at $13.92 per share, down from $16.88 on July 19, 2005. On August 31, 2005, Host America issued a press release updating investors about the ongoing investigation into its July 12, 2005 notice. In the press release, Host America informed investors that the Company "never had a written agreement" or "any agreement for the installation of LightMasterPlus(r)" with Wal-Mart and that nearly two months after Host America's announcement on July 12, 2005, "neither Host nor its wholly-owned energy management subsidiary R.S. Services, Inc. has received from Wal-Mart a list of the 10 stores to be surveyed." In reaction to Host America's August 31, 2005, disclosure, the price of the Company's common stock closed down $10.54 per share, or more than 73 percent, on the first day it reopened for trading. On September 8, 2005, Host America announced that it had received notice that the Nasdaq Listing Qualification Panel had determined to delist the Company's common stock and warrants from the Nasdaq Stock Market.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than fifteen years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.