- December 13, 2019
- David A Noyes & Co.
SteadyServ Technologies (“SteadyServ”) is an Indiana based technology company that created a patented scale system to measure the weight of beer kegs so that restaurants and other vendors can more closely and accurately monitor the amount of beer remaining in a keg. The technology allows vendors, through their computer or smart phone, to track the amount of beer consumed and the amount of beer remaining so, in theory, they may more effecticiently service their clientele. The target market for SteadyServ is large retaurants and bars and stadiums.
According to publicly available documents, since SteadyServ was founded in 2012, it has raised capital of more than $20 million, principally through a preferred stock offering. In order to identify potential investors, SteadyServ entered into sales agreements with brokerage firms so that the Financial Advisors could offer the preferred stock investment opportunities to “main street” investors. One such brokerage firm was David A. Noyes, a FINRA registered wealth management firm with a significant presence in Indianapolis, Indiana. These investments were sold in the form of private placement offerings with little or no disclosure. Investors relied on the due diligence conducted by Financial Advisors at David A. Noyes and other brokerage firms.
Unfortunately for investors, in February 2019, SteadyServ filed for Chapter 11 bankruptcy protection. In court filings made by SteadyServ, it disclosed more than $6 million in liabilities and only $54,999 in assets. This ratio ensures that preferred stock investors will receive virtually nothing in the bankruptcy as there are no assets to distribute.
Preferred stock investors were induced with the allure of robust revenue projections of $4 million in 2016, $18 million in 2017 and $43 million in 2018. These figures are grossly imbalanced with the actual disclosed revenues, which were below $1 million and declining each year. These statements constitute material misrepresentations. Often times, Financial Advisors fail to conduct proper due diligence or over-promise results in connection with the sale of private placement securities because the commissions are higher than in traditional investments—often times as high as 10%.
If you invested in SteadyServ at the recommendation of your Financial Advisor, contact the attorneys at Wolper Law Firm, P.A. to discuss your legal options. Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at email@example.com.