Medizone International – Securities Investigation
Are you concerned about your investment in Medizone International Inc.? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.
A Chapter 11 bankruptcy petition filed April 18 in Nevada caused Medizone International to default on $305,000 in unsecured convertible promissory notes issued to investors at the end of January.
Medizone International, a medical device company, began in Nevada and relocated its corporate office to Kalamazoo, MI in March 2017. The company operates a lab in Kingston, Ontario, and has seven full-time and two part-time employees.
The company’s product, AsepticSure, claims to disinfect non-porous surfaces in hospitals, potentially reducing hospital-acquired infections that cause the deaths of thousands of patients in the U.S. each year. The application also has applications in medical labs, biomedical cleanrooms and athletic facilities and on sports equipment.
According to reports, Medizone International has been testing and gathering data on the device’s performance for an application to the U.S. Food and Drug Administration later this year.
The company was pushed into bankruptcy after it accumulated a deficit of $40 million at the end of 2017, recorded zero revenues for the year, and began 2018 with less than $30,000 in cash. The company recorded net losses of $2 million in 2017 and $2.6 million in 2016, when it had $237,000 in revenues, according to SEC filings.
The involuntary bankruptcy petition from creditors includes the company’s former director of operations who left the company at the end of February 2017.
According to SEC filings, Medizone International Inc. filed a Form D to raise capital from investors between 2010 and 2012.
Investments such as these are typically sold by brokerage firms in exchange for a large up front commission. High fees can range from 7-10%, as well as additional “due diligence fees” that can range from 1-3%.
The problem with private placement investments such as Medizone International Inc. is that they typically involve a high degree of risk. They are also often sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds.
Investigating Potential Claims
The White Law Group is investigating the liability that FINRA registered brokerage firms may have for unsuitably recommending high-risk private placements, like Medizone International Inc. to investors.
Despite the risks of investing in private placements, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.
If you have concerns regarding your investment in Medizone International Inc. and would like to speak with a securities attorney about your options, please call The White Law Group at 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visithttps://www.whitesecuritieslaw.com.