Thieler Law Corp advises investors with losses exceeding $100,000 of the June 22, 2021.lead plaintiff deadline in a class action lawsuit filed against Verus International, Inc. (OTC: VRUS) (Verus International, Inc. or “the Company”). The suit is pending in the U.S. District Court for the District of Maryland and investors, who purchased Verus International, Inc. securities between  June 17, 2019 through October 8, 2020 (“Class Periods”), have until June 22, 2021.to move for lead plaintiff. You do not need to move for lead plaintiff to be a member of the Class.

If you purchased Verus International, Inc. securities during the Class Period, and have losses over $100,000, you may contact Thieler Law Corp by calling at (619) 377 - 4324 or emailing mail@thielerlaw.com . No class has been certified in this case, and if your losses are less than $100,000 you are still a member of the class.

Verus purports to be a multi-line consumer packaged goods company, which develops branded product lines in the U.S. and globally. Verus was purportedly the fourth fastest growing consumer products food company at the end of 2019, which included its acquisitions of the Big League Foods and a controlling interest in NutriBrands.

Although the Company portrayed itself as a growth story with 2020 being “the year when all of the elements come together and record setting growth will become the central theme” after the Company had come off “back to back 150%+ growth quarters,” the reality was that the Company was not “enter[ing] a period of hypergrowth.”1 In fact, just weeks into 2020, on February 24, 2020, the Company announced that its auditor, CBIZ Mayer Hoffman McCann, LLC (“CBIZ MHM”), advised the Company that it would need to restate its financials due to certain errors in its prior annual and interim periodic filings for the fiscal year 2018 and the first, second and third quarter of 2019.

On this news, the Company’s stock price declined from $0.019 to $0.015 on February 25, 2020. Instead of restating the Company’s financials to account for these irregularities, the Company permitted its auditor to resign just weeks after touting the auditor’s retention as a significant milestone for Verus. Despite this stand, the market nonetheless showed its concern as the price continued its downward trend. The Company’s stock price continued downward thereafter closing at $0.011 on March 9, 2020.

Thereafter, Verus disclosed that the Company was not prepared to capitalize on its Big League Food acquisition and its Major League Baseball (“MLB”) license as the Company struggled to fill orders from retailers approximately nine months after the transaction occurred. Accordingly, the stock declined further to a close of $0.009 on March 17, 2020.

During this time, a novel coronavirus strain, COVID-19, exploded from a regional crisis in China into a worldwide pandemic. As COVID-19 spread like wildfire, people sought to protect themselves and others from the spread of the virus. Accordingly, the demand for personal protective equipment (“PPE”) and specifically, N95 masks surged.

In order to stem the Company’s reeling stock price, which had dipped below $0.01 per share, Defendants represented that Verus seized the opportunity presented by the COVID-19 pandemic. On April 3, 2020, Verus announced the acquisition of a controlling 51% interest in ZC Top Apparel Manufacturing, Inc., (“ZTAM”), a purported Philippines-based manufacturer of reusable N95 fabric masks and biohazard suits. According to the press release, Verus was “providing the funding and other resources” to begin fulfilling pending governmental orders on an expedited basis and that “protective gear could eclipse all of [Verus’s] existing revenue sources.”

In the press release announcement, the Company’s CEO, Defendant Anshu Bhatnagar (“Bhatnagar”), exclaimed that the ZTAM partnership was a “transformative moment for our company” given the Philippines-based facility “has a peak production capacity of ten million masks per month” and that it could “operate at near capacity for the foreseeable future.” Defendant Bhatnagar explained further that ZTAM offered “an operating facility with an existing product line, so our investment will go directly to produce masks and biohazard suits.” Defendant Bhatnagar added that “[w]e expect this to be a very profitable enterprise within the first month of operation, with a positive impact on our future projections.”

On this news, the Company’s stock price rose from $0.014 to a close of $0.018 on April 3, 2020 following the announcement. Over the next few days, the Company’s stock price continued to climb, closing at $0.021 on April 6, 2020.

However, in the weeks and months that followed, the Company’s stock price declined as the truth was slowly revealed. First, Verus revealed that rollout of sample masks and other PPE were encountering “logistical issues.” Second, the Company needed to secure a facility in Vietnam, seemingly unrelated to ZTAM, to produce sample masks months after the announcement. Third, ZTAM Chief Executive Officer (“CEO”) Ronald Ian Bilang (“Bilang”) cryptically tweeted about a potential escalation of regulatory investigations, involvement of the Office of International Affairs (“OIA”) and continued deafening silence from Verus and Defendants.

Finally, on October 8, 2020, Verus announced that the Company issued a “Repayment and Notice of Rescission of Transaction” to ZTAM, as a result of “failure of contractual performance and breach of contract.” According to the press release, ZTAM did not register Verus’s “controlling interest of 51%” as required under the term sheet dated April 3, 2020.

According to the lawsuits, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Verus lacked the requisite resources, infrastructure and/or expertise to exploit its Big League Foods brand and its Major League Baseball (MLB) license; (2) the Company issues in production ramp-up were not fully resolved to enable the Company to fulfill customer orders; (3) as a result, the Company’s prospects and outlook were not as represented; (4) the Company’s internal controls for financial reporting and accounting were not sufficient with specific respect to stock-based compensation and classification of equity instruments; (5) as a result, the Company’s financial results, outlook and prospects were materially worse than represented; and (6) as a result of the foregoing, the Company’s public statements were materially false and misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.

If you were negatively impacted by your investment in Verus International, Inc. (OTC: VRUS) securities between  June 17, 2019 through October 8, 2020 and would like to learn more about this lawsuit and your ability to participate as a lead plaintiff, please contact us for your no-cost evaluation.

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