NEW YORK, April 07, 2023 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Inspirato Incorporated ISPOKornit Digital Ltd. KRNT, Alico, Inc. ALCOCatalent, Inc. CTLT. Stockholders have until the following deadlines to petition the court for the role of lead plaintiff. The link below provides additional information on each case.
Inspirato Incorporated ISPO
Class Period: December 15, 2022 – May 11, 2022
Deadline for Lead Plaintiffs: April 17, 2023
The Complaint states that the Company made misleading statements to market. Inspirato’s financial statements, including those for the quarters ended March 31, 2022, and June 30, 2022 (collectively the “Non Reliance Periods”), cannot be relied on. Incorrectly applying Accounting Standards Update (ASU No. 2016-02-02, Leases (Topic 842″) (“ASC 832), which resulted in the non-reliability of Non-Reliance Periods. These facts show that the Company’s public statements during the class period were false, misleading and misleading. Investors suffered losses when Inspirato was revealed to be false.
For more information on the Inspirato class action go to: https://bespc.com/cases/ISPO
Kornit Digital Ltd. KRNT
Class Period: July 5-2022 – February 17, 2021
Deadline for Lead Plaintiffs: April 17, 2023
Kornit develops and manufactures digital printing technology for the apparel, textile, and garment industries. End-users have the option to print directly-to-garment (“DTG”) or directly-to-fabric (“DTF”) with the digital inkjet printers of Kornit. DTG printing is where designs and images can be printed directly onto textiles like clothing and apparel. In DTF printing, large rolls of fabric pass through wide inkjet printers that print images and designs directly onto swaths of fabric that are then cut and sewn into a product, and can be used in the fashion and home décor industries. Kornit also sells textile inks, and other consumables to use with its digital printers. Kornit offers customer support contracts that provide technical support and equipment services to its printers.
The Company began offering software services during the Class Period. This included a suite end-to-end fulfillment solutions and production solutions called KornitX. Through KornitX, the Company offers, among others, automated production systems, workflow, and inventory management.
Amazon.com, Inc. (“Amazon”), a multinational e-commerce company, is the Company’s largest customer. Other customers of Kornit during the Class Period included Delta Apparel, Inc. (“Delta Apparel”), which is a major provider of activewear, lifestyle apparel, and Fanatics, Inc. (“Fanatics”), which is a global digital platform that provides licensed merchandise and a leader in licensing. Kornit’s ten largest customers account for more than 60% of its revenue. Accordingly, it was critically important for Kornit to maintain those major customers as well as continue to grow its customer base in order to achieve the Company’s ambitious goal of “becoming a $1 billion revenue company in 2026.”
Kornit repeatedly spoke out about the alleged competitive advantages it had and assured investors that there was virtually no competition in the “directly-to-garment printing” market. Kornit also claimed that its digital printing systems and consumable products (such as textile inks) were in high demand. Kornit also provided services to customers to help them maintain and manage their digital printers and manage customer workflows. Kornit assured investors that it would be able to retain existing customers and draw new customers due to the strong demand for its products. It also said that this would minimize the risks of a significant portion of the company’s revenues being concentrated with large customers.
These and other statements were made during the Class Period, but they were false. Kornit and its senior executives did not know, or at least recklessly disregard, the fact that the Company’s digital printer business was plagued in quality control and customer service issues. These problems and deficiencies led Kornit to lose market share to its competitors. This resulted in a decline in revenue for the Company as customers moved to other digital printing companies. Because of these false representations, Kornit ordinary shares were traded at artificially elevated prices during the Class Period.
Investors began to learn the truth on March 28, 2022, when Delta Apparel and Fanatics—two of Kornit’s major customers—announced that for months they had collaborated with one of Kornit’s principal competitors to develop a new digital printing technology that directly competed with products and services Kornit offered. Delta Apparel stated that the new technology was already in place in four of its digital printing facilities, and plans to continue expanding. The utilization of this new, competing technology by Delta Apparel and Fanatics reflected the widespread dissatisfaction of Kornit’s major customers with the Company’s product quality and customer service, and meant that Kornit would likely lose revenue from two of its most important customers.
Kornit reported a net loss for its first quarter 2022, even though it had reported revenues exceeding expectations. This compares to a profit in the previous year period of $5.1million. The revenue guidance issued by the Company for the second quarter 2022 was also significantly lower than analysts’ expectations. Kornit said that the Company’s disappointing guidance was due to a slower pace of orders from customers in the electronic commerce segment. The Company also admitted that it knew for at least two quarters that Delta Apparel had purchased digital printing systems from Kornit competitors. These disclosures resulted in Kornit’s ordinary shares falling by $18.78, or 33.3%,
Kornit announced on July 5, 2022 that it would report significant revenue loss for the second quarter in 2022. Kornit forecasted that revenue for the second quarter would be between $56.4 million and $59.4 millions. This is far below the $85 million to $95 million revenue guidance the Company gave less than two months ago, in May 2022. Kornit said that the significant revenue loss was due to “a significantly slower rate of direct-to garment (DTG) system orders in the second quarter compared to our previous expectations.” These disclosures resulted in Kornit’s ordinary shares falling by $8.10 per share or 25.7%.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s shares, Plaintiff and other Class members have suffered significant losses and damages.
For more information on the Kornit class action go to: https://bespc.com/cases/KRNT
Alico, Inc. ALCO
Class Period: December 13, 2022 – February 4, 2021
Deadline for Lead Plaintiffs: April 18, 2023
Alico operates in the U.S. together with its subsidiaries as an agribusiness company and land management firm. The Company operates as an agribusiness and land management company in the United States. It has two segments. Alico Citrus is a segment that cultivates citrus trees for fresh and processed citrus markets. The Land Management and Other Operations section owns and manages land within Collier, Glades and Hendry Counties. It also leases land for recreation and grazing, conservation and mining purposes.
Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Alico had deficient disclosure controls and procedures and internal control over financial reporting; (ii) as a result, the Company had improperly calculated Alico’s deferred tax liabilities over a multi-year period; (iii) accordingly, the Company would likely be required to restate one or more of its previously issued financial statements; (iv) the foregoing would impede the timely completion of the audit of the Company’s financial results in advance of its year-end earnings call; and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.
Alico announced that its year-end earnings call would be delayed on December 6, 2022 in a press release. The press release stated specifically that Alico needed additional time to complete the audit of its financial results for September 30, 2022 by an independent registered public accountant firm.
This news caused Alico’s stock to drop $3.06 per share (or 10.42%) to close at $26.29 per Share on December 6, 2022.
Alico then issued a press statement on December 7, 2022. It provided an update about the Company’s delay in reporting fiscal year 2022 financial results and in making required filings to the SEC. In the press release, the Company disclosed that “[t]he key item that is requiring such additional time involves evaluation of the proper amount of the Company’s Deferred Tax Liability, particularly certain portions of that Deferred Tax Liability arising in prior fiscal years, including those going back to fiscal year 2019 or possibly several years before fiscal year 2019.”
Alico finally filed its Annual Report on Form 10K for the year ending September 30, 2022 with the SEC on December 13, 2022 (the “2022-10K”). Alico “restates” its position in the 2022-10K.[d] the Company’s previously issued audited consolidated balance sheet, audited consolidated statements of changes in equity and related disclosures as of September 30, 2021 included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2021 (the ‘2021 10-K’) previously filed with the SEC and the Company’s previously issued unaudited consolidated balance sheet, unaudited consolidated statements of changes in equity and related disclosures as of the end of each quarterly periods ended June 30, 2022, March 31, 2022, December 31, 2021, June 30, 2021, March 31, 2021 and December 31, 2020 included in the Company’s respective Quarterly Report on Form 10-Q for each of the quarters then ended previously filed with the SEC (together with the 2021 10-K, the ‘Financial Statements’).” The Company also stated that the following:[o]n December 12, 2022, the audit committee (the ‘Audit Committee’) of the board of directors of the Company concluded that the Company’s previously issued Financial Statements can no longer be relied upon due to an error identified during the completion of the 2022 10-K.” Specifically, Alico stated that “[t]he error that led to the Audit Committee’s conclusion relates to the calculation of the deferred tax liabilities for the fiscal years 2015 through 2019, which resulted in a cumulative reduction in the Company’s deferred tax liability, and a corresponding cumulative increase in retained earnings, of approximately $2,512,000 on the Company’s balance sheet as of September 30, 2022.”
Alico stock closed at $25.05 per Share on December 14, 2022, after falling by $2.64 per shares (or 9.53%).
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages.
For more information on the Alico class action go to: https://bespc.com/cases/ALCO
Catalent, Inc. CTLT
Class Period: August 30, 2021 to October 31, 2022
Deadline for Lead Plaintiffs: April 25, 2023
This case is about how a company fell after it initially received benefits from the COVID-19 pandemic (also called “COVID-19”, “COVID” or the “pandemic”) Catalent, a vaccine manufacturer was one of the COVID beneficiaries because it appeared well-positioned to capitalise on the rapidly increasing demand for vaccine production capacity. Indeed, Catalent almost doubled its business during the first year of the pandemic when the bulk of vaccines were administered. Catalent’s success during the early stages of the pandemic caused its stock price to soar to record highs. Mid-2021 was when COVID related work had slowed down. The Defendants then began channel stuffing and accounting schemes in an attempt to boost the Company’s revenues. These schemes gave Catalent a false appearance of continued growth which enabled its stock price to hit new records. To support these plans and keep pace with its high growth targets, Catalent was reducing safety and controlling procedures at key production plants to help them. Catalent saw significant sales declines in late 2022 and had excess inventory across its supply chain. Catalent stock plummeted to pre-COVID levels. Investors suffered significant losses as Catalent discovered that Catalent’s Class Period revenues and early-COVID revenues could not be sustained.
Catalent is a multinational corporation which manufactures and packages pharmaceuticals into devices suitable for human consumption. according to long-term supply agreements with pharmaceutical companies. Catalent sells these products directly to pharmaceutical companies. They then sell them through their supply chain to healthcare providers (i.e. clinics and hospitals).), which administer them to patients, who are the end consumers.
Between April 2018 and March 2020, Catalent’s quarterly revenues averaged $669 million. Catalent stock closed at approximately $47.57 per ounce during the time these revenues were reported to market. Catalent was involved in large-scale COVID initiatives, including the filling of vaccines into syringes by Moderna and AstraZeneca. These projects helped Catalent’s quarterly revenues rise to new heights. They averaged about $940 million between April 2020 – March 2021. This is a 40% increase over preCOVID revenues. Catalent stock averaged $102.42 per share over the period that the revenue surge was reported.
As the pandemic progressed, the demand for Catalent COVID products began to decline. This was because many potential patients had been vaccinated. According to Centers for Disease Control and Prevention data, the United States had received an unprecedented 4.5 million COVID vaccines from April 1, 2021. This figure was a result of 1.5 million daily doses administered between December 14, 2020 and August 28, 20,21. By comparison, CDC data indicates that average daily vaccinations in the United States were under 625,000 during the Class Period.
Catalent maintained its growth in revenues, despite the decline in COVID vaccine demand. Catalent assured investors that customers demand was strong throughout the Class Period. The average quarterly revenue reported by Catalent during the Class Period was $1.2Billion, which is an 80 percent improvement over preCOVID-19 revenues. It also represents a 28 percent increase on its reported revenues in the first year of the pandemic. Investors did not know that Defendants artificially inflated these revenues by fraudulent accounting and channel stuffing schemes. This was to fool investors into believing that Catalent was actually generating them.
Steady revenue growth. The fraud of the defendants caused Catalent stock trading at a record high price of $142.64 per shares on September 9, 2021, and an average closing value of $108.00 per share during Class Period.
Defendants made misleading statements throughout the Class Period because they failed to disclose or misrepresented the following adverse facts that were either known to them or were recklessly ignored by them.
A. Catalent materially overstated the revenue and earnings of its clients by prematurely recognizing revenues in violation U.S. Generally Accepted Accounting Principles (“GAAP”)
b. Catalent had material weaknesses in its internal control over financial reporting related to revenue recognition;
c.Catalent misrepresented demand for its product while it knowingly sold more product direct to its customers than could have been sold to healthcare providers and end users.
d. Catalent ignored key production rules in order to quickly produce excess inventory. This excess inventory was used to boost the Company’s financial results by premature revenue recognition in violation GAAP, and/or stuffing direct customers with it;
e. The foregoing revealed that Defendants had no reasonable basis for positive statements they made about the Company’s financial performance, outlook, regulatory compliance, and overall health during the Class Period.
Catalent’s misrepresentations first became public on August 29, 2022. The Company revealed that there was a significant downturn in demand for COVID products. Catalent’s stock closed at $92.28 per Share on August 29, 2022 after this announcement.
Then, on September 20, 2022, a Washington Post report exposed that the release of COVID-19 vaccines produced by Catalent had been delayed by regulators because of improper sterilization at one of Catalent’s key facilities. On this news, Catalent’s stock price declined by 9.3 percent over two trading sessions, to close at $79.06 per share on September 22, 2022.
Catalent disclosed that its quarterly earnings fell to zero on November 1, 2022 and that it had lowered its financial forecast, which indicated falling demand. The Company also stated that regulatory issues at its key facilities were negatively affecting its financial results. Catalent stock fell 31.7 percent over the course of two trading sessions and closed at $44.90 per share November 2, 2022. Overall, Catalent stock declined by more than 68% during the Class period. It fell from $142.00 high to $44.90 low on November 2, 2022.
Catalent disclosed that it had approximately $400 million of excess inventory on November 16, 2022. This further revealed that the Company had misrepresented its customers’ demand and its purported ability predict future demand. Catalent stock closed at $42.07 per Share on November 17th 2022 after two trading sessions.
GlassHouse Research published on December 8, 2022, a report that Catalent had grossly underestimated its revenues by $568.2 Million in violation GAAP. The report detailed numerous red flags that were indicative of Catalent’s improper accounting practices. These red flags included the rapid increase in Catalent’s contract asset and inventory balances, declining customer deposits, executive turnover, and recent scrutiny of the Company’s revenue accounting by regulators. Catalent’s direct clients were also reported as having excess inventory that would take “years to unwind.” This news caused Catalent’s stock to drop 3.6 percent and close at $45.54 per Share on December 8, 2022.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of Catalent securities, Plaintiff and other Class members have suffered significant losses and damages.
For more information on the Catalent class action go to: https://bespc.com/cases/CTLT
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Contact Information
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
[email protected]
www.bespc.com