Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Tattooed Chef, Daktronics, Gaotu, and Avaya and Encourages Investors to Contact the Firm
News provided byBragar Eagel & Squire
Jan 23, 2023, 9:00 PM ET
NEW YORK, Jan. 23, 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 Tattooed Chef, Inc. (NASDAQ: TTCF), Daktronics, Inc. (NASDAQ: DAKT), Gaotu Techedu Inc. (NYSE: GOTU), and Avaya Holdings Corp. (NYSE: AVYA, OTCMKTS: AVYAW). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Tattooed Chef, Inc. (NASDAQ: TTCF)
Class Period: March 20, 2021 - October 12, 2022
Lead Plaintiff Deadline: February 21, 2023
On October 12, 2022, after market hours, the Company announced that it would restate its financial statements from March 31, 2021 to the present and revealed for the first time the revenue was overstated by $213,000 and the net loss was understated by $90,000 on the 1Q21 Report. On the 2Q21 Report, the revenue was overstated by $446,000 three months ended June 30, 2021 and $659,000 six months ended June 30, 2021 and the net loss was understated by $4,276,000 three months ended June 30, 2021 and $4,366,000 six months ended June 30, 2021. On the 3Q21 Report, the revenue was overstated by $425,000 three months ended September 30, 2021 and $878,000 nine months ended September 30, 2021 and the net loss was understated by $372,000 three months ended September 30, 2021 and $4,165,000 nine months ended September 30, 2021. On the Annual Report, the revenue was overstated by $5,436,000 ended December 31, 2021.
The Company also made numerous other changes in financial statements that revealed the extent of internal control weaknesses, stating the following, in pertinent part, in its current report filed with the SEC on Form 8-K:
On October 6, 2022, Tattooed Chef, Inc. (the “Company”) received a written notice pursuant to Item 4.02(b) from the Company’s former independent registered public accounting firm, BDO USA, LLP, that the Company’s unaudited interim condensed consolidated financial statements for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, and its audited annual consolidated financial statements for the year ended December 31, 2021, and accompanying audit report, each as previously filed with the Securities and Exchange Commission (“SEC”), were materially misstated and should no longer be relied upon and should be restated, because the Company (a) incorrectly recorded expenses related to a multi-vendor mailer program with a large customer as operating expenses rather than as a reduction of revenue; and (b) incorrectly recorded expenses for advertising placement by a marketing services firm on a straight-line basis over the life of the contract rather than when the services were actually rendered. For these reasons, pursuant to Item 4.02(a) the Board, after consultation with the Audit Committee, has also determined that the Company’s unaudited interim condensed consolidated financial statements for the quarters ended March 31, 2022 and June 30, 2022 should no longer be relied upon.
On this news, Tattooed Chefs’ share price fell $0.44 per share, or 9.8%, from its close on October 12, 2022 to open on October 13, 2022 at $4.05 per share, damaging investors.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common shares, Plaintiff and other Class members have suffered significant losses and damages.
For more information on the Tattooed Chef class action go to: https://bespc.com/cases/TTCF
Daktronics, Inc. (NASDAQ: DAKT)
Class Period: March 10, 2022 - December 6, 2022
Lead Plaintiff Deadline: February 21, 2023
On August 31, 2022, Daktronics issued a press release announcing its first quarter 2023 results. Therein, the company reported that it experienced “multiple material supply chain disruptions, labor shortages, and a shutdown of our facilities in Shanghai, China for a significant portion of the quarter.” The Company also reported that gross profit as a percentage of net sales was 15%, which was lower compared to 22% a year earlier. Operating expenses were $31.3 million, compared to $26.5 million a year earlier. And operating margin for the first quarter of fiscal 2023 was negative 3.2%, compared to positive 3.9% for the first quarter of fiscal 2022.
On this news, Daktronics’ share price fell $0.91, or 22.1%, to close at $3.20 per share on August 31, 2022, thereby injuring investors.
Then, on December 6, 2022, after the market closed, Daktronics filed a Form 12b-25 with the SEC stating that it would be unable to timely file its Quarterly Report on Form 10-Q for the period ended October 29, 2022, and that there is “substantial doubt” about the Company’s ability to continue as a going concern. Daktronics also disclosed that it recorded a valuation allowance of approximately $13.0 million for deferred tax assets, which “created a covenant violation under our line of credit agreement.” As a result, the Company “also expects to conclude that its disclosure controls and procedures and internal control over financial reporting were not effective as a result of material weaknesses.”
On this news, Daktronics’ share price fell $1.30, or 39.2%, to close at $2.02 per share on December 7, 2022, thereby injuring investors.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company was experiencing challenges that increased costs, including supply chain disruptions, that impacted Daktronics’ ability to fund inventory levels and operations; (2) that, as a result, it was probable that some portion of the Company’s deferred tax assets would not be realized; (3) that as a result, Daktronics was reasonably likely to record a material valuation allowance to its deferred tax assets; (4) that there were material weaknesses in the Company’s internal controls over financial reporting related to income taxes; (5) that the foregoing presented liquidity concerns and there was substantial doubt as to the Company’s ability to continue as a going concern; (6) as a result, Defendants’ statements about its business, operations, and prospects were materially false and misleading and/or lacked reasonable basis at all relevant times.
For more information on the Daktronics class action go to: https://bespc.com/cases/DAKT
Gaotu Techedu Inc. (NYSE: GOTU)
Class Period: March 5, 2021 - July 23, 2021
Lead Plaintiff Deadline: February 28, 2023
The Gaotu class action lawsuit alleges that, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) China was barring tutoring for profit in core school subjects and the policy change would restrict foreign investment in a sector that had
become essential to success in Chinese school exams; and (ii) the impact such regulations would have on Gaotu’s operations and profitability and the value of Gaotu securities.
On July 23, 2021, Reuters reported that “China is barring tutoring for profit in core school subjects to ease financial pressures on families that have contributed to low birth rates, news that sent shockwaves through its vast private education sector and share prices plunging.” The article added that “[a]ll institutions offering tutoring on the school curriculum will be registered as nonprofit organisations, and no new licences will be granted, according to the document, which says it was distributed by China’s State Council, or cabinet, to local governments and is dated July 19.” On this news, the price of Gaotu ADSs fell by more than 63%, damaging investors.
For more information on the Gaotu class action go to: https://bespc.com/cases/GOTU
Avaya Holdings Corp. (NYSE: AVYA, OTCMKTS: AVYAW)
Class Period: November 22, 2021 - November 29, 2022
Lead Plaintiff Deadline: March 6, 2023
Avaya purports to be a "global leader in digital communications products, solutions and services for businesses of all sizes delivering its technology predominantly through software and services." The Company claims that its "global, experienced team of professionals delivers award-winning services from initial planning and design, to seamless implementation and integration, to ongoing managed operations, optimization, training and support."
Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company's internal control over financial reporting ("ICFR") was deficient in several areas; (ii) as a result of these deficiencies, the Company had failed to design and maintain effective controls over its whistleblower policies and its ethics and compliance program; (iii) the Company's deteriorating financial condition was likely to raise substantial doubt as to its ability to continue as a going concern; and (iv) as a result, the Company's public statements were materially false and misleading at all relevant times.
On July 28, 2022, Avaya announced the termination of its Chief Executive Officer James M. Chirico, Jr. ("Chirico"). The Company also announced preliminary Q3 2022 financial results that included expected revenues and adjusted EBITDA well below previously given guidance and an unquantified but "significant" impairment charge. In addition, Avaya withdrew its 2022 guidance.
On this news, Avaya's stock price fell $1.19 per share, or 56.99%, to close at $0.90 per share on July 29, 2022.
Then, on August 9, 2022, Avaya announced that: (1) it determined there was substantial doubt about its ability to continue as a going concern; (2) it would not timely file its financial statements for the quarter ended June 30, 2022; (3) its Audit Committee commenced internal investigations into circumstances surrounding the Company's financial results for the quarter; and ( 4) the Audit Committee also commenced an investigation into matters raised by a whistle blower.
On this news, Avaya' s stock price fell $0.51 per share, or 45.54%, to close at $0.61 per share on August 9, 2022.
Finally, before the market opened on November 30, 2022, Avaya disclosed in a Current Report filed on Form 8-K with the SEC that "control deficiencies management had been reviewing represent material weaknesses in the Company's internal control over financial reporting" and that "management's assessment of ICFR included in Item 9A of the Company's Annual Report on Form 10-K for its fiscal year 2021 ended September 30, 2021 , filed with the [SEC] on November 22, 2021  should no longer be relied upon." Specifically, the Form 8-K stated that the Company "did not design and maintain effective controls related to the information and communication component of the COSO (Committee of Sponsoring Organizations of the Treadway Commission) framework," "did not design and maintain effective controls to ensure appropriate communication between certain functions within the Company," and "did not design and maintain effective controls over the ethics and compliance program."
On this news, Avaya's stock price fell $0.16 per share, or 14.28%, to close at $0.96 per share on November 30, 2022.
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 Avaya class action go to: https://bespc.com/cases/AVYA
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.