NEW YORK, March 22, 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 (NASDAQ: ISPO), Kornit Digital Ltd. (NASDAQ: KRNT), and Alico, Inc. (NASDAQ: ALCO), and Catalent, Inc. (NYSE: CTLT). Stockholders still have time to request the court’s permission to be the lead plaintiff. You can find additional information at this link.
Inspirato Incorporated (NASDAQ: ISPO)
The Class Period is May 11, 2022 through December 15, 2022
Deadline for Lead Plaintiff: April 17, 2023
According to the Complaint the Company gave misleading statements and made false claims to the markets. Inspirato’s financial statements for the quarters ending March 31, 2022 and June 30, 2022 (collectively, the “Non-Reliance Periods”) could not be relied upon. Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASC 842”), resulting in the unreliability of the Non-Reliance Periods. Based on these facts, the Company’s public statements were false and materially misleading throughout the class period. Investors suffered damage when the market discovered the truth about Inspirato.
For more information on the Inspirato class action go to: https://bespc.com/cases/ISPO
Kornit Digital Ltd.
The Class Period is from February 17, 2021 to July 5, 2022
Deadline for Lead Plaintiff: April 17, 2023
Kornit is a manufacturer of industrial digital printing solutions for the apparel, textile and garment industries. The Company’s digital inkjet printers enable end-users to print both direct-to-garment (“DTG”) and direct-to-fabric (“DTF”). Design and images are directly printed onto textiles, such as apparel and clothing. 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 sells inks, as well as other supplies for its digital printers. Kornit offers customer service contracts that provide technical support and other services to its printers.
The Class Period saw the company offer its customers software services, such as a complete suite of fulfillment and production solutions known as KornitX. It provides automated workflows and inventory management, along with production systems.
The Company’s largest customer is multinational e-commerce company, Amazon.com, Inc. (“Amazon”). Among the largest of Kornit’s other customers during the Class Period were Delta Apparel, Inc. (“Delta Apparel”), a leading provider of activewear and lifestyle apparel products, and Fanatics, Inc. (“Fanatics”), a global digital sports platform and leading provider of licensed sports merchandise. Kornit’s ten biggest customers account for more than 60%. 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.”
Throughout the Class Period, Kornit repeatedly touted the purported competitive advantages provided by its technology and assured investors that it faced virtually no meaningful competition in the “direct-to-garment” printing market. Kornit also claimed that its digital printing system, including consumables such as inks for textiles, was highly sought after. It also provided services to customers, which allowed them to monitor and maintain their digital printers and help manage customer workflows. Kornit further assured investors that the purportedly strong demand for the Company’s products and services would enable it to maintain its existing customer base and attract new customers that would limit the risks associated with a substantial portion of its revenues being concentrated among a small number of large customers.
These statements and others made during the Class Period are false. In truth, Kornit and its senior executives knew, or at a minimum, recklessly disregarded, that the Company’s digital printing business was plagued by severe quality control problems and customer service deficiencies. Those problems and deficiencies caused Kornit to cede market share to competitors, which, in turn, led to a decrease in the Company’s revenue as customers went elsewhere for their digital printing needs. Because of this misrepresentation, Kornit Ordinary Shares traded at artificiallyinflated prices for the entire 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 said that four of the company’s digital printers had been equipped with this technology and it was planning to add more. 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, which reported revenues exceeding expectations on May 11, 2022, posted a net profit of $5.2million for the first quarter 2022. That compares to an operating profit of $5.1million in the previous year. The Company also issued revenue guidance for the second quarter of 2022 that was significantly below analysts’ expectations. Kornit attributed its disappointing guidance to a slowdown in orders from the Company’s customers in the e-commerce segment. The Company also admitted that it knew for the past two quarters that Delta Apparel had purchased digital printing systems from Kornit competitors. The disclosures led to a drop in the Kornit share price by $18.78/share, 33.3%.
Kornit announced on July 5, 2022 that there would be a substantial revenue gap for the second half of 2022. Kornit expects revenue to range between $56.4million and $59.4million for the quarter. This figure is significantly lower than the revenue guidance that Kornit provided in May 2022, which was $85 million to $95 millions. Kornit attributed the substantial revenue miss to “a significantly slower pace of direct-to-garment (DTG) systems orders in the second quarter as compared to our prior expectations.” As a result of these disclosures, the price of Kornit ordinary shares declined by an additional $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. (NASDAQ: ALCO)
The Class Period is from February 4, 2021 to December 13, 2022
Deadline for Lead Plaintiff: April 18, 2023
Alico and its subsidiaries operate in the U.S. as an agribusiness-and land management company. Alico Citrus and Land Management and Other Operations are the two main segments that make up the company. Alico Citrus is a segment that cultivates citrus trees for fresh and processed citrus market delivery. Land Management and Other Operations is responsible for the management and ownership of land in Collier and Glades Counties. It also leases land to be used for recreation, 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 it was postponing the year-end earnings conference on December 6, 2022. Specifically, the press release stated that “additional time is required for completion of the audit of its financial results for the period ended September 30, 2022 by its independent registered public accounting firm.”
On this news, Alico’s stock price fell $3.06 per share, or 10.42%, to close at $26.29 per share on December 6, 2022.
Alico released a press statement on December 7th 2022 that provided an update about the Company’s delays in filing its fiscal year 2022 financial results with 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.”
Finally, on December 13, 2022, Alico filed with the SEC its Annual Report on Form 10-K for the year ended September 30, 2022 (the “2022 10-K”). In the 2022 10-K, Alico “restate[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 disclosed that “[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.”
On this news, Alico’s stock price fell $2.64 per share, or 9.53%, to close at $25.05 per share on December 14, 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 Alico class action go to: https://bespc.com/cases/ALCO
Catalent, Inc. (NYSE: CTLT)
Classes Period: October 31st 2022 – August 30, 2021
Deadline to Lead Plaintiffs: April 25, 20,23
This case is about the rise and fall of a company that initially benefited from the COVID-19 pandemic (also referred to herein as “COVID-19,” “COVID,” or the “pandemic”). Catalent as a vaccine manufacturer was one the COVID beneficiaries because it appeared well-positioned to capitalise on rapidly rising demand for vaccine production capacities. 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. By mid-2021, when COVID-related work dropped off, Defendants engaged in accounting and channel stuffing schemes to pad the Company’s revenues. This gave Catalent an appearance of growth and caused its stock price record to soar. In order to continue supporting these schemes, and keeping pace with its high growth targets, Catalent cut corners on safety procedures and controls at critical production plants. Catalent saw significant sales declines in late 2022 as well as excess inventory across its supply chain. As a result, Catalent stock dropped to pre-COVID levels causing substantial losses to its investors as they learned that Catalent’s early-COVID revenues were never sustainable, and its Class Period revenues were the product of securities fraud.
Catalent, a multi-national corporation, manufactures and packages pharmaceuticals into devices that can be used for human consumption. pursuant to long term supply agreements with pharmaceutical firms. Catalent sells the products directly to pharmaceutical firms, which then pass them along to healthcare providers (such as clinics and hospitals).), which administer them to patients, who are the end consumers.
Prior to the onset of the pandemic, Catalent’s quarterly revenue averaged approximately $669 million between April 2018 and March 2020. The average Catalent share price was $47.57 during the reporting period. The Company took on large-scale COVID project in the early 2020s, such as filling vaccines into AstraZeneca and Moderna syringes. Those projects catapulted the Company’s quarterly revenues to record highs, which averaged approximately $940 million between April 2020 and March 2021, a 40 percent jump over preCOVID revenues. Catalent stock averaged $102.42 per share over the reporting period.
By mid-2021, as the pandemic wore on, demand for Catalent’s COVID products decreased because vaccinations had already been administered to a large number of potential patients. For example, Centers for Disease Control and Prevention (“CDC”) data indicates that COVID vaccinations in the United States reached an all-time high of 4.5 million doses on April 1, 2021, and averaged 1.5 million daily doses between December 14, 2020 and August 28, 2021. 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 of COVID vaccine demand. Catalent assured investors that customers demand was strong throughout the Class Period. The Class Period’s average quarterly revenue was $1.2Billion. This is an 81% increase in revenues over the preCOVID-19 period and 28 percent more than its revenues during the first year. The Defendants, unbeknownst of investors, artificially inflated these revenues via fraudulent accounting and channel stuffing to deceive investors into believing Catalent was creating sustainable revenue growth. Defendants’ fraud caused Catalent stock to trade at a record high of $142.64 per share on September 9, 2021 and an average closing price of approximately $108.00 per share during the Class Period.
The Class Period was characterized by false statements and misleading statements by defendants. They misrepresented, failed to disclose or did not disclose these adverse facts that were either known or recklessly ignored by defendants:
a. Catalent materially overstated its revenue and earnings by prematurely recognizing revenue in violation of 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 lied about the demand for its product while it knew that it could sell more products to direct customers than to end-consumers and healthcare professionals.
d. Catalent disregarded regulatory rules at key production facilities in order to rapidly produce excess inventory that was used to pad the Company’s financial results through premature revenue recognition in violation of GAAP and/or stuffing its direct customers with this excess inventory; and
e. As a result of the foregoing, Defendants lacked a reasonable basis for their positive statements about the Company’s financial performance, outlook, and regulatory compliance during the Class Period.
Catalent’s misrepresentations were first revealed to the market on August 29, 2022, when the Company disclosed that demand for its COVID-related products was facing substantial headwinds. On this news, Catalent’s stock price declined by 7.4 percent to close at $92.28 per share on August 29, 2022.
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 were below zero, and that they had lowered their financial guidance to reflect falling demand. Catalent also revealed that key regulatory issues were negatively impacting the Company’s financial results. On this news, Catalent’s stock price declined by 31.7 percent over two trading sessions, to close at $44.90 per share on November 2, 2022. Overall, the Catalent stock dropped from an all-time high of more than $142.00 down to $44.90 by November 2, 2022. This is a drop that exceeds 68 percent.
Catalent announced that it held approximately $400 million of excess inventory. It also revealed that Catalent had misrepresented its customers’ demand and that its ability predict future demand. On this news, Catalent’s stock price declined by 8.5 percent, over two trading sessions, to close at $42.07 per share on November 17, 2022.
GlassHouse Research then published, December 8, 2022, a report that Catalent had materially understated 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. The report also described how Catalent’s direct customers were stuffed with excess inventory which “will take years to unwind.” On this news, Catalent’s stock price declined 3.6 percent to 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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