Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against NewAge, Twist, Sunlight and Gaia 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 NewAge, Inc. (OTC: NBEVQ), Twist Bioscience Corp (NASDAQ: TWST), Sunlight Financial Holdings, Inc. (NYSE: SUNL), and Gaia, Inc. (NASDAQ: GAIA). 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.
NewAge, Inc. (OTC: NBEVQ)
Class Period: January 18, 2018 - October 18, 2022
Lead Plaintiff Deadline: February 6, 2023
On January 10, 2022, NewAge filed an 8-K announcing that the Board and Defendant Willis agreed that he would “resign as [CEO], Director, and employee of the Company, effective immediately. The Company and Mr. Willis will determine the terms of his departure at a future date. [. . .] Ed Brennan will provide additional guidance and direction to the senior management team [. . .].” In response, the stock went down 6% on each of the following trading days, from an opening price of $0.98 to a closing price of $0.9251 on January 11 and from an opening price of $0.935 to a closing price of $0.88 on January 12.
On May 17, 2022, the Company announced after trading hours had concluded that it had received a late notice from Nasdaq regarding the filing of its Form 10-Q. The next day, the stock went down by 8%, from an opening price of $0.391 per share to $0.3591 per share.
On June 8, 2022, after trading had concluded for the day, the Company announced that it was undertaking a review of “strategic alternatives,” including “available financing alternatives, a potential financial restructuring, merger, sale or other strategic transaction.” The next day, NewAge’s share price went down 12%, from $0.42 per share to $0.3703. Following that, the Company’s share price closed down 11% (the price per share dropped from $0.3605 to $0.3201 on the day), 5% (the price per share dropped from ($0.3112 per share to $0.2902 on the day), and 3% (the price per share dropped from $0.298 per share to $0.29 on the day), respectively.
On August 30, 2022, NewAge announced that it was filing for Chapter 11 bankruptcy relief. Further, On August 31, 2022, The Wall Street Journal released an article called “New Age Says Cost of Internal Probe Contributed to Bankruptcy,” which highlighted the fact that in its Chapter 11 disclosure, NewAge admitted that it had conducted an expensive internal investigation into Ariix for suspected violations of the FCPA. The next day, the stock closed down 39%, from an opening price of $0.2016 per share to $0.1222 per share. It further plummeted on September 2, 2022, closing down 27%, from an opening of $0.20 per share to $0.1482.
On September 2, 2022, after trading hours in the domestic markets had finished for the day, NewAge filed an 8-K announcing that it had received writing notice from The Nasdaq Stock Market LLC (“Nasdaq”) that, as a result of its filing for protection under Chapter 11 of the U.S. Bankruptcy Code, Nasdaq determined that NewAge’s securities would be delisted from the Nasdaq stock exchange, beginning on September 8, 2022. In response to this news, NewAge stock closed down 9% on September 6, 2022, from an opening price of $0.1368 to a closing price of $0.125.
On October 18, 2022, the SEC announced that it was taking legal action against Defendant Willis. Specifically, he was alleged to have engaged in a “multi-year fraud by disseminating numerous false and misleading press releases and making false public statements concerning NewAge’s business dealings, and aided and abetted NewAge’s disclosure of material information in violation of Regulation FD,” and was accordingly charged under Section 10(b) and corresponding Rule 10b-5 of the Exchange Act, Section 17(a) of the Securities Act, and with aiding and abetting NewAge’s violations of Section 13(a) of the Exchange Act and Regulation FD.
On October 19, 2022, the SEC announced that it had instituted cease-and-desist proceedings against NewAge pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, enjoining NewAge from further violations of the Securities and Exchange Acts, and rules and regulations promulgated under them. In anticipation of these proceedings, NewAge submitted a settlement offer, which the SEC has accepted. The next day, NewAge stock plummeted from an opening price of $0.175 per share to $0.0013 per share, or 93%.
The facts constituting scienter were not known to any reasonable investor until announcements of these SEC proceedings in October 2022.
For more information on the NewAge class action go to: https://bespc.com/cases/NBEVQ
Twist Bioscience Corp (NASDAQ: TWST)
Class Period: December 13, 2019 - November 14, 2022
Lead Plaintiff Deadline: February 10, 2023
Twist, a Delaware corporation with its principal executive offices in South San Francisco, California, is a biotechnology company that manufactures synthetic DNA and DNA products. Synthetic DNA products allow users to design and modify DNA for the purposes of academic research, enhancing specialty chemical production, and developing healthcare treatments, among other uses. Twist’s common stock trades in the United States on the Nasdaq Global Select Market (“NASDAQ”) under the ticker symbol “TWST.”
Throughout the Class Period, Defendants repeatedly assured investors that the Company possessed innovative proprietary technology relating to its synthetic DNA products that positioned Twist for significant future growth. Indeed, Defendants claimed that the Company had already achieved substantial growth during the Class Period, growing from a customer base of approximately 1,300 diagnostic companies, hospitals, research institutions, and others at the end of fiscal year 2019, to approximately 2,900 customers at the end of fiscal year 2021.
Similarly, Defendants reported skyrocketing gross margins, which purportedly grew from 12.8% in fiscal year 2019, to 39.1% in fiscal year 2021, with margins projected to reach 40% for fiscal year 2022.
During the Class Period, Defendants also announced plans to build a “Factory of the Future” in Wilsonville, Oregon (the “Oregon Facility”), which would purportedly provide hundreds of jobs and occupy 110,000 square feet. By August 2022, when Twist reported its financial results for the third quarter of fiscal year 2022, Defendants projected annual capital expenditures between $95 million and $100 million, largely attributable to “building out” this new manufacturing facility.
Plaintiff and other members of the class learned the truth about the Company’s actual financial health on November 15, 2022, when Scorpion Capital (“Scorpion”) published a lengthy report (the “Scorpion Report”) alleging that Twist is “a cash-burning inferno that is not a going concern.” Specifically, Scorpion alleged that, among other things, Twist’s purported DNA chip technology is a “farce” comparable to Theranos Inc.’s now infamous non-existent blood-testing technology, and that the Company’s growth and revenues are unsustainable, among other issues.
According to the Scorpion Report, Twist is perpetuating its fraud through false reporting of capital expenditures and gross margins—which Scorpion claims are actually negative. Indeed, Scorpion’s investigation of the forthcoming Oregon Facility revealed no evidence that the Company is preparing to begin manufacturing there, suggesting that the Company is using the facility to hide large operating expenses as fraudulent capital expenditures.
Scorpion further alleged that the Company’s growth is dependent upon unsustainable pricing strategies, such as using below-cost prices to undercut competitors by as much as 70% to 85%. Ultimately, the Scorpion Report concluded that Twist is “operating a Ponzi-like scheme that will end in bankruptcy.”
In response to the revelations in the Scorpion Report, the price of Twist common stock fell $7.57 per share, or nearly 20%, from a close of $38.00 per share on November 14, 2022, to close at $30.43 per share on November 15, 2022.
This Complaint 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 and operations. Specifically, as alleged in the Scorpion Report, Defendants overstated the commercial viability of Twist’s synthetic DNA manufacturing technology while engaging in accounting fraud and using unsustainable pricing to inflate the Company’s true financial condition and prospects. As a result of Defendants’ wrongful acts and omissions, and the significant decline in the market value of the Company’s common stock, Plaintiff and other members of the Class have suffered significant damages.
For more information on the Twist class action go to: https://bespc.com/cases/TWST
Sunlight Financial Holdings, Inc. (NYSE: SUNL)
Class Period: January 25, 2021 - September 28, 2022
Lead Plaintiff Deadline: February 14, 2023
Sunlight claims to be a business-to-business-to-consumer point-of-sale (“POS”) financing platform that provides residential solar and home improvement contractors the ability to offer seamless POS financing to their customers when purchasing residential solar systems or other home improvements. The Company claims the resulting loans are facilitated by Sunlight’s proprietary technology platform, Orange® (“Orange®” or the “Platform”), through which Sunlight offers instant credit decisions to homeowners at the POS on behalf of Sunlight’s various capital providers.
Sunlight became a publicly traded company in July 2021 via the business combination of Spartan Acquisition Corp. II, a publicly traded special purpose acquisition company, with Sunlight Financial LLC (“Legacy Sunlight”) (the “Business Combination”).
On September 28, 2022, after the market closed, Sunlight disclosed that it would record a “non-cash advance receivables impairment charge of $30 million to $33 million during the Company’s fiscal quarter ending September 30, 2022.” The Company explained that “the Company was informed of certain actions taken by one of its installer partners to address liquidity issues faced by the installer” which “would likely result in an inability of the Company to collect on advances outstanding to such installer.”
The same day, the Company also issued a press release withdrawing its full-year 2022 outlook due to the “installer liquidity event.” Defendant Matthew Potere was quoted stating, “While our risk exposure with other contractor advances is much smaller (the next three largest partner advances being $10 million, $7 million, and $5 million respectively), we are reunderwriting all contractor partners' advances to further mitigate risk going forward.” (Emphasis added.)
On this news, the Company’s stock price fell $1.44 per share, or 57.1%, to close at $1.08 per share on September 29, 2022, thereby injuring investors.
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 lacked effective underwriting and risk evaluation with respect to its contractor advance program; (2) that Sunlight lacked the oversight and periodic monitoring systems necessary to timely detect bad debt associated with its contractor advance program; (3) that the Company lacked effective internal controls over accounting and reporting of non-cash advance receivables; (4) that, as a result, the Company would be forced to take a non-cash advance receivables impairment charge exceeding $30 million; and (5) that, as a result of the foregoing, Defendant’s positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
For more information on the Sunlight class action go to: https://bespc.com/cases/SUNL
Gaia, Inc. (NASDAQ: GAIA)
Class Period: December 26, 2017 - November 7, 2022
Lead Plaintiff Deadline: February 20, 2023
According to the Complaint, the Company made false and misleading statements to the market. Gaia overstated its subscriber count for the first quarter of 2019. The Company failed to maintain appropriate internal controls. Based on these facts, the Company's public statements were false and materially misleading throughout the class period. When the market learned the truth about Gaia, investors suffered damages.
For more information on the Gaia class action go to: https://bespc.com/cases/GAIA
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.
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.