NEW YORK--(BUSINESS WIRE)--#Action--Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against LMP Automotive Holdings, Inc. (“LMP” or the “Company”) (NASDAQ: LMPX) in the United States District Court for the Southern District of Florida on behalf of all persons and entities who purchased or otherwise acquired LMP securities between June 29, 2021 and My 19, 2022, both dates inclusive (the “Class Period”). Investors have until July 26, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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On November 16, 2021, after the market closed, LMP filed a notification of inability to timely file its quarterly report for third quarter 2021. It also identified several material weaknesses in its internal control over financial reporting, including that “[t]he Company did not maintain a formalized set of accounting policies” and “[t]he Company did not maintain effective controls over the review and approval of journal entries, account reconciliations, review of significant accounts and disclosures, and adequate documentation of management assumptions, estimates and judgments.”
On this news, the Company’s stock price fell $0.74, or 5.5%, to close at $12.66 per share on November 17, 2021.
Then, on March 31, 2022, LMP revealed that it could not timely file its fiscal 2021 annual report “primarily [as] a result of its ongoing evaluation of (i) the proper identification and elimination of intercompany transactions, (ii) estimates of chargeback reserves for finance and insurance products and (iii) various financial presentation matters related to the Company’s business, including as it relates to the presentation, characterization and amounts of such items in prior fiscal quarters.”
On this news, the Company’s stock price fell $0.19, or 3.8%, to close at $4.81 per share on April 1, 2022.
Then, on May 17, 2022, after the market closed, LMP disclosed that it could not timely file its Q1 2021 quarterly report due to the previously announced ongoing evaluation. LMP further disclosed that due to errors in the Company’s quarterly reports during fiscal year 2021, such reports “will likely need to be restated.” The Company also disclosed that these errors may impact “certain previously disclosed material weaknesses in the registrant’s controls over financial reporting.”
On this news, the Company’s stock price fell $0.07 per share, or 1.5%, to close at $4.60 per share on May 18, 2022.
Then, on May 19, 2022, after the market closed, LMP revealed that it would restate the financial statements for quarterly periods in fiscal 2021 “primarily due to the following errors: (i) the improper identification and elimination of intercompany transactions, (ii) incorrect estimates of chargeback reserves for finance and insurance products, and (iii) certain financial statement misclassifications impacting various balance sheet and income statement financial statement captions in the Relevant Periods.” These results caused a decrease in total revenues up to $15 million for third quarter 2021, up to $8 million for second quarter 2021, and up to $1 million for first quarter 2021. As a result, the Company stated that “material weaknesses exist in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective.”
On this news, the Company’s stock price fell $0.20 per share, or 4.4%, to close at $4.26 per share on May 20, 2022.
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 engaged in the improper identification and elimination of intercompany transactions; (2) that the Company used incorrect estimates for chargeback reserves for finance and insurance products; (3) that the Company had misclassified certain items in its financial statements which impacted balance sheet and income statement financial statement captions; (4) that there were material weaknesses in LMP’s internal control over financial reporting; (5) that, as a result of the foregoing, the Company overstated its revenue; (6) that, as a result of the foregoing, the Company would restate certain of its previously issued financial statements and results; and (7) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased or otherwise acquired LMP shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
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.
Contacts
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
