Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Lilium, Li-Cycle, Bakkt, and IronNet and Encourages Investors to Contact the Firm
News provided byBragar Eagel & Squire
Jun 13, 2022, 9:00 PM ET
NEW YORK, June 13, 2022 (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 Lilium N.V. (NASDAQ: LILM), Li-Cycle Holdings Corp. (NYSE: LICY), Bakkt Holdings, Inc. (NYSE: BKKT), and IronNet, Inc. (NYSE: IRNT). 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.
Lilium N.V. (NASDAQ: LILM)
Class Period: March 30, 2021 – March 14, 2022
Lead Plaintiff Deadline: June 17, 2022
On March 14, 2022, Iceberg Research published a short report entitled “Lilium NV - The Losing Horse in the eVTOL [electric vertical take-off and landing aircraft] Race” (the “Iceberg Report”). The Iceberg Report asserted, among other issues, that “[m]any experts have raised serious doubts about” the viability of the Company's Lilium Jet reaching its objective of “fly[ing] up to 155 miles[,]” citing “its configuration of 36 ducted fans (recently reduced to 30) that devour power during takeoff and landing (hovering), and leaves little power for actual flight.” The Iceberg Report also noted that while “Lilium promises its Jet has ready access to battery cells with energy density of 320-330 Wh/kg[,]” “[o]ne of the sources it relies on to show these batteries are within reach is . . . a 34.8% Lilium-owned associated company whose CEO Sujeet Kumar was accused by General Motors of misrepresenting battery performance, while at his previous company Envia Systems.” The Iceberg Report further noted that Lilium’s Chief Executive Officer “had no meaningful professional aerospace experience before starting Lilium in 2015" and "estimate[d] that Lilium has about 18 months before its cash runs dry.”
On this news, Lilium’s stock price fell $1.25 per share, or 33.88%, to close at $2.44 per share on March 14, 2022.
According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose: (1) Lilium materially overstates the Lilium Jet's design and capabilities; (2) Lilium materially overstates the likelihood for the Lilium Jet's timely certification; (3) Lilium misrepresents its ability to obtain or create the necessary batteries for the Lilium Jet; (4) the SPAC-merger would not and did not generate enough cash to commercially launch the Lilium Jet; (5) Qell Acquisition Corp. did not engage in proper due diligence regarding the Merger; and (6) as a result, defendants' public statements were materially false and/or misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.
For more information on the Lilium class action go to: https://bespc.com/cases/LILM
Li-Cycle Holdings Corp. (NYSE: LICY)
Class Period: February 16, 2021 – March 23, 2022
Lead Plaintiff Deadline: June 20, 2022
On March 24, 2022, Blue Orca Capital published a report (the "Report") characterizing the Company as "a near fatal combination of stock promotion, laughable governance, a broken business hemorrhaging cash, and highly questionable Enron-like accounting." According to the Report, “Li-Cycle recognizes revenues using an Enron-like mark-to-model accounting gimmick Li-Cycle recognizes revenues months prior to the actual sales of its recycled black mass, based on its own provisional estimate of the future value of the product. This accounting treatment is plainly vulnerable to abuse, giving Li-Cycle discretion over its reported revenues. We suspect that under this framework, Li-Cycle marks up the value of its receivables on unsold products and runs the gains through its revenue line.”
According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose: (1) Li-Cycle’s largest customer, Traxys North America LLC, is not actually a customer, but merely a broker providing working capital financial to the Company while Traxys tries to sell Li-Cycle’s product to end customers; (2) the Company engaged in highly questionable related party transactions; (3) the Company’s mark-to-model accounting is vulnerable to abuse and gave a false impression of growth; (4) a significant portion of the Company’s reported revenues were derived from simply marking up receivables on products that had not been sold; (5) the Company’s gross margins have likely been negative since inception; (6) the Company will require an additional $1 billion of funding to support its planned growth (which is a figure greater than the Company raised via the merger); and (7) as a result, defendants’ public statements were materially false and/or misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.
On this news, Li-Cycle’s stock price fell $0.47 cents per share, or 5.60% to close at $7.93 per share on March 24, 2022.
For more information on the Li-Cycle class action go to: https://bespc.com/cases/LICY
Bakkt Holdings, Inc. (NYSE: BKKT)
Class Period: October 15, 2021 IPO or March 31, 2021 – November 19, 2021
Lead Plaintiff Deadline: June 20, 2022
Bakkt was formerly known as “VPC Impact Acquisition Holdings” and operated as a special purpose acquisition company (SPAC), also called a blank-check company, which is a development stage company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity, or person.
On January 11, 2021, the Company and Legacy Bakkt announced entry into a definitive agreement for the Business Combination that would result in Legacy Bakkt becoming a publicly traded company with an enterprise value of approximately $2.1 billion.
On March 31, 2021, the Company filed a registration statement on Form S-4 with the U.S Securities and Exchange Commission (“SEC”) in connection with the Business Combination, which, after several amendments, was declared effective by the SEC on September 17, 2021 (the “Registration Statement”). Also on September 17, 2021, the Company filed a proxy statement and prospectus on Form 424B3 with the SEC in connection with the Business Combination, which formed part of the Registration Statement (the “Proxy” and, together with the Registration Statement, the “Offering Documents”).
On or about October 15, 2021, the Company and Legacy Bakkt completed the Business Combination pursuant to the Offering Documents. Thereafter, the Company changed its name to “Bakkt Holdings, Inc.” and began operating a digital asset platform that enables consumers to buy, sell, convert, and spend digital assets.
The complaint alleges that the Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation, and that throughout the Class Period Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, the Offering Documents and Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company had defective financial controls; (ii) as a result, there were errors in the Company’s financial statements related to the misclassification of certain shares issued prior to the Business Combination; (iii) accordingly, the Company would need to restate certain of its financial statements; (iv) the Company downplayed the true scope and severity of these issues; (v) the Company overstated its remediation of its defective financial controls; and (vi) as a result, the Offering Documents and Defendants’ public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein.
On May 17, 2021, Bakkt—then still operating as VIH—notified the SEC of its inability to timely file its quarterly report for the quarter ended March 31, 2021. Specifically, the Company advised that, as a result of a statement issued by the SEC, “the Company reevaluated the accounting treatment of its public warrants and private placement warrants” and “is currently determining the extent of the SEC Statement’s impact on its financial statements[.]”
On this news, the Company’s share price fell $0.13 per share, or 1.26%, to close at $10.18 per share on May 18, 2021.
Then, on October 13, 2021, the Company disclosed in an SEC filing that it had also previously failed to properly account for the classification of its Class A ordinary shares and “adjust[ed] . . . the initial carrying value of the Class A ordinary shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A ordinary shares.” Notably, the Company revised its balance sheet as of December 31, 2020, including, among other changes, additional paid-in capital that was reduced from $9,860,338 to nil, an accumulated deficit that ballooned from $4,861,190 to $29,250,419, and total shareholders’ equity of $5,000,009 that swung to a total shareholders’ deficit of $29,249,901.
Following these additional disclosures, the Company’s share price fell $0.47 per share, or 4.73%, to close at $9.46 per share on October 14, 2021.
Finally, on November 22, 2021, Bakkt disclosed in another SEC filing that the Company’s management “has re-evaluated . . . the accounting classification of the Class A ordinary shares . . . of [VIH] . . . and has identified errors in the historical financial statements of VIH . . . related to the misclassification . . . of the Class A Ordinary Shares prior to the [Business Combination].” Specifically, the Company found that, as a result of errors in its condensed consolidated financial statements for the year ended December 31, 2020, and the quarterly periods ended March 31, 2021, June 30, 2021 and September 30, 2021, Bakkt should “restate certain of VIH’s condensed consolidated financial statements from” those periods.
On this news, Bakkt’s stock price fell $2.70 per share, or 13.69%, to close at $17.02 per share on November 22, 2021.
As of the time the complaint was filed, Bakkt’s Class A common stock was trading between $4 to $5 per share and continues to trade below its initial value from the Business Combination, damaging investors.
For more information on the Bakkt class action go to: https://bespc.com/cases/BKKT
IronNet, Inc. (NYSE: IRNT)
Class Period: September 15, 2021 – December 15, 2021
Lead Plaintiff Deadline: June 21, 2022
On August 27, 2021, IronNet became a publicly traded company via a merger with LGL Systems Acquisition Corp. (“LGL”), a blank check company otherwise known as a special purpose acquisition vehicle (“SPAC”). Like other SPACs, LGL did not initially have any operations or business of its own. Rather, it raised money from investors in an initial public offering and then later used the proceeds from the offering to acquire IronNet, which had been a private company.
The complaint charges IronNet, its Co-Chief Executive Officers, and its Chief Financial Officer with violations of the Securities Exchange Act of 1934. According to the complaint, the defendants made materially false and misleading statements and failed to disclose known adverse facts about IronNet's business, operations, and prospects, including that: (i) the Company had materially overstated its business and financial prospects; (ii) the Company was unable to predict the timing of significant customer opportunities which constituted a substantial portion of its publicly-issued FY 2022 financial guidance; (iii) the Company had not established effective disclosure controls and procedures to reasonably ensure its public disclosures were timely, accurate, complete, and not otherwise misleading; and (iv) as a result, the Company’s public statements were materially false, misleading, and/or lacked any reasonable basis in fact at all relevant times.
For more information on the IronNet class action go to: https://bespc.com/cases/IRNT
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.