Bragar Eagel & Squire, PC reminds investors that class

NEW YORK, June 21, 2024 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, reminds investors that class action lawsuits have been filed on behalf of shareholders of Enphase Energy, Inc. (NASDAQ: ENPH), FAT Brands Inc. (NASDAQ: FAT), The Scotts Miracle-Gro Company (NYSE: SMG) and Gritstone bio, Inc. (NASDAQ: GRTS). Shareholders have until the deadlines set forth below to ask the Court to serve as lead plaintiff. For more information about each case, please see the link provided.

Enphase Energy, Inc. (NASDAQ: ENPH)

Class period: February 7, 2023 – April 25, 2023

Deadline for lead plaintiff: July 29, 2024

According to the lawsuit, the defendants created the false impression that they had reliable information regarding the company’s projected revenue outlook and expected growth while minimizing risk from seasonality and macroeconomic fluctuations. In reality, Enphase experienced a decline in battery shipments to Europe and California, a slowdown in battery adoption and usage, a longer transition period with NEM 3.0, and slower production of inverters manufactured by the new U.S. production lines. The defendants misled investors by providing the public with a materially inaccurate fiscal year 2023 revenue forecast.

The plaintiff alleges that on April 25, 2023, Enphase announced its first quarter results and stated that revenue in the United States declined approximately 9%, due to macroeconomic conditions. In addition, the defendants provided a weak outlook for the second quarter of 2023, estimating revenue in the range of $700 million to $750 million. Due to this news, the price of Enphase’s common stock dropped dramatically. From a closing price of $220.60 per share on April 25, 2023, Enphase’s stock price fell to $163.83 per share on April 26, 2023, a decline of nearly 26% in just a single day.

For more information about the Enphase class action lawsuit, please visit: https://bespc.com/cases/ENPH

FAT Brands Inc. (NASDAQ: FAT)

Teaching period: March 24, 2022 – May 10, 2024

Deadline for lead plaintiff: August 6, 2024

According to the complaint, throughout the Class Period, defendants made materially false and/or misleading statements and/or failed to disclose that: (1) defendants failed to disclose that Andrew A. Wiederhorn, the Company’s Chairman and former CEO, had improperly received payments from the Company, thereby exposing FAT Brands to criminal liability; and (2) as a result, defendants’ statements about the Company’s business, operations and prospects were materially false and misleading and/or at no time had a reasonable basis.

For more information about the Fat Brands class action lawsuit, please visit: https://bespc.com/cases/FAT

The Scotts Miracle-Gro Company (NYSE: SMG)

Teaching period: November 3, 2021 – August 1, 2023

Deadline for lead plaintiff: August 2, 2024

Scotts manufactures a variety of lawn, garden and agricultural products for residential and commercial customers. The company is also the world’s largest provider of branded lawn and garden care products. In 2014, Scotts formed a wholly owned subsidiary, The Hawthorne Gardening Company, which focuses on hydroponic cultivation for the emerging cannabis cultivation market. The company sells the vast majority of its products through third-party distributors.

During the Class Period, Scotts was heavily indebted, with its senior secured credit facilities containing various restrictive covenants and cross-default provisions requiring the Company to maintain certain financial ratios. A breach of any of these covenants could result in a default, which could cause the Company’s lenders to declare all outstanding indebtedness immediately due and payable. One key covenant required Scotts to maintain a debt-to-EBITDA ratio below 6.25. In 2020 and 2021, prior to the Class Period, Scotts had sustained millions of dollars in lost sales due to a lack of inventory caused by increasing demand. In response to this strong demand, Scotts significantly increased its inventory levels.

The complaint alleges that throughout the Class Period, Defendants made numerous materially false and misleading statements and omissions regarding the Company’s inventory levels, compliance with its credit covenants, and financial performance. Specifically, Defendants repeatedly assured investors that the Company’s inventory levels were adequate, while attributing strong sales to “selling off expensive inventory” that resulted in “peak sales” and “record deliveries.” Defendants also repeatedly allayed investors’ concerns about the Company’s debt by stating that they were “optimistic that we will remain within our bank covenants” and “foresee no issues with compliance with leverage covenants in the future.” As a result of these misrepresentations, Scotts’ common stock traded at artificially inflated prices throughout the Class Period.

The lawsuit further alleges that Scotts executives actually conspired to overload the company’s distribution channels with more inventory than could be sold to end users. This conspiracy enabled Scotts to record sales to its distributors as revenue and maintain a profit-to-debt ratio that barely exceeded the levels required by its credit agreements.

The lawsuit further alleges that the truth came to light on June 8, 2022, when Scotts disclosed that its U.S. retailers’ reorders were $300 million below target in the month of May alone. The company also cut its full-year 2022 earnings forecast by about half and announced plans to take on additional debt to cover restructuring costs in an effort to cut costs. These revelations came just weeks after the company promised that it was “on track to perform even better” than forecast. However, throughout the remainder of the class action period, defendants continued to downplay the company’s problems with inventory and debt compliance.

Then, on August 2, 2023, Scotts announced that quarterly revenue in the fiscal third quarter declined 6% and gross margins declined 420 basis points. The company also cut its fiscal year EBITDA guidance by a whopping 25% and announced that it would have to take a $20 million write-down for “pandemic-related excess inventory.” Scotts also announced that it would have to change its credit covenants from 6.25x debt-to-EBITDA to 7.00x debt-to-EBITDA. As a result of these revelations, the price of Scotts’ common stock plummeted.

For more information about the Scotts class action lawsuit, visit: https://bespc.com/cases/SMG

Gritstone bio, Inc. (NASDAQ: GRTS)

Teaching period: March 9, 2023 – February 29, 2024

Deadline for lead plaintiff: August 6, 2024

Gritstone, a clinical-stage biotechnology company, is developing vaccine-based immunotherapy candidates against cancer and infectious diseases.

In September 2023, Gritstone entered into a contract with the Biomedical Advanced Research and Development Authority (“BARDA”) to conduct a 10,000-participant, randomized, double-blind Phase 2b study to compare the efficacy, safety and immunogenicity of its COVID-19 vaccine candidate (a samRNA vaccine candidate) to an approved COVID-19 vaccine (the “Phase 2b CORAL Study” or the “Study”). In a press release announcing the Phase 2b CORAL Study, the Company stated that the contract represents “strong validation of (its) innovative infectious disease vaccine platform,” that the conduct of the Study will be fully funded by BARDA, and that the Study is expected to start in the first quarter of 2024.

Throughout the Class Period, Defendants made materially false and misleading statements about the Company’s business, operations and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company would not be able to initiate the Phase 2b CORAL Study in the timeframe disclosed to investors; (ii) doing so would impair Gritstone’s ability to obtain external funding in connection with the Study, which would negatively impact Gritstone’s ability to maintain its balance sheet and cash balance; (iii) Gritstone accordingly overstated its ability to successfully develop and commercialize its products; (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.

On February 12, 2024, Gritstone announced in a press release that the company was delaying the start of the trial to fall 2024, reportedly to “enable the use of fully GMP compliant raw materials in the vaccine, which is expected to increase the regulatory benefit of the trial.”

Then, on February 29, 2024, Gritstone issued a press release announcing “a reduction of approximately 40% of its workforce,” stating, “This move comes as a result of the recently announced delay of the planned CORAL Phase 2b trial, which resulted in Gritstone not receiving external funding that it had originally anticipated beginning in Q1 2024 to begin the trial.”

On this news, Gritstone’s stock price fell $0.78 per share, or 27.86%, to close at $2.02 per share on March 1, 2024.

For more information about the Gritstone class action lawsuit, please visit: https://bespc.com/cases/GRTS

About Bragar Eagel & Squire, PC:

Bragar Eagel & Squire, PC 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, derivatives and other complex litigation in state and federal courts across the country. For more information about the firm, visit www.bespc.com. Attorney advertising. Past results do not guarantee similar results.

Contact information:

Bragar Eagle & Squire, PC
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
[email protected]
www.bespc.com