NEW YORK, September 22, 2021 (GLOBE NEWSWIRE) – Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, reminds investors that class actions have been filed on behalf of shareholders of Concho Resources Inc. (Other OTC: CXO), ATI Physical Therapy, Inc. (NYSE: ATIP), HyreCar Inc. (NASDAQ: HYRE) and The Honest Company, Inc. (NASDAQ: HNST). Shareholders have until the deadlines below to request the court to act as principal plaintiff. Additional information on each case can be found at the link provided.
Concho Resources Inc. (Other OTC: CXO)
Appeal period: February 21, 2018 and July 31, 2019
Principal applicant deadline: September 28, 2021
On July 31, 2019, after market close, Concho released its financial results for the second quarter of 2019. On that date, the Company disclosed that the 23 wells on the Dominator project were spaced “too tight”, and that Concho had already “Incorporated the learnings of [the Dominator Project] in its program for the second half of 2019 and future projects in the Delaware basin. Concho also revealed that it will be forced to reduce its production targets for the remainder of the year, including reducing its number of active platforms to 18, from 33 in the first quarter of 2019.
On this news, Concho fell 22% to close at $ 75.97 per share on August 1, 2019, down from the closing price of $ 97.68 per share on July 31, 2019.
The complaint alleges that, throughout the Class Period, the Defendants made false and / or misleading statements and / or failed to disclose that: (i) the well spacing at the Company’s Project Dominator was aggressive and very risky, and had no reasonable basis to believe it would work as intended; (ii) Concho’s practice of implementing tighter well spacing was not relegated to a handful of “tests” and therefore more prevalent than the market led to believe; (iii) it was known or recklessly ignored that any measure to mitigate the risks associated with well spacing was non-existent and / or impossible; (iv) these risks had manifested themselves during the period covered by the action, causing underground well interference and a permanent decline in production, forcing the Company to reduce its production targets and adopt more conservative spacing measures in his other projects; (v) it would take several quarters to mitigate the impacts of the widespread failure of well spacing; and (vi) as a result of the foregoing, the Company’s public statements were materially false and misleading at all material times.
For more information on the Concho class action lawsuit, visit: https://bespc.com/cases/CXO
ATI Physical Therapy, Inc. (NYSE: ATIP)
Class period: April 1, 2021 to July 23, 2021
Principal applicant deadline: October 15, 2021
On June 17, 2021, ATI went public through a business combination with FVAC (“Business Combination”).
On July 26, 2021, before the market opened, ATI released its financial results for the second quarter of 2021, the period in which the business combination was completed. Among other things, ATI reported that “the acceleration of attrition among [its] Therapists in the second trimester and third trimester, combined with increased competition for clinicians in the workforce, have kept us from meeting the demand we have and have increased our labor costs. While ATI has implemented some corrective actions, the Company has reduced its guidance for fiscal 2021 due to the above factors.
Following this news, the Company’s share price fell $ 3.62, or 43%, to close at $ 4.72 per share on July 26, 2021, on unusually high trading volume. The share price continued to fall to 19% in the next trading session. As a result, FVAC investors who could have voted against the business combination and repurchased their shares at $ 10.00 per share suffered a loss of $ 5.28 per share.
The complaint filed in this class action alleges that throughout the Class Period, the Defendants made materially false and / or misleading statements, and failed to disclose material adverse facts regarding the business, operations and prospects of the society. Specifically, the defendants failed to disclose to investors: (1) that ATI was experiencing attrition among its physiotherapists; (2) that ATI faced increasing competition for clinicians in the workforce; (3) that due to the above, the Company has had difficulty retaining therapists and incurred increased labor costs; (4) that due to the labor shortage, the Company would open fewer new clinics; and (5) that as a result of the foregoing, the Defendants’ positive statements regarding the activities, operations and prospects of the Company were materially misleading and / or lacked reasonable basis.
For more information on the ATI class action lawsuit, visit: https://bespc.com/cases/ATIP
HyreCar Inc. (NASDAQ: HYRE)
Class period: May 14, 2020 to August 10, 2021
Principal applicant deadline: October 26, 2021
On August 10, 2021, HyreCar reported deeply disappointing results for the quarter ended June 30, 2021 (“Q2 2021”), including net losses of $ 9.3 million versus losses of $ 3.8 million for the same period the previous year. In addition, HyreCar’s adjusted EBITDA loss for the second quarter of 2021 was $ 7.1 million (four times higher than the adjusted EBITDA loss of $ 1.7 million recorded in the second quarter of 2020) and its gross margin for the second quarter of 2021 was only $ 0.8 million (less than a third of HyreCar’s gross margin in the second quarter of 2020), with a gross profit margin of just 24%. Along with the post, HyreCar revealed that HyreCar incurred skyrocketing top-line costs in the quarter, primarily due to a significantly higher incidence of insurance claims, including claims before 31 December. March 2021 “beyond the reserves”. During the HyreCar earnings call, executives revealed that HyreCar was forced to revamp its claims processes and procedures and improve its risk price adjustments for policies issued by HyreCar. And when asked if HyreCar was really on track to achieve 45-50% gross margins in the short term, as previously depicted, HyreCar’s CFO essentially removed that target, calling it a “pull target.” towards the sky ”and stating that“ shooting for the margin over 40% ”was more realistic.
On this news, HyreCar’s share price fell $ 9.27 per share, nearly 50%, closing at $ 9.85 per share on August 11, 2021.
The complaint alleges that, throughout the Class Period, the Defendants made false and misleading representations and failed to disclose that: (i) HyreCar had substantially underestimated its insurance reservations; (ii) HyreCar consistently failed to pay valid insurance claims incurred prior to the Class Period; (iii) HyreCar had incurred significant expenses in transitioning to its new Third Party Insurance Claims Administrator and handling claims incurred in previous periods; (iv) HyreCar had not properly priced the risk in its insurance products and suffered a high incidence of claims as a result; (v) HyreCar was forced to radically reform its underwriting, policies and complaints procedures in response to unacceptable severity of claims and customer complaints; and (vi) as a result, HyreCar’s operations and outlook have been distorted as HyreCar was not on track to meet the financial estimates provided to investors during the Class Period, and those estimates had no impact. reasonable basis in fact, including HyreCar’s purported gross margin, earnings before interest, taxes, depreciation and amortization (“EBITDA”), and trajectories of net losses.
For more information on the HyreCar class action lawsuit, visit: https://bespc.com/cases/HYRE
The Honest Company, Inc. (NASDAQ: HNST)
Appeal period: IPO of May 2021
Lead Applicant Deadline: November 15, 2021
On May 6, 2021, Honest Company completed its IPO, selling approximately 26 million common shares for $ 16.00 per share.
Approximately two months after the IPO on August 13, 2021, before the market opened, Honest Company reported its second quarter 2021 financial results, reporting a net loss of $ 20 million, compared to a loss net of just $ 0.4 million for the second quarter of 2020. Honest revealed that its revenue was only up 3% from the second quarter of 2020 as it was negatively affected by “an impact estimated at $ 3.7 million on inventories of COVID-19, mainly in diapers and wipes during the period of the previous year. Honest Company also revealed that revenue for its Nappies & Wipes category was down 2% from the second quarter of 2020. Honest further revealed that “Household and Welfare revenues were down 6% from Q2 2020. in the second quarter of 2020, consumer and customer demand for disinfection products declined as consumers were vaccinated and customers managed large inventories. “
Following this news, the company’s stock price fell $ 3.98 per share, or 28%, to close at $ 10.07 per share on August 13, 2021, on unusually high trading volume.
On August 19, 2021, the company’s share price closed at an all-time low of $ 9.16 per share, down nearly 43% from the IPO price of $ 16.00. per share.
According to the complaint, the registration statement was materially false and misleading and omitted: (1) that prior to the IPO, the company’s results had been significantly affected by a multi-million dollar inventory of COVID-19 for the products of the diapers and Wipes category and the Household and well-being category; (2) that at the time of the IPO, the Company was experiencing a deceleration in demand for these products; (3) that as a consequence, the financial results of the Company would probably be adversely affected; and (4) that as a result of the foregoing, the Defendants’ positive statements regarding the business, operations and prospects of the Company were materially misleading and / or lacked reasonable basis.
For more information on the Honest Company class action lawsuit, visit: https://bespc.com/cases/HNST
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 company, please visit www.bespc.com. Lawyer advertising. Past results do not guarantee similar results.
Bragar Eagel & Squire, PC
Brandon Walker, Esq.
Melissa Fortunato, Esq.
Marion Passmore, Esq.