Capstone Green Energy Corp. (CGRNQ) Lacked a Reasonable Basis to Report Certain Financial Results
A shareholder filed a class action lawsuit on behalf of persons and entities that purchased or otherwise acquired Capstone Green Energy Corp. (OTC: CGRNQ) between June 14, 2021 and September 22, 2023. Capstone is a California based gas turbine manufacturer that specializes in microturbine power along with heating and cooling cogeneration systems.
According to the complaint, during the class period, defendants failed to disclose: (1) that the Company had engaged in “bill and hold transactions” with customers; (2) that these transactions were not reported pursuant to generally accepted accounting principles (“GAAP”); (3) that, “as a result of apparent errors primarily related to revenue recognition associated with bill and hold transactions” the Company lacked a reasonable basis to report certain financial results and was reasonably likely to restate its financial statements; and (4) 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.
Between August 15, 2023 and September 22, 2023, Capstone made a series of statements regarding its financial reporting, causing the Company’s stock to decline. Then, on September 28, 2023, the Company announced it had filed for Chapter 11 bankruptcy. On this news, the Company’s stock price fell $0.10, or 17%, to close at $0.50 per share on September 28, 2023.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Capstone Green Energy Corp. Shareholders who want to act as lead plaintiff for the class must file their motion for lead plaintiff by December 12, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
