Robbins LLP: InfuSystem Holdings, Inc. (INFU) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that a class action complaint was filed against InfuSystem Holdings, Inc. (NYSE MKT: INFU) in the U.S. District Court for the Central District of California. The complaint is brought on behalf of all purchasers of InfuSystem securities between May 12, 2015 and November 7, 2016, for alleged violations of the Securities Exchange Act of 1934 by InfuSystem’s officers and directors. InfuSystem, through its subsidiaries, provides infusion pumps and related products and services in the United States and Canada.
InfuSystem Accused of Overstating Revenues in Its Financial Statements
According to the complaint, InfuSystem submitted several filings with the U.S. Securities and Exchange Commission attesting to the accuracy of the financial statements, effectiveness of internal controls, and that all fraud was disclosed. However, the complaint alleges that InfuSystem officials failed to disclose that: (1) the company lacked effective internal control over financial reporting; (2) the company’s financial statements dating back to the beginning of 2015 overstated the estimated accounts receivable collections, which in turn overstated revenues and pre-tax income by a corresponding amount; and (3) the company’s financial statements dating back to the beginning of 2015 could no longer be relied upon.
On November 7, 2016, InfuSystem revealed that certain of its financial statements should not be relied upon and that the Audit Committee believes that material adjustments to the financial statements are required. The company discovered that it had been applying an incorrect cash collection percentage, which resulted in an overstatement of historical cash collection percentages, which was then used to estimate future cash collections relative to an outstanding accounts receivable balance. The company further noted that it would seek to extend the time required to file its quarterly report on Form 10-Q for the fiscal quarter and nine months ended September 30, 2016, but that there can be no assurance that it would be able to file such report within that time period. On this news, InfuSystem stock fell $1.00 per share, or over 38%, to close at $1.60 per share on November 7, 2016.
InfuSystem Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.