Latch, Inc. (LTCH) f/k/a TS Innovation Acquisitions Corp. (TSIA) Has Disclosed Revenue Recognition Errors Due to Unreported Sales Arrangements
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Latch, Inc. (NASDAQ: LTCH) securities between May 13, 2021 and August 25, 2022, for violations of the Securities Exchange Act of 1934. Latch is an enterprise technology company that offers a full-building operating system, LatchOS, to address the essential requirements of modern buildings.
According to the complaint, on or about June 3, 2021, Latch became a public entity via business combination with TSIA. On August 25, 2022, after the market closed, Latch revealed that it would restate financial statements for 2021 and the first quarter of 2022 due to revenue recognition errors related to the sale of hardware devices. Specifically, the Company stated that “certain revenue recognition errors occurred as a result of unreported sales arrangements due to sales activity that was inconsistent with the Company’s internal controls and procedures.” On this news, Latch’s stock fell $0.13, or 12.2%, to close at $0.95 per share on August 26, 2022, on unusually heavy trading volume.
Throughout the Class Period, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants failed to disclose to investors that there were unreported sales arrangements related to hardware devices that would result in the Company improperly recognizing revenue throughout fiscal 2021 and first quarter 2022. This material weakness in Latch’s internal control over financial reporting related to revenue recognition required Latch to restate financial statements for fiscal 2021 and first quarter 2022.
Next Steps: If you acquired shares of Latch, Inc. (LTCH) between May 13, 2021 and August 25, 2022, you have until October 31, 2022, to ask the court to appoint you lead plaintiff for the class. 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.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
