Tattooed Chef, Inc. (TTCF) Misstated its Financials Due to Material Weaknesses in Internal Control

A shareholder filed a class action on behalf of all investors who purchased or otherwise acquired Tattooed Chef, Inc. (NASDAQ: TTCF) securities between March 20, 2021 and October 12, 2022, for violations of the Securities Exchange Act of 1934. Tattooed Chef, Inc. is a plant-based food company that offers sourced plant-based food. Its plant-based products are available in the frozen food sections of national retail food stores across the United States as well as on its e-commerce site.

According to the complaint, defendants failed to disclose that Tattooed Chef continuously downplayed its serious issues with internal controls and its financial statements from March 31, 2021 to the present included “certain errors” such as overstating revenue and understating losses. As a result, Tattooed Chef would need to restate its previously filed financial statements for certain periods.

On October 12, 2022, after market hours, the Company announced that it would restate its financial statements from March 31, 2021 to the present and revealed for the first time it had misstated revenue on each quarterly report. The Company also made numerous other changes in financial statements that revealed the extent of internal control weaknesses. Specifically, Tattooed Chef "(a) incorrectly recorded expenses related to a multi-vendor mailer program with a large customer as operating expenses rather than as a reduction of revenue, and (b) incorrectly recorded expenses for advertising placement by a marketing services firm on a straight-line basis over the life of the contract rather than when the services were actually rendered." On this news, Tattooed Chef's share price fell $0.44 per share, or 9.8%, to close at $4.05 per share on October 13, 2022.

What Now: Similarly situated shareholders may be eligible to participate in the class action against Tattooed Chef, Inc. Shareholders who want to act as lead plaintiff for the class must file their papers by February 21, 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.

All representation is on a contingency fee basis. Shareholders pay no fees or expenses.