Volta Inc. (VLTA) Had Material Weaknesses in Internal Controls Leading to a Material Error in its Financial Results
A shareholder filed a class action on behalf of persons and entities that purchased or otherwise acquired Volta Inc. (NYSE: VLTA) securities between August 2, 2021 and March 28, 2022, for violations of the Securities Exchange Act of 1934. Volta partners with real estate and retail businesses to locate and deploy its electric vehicle charging stations.
According to the complaint, on August 26, 2021, Volta Industries, Inc. and Tortoise Acquisition Corp. II, a special purpose acquisition company, completed a business combination creating Volta Inc. On February 25, 2022, Volta filed a Form 8-K with the SEC stating that its Audit Committee determined that its third quarter 2021 financial statements would be restated. The Company downplayed the impact of the restatement and assured investors the understatements were unintentional.
However, those statements were false. Defendants failed to disclose to investors that there were material weaknesses in the Company’s internal control over financial reporting. As a result, Volta had improperly accounted for restricted stock units issued in connection with the business combination and therefore understated its net loss for third quarter 2021 requiring it to restate its financial statements. On March 2, 2022, Volta revealed the true impact of the restatement: “an approximate $26.7 million increase to stock-based compensation and corresponding increase to paid-in capital, resulting in an approximate net loss for the three and nine months ended September 30, 2021 of $69.7 million and $155.5 million, respectively.” On this news, the Company’s stock price fell 2.6% on March 3, 2022.
On March 28, 2022, Volta announced its founders had resigned as CEO and President and from the Board of Directors of the Company. In connection with their resignations, they were converting their Class B share holdings and equity awards to Class A stock. On this news, the Company’s share price fell 18%, to close at $3.37 per share on March 28, 2022.
Next Steps: If you acquired shares of Volta Inc. (VLTA) between August 2, 2021 and March 28, 2022, you have until May 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.