The Luna class action lawsuit alleges that defendants throughout the Class Period 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, the Complaint alleges Defendants failed to disclose to investors: (1) Luna’s financial statements dating back to May 16, 2022 through and including November 14, 2023 contained unearned revenues that should not have been recognized; (2) Luna would need to restate financial statements that it filed during May 16, 2022 through and including November 14, 2023; (3) Luna’s disclosure controls and procedures did not provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (4) Luna’s disclosure controls and procedures were not effective; and (5) as a result, Defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all times.
Investors began to learn the truth on Mar. 12, 2024, when Luna revealed that it would not timely file its annual financial statements for the year ended Dec. 31, 2023 as a result of having reported revenues during Q2 and Q3 2023 “that did not qualify for revenue recognition under [GAAP].” The company also warned that investors should no longer rely on its financial statements for the quarters ended June 30 and September 30, 2023 and that its internal controls over financial reporting was not sufficient. This news drove the price of Luna shares crashing over 35% lower on Mar. 13, 2024.
Then, on March 25, 2024, after the market closed, the Company filed with the SEC a current report on Form 8-K (the “March 25 Form 8-K”) which announced that Defendant Graeff had retired, effective immediately. On this news, the price of Luna Innovations stock fell by $0.41 per share, or 11.54%, to close at $3.14 on March 26, 2024.
On April 19, 2024, Luna announced that, in addition to non-reliance on its 2Q23 and 3Q23 Reports, investors should no longer rely on its previously filed financial statements contained in its 1Q22, 2Q22, 3Q22, FY22, and 1Q23 Reports because the Company improperly recognized revenues in each of these Reports too. This news drove the price of Luna shares down $0.36 (12.8%) during the two trading days ended April 22, 2024.
CASE TIMELINE
