NEW YORK, Jan. 13, 2023 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Latch, Inc. (NASDAQ: LTCH) on behalf of long-term stockholders following a class action complaint that was filed against Latch on August 31, 2022 with a Class Period from May 31, 2021 to August 25, 2022. Our investigation concerns whether the board of directors of Latch have breached their fiduciary duties to the company.
Latch, Inc. (LTCH) f/k/a TS Innovation Acquisitions Corp. Issued a False and Misleading Registration Statement in Connection with its Merger.
According to the complaint, Latch went public through a SPAC merger with TSIA that closed on June 4, 2021. 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.
On November 10, 2022, Latch filed another Form 12b-25 Notification of Late Filing with the SEC, noting the Audit Committee had expanded its investigation "to include an investigation of the Company's financial statements for 2019 and 2020," which predate the merger.
Latch’s Pre-Merger Registration Statement materially misrepresented nearly every “Key Business Metric,” including, but not limited to: (1) falsely representing its sales revenue, which was based primarily on bookings of non-binding letters of intent that in reality in no way could lead to the revenue Latch projected; (2) grossly misrepresenting the “typical” timeline for converting a letter of intent into a sale; (3) misrepresenting the ease and feasibility of retrofitting buildings booked in connection with the letters of intent; (4) inflating hardware sales by delivering hardware to clients before projects were due to begin in order to recognize additional revenue on a quarterly basis; (5) touting technology and products that either did not have a proof of concept and would not be usable or deliverable; and (6) overstating the “international market” Latch had and would be able to expand into.
If you are a long-term stockholder of Latch, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at firstname.lastname@example.org, by telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
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Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.