Ormat Technologies, Inc.
- Company Name
- Ormat Technologies, Inc.
- Stock Symbol
- Class Period
- August 8, 2017 to May 15, 2018
- Motion Deadline
- August 10, 2018
- District of Nevada
The complaint charges Ormat and certain of its officers with violations of the Securities Exchange Act of 1934. Ormat engages in the geothermal and recovered energy power businesses worldwide.
The complaint alleges that throughout the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Ormat’s business and financial condition. Specifically, defendants failed to disclose that: (1) there were errors in the income tax provision primarily relating to Ormat's valuation allowance based on its ability to utilize foreign tax credits in the United States prior to their expiration; (2) Ormat had netted certain deferred income tax assets and deferred income tax liabilities across different tax jurisdictions that were not permitted to be netted pursuant to U.S. generally accepted accounting principles; (3) Ormat's internal controls over financial reporting were ineffective during the Class Period; and (4) due to the foregoing, Ormat would need to restate its second, third and fourth quarter and full-year 2017 financial statements. As a result of this information being withheld from the market, Ormat securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of $70.08 per share.
On May 11, 2018, Ormat disclosed that would delay the filing of its quarterly report on Form 10-Q for the period ended March 31, 2018 because "management ha[d] identified an error in the Company's financial statement presentation of deferred income tax assets and deferred income tax liabilities that affects the Company's balance sheets in previous reporting periods." Ormat further disclosed that "[t]he Company [wa]s evaluating the impact of this error on its consolidated financial statements and the extent to which the Company's annual and quarterly consolidated financial statements filed in previous periods require revision or amendment." On this news, the price of Ormat stock fell over 6%, or $3.58 per share, over two consecutive trading days to close at $52.77 per share on May 14, 2018.
Then on May 16, 2018, Ormat revealed that "it will restate its second, third and fourth quarter 2017 financial statements and its full-year 2017 financial statements" and that, therefore, "investors should no longer rely upon the Company's previously issued financial statements for the periods set forth above, earnings releases for these periods, and other communications relating to these financial statements." On this news, the price of Ormat stock fell $0.67 per share to close at $52.35 per share on May 16, 2018.