Revolution Lighting Technologies, Inc.
- Company Name
- Revolution Lighting Technologies, Inc.
- Stock Symbol
- Class Period
- March 14, 2014 to November 14, 2018
- Motion Deadline
- April 1, 2019
- Southern District of New York
The complaint charges Revolution and certain of its officers with violations of the Securities Exchange Act of 1934. Revolution designs and manufactures light-emitting diode lighting solutions for industrial, commercial and government markets.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Revolution’s business and financial results. Specifically, defendants failed to disclose that the Company had inadequate internal control over financial reporting, and, as a consequence, the Company was improperly recognizing revenue for certain transactions, resulting in its financial statements being misstated and subjecting the Company to increased regulatory scrutiny and substantial costs. As a result of this information being withheld from the market, Revolution securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $34 per share.
On October 17, 2018, Revolution announced that revenue for the third quarter of 2018 would be $33 million, compared to previous guidance of $40-$41 million, and that Robert LaPenta, its Chief Executive Officer, had offered to acquire all of the Company’s common stock at a price of $2.00 per share. On this news, the Company’s stock price fell $0.98 per share, or over 38%, to close at $1.58 per share on October 17, 2018. On October 19, 2018, the Company disclosed an ongoing SEC investigation regarding revenue recognized from transactions between 2014 through the second quarter of 2018. The Company estimated that the net effect on the reported revenue based on shipment of products, as opposed to the Company’s policy of bill and hold revenue recognition, “would have been to reduce revenue by $5.0 million, $6.3 million and $6.3 million in each of 2014, 2015 and 2016, respectively, and increase revenue by $11.6 million and $5.1 million in 2017 and 2018, respectively.” On this news, the Company’s stock price fell $0.16 per share, or over 10%, to close at $1.43 per share on October 22, 2018.
Then on November 14, 2018, the Company announced that its Transaction Committee was considering an updated proposal from LaPenta to acquire all of the Company’s outstanding stock for $1.50 per share. According to Revolution, LaPenta wanted to take the Company private in part due to the ongoing SEC investigation. On this news, the price of Revolution shares fell $0.55 per share, or nearly 40%, to close at $0.85 per share on November 15, 2018.