The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Cano Health, Inc. (“Cano” or the “Company”) f/k/a Jaws Acquisition Corp. (“Jaws”) (NYSE: CANO) securities between May 18, 2020 and February 25, 2022, inclusive (the “Class Period”). Cano investors have until May 17, 2022 to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to participate.
On June 3, 2021, Jaws, a special purpose acquisition company, completed a business combination with Primary Care (ITC) Intermediate Holdings, LLC, and the combined company was renamed Cano (the “Business Combination”).
On February 28, 2022, Cano announced that it would be delaying the release of its financial results from the fourth quarter and full year 2021 due to the results of a recent internal audit. The audit “identified certain non-cash adjustments to account for revenue recognition under accounting standard ASC 606 . . . related to Medicare Risk Adjustments.”
On this news, Cano’s Class A common stock fell $0.32, or 6.2%, to close at $4.87 per share on February 28, 2022, thereby injuring investors.
Then, on March 14, 2022, Cano filed its annual report for fiscal 2021, stating that “[t]he correction in the timing of revenue recognition under ASC 606 resulted in adjustments to capitated revenue, direct patient expense, accounts receivable, net of unpaid service provider costs, and accounts payable and accrued expenses.” As a result, the Company restated its financial statements for each of the quarterly periods in fiscal 2021, including to report that capitated revenue decreased 2.13% for the three months ended March 31, 2021; 13.11% for the three months ended June 30, 2021; and 5.58% for the three months ended September 30, 2021.
The complaint alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Cano overstated its due diligence efforts and expertise with respect to acquiring target businesses; (2) accordingly, Cano performed inadequate due diligence into whether the Company, post-Business Combination, could properly account for the timing of revenue recognition as prescribed by ASC 606, particularly with respect to Medicare risk adjustments; (3) as a result, the Company misstated its capitated revenue, direct patient expense, accounts receivable, net of unpaid service provider costs, and accounts payable and accrued expenses; (4) accordingly, the Company was at an increased risk of failing to timely file one or more of its periodic financial reports; and (5) as a result of the foregoing, Defendants’ public statements were materially false and misleading at all relevant times.
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If you purchased Cano securities during the Class Period, you may move the Court no later than May 17, 2022 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Cano securities, have information or 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 Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to info@frankcruzlaw.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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View source version on businesswire.com: https://www.businesswire.com/news/home/20220321005813/en/
Contacts
The Law Offices of Frank R. Cruz, Los Angeles
Frank R. Cruz, 310-914-5007
fcruz@frankcruzlaw.com
www.frankcruzlaw.com
