SAN FRANCISCO, March 28, 2024 (GLOBE NEWSWIRE) -- Hagens Berman urges Avid Bioservices, Inc. (NASDAQ: CDMO) investors who suffered substantial losses to submit your losses now.
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Avid Bioservices, Inc. (CDMO) Investigation:
Avid shares fell on Mar. 12, 2024 after the CDMO announced the need to restate its financial performance over several quarters in 2022 and 2023. The company blamed the misreporting on its misclassification of certain notes as long term liabilities and its failures to record additional interest expenses payable to note holders.
The debt in question is $143.8 million of 1.250% exchangeable senior notes due 2026 (“2026 Notes”) that Avid privately placed with qualified institutional investors in Mar. 2021. The 2026 Notes bore a restrictive legend, essentially preventing purchasers from reselling them in the public marketplace unless the sale is exempt from the SEC’s registration requirements. In addition, the indenture governing the 2026 Notes required Avid to remove the legend by Mar. 17, 2022. Avid has continually reported the 2026 Notes on its balance sheet as long-term liabilities.
Questions about Avid’s accounting for the 2026 Notes began to arise on Mar. 6, 2024, when Avid admitted that it had not removed the restrictive legend when required and, as a result, a holder of at least 25% of the 2026 Notes submitted an acceleration notice declaring “100% of the principal of, and accrued and unpaid interest on, the 2026 Notes to be due and payable immediately.” The company quantified the accelerated amount at approximately $146 million and said it would pay down the balance using proceeds from a new $160 million private placement of 7% senior notes due 2029 initially convertible into 101.1250 shares of Avid Biosciences’ common stock per $1,000 principal amount of notes.
Then, on Mar. 12, 2024, Avid announced that as a result of the misclassification, its quarterly financial statements for the periods ended Oct. 31, 2022, Jan. 31, 2023, July 31, 2023, and Oct. 31, 2023, and its annual financial statements for the year ended Apr. 30, 2023 should no longer be relied on and will be restated. Avid also said that, as a result, it would not timely file its quarterly financial statements for the period ended Jan. 31, 2024.
The company’s share price has declined over 66% over the last 12 months.
“We’re investigating whether Avid Bioservices may have intentionally deceived investors by failing to timely remove the restrictive legend on the 2026 notes and continuing to report the notes as long term liabilities,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Avid Bioservices and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »
If you’d like more information and answers to frequently asked questions about the Avid Bioservices investigation, read more »
Whistleblowers: Persons with non-public information regarding Avid Bioservices Pharmaceuticals should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email CDMO@hbsslaw.com.
About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation law firm focusing on corporate accountability through class-action law. The firm is home to a robust securities litigation practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and fraud. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
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Contact:
Reed Kathrein, 844-916-0895
