SAN DIEGO–(BUSINESS WIRE)–$LTCH #LatchInc—The Class: Shareholder rights law firm Robbins LLP informs investors of a class action on behalf of Legacy Latch shareholders who acquired publicly traded securities of Latch, Inc. (NASDAQ: LTCH) through its June 4, 2021 merger. The complaint alleges violations of the Securities Act of 1933. Latch is an enterprise technology company that offers a full-building operating system, LatchOS, to address the essential requirements of modern buildings.
If you would like more information about Latch, Inc.’s misconduct, click here.
What is this Case About: 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.
Next Steps: If you acquired shares of Latch, Inc. (LTCH) prior to its merger with TSIA contact us for information about your legal options.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
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