NEW YORK, NY/ACCESSWIRE/March 18, 2022/ Pomerantz LLP announces that a class action lawsuit has been filed against Cano Health, Inc. (“Cano” or the “Company”) f/k/a Jaws Acquisition Corp. (“Jaws”) CANO CANO/WS, JWS, JWS.U, JWS WS))) and some of its leaders. The class action, filed in the United States District Court for the Southern District of Florida and registered as 22-cv-20827, is on behalf of a class consisting of all persons and entities other than defendants. who purchased or otherwise acquired securities of Cano between May 18, 2020 and February 25, 2022, both dates inclusive (the “Class Period”), seeking to recover damages caused by the Defendants’ violations of the federal securities laws securities and to seek remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, to against the Company and certain of its senior executives.
If you are a shareholder who purchased or otherwise acquired securities of Cano during the class period, you have until May 17, 2022 to ask the court to name you as the lead plaintiff in the class. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those applying by email are encouraged to include their mailing address, phone number and number of shares purchased.
[Click here for information about joining the class action]
Cano provides primary care medical services to its members in the United States and Puerto Rico. The Company owns and operates medical centers, as well as pharmacies.
Cano was formerly a Special Purpose Acquisition Corporation (“SPAC”) and operated as “Jaws Acquisition Corp.” A SPAC, also known as a blank check company, is a development-stage company that does not have a specific business plan or objective or has indicated that its business plan is to engage in a merger or acquisition with one or more unidentified companies, other entities or persons. . On June 3, 2021, Jaws completed a merger with Primary Care (ITC) Intermediate Holdings, LLC, whereby, among other things, Jaws changed its name to “Cano Health, Inc.” and began providing primary care medical services (the “Business Combination”).
As a publicly traded company, Cano must adhere to strict financial reporting requirements, including timely filing periodic financial reports with the U.S. Securities and Exchange Commission and complying with Financial Accounting guidelines. Standards Board, including Accounting Standards Update No. 2014-09. , Income from contracts with customers (subject 606) (“ASC 606”). In particular, under ASC 606, Cano must analyze its revenue recognition with respect to, among otherscertain Medicare risk adjustments.
The Complaint alleges that, throughout the Class Period, the Defendants made materially false and misleading statements regarding the company’s business, operations and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Cano overstated its due diligence efforts and expertise in acquiring target businesses; (ii) as a result, Cano performed inadequate due diligence to determine whether the Company, post-business combination, could properly account for the timing of revenue recognition as prescribed by ASC 606, particularly with respect to relates to Medicare risk adjustments; (iii) as a result, the Company misreported its capitation revenues, direct patient expenses, accounts receivable, net of unpaid service provider costs, and accounts payable and accrued liabilities; (iv) as a result, the Company was at increased risk of not filing one or more of its periodic financial reports on time; and (v) as a result, the Company’s public statements were materially false and misleading at all material times.
On February 28, 2022, Cano issued a press release “announcing[ing] it will delay the release of its fourth quarter and full year 2021 results, conference call and guidance updates for 2022, originally scheduled for Monday, February 28, 2022.” In explaining the delay, Cano indicated that ” in connection with the finalization of its audit of the financial statements for the year ended December 31, 2021, the Company and its independent auditor . . . identified certain potential non-cash adjustments to account for revenue recognition under ASC 606 accounting standard.” Specifically, Cano indicated that “[t]The adjustments relate to how and when the Company recognizes revenue related to Medicare risk adjustments” and that “[t]The adjustments are expected to impact the timing of revenue recognition, by delaying the recognition of certain amounts related to the Medicare risk adjustment to later periods[.]”
On this news, the price of Cano’s Class A common stock fell $0.32 per share, or 6.17%, to close at $4.87 per share on February 28, 2022.
On March 14, 2022, Cano filed its annual report for the three months and year ended December 31, 2021 (the “2021 10-K”). This deposit indicated, among othersthis “[t]Correction of timing of revenue recognition under ASC 606 resulted in adjustments to capitation revenue, direct patient expenses, accounts receivable, net of unpaid service provider costs, and accounts payable and accrued liabilities to pay[,]” and that the Company has therefore ” restated its financial statements for each of the quarterly periods ended March 31, 2021, June 30, 2021 and September 30, 2021 in the [2021 10-K.]For example, 10-K 2021 reported that, as restated, per capita income decreased 2.13% for the three months ended March 31, 2021; 13.11% for the three months ended March 30 June 2021; and 5.58% for the three months ended September 30, 2021.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris and Tel Aviv, is recognized as one of the leading firms in the areas of corporate litigation, securities and antitrust. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues the tradition he established, fighting for the rights of victims of securities fraud, breaches of fiduciary duty and corporate misconduct. The firm recovered numerous multimillion-dollar damages on behalf of class members. See www.pomlaw.com
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