NEW YORK, July 09 10, 2022 (GLOBE NEWSWIRE) — Pomerantz LLP announces that a class action lawsuit has been filed against Enservco Corporation (“Enservco” or the “Company”) (NYSE: ENSV) and certain of its officers. The class action, filed in the United States District Court for the District of Colorado and registered as 22-cv-01267, is on behalf of a class consisting of all persons and entities other than defendants who have purchased or otherwise acquired securities of Enservco between May 13, 2021 and April 18, 2022, both dates inclusive (the “Class Period”), seeking to recover damages caused by the Defendants’ violations of federal securities laws Securities and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and some of its senior leaders.
If you are a shareholder who purchased or otherwise acquired securities of Enservco during the class period, you have until July 19, 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]
Enservco, through its subsidiaries, provides well improvement and fluid management services to the onshore oil and gas industry in the United States.
Recently, the company has used several tactics in an apparent effort to bolster its balance sheets. For example, in August 2020, Enservco’s Board of Directors approved a transaction to, among others, exchange 50% of the Company’s subordinated debt with Cross River Partners, LP (“Cross River Partners”), a related party. Enservco’s CEO, Defendant Richard A. Murphy, is a managing member of Cross River Capital Management, LLC, the general partner of Cross River Partners. On February 3, 2021, Enservco exchanged the remaining 50% of its subordinated debt with Cross River Partners. In addition, the Company has granted a warrant to Cross River Partners to purchase up to 150,418 additional common shares of the Company in the future at an exercise price of $2.507 per share.
Additionally, during the second quarter of 2021, Enservco amended the payroll tax returns originally filed for the third and fourth quarters of 2020 to claim refundable employee retention credits (“ERCs”), a type of employee retention credit. tax under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) – for these periods.
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, the defendants made false and/or misleading statements and/or failed to disclose that: (i) Enservco had disclosure controls and procedures and flawed internal control over financial reporting; (ii) as a result, there were errors in Enservco’s financial statements relating to, among others, its transactions with Cross River Partners and the accounting for ERCs; (iii) as a result, the Company should restate certain of its financial statements and delay the filing of its 2021 annual report with the United States Securities and Exchange Commission (“SEC”); (iv) the Company has minimized the true extent and severity of its financial reporting problems; (v) as a result, the Company was unable to file its delayed 2021 Annual Report with the SEC within the time originally scheduled; and (vi) as a result, the Company’s public statements were materially false and misleading at all material times.
On March 28, 2022, Enservco disclosed in an SEC filing that it had “concluded that the company’s previously released condensed consolidated financial statements as of and for the three months ended March 31, 2021, June 30, 2021 and September 2021” (collectively, the “Relevant Periods”) “should no longer be relied upon substantially due to the Company’s accounting for a debt-to-equity conversion with a related party”, namely, Cross River Partners. The company further indicated that it had “misinterpreted[ed the] eligibility for certain employee retention tax credits under the relevant provisions of the [CARES Act]and “would amend its quarterly reports on Form 10-Q for the relevant periods to reflect restatements to its condensed consolidated financial statements for the relevant periods.”
On this news, Enservco’s stock price fell $0.45 per share, or 12.3%, to close at $3.21 per share on March 28, 2022.
On March 31, 2022, Enservco disclosed in an SEC filing that it could not timely file the company’s annual report on Form 10-K with the SEC for the quarter and year ended March 31, 2022. December 2021 because the company was “in the process of reprocessing [its] financial statements and prepare amendments to its Quarterly Reports on Form 10-Q for the relevant periods, which must be completed prior to the completion and filing of the [Company]Annual Report on Form 10-K for the period ended December 31, 2021.”
On this news, Enservco’s stock price fell $0.21 per share, or 7.78%, to close at $2.49 per share on April 1, 2022.
On April 4, 2022, Enservco disclosed in an SEC filing that its chief financial officer, the accused Marjorie A. Hargrave, “is leaving the company and will no longer be a senior officer and employee of the company effective April 22 2022”.
On this news, Enservco’s stock price fell $0.19 per share, or 7.48%, to close at $2.35 per share on April 5, 2022.
On April 11, 2022, Enservco filed amended quarterly reports with the SEC for the relevant periods, each reporting adjusted net losses that increased and other adjusted income that decreased materially for their respective periods.
Then, on April 18, 2022, Enservco disclosed in an SEC filing that the company “will not be filing its Form 10-K for the fiscal year ended December 31, 2021 within the 15-day extension provided by the 12b-25 of the Company’s filing” because it “intends to [again] amend its quarterly reports on Form 10-Q for the relevant periods to reflect the restatements of its condensed consolidated financial statements for the relevant periods. »
On this news, Enservco’s stock price fell $0.38 per share, or 10.47%, to close at $3.25 per share on April 19, 2022.
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
Robert S. Willoughby
888-476-6529 ext. 7980