NEW YORK, NY / ACCESSWIRE / April 17, 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") (NYSE: CANO; CANO/WS; JWS; JWS.U; JWS WS) and certain of its officers. The class action, filed in the United States District Court for the Southern District of Florida, and docketed under 22-cv- 20827, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Cano securities between May 18, 2020 and February 25, 2022, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws 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 certain of its top officials.
If you are a shareholder who purchased or otherwise acquired Cano securities during the Class Period, you have until May 17, 2022 to ask the Court to appoint you as Lead Plaintiff for 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 who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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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 operates pharmacies.
Cano used to be a special purpose acquisition company ("SPAC") and operated under the name "Jaws Acquisition Corp." A SPAC, also called a blank-check company, is a development stage company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity, or person. On June 3, 2021, Jaws consummated a merger with Primary Care (ITC) Intermediate Holdings, LLC, whereby, among other things, Jaws changed its name to "Cano Health, Inc." and began to provide primary care medical services (the "Business Combination").
As a publicly traded company, Cano must adhere to strict financial reporting requirements by, among other things, timely filing periodic financial reports with the U.S. Securities and Exchange Commission and complying with Financial Accounting Standards Board guidelines, including Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"). Particularly, under ASC 606, Cano must analyze its revenue recognition with respect to, inter alia, certain Medicare risk adjustments.
The complaint alleges that, throughout the Class Period, 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 with respect to acquiring target businesses; (ii) 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; (iii) 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; (iv) accordingly, the Company was at an increased risk of failing to timely file one or more of its periodic financial reports; and (v) as a result, the Company's public statements were materially false and misleading at all relevant times.
On February 28, 2022, Cano issued a press release "announc[ing] it will delay its fourth quarter and full year 2021 earnings release, conference call and 2022 guidance updates, previously scheduled for Monday, February 28, 2022." In explaining the delay, Cano advised that "in the course of finalizing 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 accounting standard ASC 606." Specifically, Cano advised that "[t]he adjustments relate to how and when the Company accrues revenue related to Medicare Risk Adjustments" and that "[t]he adjustments are expected to impact the timing of revenue recognition, by delaying recognition of certain amounts related to the Medicare Risk Adjustment to subsequent periods[.]"
On this news, Cano's Class A common stock price 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 quarter and year ended December 31, 2021 (the "2021 10-K"). That filing stated, inter alia, 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[,]" and that the Company 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, the 2021 10-K reported that, as restated, 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.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. 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 in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com
SOURCE: Pomerantz LLP