According to the Complaint, Plaintiff brings this class action on behalf of all persons similarly situated, (the "Class"), other than Defendants and their affiliates, who (1) purchased or otherwise acquired the common shares of EnerNOC, Inc. ("EnerNOC" or the "Company) between November 1, 2007, through and including, February 27, 2008, (the "Class Period"); and/or (2) purchased or otherwise acquired EnerNOC common stock pursuant to Prospectus on Form 424B4 filed November 13, 2007 ("November 13 Prospectus") between November 13, 2007 through and including February 27, 2008, for violations of the federal securities laws. Plaintiff seeks to recover damages caused to the Class by Defendants' violations of Section 11 of the Securities Act of 1933 (the "Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act").
Specifically, the complaint alleges that on November 1, 2007, EnerNOC announced its financial results for the third quarter and nine months ended September 30, 2007. EnerNOC reported revenues of $19.1 million for the third quarter of 2007, compared to $11.0 million for the same period in 2006. Total revenues for the nine months ended September 30, 2007, totaled $41.1 million. Cost of revenues for the third quarter of 2007 was $11.3 million, compared to $5.2 million for the same period in 2006. The Company represented that this was the highest quarterly revenue performance in Company history and that sales of EnerNOC’s demand response solutions accounted for substantially all of the third quarter revenue in both 2006 and 2007. These statements were materially false and misleading when made because Defendants knew, but failed to adequately reveal, that expenses were rising far faster than revenues creating a negative trend, and the increasing number of megawatts under management involved prolonged lags in the ability to recognize revenue.
According to the Company’s FORM 10-Q for the quarterly period ended March 31, 2009, in March 2008, three purported class action lawsuits were filed in the United States District Court for the District of Massachusetts (the Court) against the Company, several of its officers and directors, and certain of the underwriters of the Company’s November 2007 follow-on public offering of its common stock. The three class action complaints have been consolidated by the Court into a single action and an amended consolidated complaint was filed on September 24, 2008. The lead plaintiff in the consolidated class action claims to represent two purported classes: (i) an “Exchange Act Class” consisting of persons who purchased shares of the Company’s common stock from November 1, 2007 through February 27, 2008 and (ii) a “Securities Act Class” consisting of persons who purchased shares of the Company’s common stock pursuant or traceable to the follow-on public offering. The lead plaintiff alleges, among other things, that the defendants made false and misleading statements and failed to disclose material information in various SEC filings and other public statements. The amended consolidated class action complaint asserts, on behalf of the purported Securities Act Class, various claims under the Securities Act of 1933, as amended (Securities Act), against all defendants and, on behalf of the purported Exchange Act Class, various claims under the Securities Exchange Act of 1934, as amended, and Rule 10b-5 against the Company and the individual officer and director defendants. The amended consolidated class action complaint seeks, among other relief, class certification, unspecified damages, fees, and such other relief as the Court may deem just and proper. The defendants filed a motion to dismiss the amended consolidated complaint on October 27, 2008 and a hearing on the motion was held on January 8, 2009. The Court took defendants’ motion under advisement following the hearing. During the hearing and thereafter, lead plaintiff expressed an intention to abandon his claims against all defendants under the Securities Act. The lead plaintiff has since voluntarily dismissed the underwriter defendants, against whom only Securities Act claims were alleged, from the matter. The Court has not taken any action on the defendants’ motion.