According to the law firm press release, Lime Energy is a provider of clean energy solutions. The Complaint alleges that throughout the Class Period the defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about Lime Energy’s business, operations and financial condition. Specifically, the Complaint alleges that the defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company was improperly recording revenue; (2) as a result, the Company’s revenue and financial results were overstated; (3) as such, the Company’s financial statements were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”); (4) the Company lacked adequate internal and financial controls; and (5), as a result of the foregoing, the Company’s financial statements were materially false and misleading at all relevant times.
On July 17, 2012, the Company disclosed that the Audit Committee of the Board of Directors of Lime Energy had determined that the Company’s consolidated financial statements filed with the Securities and Exchange Commission on Form 10-K for the periods ended December 31, 2010 and December 31, 2011 and the quarterly report on Form 10-Q for the period ended March 31, 2012, may no longer be relied upon. According to the Company, the Audit Committee made that determination based on the results of a partial internal review conducted by the Company’s management and concluded Friday, July 13, 2012.
The Company further indicated that, based on the results of that partial internal review, the Company’s management and the Audit Committee believe that some portion of the Company’s revenue was improperly recorded Lime Energy indicated that the misreporting may potentially require restatement of its previously issued financial statements. Moreover, the Company stated that, “[i]n some cases, it appears that non-existent revenue may have been recorded” and that “[i]n other cases, it appears that revenue may have been recorded earlier than it should have been.”
As a result of this news, shares of the Company declined $0.91 per share, or 44.83%, to close on July 17, 2012, at $1.12 per share, on unusually heavy trading volume.
On January 28, 2014, the Court approved the order preliminarily approving the settlement between the parties.