According to the law firm press release, the lawsuit alleges ARCA issued materially false and misleading statements to investors and/or failed to disclose that: (1) ARCA’s financial statements contained errors concerning sales tax related to its appliance replacement programs; and (2) the Company lacked adequate internal controls. On August 6, 2014, the Company announced that the California Board of Equalization ("BOE") is conducting an examination of sales and use taxes covering ARCA's appliance replacement sales. On this news, the Company’s shares fell $1.11 per share or over 27% to close at $2.99 per share on August 7, 2014, damaging investors. On February 11, 2015, the Company announced that it expects an assessment of at least $4.0 million from the BOE and will need to restate its previously issued financial statement for the years ended December 28, 2013, December 29, 2012 and December 31, 2011, for the quarters in those years, and for the quarters ended March 29, June 28 and September 27, 2014. On this news, the Company’s shares fell $0.43 per share or over 14% to close at $2.54 per share on February 12, 2015, further damaging investors.
On July 27, 2015, the lead plaintiffs filed an amended complaint.
On November 24, 2015, the Court issued an Order granting the motion to dismiss. Plaintiffs were given leave to amend their complaint. Plaintiffs filed the amended complaint on December 15.
On August 25, 2016, the Court issued an Order granting Defendants' motion to dismiss. Plaintiffs were given leave to amend their complaint. Plaintiffs declined to amend, thus the Court ordered this case dismissed on October 12, 2016.