According to the Complaint, YogaWorks claims that it is “one of the largest and fastest growing providers of high quality yoga instruction in the U.S.” and “the only national, multidiscipled yoga instruction company.” YogaWorks generates most of its revenue from offering a variety of yoga classes at its studios. The in-studio classes offer yoga instruction for all skill levels in various yoga styles. The prices for classes vary by location and region, but on average students pay $90-$135 per month for an unlimited membership. YogaWorks offers sixmonth and annual prepaid memberships, as well as class packages in increments of 10 to 20 classes.
YogaWorks also derives revenue from teacher training programs and online subscriptions of MyYogaWorks.com. The teacher training program began in 1990 and has graduated approximately 12,000 students. These graduates are considered “ambassadors of the YogaWorks brand.” YogaWorks offers a 200-hour and a 300-hour training program, taught in 16 countries at YogaWorks studios as well as nonYogaWorks studios. Tuition for the 200-hour program is approximately $3,500 and for the 300-hour program is approximately $4,200.
This is a federal securities class action on behalf of all persons and entities, other than Defendants, who purchased YogaWorks securities pursuant and/or traceable to the Company’s initial public offering commenced on or about August 10, 2017 and closed on August 16, 2017 (the “IPO”), seeking to recover compensable damages caused by Defendants’ violations of the Securities Act of 1933.
According to the Complaint, YogaWorks’ Registration Statement and Prospectus made materially misleading statements regarding: (1) YogaWorks’ studio-level economics and the adverse trends it faced in declining studio profitability; (2) reasons for YogaWorks’ declining revenue, including increasing corporate overhead costs; and (3) YogaWorks’ increasing corporate infrastructure costs and inability to achieve economies of scale. As of December 27, 2018, YogaWorks’ stock closed at $0.44 or 92% below its IPO price of $5.50.
On March 20, 2019, the Court issued Orders appointing Lead Plaintiff and Counsel and consolidating cases. Lead Plaintiff filed a consolidated Complaint on May 21, 2019. Defendants filed Motions to Dismiss the consolidated Complaint on July 23. On December 3, the Court issued an Order granting Defendants' Motions to Dismiss. Plaintiffs were given leave to amend the Complaint. On January 14, 2020, Plaintiffs filed an amended consolidated Complaint. Defendants filed a Motion to Dismiss the amended consolidated Complaint on February 14. On April 23, the Court issued an Order granting Defendants' Motion to Dismiss and dismissed the case with prejudice.