According to the Complaint, BigBear.ai Holdings, Inc. is an artificial intelligence (“AI”)-driven technology solutions company. The Company purportedly offers national security, supply chain management, and digital identity and biometrics solutions. This class action was filed against BigBear and five of its Officers.

In June 2021, BigBear.ai Holdings entered into a merger agreement with GigCapital4, Inc., a special purpose acquisition company, GigCapital4 Merger Sub Corporation, and BBAI Ultimate Holdings. Pursuant to the Merger Agreement, Merger Sub Corporation first merged with and into BigBear.ai Holdings, with BigBear.ai Holdings being the surviving entity in the merger. Then BigBear.ai Holdings merged with and into GigCapital4, with GigCapital4 being the surviving entity in the merger. On December 7, 2021, the Mergers were consummated and GigCapital4, Inc. was renamed as BigBear.ai Holdings, Inc.

Upon completion of the Business Combination, BigBear issued $200 million of unsecured convertible notes-debt instruments that can be converted into equity at a future date-due to mature on December 15, 2026 (the "2026 Notes"). Convertible notes are often classified as long-term debt and as such, consistent with generally accepted accounting principles ("GAAP"), they must be accounted for in a company's quarterly and annual reports as liabilities until they reach maturity, at which point they either convert to equity or are repaid as principal and interest.

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, the Complaint alleges Defendants made false and/or misleading statements and/or failed to disclose that: (i) BigBear maintained deficient accounting review policies related to the reporting and disclosure of certain non-routine, unusual, or complex transactions; (ii) as a result, the Company incorrectly determined that the conversion option within the 2026 Convertible Notes qualified for the derivative scope exception under ASC 815-40 and failed to bifurcate the conversion option as required by ASC 815-15; (iii) accordingly, BigBear had improperly accounted for the 2026 Convertible Notes; (iv) the foregoing error caused BigBear to misstate various items in several of the Company's previously issued financial statements; (v) as a result, these financial statements were inaccurate and would likely need to be restated; (vi) BigBear would require extra time and expense to correct the inaccurate financial statements, thereby increasing the risk that the Company would be unable to timely file certain financial reports with the U.S. Securities and Exchange Commission; and (vii) as a result, the Company's public statements were materially false and misleading at all relevant times.