On December 13, 2016 Pomerantz LLP was appointed Lead Counsel in a class action lawsuit filed against LifeVantage Corporation ("LifeVantage" or the "Company") and certain of its officers. The class action, filed in United States District Court, District of Utah, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired LifeVantage securities between November 4, 2015 and September 13, 2016 both dates inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
LifeVantage identifies, researches, develops, and distributes nutraceutical dietary supplements and skin care products. LifeVantage Corporation sells its products through a network of independent distributors and preferred customers in the United States, Japan, Hong Kong, Australia, Canada, the Philippines, Mexico, and Thailand. The Company also sells its products online.
The complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) LifeVantage lacked effective internal financial controls; (ii) as a result, the Company had improperly accounted for sales in certain international markets, along with associated revenue and income tax accruals; and (iii) as a result of the foregoing, LifeVantage's public statements were materially false and misleading at all relevant times.
On September 13, 2016, post-market, LifeVantage issued a press release and filed a Current Report on Form 8-K with the Securities and Exchange Commission, announcing a delay in the release of the Company's fourth quarter and fiscal year 2016 financial results, citing an internal review "relate[d] to sales of the Company's products in certain international markets and the determination of revenue and the deductibility of commission and incentive expenses associated with such sales, as well as the policies and procedures related to sales in those specific markets."
On this news, LifeVantage stock fell $1.32, or 12.69%, to close at $9.08 on September 14, 2016.