Cano Health, Inc.

Investigation
02/28/2022

Initial Lawsuit
03/18/2022

Lawsuit Progression
05/17/2022

Investigation

Continous Holding
May 18, 2020 to February 25, 2022
Proposed Claim
Securities Violation

Investors investigation into Cano Health’s adjustments related to how and when the company accrues revenue under accounting standard ASC 606.

Main Event

Cano Delays Q4: Expected Adjustments

02/28/2022

SEC Filing

Cano delays its fourth quarter and full year 2021 earnings release, conference call and 2022 guidance updates and reveals “potential non-cash adjustments to account for revenue recognition under accounting standard ASC 606.”

“The adjustments relate to how and when the company accrues revenue related to Medicare Risk Adjustments. The adjustments are expected to impact the timing of revenue recognition, by delaying recognition of certain amounts related to the Medicare Risk Adjustment to subsequent periods, but do not impact the Company’s cash from operations, its cash position, or estimated collectability of receivables.”

The stock impact compares the closing price immediately preceding the date of the event and the following closing price. The price difference also reflects the overall mix of information.

Stock Impact

Close	Previous close	Price variation	Percentage variation
$4.87	$5.19	$-0.32	-6.17%

See more on Factual Timeline

Initial Lawsuit

First Complaint - 03/18/2022

This is a federal securities class action on behalf of a class consisting of all persons and entities other than defendants that purchased or otherwise acquired Cano securities between May 18, 2020 and February 25, 2022, both dates inclusive.

Filing Date
03/18/2022
Class Period
05/18/2020 to 02/25/2022
Transgression
Securities Violation
Filing Firms
Pomerantz LLP
Miller Shah LLP
Case Title
Gonzalez v. Cano Health, Inc. f/k/a Jaws Acquisition Corp. et al
Docket Number
1:22-cv-20827
Court
Florida Southern District Court
Free File
Complaint

Allegations

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors that:

(i) Cano overstated its due diligence efforts and expertise with respect to acquiring target businesses;
(ii) accordingly, Cano performed inadequate due diligence into whether the company, post-merger with Primary Care (ITC) Intermediate Holdings, LLC, could properly account for the timing of revenue recognition as prescribed by ASC 606, particularly with respect to Medicare risk adjustments;
(iii) as a result, the company misstated its capitated revenue, direct patient expense, accounts receivable, net of unpaid service provider costs, and accounts payable and accrued expenses;
(iv) accordingly, the company was at an increased risk of failing to timely file one or more of its periodic financial reports; and
(v) as a result, the company’s public statements were materially false and misleading at all relevant times.