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Enservco Corporation

Class Action
  • Active
Investigation
03/28/2022
Initial Lawsuit
05/20/2022
Lawsuit Progression
07/19/2022

Investigation

Why the investors investigation? Enservco disclosed in March the restatement of its financials because of the accounting for a conversion of debt to equity with Cross River Partners, L.P. and the misinterpretation of eligibility for certain employee retention tax credits under relevant provisions of the Coronavirus Aid, Relief, and Economic Security Act.

We invite shareholders of the company to collaborate together on this investigation to uncover the reality of said restatement and debt to equity conversion. We will update this page with the lawsuit’s outcome.

  • Investigation Date
    03/28/2022
  • Hypothetical Affected Period
    May 13, 2021 to April 18, 2022
  • Hypothetical Transgression
    Securities Violation
Main Event

Restatement

03/28/2022

SEC Filing

Enservco discloses that its previously issued financial statements for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021 should no longer be relied upon because of the accounting for a conversion of debt to equity with Cross River Partners, L.P. and the misinterpretation of eligibility for certain employee retention tax credits under relevant provisions of the Coronavirus Aid, Relief, and Economic Security Act.

“On February 3, 2021, Cross River Partners, L.P., a related party, converted subordinated debt in the principal amount of $1.25 million and $62,000 in accrued interest into 601,674 shares of Company common stock. In connection with such conversion, the Company issued a warrant to Cross River Partners, L.P. to purchase up to 150,418 additional shares of Company common stock in the future at an exercise price of $2.507 per share. At the time, the Company did not record a loss on the debt conversion and recorded the transaction through equity . . . The Company has since determined that the debt conversion in conjunction with the warrant issuance resulted in a loss of $304,000, which should have been reflected on the Company’s consolidated statement of operations for the quarter ended March 31, 2021.“

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
$3.21 $3.66 $-0.45 -12.3%
See more on Factual Timeline

Initial Lawsuit

First Complaint - 05/20/2022

A shareholder of the company filed this federal securities class action on behalf of a class consisting of all persons and entities other than defendants that purchased or otherwise acquired Enservco securities between May 13, 2021 and April 18, 2022, both dates inclusive.

  • Filing Date
    05/20/2022
  • Class Period
    05/13/2021 to 04/18/2022
  • Transgression
    Securities Violation
  • Filing Firms
    Pomerantz LLP
    The Schall Law Firm
  • Case Title
    Saee v. Enservco Corporation et al
  • Docket Number
    1:22-cv-01267
  • Court
    Colorado 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) Enservco had defective disclosure controls and procedures and internal control over financial reporting;
(ii) as a result, there were errors in Enservco’s financial statements relating to, inter alia, its transactions with Cross River Partners, L.P. and accounting for Employee Retention Credits (ERCs);
(iii) accordingly, the company would need to restate certain of its financial statements and delay the filing of its 2021 annual report with the SEC;
(iv) the company downplayed the true scope and severity of its financial reporting issues;
(v) accordingly, the company could not file its delayed 2021 annual report with the SEC within its initially represented timeline; and
(vi) as a result, the company’s public statements were materially false and misleading at all relevant times.

Defendants

  • Company
    Enservco Corporation
  • Chief Executive Officer
    Richard A. Murphy
  • Chief Financial Officer
    Marjorie A. Hargrave

Lawsuit progression

  • Docket Number
    1:22-cv-01267
  • Court
    Colorado District Court

The lead plaintiff deadline has passed, we will update this page as the lawsuit progresses.
Last event retrieved on 09/28/2022.

Factual Timeline

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