Avid Bioservices (CDMO) Tanks 30% After Disclosing Possible Accounting Restatements Due to $146 Million Acceleration Notice – Hagens Berman
CDMO Investors with Substantial Losses Encouraged to Contact Hagens Berman, National Trial Attorneys
SAN FRANCISCO, March 11, 2024 (GLOBE NEWSWIRE) — Hagens Berman urges Avid Bioservices, Inc. (NASDAQ: CDMO) investors who suffered substantial losses to submit your losses now.
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Avid Bioservices, Inc. (CDMO) Investigation:
“The investigation centers on Avid Bioservices’ failure to timely remove the restrictive legend on certain of its unregistered notes and the propriety of continuing to report the notes as long term liabilities,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
In Mar. 2021, Avid privately placed $143.8 million of 1.250% exchangeable senior notes due 2026 (“2026 Notes”) with qualified institutional investors. The 2026 Notes bore a restrictive legend, essentially preventing purchasers from reselling them in the public marketplace unless the sale is exempt from the SEC’s registration requirements. In addition, the indenture governing the 2026 Notes required Avid to remove the legend by March 17, 2022. Avid has continually reported the 2026 Notes on its balance sheet as long-term liabilities.
Recently, on Mar. 6, 2024, Avid disclosed that it had not removed the restrictive legend when required and, as a result, a holder of at least 25% of the 2026 Notes submitted an acceleration notice declaring “100% of the principal of, and accrued and unpaid interest on, the 2026 Notes to be due and payable immediately.” The company quantified the accelerated amount at approximately $146 million.
Avid also said that, as a result of its classification of the 2026 Notes as long term liabilities and its failure to record the additional interest, it is evaluating whether investors should no longer rely on its financial statements going back to Oct. 31, 2022.
Finally, the company also announced the pricing of a new private placement of convertible notes. The $160 million of 7% senior notes due 2029 can be converted into 101.1250 shares of Avid Bioservices’ common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of about $9.89 a share, representing a 13% premium to its Mar. 6 closing share price of $8.79. Avid said it would use the proceeds from the new convertible notes to pay down the 1.250% exchangeable senior notes.
These revelations drove the price of Avid shares about 30% lower on March 7, 2024.
If you invested in Avid Bioservices and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »
If you’d like more information and answers to frequently asked questions about the Avid Bioservices investigation, read more »
Whistleblowers: Persons with non-public information regarding Avid Bioservices should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation law firm focusing on corporate accountability through class-action law. The firm is home to a robust securities litigation practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and fraud. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
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Contact:
Reed Kathrein, 844-916-0895
