Lerach Coughlin Stoia Geller Rudman & Robbins LLP
("Lerach Coughlin") (http://www.lerachlaw.com/cases/paincare/) today
announced that a class action lawsuit has been commenced in the United
States District Court for the Middle District of Florida, Orlando
Division, on behalf of purchasers of PainCare Holdings, Inc.
("PainCare") (AMEX: PRZ) common stock during the period between
February 3, 2003 and March 15, 2006 (the "Class Period").
If you wish to serve as lead plaintiff, you must move the Court no later than May 19, 2006. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Samuel H. Rudman or David A. Rosenfeld of Lerach Coughlin at 800/449-4900 or 619/231-1058 or via e-mail at wsl@lerachlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.lerachlaw.com/cases/paincare/. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges PainCare and certain of its officers and directors with violations of the Securities Exchange Act of 1934. PainCare describes itself as "one of the nation's leading providers of pain-focused medical and surgical solutions and services."
The complaint alleges that, throughout the Class Period, defendants issued numerous positive statements and filed quarterly reports with the SEC which described the Company's increasing financial performance. These statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (a) that PainCare improperly accounted for convertible term notes and certain freestanding and embedded derivates related to shares of PainCare's common stock issued in several private placement transactions; (b) that PainCare failed to properly account for option grants issued under the Company's 2000 and 2001 stock option plans; (c) that the Company lacked adequate internal controls and was therefore unable to ascertain its true financial condition; and (d) that as a result of the foregoing, the Company's financial results from 2000-2005 were materially overstated at all relevant times.
On March 15, 2006, the Company shocked the market when it issued a press release announcing that PainCare will restate its historical financial statements for the years ended December 31, 2000, December 31, 2001, December 31, 2002, December 31, 2003 and December 31, 2004, and the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005. The total restatement will lower net income by a combined $39.6 million.
In response to this announcement, shares of the Company's stock fell $0.36 per share, or almost 13%, to close at $2.50 per share, on unusually heavy trading volume. During the next three trading days, as the market digested the news, shares of the Company's stock continued to fall, reaching as low as $1.41 per share on March 21, 2006, a more than 50% decline.
Prior to disclosing these adverse facts to the investing public, PainCare: (i) acquired at least twenty companies using its artificially inflated common stock and cash received from private placements and credit facilities as consideration; (ii) entered into private placement deals whereby the Company received over $33 million in gross proceeds; (iii) increased its credit facilities by at least $30 million on more favorable terms than it would have if the truth was known; and (iv) completed an offering of 8 million shares of its common stock whereby it reaped approximately $15.2 million in gross proceeds.
Plaintiff seeks to recover damages on behalf of all purchasers of PainCare publicly-traded common stock during the Class Period (the "Class"). The plaintiff is represented by Lerach Coughlin, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Lerach Coughlin, a 160-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston, Philadelphia and Seattle, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Lerach Coughlin lawyers have been responsible for more than $20 billion in aggregate recoveries. The Lerach Coughlin Web site (http://www.lerachlaw.com) has more information about the firm.
If you wish to serve as lead plaintiff, you must move the Court no later than May 19, 2006. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Samuel H. Rudman or David A. Rosenfeld of Lerach Coughlin at 800/449-4900 or 619/231-1058 or via e-mail at wsl@lerachlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.lerachlaw.com/cases/paincare/. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges PainCare and certain of its officers and directors with violations of the Securities Exchange Act of 1934. PainCare describes itself as "one of the nation's leading providers of pain-focused medical and surgical solutions and services."
The complaint alleges that, throughout the Class Period, defendants issued numerous positive statements and filed quarterly reports with the SEC which described the Company's increasing financial performance. These statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (a) that PainCare improperly accounted for convertible term notes and certain freestanding and embedded derivates related to shares of PainCare's common stock issued in several private placement transactions; (b) that PainCare failed to properly account for option grants issued under the Company's 2000 and 2001 stock option plans; (c) that the Company lacked adequate internal controls and was therefore unable to ascertain its true financial condition; and (d) that as a result of the foregoing, the Company's financial results from 2000-2005 were materially overstated at all relevant times.
On March 15, 2006, the Company shocked the market when it issued a press release announcing that PainCare will restate its historical financial statements for the years ended December 31, 2000, December 31, 2001, December 31, 2002, December 31, 2003 and December 31, 2004, and the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005. The total restatement will lower net income by a combined $39.6 million.
In response to this announcement, shares of the Company's stock fell $0.36 per share, or almost 13%, to close at $2.50 per share, on unusually heavy trading volume. During the next three trading days, as the market digested the news, shares of the Company's stock continued to fall, reaching as low as $1.41 per share on March 21, 2006, a more than 50% decline.
Prior to disclosing these adverse facts to the investing public, PainCare: (i) acquired at least twenty companies using its artificially inflated common stock and cash received from private placements and credit facilities as consideration; (ii) entered into private placement deals whereby the Company received over $33 million in gross proceeds; (iii) increased its credit facilities by at least $30 million on more favorable terms than it would have if the truth was known; and (iv) completed an offering of 8 million shares of its common stock whereby it reaped approximately $15.2 million in gross proceeds.
Plaintiff seeks to recover damages on behalf of all purchasers of PainCare publicly-traded common stock during the Class Period (the "Class"). The plaintiff is represented by Lerach Coughlin, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Lerach Coughlin, a 160-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston, Philadelphia and Seattle, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Lerach Coughlin lawyers have been responsible for more than $20 billion in aggregate recoveries. The Lerach Coughlin Web site (http://www.lerachlaw.com) has more information about the firm.