b'CASES GOODWINPursuant to the courts scheduling order, plaintiffs willPyxus International, Inc.: Donna Jones, et al. file their opposition to defendants motion to dismiss onv. Pyxus International, Inc., et al., Case No. or before March 30, 2020 and defendants will have the5:19-cv-00234-BO (E.D.N.C., June 7, 2019)opportunity to file a reply on or before April 29, 2020.Pyxus International, Inc. (Pyxus) is an agricultural KushCo Holdings, Inc.: Joe W. May v. KushCocompany that focuses on purchasing, processing and Holdings, Inc. et al., Case No. 8:19-cv-00798- shipping tobacco to manufacturers of cigarettes and JLS-KES (C.D. Cal., April 30, 2019) other tobacco products. In February 2018, the company KushCo Holdings, Inc. (KushCo) is a packagingannounced its expansion of its services into the supplier to the cannabis industry. In April 2019,cannabis industry. KushCo publicly disclosed to investors that theIn June 2018, the company reported increases in financial statements included in their SEC filings forrevenue as part of its fiscal year 2018 financial results. the 2018 fiscal year understated the companys netPyxus also filed their Form 10-K for the period ending loss by approximately $14.1 million due to errors in theon March 31, 2018 where they noted that the companys accounting methodology used for certain contingentfinancial results [would] vary according to growing payments related to transactions. The companys stockconditions, customer indications and other factors, price fell by 7.76% to $5.35 per share. which reduces your ability to gauge quarterly and An investor filed a putative class action against theannual financial performance. On November 8, 2018 company, certain of its current and former officers, andthe company disclosed that they suffered a 12% decline its auditor alleging violations of Sections 10(b) and 20(a)in sales in connection with the timing of shipments of the Exchange Act and Rule 10b-5 in connection withand crop issues. Following that announcement, the allegedly false and materially misleading statementscompanys stock price fell approximately 28%, closing about the companys financial position. Specifically,at $18.26. The next day, the SEC announced that they plaintiff alleges that the companys incorrect financialsettled charges against the company regarding alleged statements stemmed from their acquisition of threemisstatements in their financial statements between companies, which increased the companys assets five- 2011 and 2015, which were attributed to improper and fold. As part of the acquisitions, KushCo was to pay theinsufficient accounting, process and control activities sellers in contingent stock in amounts related to eachfor inventory, deferred crop costs and revenue acquired companys future performance. Although thetransactions in Africa. The same day, the companys company claimed to have properly applied Generallystock price fell approximately 16%, closing at $15.38.Accepted Accounting Principles (GAAP), plaintiff alleges that defendants, in fact, did not, and rather,Specifically, plaintiffs alleged that the they classified the contingent payments as equity instead of liabilities. Plaintiff alleges that by doing so,company failed to disclose in their regulatory the company avoided having to remeasure periodicallyfilings and public announcements that they the fair value of the stock earnouts. As a result, plaintiffwere experiencing longer shipping cycles, alleges that the companys financial reporting was falsethe cycles impact on the companys financial and misleading and inflated the companys stock price,results and the lack of internal control over allowing the company to pay for the acquisitions. financial reporting, which led to regulatory Per the courts scheduling order, defendants will filescrutiny.their motion to dismiss on or before February 18, 2020, plaintiffs will file their opposition papers on or before April 3, 2020 and any reply papers will be filed on orInvestors filed a putative class action alleging violations before May 1, 2020. of Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, in connection with materially false and misleading statements made by the company and its executives, including the companys CEO and CFO. Specifically, plaintiffs alleged that the company 11'