BBAI ALERT: Kirby McInerney LLP Announces the Filing of a Securities Class Action on Behalf of BigBear.ai Holdings, Inc. Investors

/EIN News/ -- NEW YORK, April 15, 2025 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Eastern District of Virginia on behalf of those who acquired BigBear.ai Holdings, Inc. (“BigBear” or the “Company”) (NYSE:BBAI) securities during the period from March 31, 2022, through March 25, 2025 (“the Class Period”). Investors have until June 10, 2025, to apply to the Court to be appointed as lead plaintiff in the lawsuit.

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In June 2021, BigBear entered into a merger agreement (the “Merger Agreement”) with GigCapital 4, Inc. (“GigCapital4”), a special purpose acquisition company. Upon completion of the Business Combination, BigBear issued $200 million of unsecured convertible notes due to mature on December 15, 2026 (the “2026 Convertible Notes”).

On March 18, 2025, BigBear disclosed in a filing with the SEC that certain of the Company’s financial statements since fiscal year 2021 should no longer be relied upon and would be restated. Specifically, management identified a material error in the previously reported financial statements related to the accounting treatment of the Company’s 2026 Convertible Notes. In addition, BigBear revealed that, as a result of the foregoing, the Company would be unable to timely file its Annual Report for 2024 (the “2024 10-K”) “without unreasonable effort or expense.” On this news, the price of BigBear shares declined by $0.52 per share, from $3.49 per share on March 17, 2025, to close at $2.97 on March 18, 2025.

Then, on March 25, 2025, BigBear filed its 2024 10-K. In discussing the error in the previously reported financial statements, the 2024 10-K stated, in relevant part, that a “conversion option embedded within the 2026 Notes was incorrectly deemed to be eligible for a scope exception from the bifurcation requirements of ASC 815-15 and therefore requires bifurcation as a derivative and that certain adjustments to the conversion rate that violate the ‘fixed-for-fixed’ criteria described in [ASC] 815-40.” As a result, the consolidated financial statements were restated “to reflect the issuance of the 2026 Notes Conversion Option at fair value as of December 8, 2021, and the subsequent remeasurement to fair value at each reporting date.” The 2024 10-K further revealed that the adjustments reflected in the restatements related to, among other items, accumulated deficits, derivative liabilities, deferred tax liabilities, net loss, interest expense, and amortization of debt issuance discount. Finally , the 2024 10-K disclosed that the Company had identified a material weakness in its internal control over financial reporting – specifically, that BigBear had not “consistently executed [its] technical accounting review policies, inclusive of the application of certain interpretations subject to significant judgement or difference in interpretation, at a precision level sufficient to achieve complete, accurate and timely financial accounting, reporting and disclosures of certain non-routine, unusual, or complex transactions.” On this news, the price of BigBear shares declined by $0.32, from $3.51 per share on March 25, 2025, to close at $3.19 per share on March 26, 2025.

The complaint alleges that defendants, throughout the Class Period, failed to disclose that: (1) BigBear maintained deficient accounting review policies related to the reporting and disclosure of certain non-routine, unusual, or complex transactions; (2) as a result, the Company incorrectly determined that the conversion option within the 2026 Convertible Notes qualified for the derivative scope exception under ASC 815-40 and failed to bifurcate the conversion option as required by ASC 815-15; (3) accordingly, BigBear had improperly accounted for the 2026 Convertible Notes; (4) the foregoing error caused BigBear to misstate various items in several of the Company’s previously issued financial statements; and (5) as a result, these financial statements were inaccurate and would likely need to be restated.

If you purchased or otherwise acquired BigBear securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or fill out the contact form below, to discuss your rights or interests with respect to these matters without any cost to you.

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Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.

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Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq.
212-699-1180
https://www.kmllp.com
investigations@kmllp.com