GlobeNewswire Inc | Dec 6, 2021 01:03PM EST

December 06, 2021

NEW YORK, Dec. 06, 2021 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Eargo, Inc. (Eargo or the Company) (NASDAQ: EAR) in the United States District Court for the Northern District of California on behalf of those who purchased Eargo, Inc. securities between February 25, 2021 and September 22, 2021, both dates inclusive (the Class Period).

On August 12, 2021, after the market closed, Eargo revealed that claims submitted to the Companys largest third-party payor, which accounted for 80% of Eargos accounts receivable, had not been paid since March 1, 2021.

On this news, the Companys share price fell $8.00, or over 24%, to close at $24.70 per share on August 13, 2021, on unusually heavy trading volume.

On September 22, 2021, after the market closed, Eargo revealed that "it is the target of a criminal investigation by the U.S. Department of Justice (the DOJ) related to insurance reimbursement claims the Company has submitted on behalf of customers covered by federal employee health plans." Moreover, the DOJ is the "principal contact related to the subject matter of the [ongoing] audit" of Eargo by an insurance company that is the Companys largest third-party payor. As a result of the foregoing, Eargo withdrew its full year financial guidance.

On this news, the Companys share price fell $14.81, or over 68%, to close at $6.86 per share on September 23, 2021, on unusually heavy trading volume.

The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Companys business, operations, and prospects. Specifically, the complaint alleges that Defendants failed to disclose to investors: (1) that Eargo had improperly sought reimbursements from certain third-party payors; (2) that the foregoing was reasonably likely to lead to regulatory scrutiny; (3) that, as a result and because the reimbursements at issue involved the Companys largest third-party payor, Eargos financial results would be adversely impacted; and (4) as a result, Defendants statements about its business, operations, and prospects were materially false and misleading and/or lacked reasonable basis at all relevant times.

Investors who purchased or otherwise acquired shares of Eargo should contact the Firm by December 6, 2021 which is the lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.

Please visit our website at http://www.gme-law.com for more information about the firm.