This action stems from Defendants’ misrepresentations and failure to make periodic or timely disclosures of material facts or changes concerning Lightspeed’s business, operations, revenues, earnings, earnings management, and internal control systems, including DC&P and ICFR.

Defendants’ misrepresentations and omissions (collectively, “misrepresentations”) had the effect of artificially inflating the price and value of Lightspeed's securities at the time they were purchased by putative Class Members.

When the truth finally came to light through a series of two Corrective Disclosures, the value and price of Lightspeed’s securities plummeted, losing, for instance, $57.46 per share or 40% of its value on the TSX between the market close prior to the first Corrective Disclosure ($142.76 per share at closing on September 28, 2021) and the market close ten days after the last Corrective Disclosure ($85.29 per share at closing on November

17, 2021).

Defendants’ misrepresentations were first revealed by a short seller report produced by Spruce Point Capital Management LLC, an American investment firm that conducts in depth forensic research and has exposed billions of dollars of financial schemes globally over the years.

In a nutshell, the Spruce Report revealed that Defendants enabled and/or engaged in a pattern of materiality inflating the size, quality, earnings, and growth prospects of Lightspeed’s business. For instance, they grossly overstated the Company’s pre-IPO customer count by 85%, its gross transaction volume (GTV) by at least 10%, its average revenue per user (ARPU), and, after having touted in March 2019 a total addressable market (TAM) of $113B to grow to $542B, they recently revised it down to $16B (despite $2.5B spent on acquisitions since the IPO).

The Spruce Report further revealed that, throughout the Class Period, Defendants had been hiding Lightspeed’s massive organic decline, failing to make required goodwill impairments, and playing with the reporting of the Company’s revenues and earnings, as well as with the definition of some of its key performance indicators (KPIs), in a way that misled investors.

The Auditor failed to disclose any and all of these issues, despite its obligation to do so.

Defendants also misleadingly attempted to reassure investors after the publication of a report by Spruce Point Capital Inc. (Spruce Report). Nevertheless, in the Company’s quarterly filings that immediately followed, Defendants disclosed an updated earnings guidance that confirmed the accuracy of the misrepresentations revealed in the Spruce Report and further informed investors of the monetary impact (as estimated by Defendants) of their misrepresentations.