The lawsuit, filed in the United States District Court for the Northern District of California, alleges that the company failed to provide adequate warnings in its SEC filings regarding an undisclosed discount program. Plaintiffs claim this program incentivized customers to stockpile handpieces, creating a misleading impression of organic demand for the firm’s AquaBeam Robotic Systems. According to the complaint, customers accumulated over 10,000 excess handpieces by the end of the class period, with sales consistently outpacing actual procedure volume since early 2023.

Legal counsel Joseph E. Levi argues that generic risk disclosures were insufficient to address the material impact these inventory issues had on the company’s financial health. The suit asserts that investors were denied the specific procedure-level data necessary to evaluate the sustainability of recurring revenue. As the market learned of the discrepancy between reported sales and actual utilization, share prices dropped from approximately $100.00 to under $25.00. The action brings claims under the Securities Exchange Act of 1934, targeting alleged omissions regarding the quality of revenue and field inventory levels.