Redwire Space, a partner in Blue Origin's projected orbiting space station, is the subject of a class-action complaint alleging federal securities fraud.
The lawsuit, filed in the US District Court for the Middle District of Florida, claims Redwire delayed publishing its third-quarter earnings on November 10.
"Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospect," reads the court documents.
Redwire is Accused of Federal Securities Fraud
When Redwire's stock fell on November 10, it fell again five days later when the firm failed to submit financial statements or its assessment of the efficacy of its disclosure controls and processes and any impact.
"On this news, Redwire's stock price fell $0.93, or 8.3%, over two consecutive trading sessions to close at $10.32 per share on November 16, 2021, on unusually heavy trading volume," the document continues.
Blue Origin will utilize the funding to create its Orbital Reef space station in collaboration with Sierra Space and Boeing, with plans to launch the spaceship in the second half of this decade.
Blue Origin and Redwire have not responded to the case filed on December 17.
According to News Channel 8, the complaint claims that Jacksonville-based Redwire Corporation had accounting concerns in November 2021 and delayed reporting its third quarter profits.
The class action's lead plaintiff, Lemen, argues the corporation made false assertions that resulted in "significant losses and damages" for investors.
The complaint names Redwire CEO Peter Cannito and CFO William Read as defendants.
The class period, as determined by Lemen, is from August 11 to November 14, when it claims Redwire's activities affected investors financially.
Redwire indicated on November 15 that it would be unable to publish a timely quarterly report before markets opened, which is why Lemen and his counsel extended the class period until November 14. The firm did not give the reason for this.
Redwire allegedly used "devices, schemes, and artifices to defraud; made untrue statements of material fact and/or omitted to state material facts necessary to make the statements not misleading; and engaged in acts, practices, and a course of business which operated as a fraud and deceit" to those who bought the company's securities, or stocks, according to Lemen's lawsuit.
The plaintiffs are seeking a jury trial. It's unclear if the lawsuit will affect Redwire's participation in the Orbital Reef's development, DailyMail said.
Redwire's Role in Jeff Bezos' Orbital Reef Space Station
Redwire works on solar power production and in-space 3D printing and manufacturing as part of the crucial space solutions business.
According to Flying Magazine, Redwire has joined Jeff Bezos' Blue Origin in October to work on the Orbital Reef commercial space station project in various capacities. These cover microgravity research, payload development, operations, huge deployable structures, and Orbital Reef's digital twin production.
NASA revealed in December that they had selected blue Origin to construct the project as a replacement for the International Space Station, which is reaching the end of its life cycle. Orbital Reef also has partnered with Boeing, Genesis Engineering Solutions, and Arizona State University.
Redwire collaborated with NASA on the DART (Double Asteroid Redirection Test), an experimental rocket launch to reroute a nearby asteroid.
