RADNOR, Pa., Aug. 11, 2016 /PRNewswire/ -- The law firm of Kessler Topaz Meltzer & Check, LLP reminds Inovalon Holdings, Inc. (Nasdaq: INOV) ("Inovalon" or the "Company") shareholders that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of the Company's common stock issued pursuant or traceable to Inovalon's February 12, 2015 initial public offering of common stock (the "IPO").
REMINDER: Investors who purchased Inovalon securities may, no later than August 23, 2016, petition the Court to be appointed as a lead plaintiff representative of the class. For additional information please visit https://www.ktmc.com/new-cases/inovalon-holdings-inc#join
Inovalon investors who wish to discuss this action and their legal options are encouraged to contact Kessler Topaz Meltzer & Check, LLP (Darren J. Check, Esq., D. Seamus Kaskela, Esq. or Adrienne O. Bell, Esq.) at (888) 299 – 7706 or at firstname.lastname@example.org.
Inovalon is a technology company that provides cloud-based data analytics and data-driven intervention platforms to the healthcare industry in the United States.
On February 12, 2015, Inovalon completed its IPO of common stock. The IPO was a financial success for the Company as it sold over 25 million shares of common stock to investors at $27.00 per share for gross proceeds of over $684 million.
The complaint alleges that the IPO Offering Materials were negligibly prepared, contained untrue statements of material facts, and omitted to state other necessary facts. Among other things, the complaint alleges that the IPO Offering Materials failed to disclose the substantial revenues the Company derived from sales in New York City and the State of New York. This was material information because the IPO Offering Materials also failed to disclose that the State of New York had implemented (prior to the IPO), and New York City was about to implement, substantial corporate tax reforms that would significantly impact Inovalon's tax rate and financial results.
Subsequently, Inovalon reported quarterly financial results that included higher than expected corporate tax rates, which in turn adversely impacted the Company's financial results. For example, on August 5, 2015, Inovalon reported its second quarter 2015 financial results and disclosed that "New York City enacted corporate tax reform legislation retroactive to January 1, 2015 which increased the Company's effective tax rate by 1.7% and 1.1% for the three and six months ended June 30, 2015, respectively. This legislation negatively impacted Non-GAAP diluted net income per share during the quarter by $0.01." The Company also reduced its fiscal 2015 Non-GAAP net income and Non-GAAP diluted net income per share guidance on August 5, 2015 "to reflect the effect of intra-quarter changes in New York City tax and other statutory tax regulation changes," and disclosed that "inherent in the revised guidance provided for Non-GAAP net income and Non-GAAP diluted net income per share is an increase in the effective tax rate from 41% to 43%."
Following this news, shares of the Company's stock declined $5.87 per share, or over 23%, to close on August 6, 2015 at $19.53 per share.
Inovalon shareholders may, no later than August 23, 2016, petition the Court to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class in the action. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check prosecutes class actions in state and federal courts throughout the country. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check. For more information about Kessler Topaz Meltzer & Check, or for additional information about participating in this action, please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
Darren J. Check, Esq.
D. Seamus Kaskela, Esq.
Adrienne O. Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
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SOURCE Kessler Topaz Meltzer & Check, LLP