NEW YORK–(BUSINESS WIRE)–Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed in the United States District Court for the Central District of California on behalf of investors that purchased Ontrak, Inc. (NASDAQ: OTRK) securities between November 5, 2020 and February 26, 2021, inclusive (the “Class Period”). Investors have until May 3, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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On March 1, 2021, Ontrak issued a press release announcing preliminary financial results for fourth quarter and full year 2020. Therein, the Company stated that its largest customer had terminated its contract with Ontrak, effective June 26, 2021. The Company stated that this customer “evaluated Ontrak on a provider basis” and “[a]s such, the customer evaluated [Ontrak’s] performance based on [its] ability to achieve the lowest possible cost per medical visit, and not on [its] clinical outcomes data or medical cost savings.” The Company also stated that “the coaching model which Ontrak has pioneered for over a decade was seen by the customer to be less relevant to their performance metrics.”
On this news, the Company’s share price fell $27.32, or more than 46%, to close at $31.62 per share on March 1, 2021.
The complaint, filed on March 3, 2021, 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 Company’s business, operations, and prospects. Specifically, defendants failed to disclose to investors: (1) that Ontrak’s largest customer evaluated the Company on a provider basis, valuing Ontrak’s performance based on achieving the lowest cost per medical visit rather than clinical outcomes or medical cost savings; (2) that, as a result, Ontrak’s largest customer did not find the Company’s program to be effective and was reasonably likely to terminate its contract with Ontrak; (3) that, because this customer accounted for a significant portion of the Company’s revenue, the loss of the customer would have an outsized impact on Ontrak’s financial results; and (4) that, as a result of the foregoing, defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased Ontrak securities during the Class Period and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker, Melissa Fortunato, or Marion Passmore by email at firstname.lastname@example.org, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
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Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.