Kessler Topaz Meltzer & Check, LLP Reminds Inovalon Holdings, Inc. Shareholders of Important Deadline in Class Action Lawsuit

RADNOR, PA--(Marketwired - August 01, 2016) - The law firm of Kessler Topaz Meltzer & Check, LLP announces that a shareholder class action lawsuit has been filed in the United States District Court for the Southern District of New York against Inovalon Holdings, Inc. (NASDAQ: INOV) ("Inovalon" or the "Company") on behalf of purchasers of the Company's common stock issued pursuant or traceable to the Registration Statement and Prospectus (collectively, the "IPO Offering Materials") filed in connection with Inovalon's February 12, 2015 initial public offering of common stock (the "IPO").

Deadline Reminder: Investors who purchased Inovalon securities during the Class Period 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.

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%."