According to the law firm press release, the Complaint alleges throughout the Class Period defendants made materially false and misleading statements regarding the Company's business, operational and financial information. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company overstated revenues from several contracts and failed to follow GAAP standards, fixing its financial statements only a year and half later and causing millions in losses to the Company and Investors; and (ii) as a result of the foregoing, Osiris's public statements were materially false and misleading at all relevant times.
It is alleged that on November 16, 2015, Osiris surprised investors by disclosing that it has "determined to correct the revenue recognition for three contracts which will result in a decrease in product revenues of $1.8 million in the first quarter of 2015, a decrease in product revenue of $1.0 million in the second quarter, an increase in product revenues of $0.8 million in the third quarter of 2015 and a decrease in product revenues of $1.1 million in 2014." Thus, three restatements were made related to distributor relationships, which completely removed about $3.1 million of sales and shifted about $3.9 million of sales between quarters. As a result of these errors, Osiris missed its revenue targets in three of the last four quarters.
Following this news, Osiris shares fell sharply. They dropped $3.02, or 21.53%, to close at $10.97 on November 17, 2015, damaging investors.