The Class Action alleges that, during the Class Period, Defendants made materially false and misleading statements and failed to disclose material adverse facts about the Companys business, operations, and prospects. Specifically, Defendants failed to disclose that: (1) the TSA and CMS contracts, which constituted a majority of the Companys future revenues, were not on track to commence as represented at the end of 2021 and in 2022; (2) Defendants lacked a reasonable basis and sufficient visibility to provide and affirm the Companys 2021 guidance in the face of the uncertainty surrounding the TSA and CMS contracts; (3) COVID- and hacking scandal-related headwinds were throwing off the timing for performance of the TSA and CMS contracts and their associated revenues; (4) as a result, the guidance provided by Defendants was not in fact conservative; (5) as a result of the delays, Telos would be forced to dramatically reduce its revenue estimates; and (6) as a result of the foregoing, Defendants statements about Telos business, operations, and prospects, were materially false and/or misleading and/or lacked a reasonable basis. The truth emerged during Telos third quarter 2021 earnings call on November 15, 2021, causing Telos stock price to fall and investors to suffer substantial losses. On that call, Telos announced that it was not expecting the TSA PreCheck contract to deliver meaningful sales this year. The Company also disclosed that it was not including revenue from the CMS contract in the Companys 2022 outlook. In response to these revelations, Telos stock price fell $6.84 per share, or more than 28 percent.
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