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Federman & Sherwood Announces the Filing of a Securities Class Action Lawsuit against Obalon Therapeutics, Inc. [NASDAQ: OBLN]

Oklahoma City, OK (March 6, 2018) – On February 14, 2018, a securities class action lawsuit was filed in the United States District Court for the Southern District of California against Obalon Therapeutics, Inc. (NASDAQ: OBLN). The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material or false misrepresentations to the market which had the effect of artificially inflating the market price during the Class Period, which is October 5, 2016 through January 23, 2018. More specifically, this litigation was filed because on October 5, 2016, Obalon held its initial public offering, issuing 5,000,000 shares and raising net proceeds of approximately $67.2 million. Obalon then attested in its prospectus and other public filings that its financial statements were prepared in accordance with United States generally accepted accounting principles. Obalon also emphasized substantial revenue growth and improvements in its gross margin in its financial reports throughout the class period.

On January 23, 2018, Obalon revealed that a whistleblower contacted KPMG LLP, the company’s independent auditors, to allege that Obalon had improperly recognized revenue during the company’s fourth fiscal quarter of 2017. As a result, Obalon canceled its previously announced offering of 5,454,545 shares of its common stock at a price of $5.50 per share and said that its Audit Committee would investigate the allegations. On this news, Obalon’s stock fell $1.73 to close at $3.46 on January 23, 2018.

Plaintiff seeks to recover damages on behalf of all Obalon Therapeutics, Inc. shareholders who purchased common stock during the Class Period and are therefore a member of the Class as described above. You may move the Court no later than Monday, April 16, 2018 to serve as a lead plaintiff for the entire Class. However, in order to do so, you must meet certain legal requirements pursuant to the Private Securities Litigation Reform Act of 1995.

To join this class action, click here to obtain an investor certification. Once complete, please email this form to rkh@federmanlaw.com, fax to us at (405) 239-2112 or send by regular mail to Federman & Sherwood, 10205 North Pennsylvania Avenue, Oklahoma City, OK 73120, ATTN: Robin.

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