Allegations
(a) it was not true that the Company’s purported success was the result of hyper-demand for Pareteum’s unique products or exceptional service, or the Company’s competent management; but, in fact, Defendants had propped up the Company’s results by manipulating Pareteum’s accounting for revenues, income, and the important Backlog metric; (b) Defendants had materially overstated the Company’s profitability by failing to properly account for the Company’s results of operations and by artificially inflating the Company’s financial results; (c) it was not true that Pareteum contained even the most minimally adequate systems of internal operational or financial controls necessary to assure that Pareteum’s reported financial statements were true, accurate, and/or reliable; (d) as a result, it also was not true that the Company’s financial statements and reports were prepared in accordance with GAAP and SEC rules; and (e) as a result of the aforementioned adverse conditions, Defendants lacked any reasonable basis to claim that Pareteum was operating according to plan, or that Pareteum could achieve the guidance sponsored and/or endorsed by Defendants.