ATI Physical Therapy, Inc.

ATI Physical Therapy, Inc.

Ticker: ATIP

Class Period Start: 04/01/2021

Class Period End: 07/23/2021

Registration Deadline: 10/15/2021

ATI Physical Therapy, Inc. (“ATI” or the “Company”) is an outpatient physical therapy company. It owns and operates nearly 900 physical therapy clinics across 25 states.

On June 17, 2021, ATI became public via a business combination with FVAC (“Business Combination”).

On July 26, 2021, before the market opened, ATI reported its financial results for second quarter 2021, the period in which the Business Combination was completed. Among other things, ATI reported that “the acceleration of attrition among [its] therapists in the second quarter and continuing into the third quarter, combined with the intensifying competition for clinicians in the labor market, prevented us from being able to meet the demand we have and increased our labor costs.” Though ATI was implementing certain remedial actions, the Company reduced its fiscal 2021 forecast due to the foregoing factors.

On this news, the Company’s share price fell $3.62, or 43%, to close at $4.72 per share on July 26, 2021, on unusually heavy trading volume. The share price continued to decline the next trading session by as much as 19%. As a result, FVAC investors who could have voted against the Business Combination and redeemed their shares at $10.00 per share suffered a loss of $5.28 per share.

A securities class action has been filed against ATI on behalf of shareholders that purchased ATI shares between April 1, 2021 through July 23, 2021.  This case has been filed in the U.S. District Court for the Northern District of Illinois.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that ATI was experiencing attrition among its physical therapists; (2) that ATI faced increasing competition for clinicians in the labor market; (3) that, as a result of the foregoing, the Company faced difficulties retaining therapists and incurred increased labor costs; (4) that, as a result of the labor shortage, the Company would open fewer new clinics; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

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