LOS ANGELES--(BUSINESS WIRE)--Glancy Prongay & Murray LLP (“GPM”), a leading national shareholder rights law firm, announces that a class action lawsuit has been filed on behalf of Xiao-I Corporation (“Xiao-I” or the “Company”) (NASDAQ: AIXI) investors who purchased: (a) American depository shares (“ADSs”) pursuant and/or traceable to the Offering Documents issued in connection with the Company’s March 2023 initial public offering (the “IPO” or “Offering”); and/or (b) securities between March 9, 2023 and July 12, 2024, both dates inclusive (the “Class Period”). Xiao-I investors have until December 16, 2024 to file a lead plaintiff motion.
If you suffered a loss on your Xiao-I investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at www.glancylaw.com/cases/xiao-i-corporation/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at shareholders@glancylaw.com to learn more about your rights.
On or about March 9, 2023, Xiao-I conducted its IPO, issuing 5.7 million ADSs to the public at the Offering price of $6.80 per ADS for gross proceeds of $38.76 million.
On September 25, 2023, Xiao-I issued a press release announcing inter alia, a net loss of $18.8 million for the first half of 2023, and revealing that its “[t]otal operating expenses” increased 355% year over year, and R&D expenses “grew by 708% year over year.” On this news, Xiao-I’s ADS price fell $2.70, or 14.22%, to close at $16.29 per ADS on September 25, 2023.
Then, on April 30, 2024, Xiao-I revealed, inter alia, FY 2023 revenues of $59.2 million as well as a net loss of $27 million, noting “[R&D] expenses . . . grew by 118.3% year over year.” On this news, Xiao-I’s ADS price fell $0.72, or 6.15%, to close at $10.98 per ADS on April 30, 2024.
Finally, on July 15, 2024, Xiao-I announced it “received a notification letter dated July 11, 2024 (the ‘Deficiency Letter’) from the Listing Qualifications Department of [t]he [NASDAQ], indicating that the Company is no longer in compliance with the minimum bid price requirement[.]” On this news, Xiao-I’s ADS price fell $0.13, or 2.28%, to close at $5.99 per ADS on July 15, 2024.
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, the Offering Documents and Defendants failed to disclose to investors that: (1) Defendants had downplayed the true scope and severity of risks that Xiao-I faced due to certain of its Chinese shareholders’ non-compliance with Circular 37 Registration, including the Company’s inability to use Offering proceeds for intended business purposes; (2) Xiao-I failed to comply with GAAP in preparing its financial statements; (3) Defendants overstated Xiao-I’s efforts to remediate material weaknesses in the Company’s financial controls; (4) Xiao-I was forced to incur significant R&D expenses to effectively compete in the AI industry; (5) Xiao-I downplayed the significant negative impact that such expenses would have on the Company’s business and financial results; (6) accordingly, Xiao-I overstated its AI capabilities, R&D resources, and overall ability to compete in the AI market; (7) as a result of all the foregoing, there was a substantial likelihood that Xiao-I would fail to comply with the NASDAQ’s Minimum Bid Price Requirement; and (8) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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If you purchased or otherwise acquired Xiao-I securities during the Class Period, you may move the Court no later than December 16, 2024 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles, California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.
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