A securities class action has been filed in the USDC — S.D.N.Y. against Xiao-l Corp. (AIXI) (“Xiao-l” or the “Company”), on behalf of all persons or entities that purchased or otherwise acquired:
(a) Xiao-I Corporation (“Xiao-I” or the “Company”), American depository shares (“ADSs”) pursuant and/or traceable to the Offering Documents issued in connection with the Company’s initial public offering conducted on or about March 9, 2023 (the “IPO” or “Offering”); and/or
(b) Xiao-I securities between March 9, 2023 and July 12, 2024, both dates inclusive (the “Class Period”).
Xiao-I, through its subsidiaries, operates as a global artificial intelligence (“AI”) company. The Company is incorporated in the Cayman Islands and headquartered in the People’s Republic of China (the “PRC” or “China”). As a holding company with no material operations of its own, Xiao-I conducts most of its operations through its subsidiary Shanghai Xiao-I Robot Technology Co., Ltd. (“Shanghai Xiao-i”), which comprises the Company’s AI business.
The claim arises on July 15, 2024, during pre-market hours, Xiao-I issued a press release announcing “that 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.
The Complaint alleges that the Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Additionally, the Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, the Complaint alleges that the Offering Documents and Defendants made false and/or misleading statements and/or failed to disclose 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, the Offering Documents and Defendants’ public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein, thereby harming investors.
On this news, Xiao-I’s ADS price fell 2.28% to close at approximately $0.67 per ADS on July 15, 2024.
If you purchased Xiao-I securities during the class period and would like to receive more information or join the action, please enter your contact information below for a FREE consultation and click “Submit Your Information”.
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