Xiao-I Corporation
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CONTACT:
Portnoy Law Firm
Lesley F. Portnoy, Esq.,
www.portnoylaw.com
Office: 310.692.8883
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Los Angeles, CA 90067
info@portnoylaw.com
The claim arises on July 15, 2024, when, during pre-market hours, Xiao-I issued a press release announcing that it had received a notification letter from the NASDAQ Listing Qualifications Department, dated July 11, 2024 (the “Deficiency Letter”), stating that the Company was no longer in compliance with NASDAQ’s minimum bid price requirement.
The Complaint asserts that the Offering Documents were negligently prepared, containing false statements of material fact or omitting necessary information to make the statements not misleading. It further alleges that the Offering Documents were not prepared in accordance with applicable rules and regulations. The Complaint also claims that throughout the Class Period, Defendants made materially false and misleading statements regarding Xiao-I’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 the following: (1) Defendants minimized the true extent of risks Xiao-I faced due to certain Chinese shareholders’ non-compliance with Circular 37 Registration, which impacted the Company’s ability to use Offering proceeds for their intended purposes; (2) Xiao-I’s financial statements were not prepared in compliance with GAAP; (3) Defendants exaggerated Xiao-I’s efforts to correct material weaknesses in its financial controls; (4) Xiao-I had to incur significant R&D expenses to compete in the AI industry; (5) Xiao-I downplayed the significant negative impact these expenses would have on the Company’s business and financial performance; (6) as a result, Xiao-I overstated its AI capabilities, R&D resources, and its overall ability to compete in the AI market; (7) due to these issues, there was a substantial risk that Xiao-I would fail to meet NASDAQ’s Minimum Bid Price Requirement; and (8) consequently, the Offering Documents and Defendants’ public statements throughout the Class Period were materially false and/or misleading, and omitted required information. Following the announcement, Xiao-I’s ADS price dropped 2.28%, closing at approximately $0.67 per ADS on July 15, 2024.
