According to the lawsuit, the Offering Documents and defendants made false and/or misleading statements and/or failed to disclose that:
- 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, which imposes certain registration requirements on Chinese residents that contribute domestic assets or interests to offshore companies, including Xiao-I’s inability to use Offering proceeds for intended business purposes;
- Xiao-I failed to comply with the U.S.’s Generally Accepted Accounting Principles (“GAAP”) in preparing its financial statements;
- defendants overstated Xiao-I’s efforts to remediate material weaknesses in Xiao-I’s financial controls;
- Xiao-I was forced to incur significant research and development (“R&D”) expenses to effectively compete in the AI industry;
- Xiao-I downplayed the significant negative impact that such expenses would have on Xiao-I’s business and financial results;
- accordingly, Xiao-I overstated its AI capabilities, R&D resources, and overall ability to compete in the AI market;
- as a result of all the foregoing, there was a substantial likelihood that Xiao-I would fail to comply with NASDAQ’s listing requirements, including, inter alia, that its ADSs maintain a minimum closing bid price of $1.00 per share, (the “Minimum Bid Price Requirement”); and
- 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.
No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff.
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