NEWTOWN, Pa., Oct. 23, 2024 (GLOBE NEWSWIRE) -- Edelson Lechtzin LLP, a leading class action law firm, is investigating securities fraud claims on behalf of all investors of Xiao-I Corporation (NASDAQ: AIXI) that purchased or otherwise acquired (a) Xiao-I American depository shares (“ADSs”) pursuant and/or traceable to the Offering Documents issued in connection with the Company’s public offering conducted on or about March 9, 2023; and/or (b) Xiao-I securities between March 9, 2023 and July 12, 2024, inclusive (the “Class Period”). To join this case, go HERE.
Investors who purchased Edwards stock during the Class Period may move the U.S. District Court for the Southern District of New York to appoint them as lead plaintiff, no later than December 16, 2024. Please contact Edelson Lechtzin LLP to discuss your investment losses at 844-696-7492 or by e-mail at elechtzin@edelson-law.com.
Background on Xiao-I Corporation
Based in Shanghai, China, Xiao-I is an artificial intelligence enterprise offering various AI business solutions.
The Securities Fraud Claims.
The Complaint alleges that throughout the Class Period, : (i) 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; (ii) Xiao-I failed to comply with GAAP in preparing its financial statements; (iii) Defendants overstated Xiao-I’s efforts to remediate material weaknesses in the Company’s financial controls; (iv) Xiao-I was forced to incur significant R&D expenses to effectively compete in the AI industry; (v) Xiao-I downplayed the significant negative impact that such expenses would have on the Company’s business and financial results; (vi) accordingly, Xiao-I overstated its AI capabilities, R&D resources, and overall ability to compete in the AI market; and (vii) 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.
On September 25, 2023, Xiao-I reported a net loss of $18.8 million for the first half of 2023, compared to a $0.6 million profit in 2022. Operating expenses rose by 355%, mainly due to a 708% increase in research and development costs, despite improved efficiency in other areas. On this news, the price of Xiao-I ADS fell $0.30 per share, or 14.22%, to close at $1.81 per share on September 25, 2023.
On October 20, 2023, Xiao-I reported a $18.8 million loss and a 708% rise in R&D costs, driven by investments in AI research and cloud projects following the release of OpenAI’s ChatGPT. On this news the price of Xiao-I ADS fell $0.03 per share, or 1.79%, to close at $1.65 per share on October 20, 2023.
On April 30, 2024, Xiao-I announced its FY 2023 results, reporting revenues of $59.2 million, missing estimates by $30.08 million. The Company had a net loss of $27 million, up from $6 million in FY 2022. Operating expenses increased by 80.7% to $61.3 million, mainly due to a 118.3% rise in R&D costs, despite some efficiency gains in other areas. On this news, the price of Xiao-I ADS fell $0.08 per share, or 6.15%, to close at $1.22 per share on April 30, 2024.
On July 15, 2024, Xiao-I issued a press release announcing that it had received a notification letter dated July 11, 2024, from the Listing Qualifications Department of NASDAQ. The letter indicated that the Company is no longer in compliance with the minimum bid price requirement as outlined in NASDAQ Listing Rule 5450(a)(1) because the Company’s closing bid price per ADS has been below $1.00 for 30 consecutive business days. On this news, Xiao-I’s ADS price fell 2.28% to close at approximately $0.67 per share on July 15, 2024.
For more information, please contact:
Marc H. Edelson, Esq.
Eric Lechtzin, Esq.
EDELSON LECHTZIN LLP
411 S. State Street, Suite N-300
Newtown, PA 18940
Phone: 844-696-7492 or 215-867-2399 ext. 1
Email: medelson@edelson-law.com
Email: elechtzin@edelson-law.com
Web: www.edelson-law.com
Edelson Lechtzin LLP is a leading class action law firm with offices in Pennsylvania and California. In addition to cases involving securities and investment fraud, our lawyers focus on class and collective litigation in cases alleging violations of the federal antitrust laws, employee benefit plans under ERISA, wage theft and unpaid overtime, consumer fraud, and dangerous and defective drugs and medical devices.
This press release may be considered Attorney Advertising in some jurisdictions. No class has been certified in this case, so counsel does not represent you unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing now. Your ability to share in any potential future recovery does not depend on serving as lead plaintiff.
