Investors Seek Leadership Role in Securities Fraud Case Against Xiao-I Corporation

Major Opportunity for Investors: Join the Xiao-I Class Action

Overview

In a significant development for investors of Xiao-I Corporation (NASDAQ: AIXI), Glancy Prongay & Murray LLP has opened the door for those facing substantial financial losses to take an active role in a securities fraud class action lawsuit against the company. The class period under scrutiny spans from March 9, 2023, to July 12, 2024, with a deadline set for December 16, 2024, for potential lead plaintiffs.

The Allegations

The lawsuit seeks to hold Xiao-I accountable for allegedly misleading practices related to its business operations and financial disclosures. The complaint specifies several key points where the company is said to have failed its investors, including:
1. Downplaying Risks: Xiao-I is accused of significantly downplaying the scope and severity of risks it faced due to compliance issues with its Chinese shareholders regarding Circular 37 Registration. This aspect reportedly hampered the company's ability to utilize proceeds from its offerings for intended business purposes.
2. Inaccurate Financial Reporting: Allegations suggest that Xiao-I failed to comply with Generally Accepted Accounting Principles (GAAP) while preparing its financial statements, raising questions about the accuracy of reported financial health.
3. Overstated Remediation Efforts: The complaint asserts that the company exaggerated its attempts to address material weaknesses in its financial controls, potentially deceiving investors about its operational integrity.
4. Excessive R&D Expenditures: Xiao-I allegedly incurred significant research and development expenses to remain competitive in the AI market, which the company did not adequately convey to its investors.
5. Profitability Concerns: Concerns were raised regarding the negative impacts that excessive expenditures would have on the company's financial performance, which Xiao-I downplayed, thereby misleading investors about its competitive capabilities.
6. Misleading Statements: Continuous positive statements regarding the company's business and growth prospects were deemed materially misleading and lacked a reasonable basis, raising alarm regarding compliance with NASDAQ's Minimum Bid Price Requirement.

Investor Participation

For investors wishing to participate in this class action, Glancy Prongay & Murray LLP offers an avenue to submit their contact information and express their intent to serve as lead plaintiffs. Interested parties can visit their dedicated web page at Glancy Law or contact attorney Charles H. Linehan directly at 310-201-9150 or via email at [email protected] This provides an opportunity to understand rights and options regarding the unfolding lawsuit.

No Immediate Action Required

It is essential to note that current class members are not required to take immediate action. They are urged to either retain legal counsel or choose to remain as absent members of the class action without any adjustment to their rights.

Conclusion

This lawsuit against Xiao-I Corporation presents a crucial moment for investors affected by the alleged securities fraud. As the situation unfolds, it serves as a reminder of the importance of transparency and accountability in the corporate sector—an assurance that investors deserve as stakeholders in any enterprise. Follow Glancy Prongay & Murray LLP for updates as the case against Xiao-I progresses, and seize the opportunity to assert your rights as an investor.