ALERT: Cloopen Group Holding Limited Investors with Substantial Losses Have Opportunity to Lead Class Action Lawsuit – RAAS

SAN DIEGO–(BUSINESS WIRE)–#Cloopencase—Robbins Geller Rudman & Dowd LLP announces that purchasers of Cloopen Group Holding Limited’s (NYSE: RAAS) American Depositary Shares (“ADSs”) pursuant and/or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with Cloopen’s IPO, and/or securities between February 9, 2021 and May 10, 2021, inclusive (the “Class Period”) have until February 8, 2022 to seek appointment as lead plaintiff in Dong v. Cloopen Group Holding Limited, No. 21-cv-10610 (S.D.N.Y.). Commenced on December 10, 2021, the Cloopen class action lawsuit charges Cloopen, certain of its executives and directors, as well as the underwriters of Cloopen’s IPO with violations of the Securities Act of 1933 and/or Securities Exchange Act of 1934.

If you wish to serve as lead plaintiff of the Cloopen class action lawsuit, please provide your information by clicking here. You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at [email protected]. Lead plaintiff motions for the Cloopen class action lawsuit must be filed with the court no later than February 8, 2022.

CASE ALLEGATIONS: Cloopen claims to be the largest multi-capability cloud-based communications solution provider in China. In its February 2021 United States IPO, Cloopen sold 23 million ADSs (including the full exercise of the underwriter defendants’ over-allotment option) at $16 per ADS, netting approximately $342 million in proceeds from the offering.

The Cloopen class action lawsuit alleges that the Registration Statement led Cloopen ADS purchasers to believe that Cloopen’s much-touted growth strategy, which relied upon cross-selling, up-selling, optimizing existing solutions, and developing new features, was effective. Indeed, as portrayed in the Registration Statement, Cloopen appeared to be retaining and even expanding its customer base, as well as maintaining its key sales metrics such as dollar-based net retention rate, which reflected its ability to increase existing customer revenue. Yet, Cloopen’s representations concerning its successful growth strategy were materially false and misleading. In fact, as the Cloopen class action lawsuit alleges, Cloopen’s growth strategy was not working and its existing customers were abandoning the company. The Cloopen class action lawsuit further alleges that Cloopen’s Registration Statement failed to disclose that an increasing number of its customers were refusing to pay, forcing Cloopen to record massive increases in its accounts receivables and allowance for doubtful accounts. The Registration Statement also allegedly failed to disclose that Cloopen was weighted down by massive liabilities related to the fair value of certain recently-granted warrants.

On March 26, 2021, just over six weeks after its IPO, Cloopen reported fourth quarter of 2020 revenues of just $39.6 million – $2 million shy of analysts’ consensus – net losses of $46.8 million, representing a 466.9% increase year-over-year, and operating expenses of $27.6 million, representing a 30% increase over fourth quarter of 2019. Cloopen blamed a “change in fair value of warrant liabilities of . . . $34.4 million” for Cloopen’s remarkable net loss and “an increase in the provision for doubtful accounts resulting from increased in accounts receivables” for the 59.2% increase in general and administrative expenses. On this news, the price of Cloopen’s ADSs fell by more than 18%.

Weeks later, as Cloopen belatedly revealed additional facts about its failed growth strategy and withering customer base, including that its dollar-based net retention rate by year end 2020 fell far below historical periods, Cloopen’s share price fell again.

At the time the Cloopen class action lawsuit was commenced, Cloopen’s share price has dropped as low as $2.70 per ADS, a decline of more than 80% from the $16 IPO price.

THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Cloopen ADSs pursuant and/or traceable to the Registration Statement issued in connection with Cloopen’s IPO and/or Cloopen securities during the Class Period to seek appointment as lead plaintiff in the Cloopen class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Cloopen class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Cloopen class action lawsuit. An investor’s ability to share in any potential future recovery of the Cloopen class action lawsuit is not dependent upon serving as lead plaintiff.

ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: With 200 lawyers in 9 offices nationwide, Robbins Geller Rudman & Dowd LLP is the largest U.S. law firm representing investors in securities class actions. Robbins Geller attorneys have obtained many of the largest shareholder recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors last year, more than double the amount recovered by any other securities plaintiffs’ firm. Please visit http://www.rgrdlaw.com for more information.

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Contacts

Robbins Geller Rudman & Dowd LLP

655 W. Broadway, San Diego, CA 92101

J.C. Sanchez, 800-449-4900

[email protected]