Cloopen Group Holding Limited (NYSE:RAAS) Long Term Shareholder Notice: Investigation of Potential Wrongdoing

An investigation on behalf of current long term investors in Cloopen Group Holding Limited (NYSE:RAAS) shares over possible breaches of fiduciary duty by certain officers and directors was announced.

San Diego, CA — (SBWIRE) — 04/21/2022 — An investigation was announced concerning potential breaches of fiduciary duties by certain directors and officers of Cloopen Group Holding Limited.

Investors who are current long term investors in Cloopen Group Holding Limited (NYSE: RAAS) shares, have certain options and should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 – 1554.

The investigation by a law firm for investors in NYSE: RAAS stocks follows a lawsuit filed against Cloopen Group Holding Limited over alleged securities laws violations. The investigation on behalf of current long term investors in NYSE: RAAS stocks, concerns whether certain Cloopen Group Holding Limited directors are liable in connection with the allegations made in that lawsuit.

The plaintiff alleges that the Registration Statement led Cloopen Group Holding Limited ADS purchasers to believe that the Company’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, the complaint alleges that Cloopen Group Holding Limited 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.

The plaintiff further alleges that the Registration Statement failed to disclose that an increasing number of Cloopen Group Holding Limited ‘s customers were refusing to pay, forcing the Company to record massive increases in its accounts receivables and allowance for doubtful accounts. The Registration Statement also allegedly failed to disclose that Cloopen Group Holding Limited was weighed down by huge liabilities related to the fair value of certain recently-granted warrants.

On March 26, 2021 Cloopen Group Holding Limited reported its 4Q 2020 and FY 2020 financial results, which closed on December 31, 2020. Cloopen Group Holding Limited reported 4Q 2020 revenues of $39.6 million, $2 million shy of analysts’ consensus, net losses of $46.8 million, representing a staggering 466.9% increase year-over-year, and operating expenses of $27.6 million, representing a 30% increase over 4Q 2019. Cloopen Group Holding Limited blamed a “change in fair value of warrant liabilities of . . . US$34.4 million” for its 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.

The complaint further alleges that thereafter Cloopen Group Holding Limited ‘s most senior officers continued to make materially false and misleading statements to the market and failed to reveal the true extent of Cloopen’s troubles.

The plaintiff claims that in the March 26, 2021 earnings announcement and investor conference call, Cloopen Group Holding Limited ‘s senior executives continued to misrepresent the Company’s expansion strategy, again failing to acknowledge that the strategy was failing and its existing customer base was deteriorating; nor did they disclose that Cloopen’s dollar-based net retention rate had tumbled in 4Q 2020.

The plainitff alleges that weeks later, as Cloopen Group Holding Limited 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.

Since the IPO shares of Cloopen Group Holding Limited (NYSE: RAAS) declined to as low as $2.68 per share on December 3, 2021.

Those who purchased shares of Cloopen Group Holding Limited (NYSE: RAAS) have certain options and should contact the Shareholders Foundation.

Contact:
Shareholders Foundation, Inc.
Christopher Clausen
3111 Camino Del Rio North – Suite 423
92108 San Diego
Phone: +1-(858)-779-1554
Fax: +1-(858)-605-5739
mail@shareholdersfoundation.com

About The Shareholders Foundation
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, , which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigation, and/or settlements are not filed/reached and/or related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

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Media Relations Contact

Christopher Clausen
Shareholders Foundation
Telephone: 1-858-779-1554
Email: Click to Email Christopher Clausen
Web: https://www.shareholdersfoundation.com/