A securities class action alleges iTonic Holdings Ltd (f/k/a Pheton Holdings Ltd) warned only in generic terms about microcap volatility while omitting the specific, realized risk of a coordinated manipulation scheme, and that iTonic shareholders lost roughly $30.35 per share when the stock collapsed.
NEW YORK, Aug. 12, 2026 /PRNewswire/ -- Levi & Korsinsky, LLP notifies investors in iTonic Holdings Ltd (f/k/a Pheton Holdings Ltd) (NASDAQ: ITOC, PTHL) that a securities class action has been filed on behalf of shareholders who purchased securities between September 5, 2024 and July 29, 2025. Submit your information. You may also contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com or (212) 363-7500.
iTonic shares fell from an intraday high of $32.00 on July 28, 2025 to close at approximately $1.65 on July 29, 2025, a decline of nearly 95%. Lead plaintiff applications must be submitted by September 29, 2026.
What the Company Disclosed
SEC filings stated that "there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with a number of recent initial public offerings, especially among companies with relatively smaller public floats." The offering documents also identified two material weaknesses in internal control over financial reporting, described as a lack of sufficient personnel with appropriate levels of accounting knowledge and a lack of formal policies and procedures to establish risk assessment processes and an internal control framework.
What Plaintiffs Allege Was Missing
The complaint challenges the adequacy of those warnings, contending that the disclosures never identified the specific risk that ultimately materialized. The action alleges that the offering documents omitted that the securities were exposed to a coordinated promotional and manipulation scheme, and that the auditor and underwriters engaged for the $9,000,000 September 2024 offering at $4.00 per share had been associated with other foreign microcap listings that later experienced structurally similar collapses.
Disclosure Gaps Alleged
- Risk factor language addressed volatility generally but allegedly did not warn of promotional manipulation targeting the specific security
- No disclosure allegedly addressed the professional histories of the offering participants in comparable foreign microcap listings
- Internal control material weaknesses were disclosed as boilerplate without alleged connection to oversight of trading and disclosure risk
- The lawsuit contends fabricated rumors of a Gilead Sciences transaction circulated without timely corrective disclosure
- The Company later stated that its share price had been "influenced" by "false rumors" and that it had "no contact with Gilead"
- Plaintiffs allege the surge to $32.00 occurred without any material corporate development supporting the valuation
"Generic risk factor language cannot substitute for disclosing specific, known problems that are already affecting a company's operations. The complaint alleges iTonic filings warned about microcap volatility in the abstract while omitting the manipulation risk that plaintiffs say actually materialized." -- Joseph E. Levi, Esq.
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WHY LEVI & KORSINSKY: Over the past 20 years, Levi & Korsinsky LLP has established itself as a nationally-recognized securities litigation firm that has secured hundreds of millions of dollars for aggrieved shareholders and built a track record of winning high-stakes cases. The firm has extensive expertise representing investors in complex securities litigation and a team of over 70 employees to serve our clients. For seven years in a row, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report as one of the top securities litigation firms in the United States.
Frequently Asked Questions About the iTonic Lawsuit
Q: What specific misstatements does the iTonic lawsuit allege? A: The complaint alleges iTonic Holdings Ltd (f/k/a Pheton Holdings Ltd) made materially false or misleading statements and omissions regarding the risk of market manipulation affecting its shares, the histories of its auditor and underwriters with similar foreign microcap offerings, and its internal controls. When the artificial nature of the price surge was exposed on July 29, 2025, the stock declined sharply.
Q: What court was the iTonic class action filed in? A: The case was filed in the United States District Court for the Southern District of New York, governed by the Private Securities Litigation Reform Act of 1995.
Q: Who are the defendants named in the iTonic lawsuit? A: The complaint names the Company and individual defendants including senior executives who signed SEC filings and certified financial disclosures, along with the offering's auditor and underwriters.
Q: What do iTonic investors need to do right now? A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at jlevi@levikorsinsky.com or (212) 363-7500. No immediate action is required to remain eligible as an absent class member.
Q: What is a lead plaintiff and why does it matter? A: A lead plaintiff is the investor appointed by the court to represent the entire class. Lead plaintiffs are typically investors with the largest documented losses. Being appointed does not increase individual recovery but gives direct oversight of how the case is run.
Q: What if I already sold my iTonic shares -- can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold the shares. Investors who bought during the Class Period and sold at a loss may still be eligible to participate.
Q: What does it cost me to participate? A: There is no upfront cost to contact the firm. Securities class actions are generally handled on a pure contingency basis, with no retainer and no out-of-pocket costs. Any attorneys' fees and expenses awarded to class counsel are subject to court approval.
Q: What if I live outside the United States? A: U.S. securities class actions generally cover purchases on U.S. exchanges regardless of the investor's country of residence.
CONTACT:\
Levi & Korsinsky, LLP\
Joseph E. Levi, Esq.\
Ed Korsinsky, Esq.\
33 Whitehall Street, 27th Floor\
New York, NY 10004\
jlevi@levikorsinsky.com\
Tel: (212) 363-7500\
Fax: (212) 363-7171
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