The lawsuit, filed in the Southern District of New York, centers on the conduct of Pengfei Zhang, the brother of iTonic CEO Jianfei Zhang. Plaintiffs contend that during the class period—September 5, 2024, to July 29, 2025—the board failed to warn investors about a coordinated promotional scheme fueled by fabricated acquisition rumors involving Gilead Sciences. By the time the company clarified it had no ties to Gilead, the stock had cratered from an intraday high of $32.00 to approximately $1.65.

Legal representatives at Levi & Korsinsky, LLP argue that the board’s oversight was insufficient, pointing to documented weaknesses in internal financial reporting and a lack of formal risk assessment policies. The litigation, brought under the Securities Exchange Act of 1934, seeks to hold individual directors accountable for the contents of SEC filings and market presentations. Investors who purchased shares during the specified window have until September 29, 2026, to apply for lead plaintiff status.