An investigation on behalf of investors of Yalla Group Limited (NYSE: YALA) shares over potential securities laws violations by Yalla Group Limited and certain of its directors and officers in connection with certain financial statements was announced.

The investigation by a law firm focuses on possible claims on behalf of purchasers of the securities of Yalla Group Limited (NYSE: YALA) concerning whether a series of statements by Yalla Group Limited regarding its business, its prospects and its operations were materially false and misleading at the time they were made.

Dubai based Yalla Group Limited operates a voice-centric social networking and entertainment platform under the Yalla name primarily in the Middle East and North Africa region. On or around September 30, 2020, Yalla Group Limited conducted its initial public offering ('IPO'), issuing 18.6 million American depositary shares ('ADSs') priced at $7.50 per ADS.

Then, on November 9, 2020, post-market, Yalla Group Limited announced its unaudited financial results for the third quarter of 2020. Among other results, Yalla Group Limited reported GAAP EPS of -$0.43, and costs and expenses of '$US64.7 million . . . compared with US$8.6 million in the same period last year.' Yalla Group Limited stated that '[t]he increase was primarily due to the recognition of share-based compensation of US$46.5 million upon our listing on the New York Stock Exchange on September 30, 2020. We granted a substantial amount of share options before the IPO but did not recognize any share-based compensation in prior periods because the exercisability of the options granted was conditional upon the completion of our IPO. Upon our listing on the NYSE, we immediately recognized a substantial amount of share-based compensation expenses associated with all outstanding options that were vested as of September 30, 2020.'