NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS JAN 7 2026

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

In Re: ON24, INC. SECURITIES No. 24-2204 LITIGATION, D.C. No. 4:21-cv-08578-YGR

LEADERSEL INNOTECH ESG,

Plaintiff - Appellant, MEMORANDUM*

v.

ON24, INC.; SHARAT

SHARAN; STEVEN

VATTUONE; DENISE

PERSSON; HOLDGER

STAUDE; DOMINIQUE

TREMPONT; BARRY

ZWARENSTEIN; GOLDMAN SACHS &

CO. LLC; J.P. MORGAN SECURITIES

LLC; KEYBANC CAPITAL MARKETS

INC.; ROBERT W. BAIRD & CO.

INCORPORATED; CANACCORD

GENUITY LLC; NEEDHAM &

COMPANY, LLC; PIPER SANDLER &

CO.; WILLIAM BLAIR & COMPANY,

L.L.C.; IRWIN FEDERMAN,

Defendants - Appellees.

Appeal from the United States District Court for the Northern District of California

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Yvonne Gonzalez Rogers, District Judge, Presiding

Argued and Submitted March 4, 2025 Submission Vacated August 26, 2025 Resubmitted January 5, 2026 Pasadena, California

Before: MURGUIA, Chief Judge, and SANCHEZ and H.A. THOMAS, Circuit Judges.

Leadersel Innotech ESG (“Leadersel”) brings this class action on behalf of all

persons and entities who purchased or otherwise acquired Defendant ON24, Inc.1

(“ON24”) publicly traded common stock pursuant to the public offering documents

issued in connection with ON24’s initial public offering (“IPO”).2 Leadersel alleges

that the public offering documents contained six materially misleading statements.

These statements allegedly omitted facts related to ON24’s material churn—the rate

at which customers discontinue their relationship with the business—that occurred

in advance of the IPO and the change in ON24’s customer base. Leadersel offers

two distinct theories of liability related to the alleged omissions: (1) a primary

violation of Section 11 of the Securities Act of 1933, and (2) a violation of Item 303

1 ON24 is a company that offers an online platform to businesses to generate revenue through interactive webinars, virtual events, and multimedia content experiences. 2 Defendants are the following: ON24, Inc.; Sharat Sharan, Steven Vattuone, Irwin Federman, Denise Persson, Holger Staude, Dominique Trempont, and Barry Zwarenstein (together, “Individual Defendants”); and Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Robert W. Baird & Co. Incorporated, Canaccord Genuity LLC, Needham & Company, LLC, Piper Sandler & Co., and William Blair & Company, L.L.C. (together, “Underwriter Defendants”).

2 24-2204 of Securities and Exchange Commission (“SEC”) Regulation S-K.3 Leadersel also

alleges that the individually named defendants—officers and directors of ON24—

are liable under Section 15 for directing and controlling ON24 when these alleged

Section 11 violations occurred. The district court dismissed the complaint with

prejudice. We have jurisdiction under 28 U.S.C. § 1291. We affirm in part and

reverse in part and remand.

We review the district court’s order dismissing the complaint de novo.

Friedman v. AARP, Inc., 855 F.3d 1047, 1051 (9th Cir. 2017). “Review is limited

to the contents of the complaint . . . [and a]ll allegations of material fact are taken as

true and construed in the light most favorable to the nonmoving party.” Sprewell v.

Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (citation omitted). We

may affirm on any ground supported by the record. Salameh v. Tarsadia Hotel, 726

F.3d 1124, 1129 (9th Cir. 2013).

1. We affirm the district court’s dismissal of claims that are based on

Statement 3. “[S]ection 11 of the 1933 Securities Act creates a private remedy for

any purchaser of a security if ‘any part of the registration statement, when such part

became effective, contained an untrue statement of a material fact or omitted to state

a material fact required to be stated therein or necessary to make the statements

3 After publication of the Court’s decision in Sodha v. Golubowski, 154 F.4th 1019 (9th Cir. 2025), Leadersel withdrew its 17 C.F.R. § 229.105 (“Item 105”) claim.

3 24-2204 therein not misleading.’” In re Daou Sys., Inc., 411 F.3d 1006, 1027 (9th Cir. 2005)

(quoting 15 U.S.C. § 77k(a)), abrogated on other grounds by Matrixx Initiatives,

Inc. v. Siracusano, 563 U.S. 27 (2011). Statement 3, describing ON24’s belief that

it had the opportunity to achieve significant future growth is a forward-looking

opinion that would not have misled a reasonable investor. See Omnicare, Inc. v.

Laborers Dist. Council Constr. Indus. Pension Fund, 575 U.S. 175, 186, 189–90

(2015) (holding that “opinions sometimes rest on a weighing of competing facts[,]”

and “a sincere statement of pure opinion is not an ‘untrue statement of material fact,’

regardless whether an investor can ultimately prove the belief wrong”).

2. We reverse the district court’s dismissal of Section 11 claims based on the

remaining five statements: Statement 1, describing a “highly engaged and loyal

customer base”; Statement 2, recognizing acceleration in revenue growth rate due to

the COVID-19 pandemic; Statement 4, describing a potential reduction in product

demand post-pandemic; Statement 5, describing a potential decline in the revenue

growth rate post-pandemic; and Statement 6, describing the possibility that

subscription renewals and upselling may decline in the future.

To allege a Section 11 claim, a plaintiff must show “(1) that the registration

statement contained an omission or misrepresentation, and (2) that the omission or

misrepresentation was material, that is, it would have misled a reasonable investor

about the nature of his or her investment.” Rubke v. Capitol Bancorp Ltd., 551 F.3d

4 24-2204 1156, 1161 (9th Cir. 2009) (internal quotations and citation omitted). “Section 11

does not require the disclosure of all information a potential investor might take into

account when making his decision.” Id. at 1163. However, at the pleading stage,

“Section 11 places a relatively minimal burden on a plaintiff[:] . . . he need only

show a material misstatement or omission to establish his prima facie case.” Hildes

v. Arthur Andersen LLP, 734 F.3d 854, 859 (9th Cir. 2013) (internal quotations and

citation omitted). Because Leadersel’s Section 11 claim does not “sound in fraud,”

it must only meet Rule 8(a)’s ordinary notice pleading requirements. Daou, 411

F.3d at 1027.

Construing the allegations in the light most favorable to Leadersel, the

complaint contains plausible allegations, corroborated by confidential witnesses 4,

that, during the COVID-19 pandemic, atypical customers engaged ON24 for short-

term subscriptions of one-year or less and informed ON24 of their intent to either

downsell—downgrade to a cheaper subscription—or not renew these short-term

subscriptions. The complaint contains plausible allegations that ON24

systematically tracked its data regarding customer churn risk and actual churn

occurrences. The complaint also contains plausible allegations that atypical

customer churn and downsell began to occur prior to the 2021 IPO and continued

4 Leadersel relies on the statements of eight former ON24 employees to substantiate its allegations.

5 24-2204 thereafter when ON24 failed to meet its projected mid-year revenue goals within

months after the IPO. Accordingly, Leadersel sufficiently alleges that ON24 knew

that the risk of material churn and downselling had started to come to fruition before

the IPO yet disclosed only that those risks may occur. “Risk disclosures that speak

entirely of as-yet-unrealized risks and contingencies and do not alert the reader that

some of these risks may already have come to fruition can mislead reasonable

investors.” In re Alphabet, Inc. Sec. Litig., 1 F.4th 687, 703 (9th Cir. 2021) (quoting

Berson v. Applied Signal Tech., Inc., 527 F.3d 982, 985–87 (9th Cir. 2008) (internal

quotations and alterations omitted)). Leadersel’s allegations, if taken as true, are

consistent with Leadersel’s theory that the change in customer base negatively

impacted ON24’s future growth rate and that the change should have been

specifically disclosed to potential stockholders.5 As such, Leadersel adequately pled

its Section 11 claim.

3. We also reverse the district court’s dismissal of Leadersel’s alleged 17

C.F.R. § 229.303 (“Item 303”) violation. Item 303 requires the registrant to

“‘[d]escribe any known trends or uncertainties that have had or that are reasonably

likely to have a material favorable or unfavorable impact on net sales or revenues or

5 The district court erred by improperly relying on judicially noticed revenue and ARR data to dispute Leadersel’s plausible theory of liability. Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1003 (9th Cir. 2018) (explaining that it is improper for a district court “to assume the truth of an incorporated document if such assumptions only serve to dispute facts stated in a well-pleaded complaint”).

6 24-2204 income from continuing operations.’” Sodha, 154 F.4th at 1037 (alteration in

original) (quoting 17 C.F.R. § 229.303(b)(2)(ii)). “Item 303 ‘specifies its own

standard for disclosure—i.e., reasonably likely to have a material effect’ and requires

more disclosure than the materiality test typically used in securities law.” Id. at 1041

(quoting In re NVIDIA Corp. Secs. Litig., 768 F.3d 1046, 1055 (9th Cir. 2014)).

Leadersel alleges that ON24 violated Item 303 because the risk disclosures

did not disclose the change in customer profiles that occurred before the IPO, ON24

leadership’s knowledge of several customers’ intent not to renew or intent to

downsell, and ON24 leadership’s knowledge of churn with six-month contracts

leading up to the IPO. Leadersel further alleges that ON24’s leadership

methodically tracked this information in ON24’s Salesforce software and held

meetings with ON24 management regarding customers’ churn risk leading up to the

IPO. These allegations are sufficient at this stage to allege a violation of Item 303.

See Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1297 (9th Cir. 1998) (holding

that when future impacts are reasonably likely to occur, “they cease to be optional

forecasts and instead become present knowledge subject to the duty of disclosure”).

4. Because we reverse, in part, the district court’s dismissal of Plaintiffs’

Section 11 claims, we also reverse the dismissal of the derivative Section 15 claim.

See In re Rigel Pharms., Inc. Sec. Litig., 697 F.3d 869, 886 (9th Cir. 2012)

(explaining that a Section 15 claim requires an underlying primary violation of

7 24-2204 securities law).

AFFIRMED in part, REVERSED in part, AND REMANDED. The

parties shall bear their own costs on appeal.

8 24-2204