Xiao-I Corporation SEC Filings

Xiao-I Corporation (Nasdaq: AIXI) has filed a Rule 424(b)(5) prospectus supplement covering up to US$6.128 million of American Depositary Shares (ADSs) that may be issued upon conversion of two privately-placed convertible promissory notes maturing on 19 June 2026. The notes were sold to two institutional investors under separate Securities Purchase Agreements dated 18 June 2025. Each ADS represents three ordinary shares, par value US$0.00005. The notes are initially debt instruments but will convert into equity at the investors’ option, creating potential dilution for existing shareholders.

The filing states that the company’s public float is approximately US$45.7 million, calculated from 36,353,875 ordinary shares held by non-affiliates and a May 13 2025 ADS closing price of US$3.77. Because the float is below US$75 million, Xiao-I is subject to Form F-3 Instruction I.B.5, which limits primary offerings to one-third of public float in any 12-month period; management confirms that the cumulative securities sold in the past year, including this note issuance, remain below that threshold, preserving additional capital-raising capacity.

Xiao-I is an “emerging growth company” and a Cayman Islands holding company whose operations are conducted in the People’s Republic of China through a variable interest entity (VIE), Shanghai Xiao-i Robot Technology Co., Ltd. U.S. GAAP consolidation is achieved via contractual agreements, yet investors purchase equity only in the Cayman parent. The filing reiterates that Chinese regulators could disallow the VIE structure, potentially rendering the ADSs valueless, and notes the VIE agreements have not been tested in court.

Extensive disclosure highlights restrictions on cash transfers, dividend payments, and foreign-exchange conversion. Dividends from the PRC operating entities can be paid to the Cayman parent only after meeting statutory reserve requirements and SAFE procedures. Currency controls, potential tightening of capital regulations, and unregistered shareholder transactions under SAFE Circular 37 all present additional hurdles. Management indicates no near-term intent to pay dividends and plans to retain earnings for growth.

Cash-management policies require multi-level approvals for inter-company transfers. While a new capital account with Bank of Ningbo has been opened, future regulatory changes or bank policy shifts could impede the movement of overseas proceeds into China. The prospectus therefore frames the offering as a financing tool for working capital and expansion, while cautioning investors about significant structural, regulatory, and dilution risks.