AIXI · Xiao-I Corporation

This filing discloses a material debt financing and concurrent unregistered securities issuance by Xiao-I Corporation, representing a significant near-term capital event with substantial implications for shareholders. The $3.25 million convertible note—issued under an unsecured, non-recourse structure—introduces both liquidity and risk: while it provides immediate working capital, its terms embed meaningful investor protections that constrain Xiao-I’s operational and financial flexibility. The 6% interest obligation, though modest in absolute terms, accrues on an unsecured basis, increasing the company’s fixed cost burden without corresponding asset coverage. Critically, the note’s trigger-based default framework—including automatic acceleration upon insolvency events or failure to deliver Conversion Shares within three Trading Days—creates acute execution pressure on Xiao-I’s ability to manage share issuance logistics and maintain compliance with Nasdaq and SEC requirements. The inclusion of 8.5 million Pre-Delivery Shares further signals intent to streamline future ADS conversions, but also pre-positions for equity dilution without shareholder approval. The 9.99% ownership cap and 15% weekly sales limitation reflect negotiated controls to mitigate market impact, yet underscore investor concern about liquidity overhang. Given the absence of disclosure regarding use of proceeds, investors lack visibility into whether these funds address working capital shortfalls, R&D investment, or debt refinancing—raising questions about underlying financial health. As a foreign private issuer filing on Form 6-K, Xiao-I is not subject to U.S. domestic reporting timelines for such arrangements, amplifying information asymmetry. This transaction materially alters the company’s capital structure and shareholder composition, warranting close monitoring of conversion activity, covenant compliance, and subsequent filings related to Note #2 and Note #3, which remain contingent on registration statement timing and exercise rights.