SHANGHAI - Xiao-I Corporation (NASDAQ: AIXI), a cognitive intelligence enterprise, announced today an agreement with an institutional investor to sell $3,260,870 in senior convertible notes. The notes are set to mature 360 days after issuance and bear an annual interest rate of 6%, escalating to 15% in the event of a default.
The notes will convert into American Depositary Shares (ADS) at $1.00 per ADS. Concurrently, the company is offering the investor 1,000,002 ADS, equivalent to 333,334 ordinary shares, at par. These pre-delivery ADS are restricted from sale, transfer, or assignment, except when linked to a note conversion, ensuring T+1 delivery of ADS upon such conversions. Once all notes are settled, any remaining pre-delivery ADS will be canceled.
The offering, facilitated by FT Global Capital Inc. as the exclusive placement agent, is expected to close today, subject to customary closing conditions. Xiao-I aims to use the net proceeds for working capital and general corporate purposes.
This financial move comes as part of a shelf registration statement previously filed with the U.S. Securities and Exchange Commission (SEC). Prospective investors can obtain the prospectus supplement and accompanying prospectus detailing the offering terms from the SEC's website or by contacting FT Global Capital Inc.
Xiao-I, founded in 2001, specializes in artificial intelligence, including natural language and voice recognition, machine learning, and affective computing. The company's AI technologies support a range of business solutions, driving digital transformation across industries.
This press release, based on a statement from Xiao-I Corporation, contains forward-looking statements subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated. The company's SEC filings provide further information on these risks. Xiao-I does not undertake any obligation to update forward-looking statements beyond the date of this press release.
In other recent news, Xiao-I Corporation, a leading AI enterprise, has been active in forming strategic partnerships and launching new projects. The company announced a collaboration with an unnamed AI company in the Middle East to enhance AI enterprise solutions in the UAE. This move comes after the establishment of Xiao-I's Middle Eastern subsidiary in Abu Dhabi, marking a significant step in the company's global expansion strategy.
Furthermore, Xiao-I has initiated several new projects leveraging its AI technology, such as the deployment of an AI-driven Live Chat system to elevate after-sales service for a major automobile industry client. In addition, the company has partnered with a leading Chinese bank to improve its knowledge management systems and implement an Intelligent Customer Service Training System, known as the "Smart Coach."
Xiao-I has also established an alliance with a Special Administrative Region entity to advance smart city initiatives using AI and chatbot technologies. This partnership aims to enhance urban living by integrating AI services into customer service operations.
Lastly, Xiao-I is set to launch its latest product, OOTDiffusion, a virtual try-on technology, in May, which is expected to provide a novel dressing experience to users. These are among the recent developments in Xiao-I's ongoing commitment to leveraging its AI technologies to support the digital transformation and intelligent upgrading of industries.
InvestingPro Insights
Xiao-I Corporation (NASDAQ: AIXI) is navigating challenging financial waters, as evidenced by the recent sale of senior convertible notes aimed at raising capital. InvestingPro data sheds light on some of the underlying factors that investors should consider.
The company's market capitalization stands at a modest $60.7 million, and it has been grappling with a negative P/E ratio of -2.92, which improved slightly in the last twelve months of Q4 2023 to -2.18. This indicates that investors have been valuing the company's earnings negatively, which could be a reflection of the concerns around its profitability and debt burden.
Despite these challenges, AIXI has demonstrated a strong gross profit margin of 66.63% in the same period, suggesting that the company has effective control over its cost of goods sold and is able to generate a significant profit on its sales. Still, the company's stock performance has been far from impressive, with a 1-month price total return of -23.7%, a 3-month return of -58.41%, and a staggering 1-year price total return of -84.96%, reflecting a steep decline in investor confidence.
InvestingPro Tips highlight that AIXI operates with a significant debt burden and may have trouble making interest payments on its debt, which is consistent with the decision to issue convertible notes. Moreover, the company's short-term obligations exceed its liquid assets, which could pose a liquidity risk.
On a positive note, analysts predict the company will be profitable this year, providing a glimmer of hope for its financial outlook. For more detailed analysis and additional InvestingPro Tips, investors can visit https://www.investing.com/pro/AIXI. There are over 10 additional tips available to help investors make more informed decisions.
To delve deeper into Xiao-I's financial health and to access a wealth of expert insights, consider subscribing to InvestingPro. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and start making smarter investment choices today.
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