This is a deeply dilutive financing from a distressed issuer with a history of repeated reverse splits and Nasdaq non-compliance. The variable conversion price creates a downward spiral: as the stock falls, more shares are issued upon conversion, increasing supply and further depressing the price. Traders should expect continued selling pressure from Streeterville's conversions and should avoid long positions. Monitor for further Nasdaq delisting risk and potential further dilutive offerings.
Price Chart
Executive Summary
Xiao-I Corp is issuing a $4.33M convertible promissory note (net proceeds ~$4M) to Streeterville Capital, LLC, with the ADSs issuable upon conversion registered under this 424B5. The note carries a variable conversion price at 90% of the lowest 10-day VWAP, creating severe dilution risk for existing shareholders. The company is also currently non-compliant with Nasdaq's $15M minimum market value of publicly held shares requirement and has a history of repeated reverse ADS splits to maintain listing, signaling deep financial distress.
Key Facts
- Issued a $4.33M convertible promissory note to Streeterville Capital, netting $4M in proceeds after $320K OID and $10K expenses.
- Conversion price is set at 90% of the lowest daily VWAP over the prior 10 trading days, minus $0.05, creating a highly dilutive variable-rate structure.
- Company is not in compliance with Nasdaq's $15M minimum market value of publicly held shares requirement (Rule 5450(b)(3)(C)), with a cure period until Feb 1, 2027.
- This is the 6th offering/registration filing in the last 24 months, indicating a pattern of repeated dilutive financing.
- Shareholders' deficit stood at -$104.9M as of Dec 31, 2025, with an accumulated deficit of -$226.6M.
- The company has announced a 1-for-7 reverse ADS split effective Sept 8, 2026, its third reverse split in two years.
Financial Impact
Up to $4.33M in ADSs issuable at a variable discount to market, with net cash proceeds of $4M to the company. Existing shareholders face severe dilution as the conversion price declines with the stock price.
Risk Factors
- Severe dilution from variable-rate convertible note conversion
- Nasdaq delisting risk due to non-compliance with minimum market value of publicly held shares
- Repeated reverse stock splits signal structural financial distress
- Negative shareholders' equity and large accumulated deficit
- PRC regulatory and VIE structure risks
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 4 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 424B5 Filing (Primary) | 0001213900-26-093890 |
| Document: 0001213900-26-093890-index-headers.html | 0001213900-26-093890 |
| Document: 0001213900-26-093890-index.html | 0001213900-26-093890 |
| Document: 0001213900-26-093890.txt | 0001213900-26-093890 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 3, 2026 29d ago | 6-K | $0.4840 $1.81 | ▼ −273.97% | ▼ −275.15% | $1.22 (−151.03%) |
Aug 26, 2026 5w ago | 6-K | $0.8050 $2.04 | ▼ −153.42% | ▼ −152.21% | $1.22 (−50.93%) |
Aug 26, 2026 5w ago | 424B5 | $0.8050 $2.04 | ▼ −153.42% | ▼ −152.21% | $1.22 (−50.93%) |
Aug 20, 2026 6w ago | Press Release | $0.5601 $2.09 | ▼ −273.15% | ▼ −273.15% | $1.22 (−116.93%) |
Jun 30, 2026 13w ago | 424B5 | $1.84 $1.14 | ▲ +38.04% | ▲ +37.02% | $1.22 (+33.97%) |
Jun 30, 2026 13w ago | 6-K | $1.84 $1.14 | ▲ +38.04% | ▲ +37.02% | $1.22 (+33.97%) |
Jun 3, 2026 17w ago | 6-K | $10.03 $1.89 | ▼ −81.16% | ▼ −80.16% | $1.22 (−87.89%) |
May 26, 2026 18w ago | 424B5 | $14.40 $2.50 | ▲ +82.64% | ▲ +80.69% | $1.22 (+91.56%) |
May 15, 2026 20w ago | 20-F | $11.33 $7.41 | ▲ +34.60% | ▲ +36.18% | $1.22 (+89.28%) |
May 7, 2026 21w ago | 6-K | $14.46 $8.85 | ▲ +38.80% | ▲ +39.61% | $1.22 (+91.60%) |
US Market Status
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