Xiao-I (US:AIXI)2025-12-31 21:21Financial Performance - Total net revenues for the six months ended June 30, 2025, decreased to $11,516,908 from $32,953,765 in the same period of 2024, representing a decline of approximately 65%[7] - Gross profit for the six months ended June 30, 2025, was $6,691,312, down from $21,267,261 in 2024, indicating a decrease of about 68%[7] - The net loss attributable to XIAO-I CORPORATION shareholders increased to $30,125,449 for the six months ended June 30, 2025, compared to $15,499,990 in 2024, reflecting a 94% increase in losses[7] - The company reported a loss per ordinary share attributable to shareholders of $0.84 for the six months ended June 30, 2025, compared to $0.64 in 2024, indicating a worsening of the loss per share by about 31%[7] - Total comprehensive loss attributable to XIAO-I CORPORATION shareholders for the six months ended June 30, 2025, was $30,472,464, compared to $15,316,529 in 2024, reflecting an increase of approximately 99%[7] - For the six months ended June 30, 2024, the net loss was $15,542,475, which increased to $30,389,811 for the same period in 2025, indicating a significant rise in losses[10] - Net revenue for the six months ended June 30, 2025, was $11,924,360, a significant drop from $32,953,740 for the same period in 2024, representing a decrease of about 63.9%[15] - The net loss increased to $22,455,335 for the six months ended June 30, 2025, compared to a net loss of $14,367,159 for the same period in 2024, indicating a worsening of approximately 56.5%[15] Cash Flow and Liquidity - Cash and cash equivalents increased significantly from $846,593 as of December 31, 2024, to $5,011,540 as of June 30, 2025, marking a growth of approximately 493%[4] - Cash used in operating activities for the first half of 2025 was $2,328,970, a decrease from $10,054,183 in the same period of 2024, showing improved cash flow management[10] - The company reported a total cash, cash equivalents, and restricted cash of $5,011,540 at the end of June 2025, up from $1,849,477 at the end of June 2024[10] - The Group reported net cash used in operating activities of $2,328,970 for the six months ended June 30, 2025, compared to $10,054,183 for the same period in 2024, indicating improved cash flow management despite ongoing losses[20] Assets and Liabilities - The company’s total assets decreased from $85,511,474 as of December 31, 2024, to $82,392,318 as of June 30, 2025, a decline of about 4%[4] - As of June 30, 2025, total assets decreased to $75,690,939 from $84,208,263 as of December 31, 2024, reflecting a decline of approximately 10.8%[15] - Total current liabilities rose from $86,603,467 as of December 31, 2024, to $104,242,968 as of June 30, 2025, an increase of about 20%[4] - The accumulated deficit reached $155,463,958 by June 30, 2025, compared to $126,333,035 at the end of June 2024, highlighting ongoing financial challenges[10] - The total shareholders' deficit was $36,781,083 as of June 30, 2025, compared to $23,123,342 at the end of June 2024, indicating a worsening financial position[10] - Negative working capital increased from $10,111,451 as of December 31, 2024, to $30,529,489 as of June 30, 2025, reflecting a deterioration of approximately 202.5%[20] Shareholder and Equity Information - The number of ordinary shares outstanding increased from 24,049,072 as of June 30, 2024, to 35,972,462 as of June 30, 2025, representing a growth of approximately 50%[7] - Share-based compensation expenses surged from $488,231 in the first half of 2024 to $4,992,881 in the first half of 2025, reflecting increased employee incentives[10] - The 2025 Share Incentive Plan allows for the issuance of up to 4,214,684 ordinary shares, with adjustments based on the total shares outstanding[82] - The company granted 3,813,639 RSUs to external consultants in the first half of 2025, with a weighted average fair value of $1.11 per share[95] - As of June 30, 2025, there were 889,937 share options outstanding, with a weighted average exercise price of $3.71[86] Legal and Regulatory Matters - The Group is involved in multiple legal proceedings, including a patent infringement case against Apple, which seeks damages of 10 billion yuan (approximately $1.4 billion)[112] - A securities class action lawsuit was filed against the Group on June 26, 2024, alleging misleading statements related to its AI capabilities and customer contracts[113] - The Group has recorded contingent liabilities for various legal claims, with amounts reasonably estimable[111] - Xiao-I Corporation is involved in 15 lawsuits in China during 2025, with a total amount in dispute of approximately RMB 8,014,190.09 ($1,105,737.79)[125] - The company faces claims exceeding RMB 18 million related to labor disputes involving more than 109 former employees laid off as part of a workforce optimization plan[128] - In June 2025, a shareholder rights infringement case was filed against Xiao-I Corporation, seeking compensation of RMB 2,265,315.41[126] - Another shareholder rights infringement case in September 2025 seeks compensation of RMB 12,108,027.86 ($1,690,216)[127] - Management does not expect the ongoing disputes to have a material adverse effect on the financial statements[128] Financing Activities - Proceeds from convertible loans increased significantly from $2,496,945 in the first half of 2024 to $9,885,500 in the first half of 2025, indicating a reliance on convertible financing[10] - The Group's borrowings were overdue, and discussions with the bank regarding repayment arrangements are ongoing[55] - The Group entered into a Convertible Loan Agreement on June 17, 2024, for a principal amount of $3,260,869.57, intended for general working capital purposes[52] - Convertible Loan I has a conversion price of $1.00 per ADS, with an interest rate of 6.0% per annum, increasing to 15% upon default[56] - Convertible Loan II was issued for a principal amount of $2,175,000 with an 8% Original Issue Discount, and the proceeds are intended for general working capital[59] - Convertible Loan III was issued for a principal amount of $4,637,840 with an 8% Original Issue Discount, and the proceeds are also for general working capital[66] - Convertible Loan IV was issued for a principal amount of $6,128,000 with an Original Issue Discount of $518,000, with proceeds for general working capital[71] Operational Insights - Xiao-I Corporation primarily engages in artificial intelligence technology in China, focusing on innovation and market expansion[13] - The Group is focusing on improving operational efficiency and implementing strict cost control measures to enhance financial stability[21] - The Group's future minimum lease payments under non-cancellable operating leases total $609,201, with $503,139 due by June 30, 2026[110] - The Group's investment in Jiaxing Yuanbeibei was recorded at a cost of $704,235, reflecting a 1.82% shareholding[48]