XIAO-I CORPORATION Announces Closing of $3,260,870 Senior Convertible Notes Offering
Xiao-I (NASDAQ: AIXI) announced the closing of a $3,260,870 Senior Convertible Notes Offering. The Notes, with an 8% Original Issue Discount, are convertible into the Company's ordinary shares as American Depositary Shares (ADS). Additionally, 1,000,002 ADS were offered at par, representing 333,334 ordinary shares, for gross proceeds of $2,994,945. After expenses, net proceeds were approximately $2,496,945. The funds will be used for working capital and general corporate purposes. FT Global Capital Inc. acted as the exclusive placement agent.
- Raised $3,260,870 through Senior Convertible Notes Offering.
- Gross proceeds of $2,994,945 from offering additional ADS.
- Net proceeds of approximately $2,496,945 after deducting expenses.
- Funds will support working capital and general corporate purposes.
- 8% Original Issue Discount on the Senior Convertible Notes.
- Potential shareholder dilution due to conversion of notes into ordinary shares.
- Additional offering of 1,000,002 ADS could further dilute existing shares.
Insights
The closing of Xiao-I Corporation's Senior Convertible Notes Offering and additional ADS offering is significant for several reasons. First, the $3,260,870 principal amount indicates the company's ability to secure substantial funding. However, the 8% original issue discount suggests that investors are being compensated for perceived risks associated with the investment. Convertible notes can be attractive to investors as they offer the potential for equity upside while providing downside protection through interest payments. Conversion into ADSs also indicates potential dilution for existing shareholders when the notes are converted into shares. The net proceeds of
This move also signals the company's ongoing efforts to strengthen its balance sheet amid evolving market conditions. The involvement of FT Global Capital as the exclusive placement agent adds a layer of credibility to the transaction, potentially enhancing investor confidence. However, the company's future performance will largely depend on how well it utilizes these funds to generate revenue and control expenses.
From a market perspective, Xiao-I Corporation's issuance of convertible notes and additional ADSs can be seen as a strategic move to tap into new capital while aligning investor interests with potential equity appreciation. This offering aligns with the general trend of tech companies leveraging convertible notes to raise funds without immediate dilution. However, it also increases leverage, which could be a concern if not managed properly. The tech sector's volatility can impact Xiao-I’s stock price and, consequently, the attractiveness of these convertible notes. Investors should be aware that the conversion of notes into equity could lead to dilution, impacting share value. The net proceeds directed towards working capital and corporate purposes give the company the flexibility to address immediate financial needs and invest in strategic initiatives. Investors should watch for announcements on specific projects or expenditures that indicate efficient use of these funds.
For a tech company like Xiao-I Corporation, raising funds through convertible notes and additional ADSs can be pivotal for product development and innovation. Tech companies often require substantial capital to invest in R&D, expand their product offerings and enhance their competitive edge. This fundraising could be seen as a means to invest in their core technologies or potentially explore new business avenues. Yet, the high discount rate on the notes may hint at the higher risk investors associate with the company’s future prospects. The market will be looking for signs of how this capital infusion translates into technological advancements or market expansion. If the company can demonstrate a clear and effective strategy for using these funds to drive innovation and growth, it could positively impact its valuation and investor sentiment.
After deducting the placement agent's commission and other offering expenses payable by the Company, the net proceeds to the Company were approximately
FT Global Capital Inc. acted as the exclusive placement agent in connection with this offering.
The Notes, Conversion ADSs and Pre-Delivery ADSs were sold through a prospectus supplement pursuant to the Company's effective shelf registration statement on Form F-3, as amended (SEC File No. 333-279306) and the base prospectus therein. Such prospectus supplement and accompanying prospectus relating to and describing the terms of this offering were filed with the SEC on June 17, 2024. When available, copies of such prospectus supplement and accompanying prospectus may be obtained at the SEC's website www.sec.gov or by contacting FT Global Capital Inc., 1688 Meridian Avenue Suite 700,
This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
About Xiao-I Corporation
Xiao-I Corporation is a leading cognitive intelligence enterprise in
Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's ability to achieve its goals and strategies, the Company's future business development and plans for future business development, including its financial conditions and results of operations, product and service demand and acceptance, reputation and brand, the impact of competition and pricing, changes in technology, government regulations, fluctuations in general economic and business conditions in
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SOURCE Xiao-I Corporation
FAQ
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