Xiao-I's 1-for-7 ADS Ratio Change Takes Effect Today, Leaving the Ordinary Share Count Untouched

by Jonas Halvorsen · September 8, 2026

Companies Reporter, The MicroCap Herald

Xiao-I Corporation's American depositary share ratio changed at the open of business today, the Chinese artificial-intelligence company said in an announcement dated Sept. 3. Each ADS now represents 420 ordinary shares rather than 60 — a change the company said has "the same effect on ADS holders as a one-for-seven reverse ADS split." The shares trade on the Nasdaq Global Market under the symbol AIXI.

The mechanics are narrower than a conventional reverse stock split, and the company was explicit about that. According to the announcement and the Form 6-K furnished the same day, no ordinary shares will be issued or canceled in connection with the change; only the ratio between the depositary receipts and the underlying shares moves. Citibank, N.A., the depositary, is handling the exchange, under which every seven existing ADSs become one new ADS. The new CUSIP is 98423X407.

Holders left with fractional entitlements will not receive partial receipts. The company said fractional entitlements to new ADSs "will be aggregated and sold by the depositary, and the net cash proceeds from the sale, after deduction of applicable fees, taxes and expenses, will be distributed to the applicable ADS holders."

Neither the Sept. 3 announcement nor the 6-K states a reason for the ratio change.

The company does have an open listing deficiency, announced Aug. 20. Xiao-I said Nasdaq had notified it on Aug. 6 that it no longer met the $15 million minimum market value of publicly held shares required by Listing Rule 5450(b)(3)(C), measured over the 30 consecutive business days from June 23 through Aug. 4, 2026. The company has until Feb. 1, 2027 to record an MVPHS that closes at $15,000,000 or more "for a minimum of 10 consecutive business days."

Xiao-I said at the time that the notice "has no immediate effect on the listing or trading of the Company's ADSs, which will continue to be listed and traded on The Nasdaq Global Market under the symbol 'AIXI'," and said it would continue to monitor the shortfall and weigh its options for regaining compliance.

It is worth being precise about what a ratio change does and does not do for that particular standard. Market value of publicly held shares is arithmetically the product of the trading price and the number of publicly held shares or receipts. A one-for-seven ratio change raises the first and reduces the second in the same proportion, so on the mechanics alone it leaves the product where it was. That is a different situation from a minimum bid-price deficiency, where a consolidation directly lifts the quoted price against a fixed $1.00 threshold. Neither the ratio-change announcement nor the accompanying Form 6-K refers to the market-value deficiency.

The company has been through the bid-price version of this before. On Dec. 23, 2025, Xiao-I disclosed two Nasdaq notices — one dated Dec. 16 under Rule 5450(a)(1) for a closing bid price below $1.00 over 30 consecutive business days from Nov. 3 through Dec. 15, 2025, with a June 16, 2026 deadline, and one dated Dec. 17 under the MVPHS rule, with a June 15, 2026 deadline. On June 3, 2026, the company said it had regained compliance with both: the market value of its publicly held shares had been $15.0 million or greater for ten consecutive business days from April 9 through April 22, 2026, and the closing bid price of its ADSs had been at $1.00 or greater for ten consecutive business days from May 14 through May 28, 2026.

The Aug. 6 notice is therefore the second market-value deficiency the company has disclosed in roughly eight months, arriving about nine weeks after it announced it had cured the first one.

Separately, Xiao-I filed a prospectus supplement on Aug. 26 covering ADSs issuable on conversion of a convertible note issued to Streeterville Capital, LLC. The filing describes a note with a principal amount of $4,330,000 sold for a purchase price of $4,000,000, reflecting a $320,000 original issue discount and $10,000 of expenses, bearing interest at 6.0% a year and maturing 12 months from issuance. The note converts at 90% of the lowest 10-day volume-weighted average price minus $0.05, subject to a 9.99% beneficial ownership cap, with a 110% prepayment provision. The company said it will not receive any proceeds from the issuance of ADSs upon conversion.

That structure matters for holders because the conversion price floats against a trailing average rather than being fixed at issuance. The number of ADSs ultimately issued on conversion depends on where the receipts trade during the measurement window, which means the dilution is not knowable in advance. The same prospectus supplement also described the coming ADS ratio change.

A plain risk note is in order. Nano- and micro-cap ADSs of this kind typically trade on thin volume with wide bid-ask spreads, and a seven-to-one consolidation of the receipts reduces the number outstanding, which can make quotations more volatile rather than less. A variable-priced convertible note can add shares at prices set by the market rather than by the issuer. And the Nasdaq deficiency remains unresolved: if the company does not meet the market-value standard for ten consecutive business days by Feb. 1, 2027, Nasdaq's rules contemplate a delisting determination, which the company would then have the right to appeal.

What to watch between now and then is straightforward: whether the market value of Xiao-I's publicly held ADSs clears $15 million for ten consecutive business days inside the compliance window, and how many ADSs the Streeterville note ultimately produces.