{"url_path":"/sec/aixi/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 Quantitative and Qualitative Disclosures","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1935172/0001213900-26-057986-index.html","accession_number":"0001213900-26-057986","cik":"0001935172","ticker":"AIXI","issuer_name":"Xiao-I Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/1935172/0001213900-26-057986-index.html","primary_entity_key":"0001935172","primary_entity_name":"Xiao-I Corp"},"word_count":699,"has_tables":true,"body_markdown":"Item 11. Quantitative and Qualitative Disclosures\nAbout Market Risk.\n\n \n\nConcentration of Credit Risk\n\n \n\nFinancial instruments that potentially expose us to concentrations\nof credit risk consist primarily of accounts receivable. We conduct credit evaluations of our customers, and generally do not require\ncollateral or other security from them. We evaluate our collection experience and long outstanding balances to determine the need for\nan allowance for credit losses. We conduct periodic reviews of the financial condition and payment practices of our customers to minimize\ncollection risk on accounts receivable. For the years ended December 31, 2023, 2024 and 2025, the percentage of our revenue attributable\nto our largest customer amounted to 29.3%, 22.4% and 31.9%, respectively, while the percentage of our revenue attributable our five largest\ncustomers for the years ended December 31, 2023, 2024 and 2025 amounted to 69.7%, 49.9% and 65.9%, respectively.\n\n \n\n129\n\n \n\n \n\n**Concentration of Suppliers Risk**\n\n \n\nWe rely on a limited number of suppliers for certain essential services\nto operate our network and provide products and solutions to our customers. Due to the limited number of relevant suppliers available\nin China, we rely on a limited number of suppliers for cloud, internet data center services and hardware. Our purchase from top-three\nsuppliers in aggregate accounted for 73.2%, 39.6% and 56.1% of total purchase for the years ended December 31, 2023, 2024 and 2025,\nrespectively. We may experience shortages in components or delays in delivery as a result of natural disasters, increased demand in the\nindustry or our suppliers’ lacking sufficient rights to supply the servers or other products or services.\n\n \n\n**Foreign Exchange Risk**\n\n \n\nForeign currency risk arises from future commercial\ntransactions, recognized assets and liabilities and net investments in foreign operations. Substantially all of our revenue-generating\ntransactions, and a majority of our expense-related transactions, are denominated in Renminbi, which is the functional currency of our\noperations. We do not hedge against currency risk.\n\n \n\nThe value of the Renminbi against the U.S. dollar\nand other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions. To the extent\nthat we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would reduce\nthe Renminbi amount we receive from the conversion. Conversely, if we decide to convert Renminbi into U.S. dollars for the purpose of\nmaking payments for dividends to holders of our ADSs, or for other business purposes, appreciation of the U.S. dollar against the Renminbi\nwould reduce the U.S. dollar amounts available to us.\n\n \n\nOur functional currency is the RMB, and our financial statements are\npresented in U.S. dollars. As of December 31, 2024, the RMB depreciated by approximately 2.8% against the U.S. dollar for the full year;\nas of December 31, 2025, the RMB appreciated by approximately 4.2% against the U.S. dollar for the full year. It is difficult to predict\nhow market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The\nchange in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without\ngiving effect to any underlying changes in our business or results of operations. Currently, our assets, liabilities, revenues and costs\nare denominated in RMB.\n\n \n\n**Interest Rate Risk**\n\n \n\nWe are not currently exposed to interest rate\nrisk. We do not own any interest-bearing instruments and our interest-bearing debt carries a fixed rate.\n\n \n\n**Market Price Risk**\n\n \n\nWe are not currently exposed to commodity price\nrisk or market price risk.\n\n \n\n**Seasonality**\n\n \n\nSeasonality does not materially affect our business\nor the results of our operations.\n\n \n\n**Liquidity risk**\n\n \n\nWe aim to maintain sufficient cash, cash equivalents\nand short-term investments in wealth management products to meet obligations coming due as well as future operating and capital requirements.\n\n \n\n**Inflation Risk**\n\n \n\nWe do not believe that inflation has had a material\neffect on our business, financial condition, or results of operations. If our costs become subject to significant inflationary pressures,\nwe may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business,\nfinancial condition, and operating results.\n\n \n\n130"}