{"url_path":"/sec/aixi/10-k/2026/item-15","section_key":"item-15","section_title":"Item 15 Controls and Procedures.","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":1025,"has_tables":true,"body_markdown":"Item 15. Controls and Procedures.\n\n \n\n**(a) Disclosure Controls and Procedures.**\n\n \n\nAs required by Rule 13a-15 under the Exchange\nAct, management, including our chief executive officer and our chief financial officer, has evaluated the effectiveness of our disclosure\ncontrols and procedures as of the end of the period covered by this report. Disclosure controls and procedures refer to controls and other\nprocedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded,\nprocessed, summarized and reported within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures\ninclude, without limitations, controls and procedures designed to ensure that information required to be disclosed by us in our reports\nthat we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal\nfinancial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding our required disclosures.\n\n \n\nBased on the foregoing, our chief executive officer and our chief financial\nofficer have concluded that, as of December 31, 2024, our disclosure controls and procedures were not effective due to one material\nweakness in our internal control over the financial statement closing process.\n\n \n\n**(b) Management’s Annual Report on Internal Control\nover Financial Reporting.**\n\n \n\nOur management is responsible for establishing and maintaining adequate\ninternal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act, for our company.\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability\nof financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting\nprinciples.\n\n \n\n137\n\n \n\n \n\nA company’s internal control over financial reporting includes\nthose policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect\nthe transactions and dispositions of the assets of the company, (ii) provide reasonable assurance that transactions are recorded as necessary\nto permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures\nof the company are being made only in accordance with authorizations of management and directors of the company, and (iii) provide reasonable\nassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that\ncould have a material effect on the financial statements.\n\n \n\nBecause of its inherent limitations, internal control over financial\nreporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject\nto the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or\nprocedures may deteriorate.\n\n \n\nIn connection with the audit of our consolidated\nfinancial statements, as of and for the year ended December 31, 2022, we identified two material weaknesses in our internal control\nover the financial statement closing process. A material weakness is a deficiency, or a combination of deficiencies, in internal control\nover financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated\nfinancial statements will not be prevented or detected on a timely basis. The material weakness that have been identified relates to\n(i) our lack of sufficient and competent financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and reporting\nrequirements set forth by the SEC to address complex U.S. GAAP technical accounting issues, and to prepare and review consolidated financial\nstatements and related disclosures in accordance with U.S. GAAP and SEC reporting requirements and (ii) our lack of internal file management\nprocedures and effective recognition procedures to recognize revenue and costs timely.\n\n \n\nWe implemented the following remediation measurements during the fiscal\nyear ended December 31, 2023, which addressed the second material weakness identified as of December 31, 2022:\n\n \n\n(1)We established internal file management policy, included but not limited\nto: (i) established the internal procedures for assigning sequential and unique contract numbers to each project; (ii) assign responsibilities\nfor file management to specific individuals and implemented segregation of duties; and (iii) developed a standardized electronic worksheet\nthat categorizes documents by date, name of project, revenue type, consideration of the contracts, M&S periods, and other key terms\nof the contracts.\n\n \n\n(2)We implemented documents control policies, included but not limited\nto: (i) all documents are properly labeled with their status, and revision history if any; (ii) all important documents and contracts\nwere submitted to the legal department for retention and review;\n\n \n\n(3)We engaged the third-party financial consultant to develop clear guidelines\nfor recognizing revenue and costs in accordance with U.S. GAAP, and provide training to our accounting personnels. Our responsible accounting\npersonnel took regular review and analysis of revenue, costs, and gross margin to ensure timely and accurate recognition of revenue and\ncosts based on the service periods. The third-party financial consultants conducted the second review of the revenue/cost recognition.\n\n \n\nWe are working to remediate the remaining material weakness and are\ntaking steps to strengthen our internal control. Specifically, we are still working to develop and implement a staffing plan for hiring\nadditional accounting and finance personnel in 2024, hire additional qualified resources with appropriate knowledge and expertise to handle\ncomplex accounting issues and effectively prepare financial statements and conduct regular and continuous U.S. GAAP accounting and financial\nreporting training programs for our financial reporting and accounting personnel. In order to maintain and improve the effectiveness of\nour disclosure controls and procedures and internal controls over financial reporting, we will need to expend significant resources and\nprovide significant management oversight.\n\n \n\n**(c) Attestation Report of the Registered Public Accounting\nFirm.**\n\n \n\nThis annual report does not include an attestation\nreport of the Company’s registered public accounting firm because we are an emerging growth company under the JOBS Act.\n\n \n\n**(d) Changes in Internal Control over Financial Reporting.**\n\n \n\nOther than as described above, there were no changes in our internal\ncontrol over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the year ended December 31,\n2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.\n\n \n\n138"}