0001213900-23-065338 | 20-F/A | XBRL Viewer

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2022

Property and Equipment, Net [Abstract]

	As of December 31,
	2021			2022
Electronic equipment	$	147,406		$	168,937
Office equipment		194,241			240,788
Leasehold improvement		55,857			63,683
Construction in progress		2,088			-
Less: accumulated depreciation		(191,603	)		(253,938	)
Property and equipment, net	$	207,989		$	219,470

Concentration of Credit Risk (Details)	12 Months Ended
Concentration of Credit Risk (Details)	Dec. 31, 2022
Total Revenue [Member]
Concentration of Credit Risk (Details) [Line Items]
Concentration risk, percentage	10.00%
Accounts Receivable [Member]
Concentration of Credit Risk (Details) [Line Items]
Concentration risk, percentage	10.00%
Supplier [Member]
Concentration of Credit Risk (Details) [Line Items]
Concentration risk, percentage	10.00%

Long-Term Investment

12 Months Ended

Dec. 31, 2022

Long-Term Investment [Abstract]

LONG-TERM INVESTMENT

7.	LONG-TERM INVESTMENT

Long-term investment consists of investments in privately held companies. In September 2015, the Group signed an investment agreement to acquire 20% of the shares of Shanghai Shenghan Information Technology Co., Ltd (“Shanghai Shenghan”) for RMB 5 million, of which the registered capital of RMB 125,000 was subscribed. In January 2018, with the addition of new investors to the investee, Xiao-i’s shareholding percentage in Shanghai Shenghan was diluted to 17.6%. In June 2020, with the capital injection of Wuxi Zhixin Integrated Circuit Investment Center (Limited Partnership), Xiao-i’s shareholding in Shanghai Shenghan was once again diluted to 16.56%. According to the investment agreement, Shanghai Shenghan’s board of directors consists of 3 directors, one of whom is appointed by the Group. Therefore, the Group recognized it as long-term equity investment and measured in equity method since investor had the ability to exercise significant influence over Shanghai Shenghan.

In February 2022, the Group entered into agreements with third parties to establish Zhizhen Guorui (Shanghai) Information Technology Development Co., Ltd. (“Zhizhen Guorui”) with a total consideration of $2.9 million. According to the investment agreement, Zhizhen Guorui’s board of directors consists of 5 directors, two of whom is appointed by the Group. Therefore, the Group recognized it as long-term equity investment and measured in equity method since investor had the ability to exercise significant influence over Zhizhen Guorui.

The following table sets forth the changes in the Group’s long-term investment:

	As of December 31, 2021					As of December 31, 2022
	USD		Interest %			USD		Interest %
Equity method investments
Zhizhen Guorui		-		-	%		2,647,593		37	%
Shanghai Shenghan		335,448		16.56	%		204,899		16.56	%
Total		335,448					2,852,492

The Group recognized its share of loss of $207,497, $156,630, and $143,181 for the years ended December 31, 2020, 2021 and 2022, respectively.

Taxation (Details) - Schedule of significant components of net deferred tax assets - Restated [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Taxation (Details) - Schedule of significant components of net deferred tax assets [Line Items]
Tax losses	$ 4,475,379	$ 6,239,757
Allowance for doubtful accounts	1,053,028	773,701
Accrued expenses	716,673	257,966
Impairment	301,150	310,430
Non-deductible education expense	756	818
Lease liabilities	112,203	191,758
Amortization of intangible assets	972,696
Valuation allowance	(3,611,707)	(2,685,373)
Total deferred tax assets	4,020,178	5,089,057
Right-of-use assets	(131,604)	(182,770)
Deferred tax assets, net	$ 3,888,574	$ 4,906,287

Condensed Financial Information of the Parent Company (Details) - Schedule of parent company statements of cash flow - Parent Company [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule of Parent Company Statements of Cash Flow [Abstract]
Net cash used in operating activities	$ (1)
Net cash used in investing activities
Net cash provided by financing activities
Net cash inflow	$ (1)

Accrued Expenses and Other Liabilities (Details) - Schedule of accrued expenses and other liabilities - USD ($)

12 Months Ended

Dec. 31, 2022

Dec. 31, 2021

Accrued expenses and other current liabilities:

Loan from third parties

^[1]

$ 6,485,125

$ 4,381,136

Payroll payable

4,722,793

1,591,662

Payable to staff

2,852,728

2,777,187

Interest payable

2,054,136

1,053,854

Others

891,931

512,593

Accrued expenses and other current liabilities

17,006,713

10,316,432

Accrued liabilities, non-current：

Long-term loan from third parties

^[2],[3],[4]

3,303,986

Litigation related payable

^[5]

4,769,926

5,157,971

Accrued liabilities, non-current

8,073,912

5,157,971

TOTAL

$ 25,080,625

$ 15,474,403

[1]	Loan from third parties mainly consisted of the unsecured borrowings from third parties for ordinary business operation. For the borrowings, the interest rates range from 3.8% to 25.55% and the interest expenses were $216,020 $815,994 and $1,013,209 for the years ended December 31, 2020, 2021 and 2022. The borrowings are payable on demand. In April, 2023, the Group made the repayment of principal amounted to $3,133,371 to the third parties.
[2]	(i) Long-term loan for the purpose of investing in Zhizhen Guorui in February 2022, amounted to $2,682,248 as of December 31, 2022 (Note 7), with free interest rate in the first three years. The loan is due in five years, and if Zhizhen Guorui declares any cash dividend to the Group, the cash dividend would become the source to repay the loan in the first priority.
[3]	(ii) In October 2022, the Group entered into an exclusive license agreement with a third party, under which the term of exclusive license was 2 years, and the third party should pay the license fee of $1,449,864 (RMB10 million) to the Group upon the effective of the agreement. Meanwhile, the same party entered into the agreement to grant the exclusive right to use these patents to the Group for 2 years at the consideration of $63,608 per month, aggregately $1,526,581 (RMB10.5 million). The patents under the agreements were pledged to the third party. The transaction was substantially loan from the third party with the patents pledged. The Group accounted for $1,449,864 (RMB10 million) as the principal of the loan from the third party, and the interests were calculated under effective interest method. In November 2022, the Group entered into another exclusive license agreement with the same party in the similar form to obtain another $1,449,864 (RMB10 million) loan, which was received subsequently in 2023.
[4]	Long-term loan from a third party was primarily consisted of:
[5]	Litigation related payable mainly consisted of the litigation fee of the lawsuit between the Group and Apple paid by the third parties on behalf of the Group.

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income	$ (6,005,314)	$ 3,365,002	$ (7,056,042)
Adjustments to reconcile net (loss)/income to net cash used in operating activities:
Allowance for accounts receivable	2,149,176	270,649	758,019
Allowance for prepaid expenses and other current assets		1,380,331
Allowance for amount due from a related party	20,887
Return of inventories to a related party	(239,330)
Debt relief offered by a related party	(72,819)
Written-down of inventories	154,664
Depreciation and amortization	182,269	173,055	168,795
Gain from the disposal of property and equipment		(31,409)	(33,256)
Gain from the disposal of intangible assets		(22,636)
Loss from equity investment	143,181	156,630	207,497
Deferred tax (benefits)/expenses	660,653	534,668	(235,854)
Right-of-use assets amortization	712,844	1,087,035	1,380,588
Changes in assets and liabilities
Accounts receivable	(15,012,712)	(23,393,437)	(701,260)
Inventories	(2,130,389)	(495,398)	256,507
Contract costs	1,434,836	(607,850)	313,541
Prepaid expenses and other current assets	(1,162,117)	(11,120)	957,035
Amount due from related parties		(368,847)	(4,332)
Accounts payable	4,123,775	3,394,069	(614,200)
Deferred revenue	(179,177)	1,038,149	(10,785)
Accrued expenses and other current liabilities	5,163,654	2,693,914	1,019,524
Amount due to related parties	100,315	(56,030)	208,249
Income tax payable	(16,956)	17,904	(16,399)
Lease payment liabilities	(893,276)	(1,071,775)	(1,312,365)
Prepaid expenses and other, non-current assets	(57,510)	61,130	(3,786,999)
Accrued liabilities, non-current		(1,156)	5,038,643
Net cash used in operating activities	(10,923,346)	(11,887,122)	(3,463,094)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(106,814)	(18,853)	(19,932)
Proceeds from disposal of property and equipment		96,112	15,256
Purchase of intangible assets	(308)		(21,149)
Purchase of equity method investments	(2,749,294)
Net cash (used in)/provided by investing activities	(2,856,416)	77,259	(25,825)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings	21,252,786	11,393,910	10,392,225
Repayments of short-term borrowings	(10,633,055)	(16,470,788)	(11,005,324)
Proceeds from interests-free borrowings from related parties	2,315,351	16,764,954	1,448
Repayments of interests-free borrowings from related parties	(2,314,311)	(6,893,702)
Proceeds from borrowings from third-parties	7,950,661	15,115,236	2,911,271
Repayments of borrowings from third-parties	(2,065,948)	(7,716,658)	(506,938)
Repayment of convertible loans	(1,634,715)
Deferred offering costs	(1,364,169)
Net cash provided by financing activities	13,506,600	12,192,952	1,792,682
Effect of exchange rate changes	(12,439)	101,728	(797,954)
Net change in cash, cash equivalents and restricted cash	(285,601)	484,817	(2,494,191)
Cash, cash equivalents and restricted cash, at beginning of year	1,311,846	827,029	3,321,220
Cash, cash equivalents and restricted cash, at end of year	1,026,245	1,311,846	827,029
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	609,451	121,666	747,529
Income taxes paid/(refund)	2	(36,279)	52,381
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Recognition of Right-of-use assets and Lease payment liability	$ 467,359		$ 3,630,939

Property and Equipment, Net (Details) - USD ($)	12 Months Ended
Property and Equipment, Net (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Property and Equipment, Net [Abstract]
Depreciation expense	$ 78,831	$ 65,160	$ 68,514

Organization and Principal Activities (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Mar. 29, 2019
Organization and Principal Activities (Details) [Line Items]
Net liabilities	$ 3,383,770	$ 8,950,579
Shanghai Xiao-i [Member]
Organization and Principal Activities (Details) [Line Items]
Equity interest rate			100.00%

Accrued Expenses and Other Liabilities (Details) ¥ in Millions	1 Months Ended			12 Months Ended
	Mar. 31, 2023 USD ($)	Oct. 31, 2022 USD ($)	Oct. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	May 31, 2023	Nov. 30, 2022 USD ($)	Nov. 30, 2022 CNY (¥)	Oct. 31, 2022 CNY (¥)
Accrued Expenses and Other Liabilities (Details) [Line Items]
Borrowings, interest expenses				$ 1,013,209	$ 815,994	$ 216,020
Long-term loan				$ 2,682,248
Free interest rate term				3 years
Loan due term				5 years
Exclusive license term		2 years	2 years
License fee		$ 1,449,864	¥ 10.0
Consideration of per month		63,608
Consideration of aggregate amount		1,526,581								¥ 10.5
Loan from the third party		$ 1,449,864								¥ 10.0
Loan amount								$ 1,449,864	¥ 10.0
Subsequent Event [Member]
Accrued Expenses and Other Liabilities (Details) [Line Items]
Borrowings, interest rate							15.00%
Repayment amounted	$ 3,133,371
Minimum [Member]
Accrued Expenses and Other Liabilities (Details) [Line Items]
Borrowings, interest rate				3.80%
Maximum [Member]
Accrued Expenses and Other Liabilities (Details) [Line Items]
Borrowings, interest rate				25.55%

Related Party Transactions (Details) - Schedule of related parties transactions	12 Months Ended
	Dec. 31, 2022
Zhejiang Baiqianyin Network Technology Co., Ltd (“Zhejiang Baiqianyin”) [Member]
Related Party Transaction [Line Items]
Relationship	An entity which has a common director of the Board of Directors with the Group
Shanghai Shenghan [Member]
Related Party Transaction [Line Items]
Relationship	An entity which the Group holds 16.56% equity interests
Shanghai Aoshu Enterprise Management Partnership (Limited Partnership) (“Shanghai Aoshu”) [Member]
Related Party Transaction [Line Items]
Relationship	An entity which is the Group’s employee stock ownership platform, and has a common director of the Board of Directors with the Group
Shanghai Machinemind Intelligent Technology Co., Ltd. [Member]
Related Party Transaction [Line Items]
Relationship	An entity which the Company holds 18% equity interests
Jiaxing Sound Core Intelligent Technology Co., LTD [Member]
Related Party Transaction [Line Items]
Relationship	An entity which Shanghai Shenghan holds 20% equity interests
Hui Yuan [Member]
Related Party Transaction [Line Items]
Relationship	Chairman of the board, one of the major shareholders holding 14.73% equity interests of the Company
Weng Wei [Member]
Related Party Transaction [Line Items]
Relationship	CFO of the Company
Tianjin Haiyin Equity Investment Fund Partnership (Limited Partnership) (“Tianjin Haiyin”) [MEmber]
Related Party Transaction [Line Items]
Relationship	A significant shareholder holding 5.18% equity interests of the Company
Jiaxing Chiyu Investment Partnership (limited Partnership) [Member]
Related Party Transaction [Line Items]
Relationship	A significant shareholder holding 5.44% equity interests of the Company
Haiyin Capital Investment (International) Limited [Member]
Related Party Transaction [Line Items]
Relationship	A subsidiary of Tianjin Haiyin
Zhizhen Guorui [Member]
Related Party Transaction [Line Items]
Relationship	An entity which the Group holds 37% equity interests

Intangible Assets, Net (Details) - Schedule of estimated amortization expense of intangible assets	Dec. 31, 2022 USD ($)
Schedule of estimated amortization expense of intangible assets [Abstract]
2023	$ 100,942
2024	100,942
2025	100,942
2026	100,942
2027	100,942
Thereafter	132,404
Total	$ 637,114

Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2022

Intangible Assets, Net [Abstract]

Schedule of intangible assets, net

	As of December 31,
	2021			2022
Software	$	1,092,197		$	1,009,425
Less: accumulated amortization		(293,738	)		(372,311	)
Intangible asset, net	$	798,459		$	637,114

Schedule of estimated amortization expense of intangible assets

2023	$	100,942
2024		100,942
2025		100,942
2026		100,942
2027		100,942
Thereafter		132,404
Total	$	637,114

Taxation (Details) - Schedule of income tax provision - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Taxation (Details) - Schedule of income tax provision [Line Items]
Current income tax expenses	$ 2
Deferred income tax (benefits) expenses	660,653
Total income tax (benefits) expenses	$ 660,655	$ 552,355	$ (235,854)
Restated [Member]
Taxation (Details) - Schedule of income tax provision [Line Items]
Current income tax expenses		17,687
Deferred income tax (benefits) expenses		534,668	(235,854)
Total income tax (benefits) expenses		$ 552,355	$ (235,854)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Taxation (Tables)

12 Months Ended

Dec. 31, 2022

Taxation [Abstract]

Schedule of income tax provision

	For the years ended December 31,
	2020			2021		2022
Current income tax expenses	$	-		$	17,687	$	2
Deferred income tax (benefits) expenses		(235,854	)		534,668		660,653
Total income tax (benefits) expenses	$	(235,854	)	$	552,355	$	660,655

Schedule of a reconciliation between the group’s actual provision for income taxes and the provision at the PRC, mainland statutory rate

	For the years ended December 31,
	2020			2021			2022
(Loss)/income before income tax	$	(7,291,896	)	$	3,917,357		$	(5,344,659	)
(Loss)/Income tax expense at statutory tax rate		(1,822,974	)		979,339			(1,336,164	)
Additional deduction for R&D expenses		(343,193	)		(1,005,733	)		(1,087,622	)
Investment loss		51,874			39,158			35,795
Non-deductible expenses		33,392			41,679			278,277
Tax effect of tax rate in a different jurisdiction		13,058			134,570			51,119
Effect of preferential tax rates		157,236			(356,448	)		5,259
Deferred tax effect of tax rate change		-			-			538,660
Change in valuation allowance		459,885			719,790			1,697,503
Write-off of NOL		1,214,868			-			477,828
Income tax (benefit) expense	$	(235,854	)	$	552,355		$	660,655

Schedule of significant components of net deferred tax assets

	As of December 31,
	2021			2022
Deferred tax assets:
Tax losses	$	6,239,757		$	4,475,379
Allowance for doubtful accounts		773,701			1,053,028
Accrued expenses		257,966			716,673
Impairment		310,430			301,150
Non-deductible education expense		818			756
Lease liabilities		191,758			112,203
Amortization of intangible assets		-			972,696
Valuation allowance		(2,685,373	)		(3,611,707	)
Total deferred tax assets	$	5,089,057		$	4,020,178
Deferred tax liabilities:
Right-of-use assets		(182,770	)		(131,604	)
Deferred tax assets, net	$	4,906,287		$	3,888,574

Schedule of changes in valuation allowance

	As of December 31,
	2021			2022
Balance at the beginning of the year	$	1,911,048		$	2,685,373
Current year addition		810,159			1,723,347
Current year reduction		(90,370	)		(25,844	)
Deferred tax effect of tax rate change		-			(538,660	)
Exchange rate effect		54,536			(232,509	)
Balance at the end of the year	$	2,685,373		$	3,611,707

Schedule of net operating loss carryforwards

2023	$	322,766
2024		897,460
2025		380,244
2026		407,436
2027		913,779
Thereafter		21,417,987
Total	$	24,339,672

Schedule of net operating loss from HK will carry forward indefinitely

Net operating loss carryforwards indefinitely			3,858,436
Total		$	3,858,436

Taxation (Details) - Schedule of a reconciliation between the group’s actual provision for income taxes and the provision at the PRC, mainland statutory rate - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Taxation (Details) - Schedule of a reconciliation between the group’s actual provision for income taxes and the provision at the PRC, mainland statutory rate [Line Items]
(Loss)/income before income tax	$ (5,344,659)	$ 3,917,357	$ (7,291,896)
(Loss)/Income tax expense at statutory tax rate	(1,336,164)
Additional deduction for R&D expenses	(1,087,622)
Investment loss	35,795
Non-deductible expenses	278,277
Tax effect of tax rate in a different jurisdiction	51,119
Effect of preferential tax rates	5,259
Deferred tax effect of tax rate change	538,660
Change in valuation allowance	1,697,503
Write-off of NOL	477,828
Income tax (benefit) expense	660,655	552,355	(235,854)
Restated [Member]
Taxation (Details) - Schedule of a reconciliation between the group’s actual provision for income taxes and the provision at the PRC, mainland statutory rate [Line Items]
(Loss)/income before income tax		3,917,357	(7,291,896)
(Loss)/Income tax expense at statutory tax rate		979,339	(1,822,974)
Additional deduction for R&D expenses		(1,005,733)	(343,193)
Investment loss		39,158	51,874
Non-deductible expenses		41,679	33,392
Tax effect of tax rate in a different jurisdiction		134,570	13,058
Effect of preferential tax rates	$ 538,660	(356,448)	157,236
Deferred tax effect of tax rate change
Change in valuation allowance		719,790	459,885
Write-off of NOL			1,214,868
Income tax (benefit) expense		$ 552,355	$ (235,854)

Convertible Loans

12 Months Ended

Dec. 31, 2022

Convertible Loans [Abstract]

CONVERTIBLE LOANS

9.	CONVERTIBLE LOANS

From May to September 2021, the VIE entered into loan agreements with third parties, pursuant to which the VIE has the option to deliver either ordinary shares or cash to pay the debt upon the closing of an Initial Public Offering (“IPO”).

	Annual Interest Rate		Convertible shares		Maturity (Months)	As of December 31, 2021		As of December 31, 2022
						USD		USD
Convertible loans:
Fumei Shi ⁽¹⁾		15.00%		73,719	December, 2022		1,569,218		1,449,863
Guoqiang Chen ⁽²⁾		12.00%		22,116	September, 2023		941,531		869,918
SUNNY CONCORD INTERNATIONAL LTD ⁽³⁾		15.00%		36,860	December, 2022		774,699		782,049
Senbiao Hu ⁽⁴⁾		15.00%		18,430	November, 2022		392,305		362,466
Jun Xu ⁽⁵⁾		15.00%		14,744	May, 2023		313,844		289,973
Jinzhi Li ⁽⁶⁾		14.40%		73,719	August, 2022		1,569,218		-
Chunhui Li ⁽⁷⁾		15.00%		7,372	November, 2022		156,922		-
Total				246,960			5,717,737		3,754,269

	(1)	The loan was extended in January, 2023. Pursuant to the extension agreement, the loan would be settled in cash without the conversion option (Note 17). The principal and interest of the loan were repaid in April, 2023.

	(2)	The loan was originally matured before September, 2022 and extended in September 2022. In April 2023, the loan was extended to May 31, 2023 with annual interest rate of 12% (Note 17).

	(3)	The loan was extended in January, 2023. Pursuant to the extension agreement, the loan would be settled in cash without the conversion option. In April, 2023, the maturity date of the loan was changed to May 31, 2023 with annual interest rate of 15% (Note 17).

	(4)	The loan was extended in February, 2023. Pursuant to the extension agreement, the loan would be settled in cash without the conversion option. The principal and interest of the loan were repaid in March, 2023 (Note 17).

	(5)	The loan was originally matured before May 2022 and extended in In August, 2022. In April, 2023, the loan was further extended to May 31, 2023.

	(6)	The principal and interest of the loan were repaid in 2022.

(7)

The principal and interest of the loan were repaid in 2022.

Pursuant to the terms of agreements, the VIE or a subsidiary of the VIE is required to repay principal and interest of the loans if (i) either an affiliate of the VIE, including Xiao-I, is unable to consummate an Initial Public Offering (“IPO”) before the maturity of loans, or (ii) even if IPO is consummated before the maturity of loans, the enterprise market value does not equal or exceed $435 million (RMB 3 billion) upon closing of the IPO. If such affiliate of the VIE completes an IPO before the maturity of convertible loans with enterprise market value above $435 million, the convertible loan can be paid by the VIE or a subsidiary of the VIE, at the VIE’s option, by delivering either ordinary shares of such affiliate or an equivalent amount in cash. Accordingly, upon completion of an IPO pursuant to the relevant loan agreements, the shares to be issued if such loans were converted would be ordinary shares of Xiao-I Corporation should the VIE decided to convert shares. Whether the loans are paid for in cash within ten working days after completion of the listing or in ordinary shares of Xiao-I Corporation is at the option of the VIE.

Loans can be extended with both parties’ consensus. Since the conversion is only exercisable upon closing of the IPO, the Group has determined that the conversion feature embedded in the convertible loans should not be bifurcated, and accounted the convertible loans as a liability until the contingency event is resolved.

The interest expenses of convertible loans were nil, $405,316 and $686,022 for the years ended December 31, 2020, 2021 and 2022, respectively. The aggregate number of shares that would be issued in a hypothetical conversion of the total loans outstanding at December 31, 2022 was 165,869.

In March, 2023, the Company completed its initial public offering and was listed on the Nasdaq Global Market while the enterprise market value did not meet the agreed criteria. In March and April, 2023, the VIE made repayment of the loans and interest of convertible loans of Senbiao Hu and Fumei Shi.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1I
-Subparagraph (a)
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (d)
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-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Intangible Assets, Net (Details) - USD ($)	12 Months Ended
Intangible Assets, Net (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Intangible Assets [Member]
Intangible Assets, Net (Details) [Line Items]
Amortization expense amount	$ 103,438	$ 107,895	$ 100,281

Concentration of Credit Risk

12 Months Ended

Dec. 31, 2022

Concentration of Credit Risk [Abstract]

CONCENTRATION OF CREDIT RISK

15.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of accounts receivable. The Group conducts credit evaluations of its customers, and generally does not require collateral or other security from them. The Group evaluates its collection experience and long outstanding balances to determine the need for an allowance for doubtful accounts. The Group conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.

The following table sets forth a summary of single customers who represent 10% or more of the Group’s total revenue.

	For the Years ended December 31,
	2020					2021					2022
Percentage of the Group’s total revenue	Amount		%			Amount		%			Amount		%
Customer A		-		-			3,363,631		10.3	%		9,824,275		20.4	%
Customer B		-		-			13,384,613		41.2	%		5,364,265		11.1	%
Customer C		-		-			-		-			4,980,628		10.3	%
Customer D		2,449,557		17.70	%		-		-			-		-
Customer E		1,780,014		12.80	%		-		-			-		-

The following table sets forth a summary of single customers who represent 10% or more of the Group’s total accounts receivable:

	As of December 31,
	2021					2022
Percentage of the Group’s accounts receivable	Amount		%			Amount		%
Customer B		15,203,371		48.8	%		12,801,742		30.9	%
Customer A		3,138,436		10.1	%		5,279,171		12.8	%
Customer C		-		-			4,175,607		10.1	%
Customer F		-		-			4,523,575		10.9	%

The following table sets forth a summary of single suppliers who represent 10% or more of the Group’s total purchases:

	For the Years ended December 31,
	2020					2021					2022
Percentage of the Group’s total purchase	Amount		%			Amount		%			Amount		%
Supplier A		-		-			3,756,094		73.8	%		11,475,851		34.6	%
Supplier B		-		-			-		-			7,281,914		21.9	%
Supplier C		-		-			-		-			3,402,612		10.3	%
Supplier D		139,040		10.0	%		-		-			-		-
Supplier E		181,046		13.0	%		-		-			-		-
Supplier F		550,496		39.5	%		-		-			-		-

Prepaid Expenses and Other Assets

12 Months Ended

Dec. 31, 2022

Prepaid Expenses and Other Assets [Abstract]

PREPAID EXPENSES AND OTHER ASSETS

PREPAID EXPENSES AND OTHER ASSETS

Prepayments and other assets consisted of the following:

	As of December 31,
	2021			2022
Prepaid expenses and other current assets：
Receivables from third parties ⁽¹⁾		2,479,412			359,994
Rent deposits		211,224			13,629
Bid security		70,767			-
Others		10,119			87,231
Prepaid expenses and other current assets, gross		2,771,522			460,854
Bad debt provisions ⁽¹⁾		(2,382,674	)		-
Prepaid expenses and other current assets, net	$	388,848		$	460,854
Prepaid expenses and other non-current assets：
Prepaid case acceptance fee ⁽²⁾	$	3,931,033		$	3,632,039
Others		10,313			65,636
Prepaid expenses and other non-current assets		3,941,346			3,697,675
Total	$	4,330,194		$	4,158,529

(1)

Receivables from third parties mainly includes funds lent to third parties. The Group established business partnership with these third parties and provided funds to support their business operation. Due to the third parties deteriorated financial position affected by COVID -19, the Group recorded bad debt expense for receivables from third parties of nil, $1,380,331 and $nil for the years ended December 31, 2020, 2021 and 2022, respectively, and wrote off the receivables and bad debt provision in 2022.

(2)

Prepaid case acceptance fee is the expense paid by the plaintiff in advance according to PRC law when the court decides to accept civil cases, economic dispute cases, maritime cases and administrative cases. The court charged the case acceptance fee of US$3.6 million in proportion to the claim amount of the lawsuit between the Group and Apple. The claim amount was RMB 10 billion, approximately US$1,450 million. The lawsuit is not expected to close within the one year and the amount is recognized in non-current portion of prepaid expenses.

As of December 31, 2021 and 2022, the Group wrote off the other current assets of nil and US$2,201,448, respectively.

Summary of Significant Accounting Policies (Details) - Schedule of disaggregation of revenue - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Summary of Significant Accounting Policies (Details) - Schedule of disaggregation of revenue [Line Items]
Total revenue	$ 48,184,958	$ 32,524,013	$ 13,856,734
Sale of software products [Member]
Summary of Significant Accounting Policies (Details) - Schedule of disaggregation of revenue [Line Items]
Total revenue	3,547,113	14,878,256	5,098,730
Sale of hardware products [Member]
Summary of Significant Accounting Policies (Details) - Schedule of disaggregation of revenue [Line Items]
Total revenue	46,295	75,011	415,723
Technology development service [Member]
Summary of Significant Accounting Policies (Details) - Schedule of disaggregation of revenue [Line Items]
Total revenue	16,419,889	9,246,992	6,404,394
M&S service [Member]
Summary of Significant Accounting Policies (Details) - Schedule of disaggregation of revenue [Line Items]
Total revenue	2,429,526	2,772,795	1,937,887
Sale of cloud platform products [Member]
Summary of Significant Accounting Policies (Details) - Schedule of disaggregation of revenue [Line Items]
Total revenue	$ 25,742,135	$ 5,550,959

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Short-Term Borrowings (Details) - Schedule of short-term borrowings - USD ($)

12 Months Ended

Dec. 31, 2022

Dec. 31, 2021

Short-term borrowings:

Total short-term borrowings

$ 18,784,459

$ 9,117,158

Agricultura Bank of China [Member]

Short-term borrowings:

Annual Interest Rate

3.45%

Maturity (Months)

2023-04

Principal

$ 2,029,809

Total short-term borrowings

$ 2,029,809

Agricultura Bank of China [Member]

Short-term borrowings:

Annual Interest Rate

2.70%

Maturity (Months)

2023-05

Principal

$ 1,449,864

Total short-term borrowings

$ 1,449,864

Agricultura Bank of China [Member]

Short-term borrowings:

Annual Interest Rate

3.45%

Maturity (Months)

2023-06

Principal

$ 1,449,864

Total short-term borrowings

$ 1,449,864

Bank of Jiangsu [Member]

Short-term borrowings:

Annual Interest Rate

4.60%

Maturity (Months)

2023-10

Principal

$ 1,449,864

Total short-term borrowings

$ 1,449,864

CHINA CITIC BANK [Member]

Short-term borrowings:

Annual Interest Rate

4.65%

Maturity (Months)

2023-08

Principal

$ 1,448,414

Total short-term borrowings

$ 1,448,414

CHINA CITIC BANK [Member]

Short-term borrowings:

Annual Interest Rate

4.65%

Maturity (Months)

2023-09

Principal

$ 1,448,414

Total short-term borrowings

$ 1,448,414

Shanghai Bank [Member]

Short-term borrowings:

Annual Interest Rate

5.20%

Maturity (Months)

2023-01

Principal

$ 1,304,877

Total short-term borrowings

$ 1,304,877

Shanghai Bank [Member]

Short-term borrowings:

Annual Interest Rate

4.65%

Maturity (Months)

2023-10

Principal

$ 1,304,877

Total short-term borrowings

$ 1,304,877

Agricultura Bank of China [Member]

Short-term borrowings:

Annual Interest Rate

4.00%

Maturity (Months)

2023-03

Principal

$ 1,159,891

Total short-term borrowings

$ 1,159,891

Agricultura Bank of China [Member]

Short-term borrowings:

Annual Interest Rate

2.70%

Maturity (Months)

2023-05

Principal

$ 1,159,891

Total short-term borrowings

$ 1,159,891

Shanghai Bank [Member]

Short-term borrowings:

Annual Interest Rate

4.65%

Maturity (Months)

2023-11

Principal

$ 869,918

Total short-term borrowings

$ 869,918

Shanghai Bank [Member]

Short-term borrowings:

Annual Interest Rate

4.65%

Maturity (Months)

2023-11

Principal

$ 724,932

Total short-term borrowings

$ 724,932

Bank of Nanjing [Member]

Short-term borrowings:

Annual Interest Rate

^[1]

5.50%

Maturity (Months)

^[1]

2023-06

Principal

^[1]

$ 724,932

Total short-term borrowings

^[1]

$ 724,932

Bank of Nanjing [Member]

Short-term borrowings:

Annual Interest Rate

^[1]

5.50%

Maturity (Months)

^[1]

2023-07

Principal

^[1]

$ 724,932

Total short-term borrowings

^[1]

$ 724,932

Bank of Ningbo [Member]

Short-term borrowings:

Annual Interest Rate

5.35%

Maturity (Months)

2023-06

Principal

$ 724,932

Total short-term borrowings

$ 724,932

China Merchants Bank [Member]

Short-term borrowings:

Annual Interest Rate

^[1]

5.05%

Maturity (Months)

^[1]

2023-08

Principal

^[1]

$ 704,634

Total short-term borrowings

^[1]

$ 664,062

Shanghai Bank [Member]

Short-term borrowings:

Annual Interest Rate

5.20%

Maturity (Months)

2023-01

Principal

$ 144,986

Total short-term borrowings

$ 144,986

China Merchants Bank [Member]

Short-term borrowings:

Annual Interest Rate

^[1]

5.05%

Maturity (Months)

^[1]

2022-08

Principal

^[1]

$ 1,004,300

Total short-term borrowings

^[1]

1,004,300

China Merchants Bank [Member]

Short-term borrowings:

Annual Interest Rate

^[1]

5.05%

Maturity (Months)

^[1]

2022-09

Principal

^[1]

$ 1,035,684

Total short-term borrowings

^[1]

1,035,684

Bank of Communications [Member]

Short-term borrowings:

Annual Interest Rate

5.31%

Maturity (Months)

2022-02

Principal

$ 627,687

Total short-term borrowings

627,687

Xiamen International Bank [Member]

Short-term borrowings:

Annual Interest Rate

6.80%

Maturity (Months)

2022-04

Principal

$ 784,609

Total short-term borrowings

784,609

Shanghai Pudong Development Bank [Member]

Short-term borrowings:

Annual Interest Rate

^[1]

5.22%

Maturity (Months)

^[1]

2022-03

Principal

^[1]

$ 1,114,145

Total short-term borrowings

^[1]

1,114,145

Shanghai Rural Commercial Bank [Member]

Short-term borrowings:

Annual Interest Rate

5.20%

Maturity (Months)

2022-05

Principal

$ 1,412,296

Total short-term borrowings

1,412,296

Shanghai Bank [Member]

Short-term borrowings:

Annual Interest Rate

5.20%

Maturity (Months)

2021-11

Principal

$ 784,609

Total short-term borrowings

784,609

Shanghai Bank [Member]

Short-term borrowings:

Annual Interest Rate

5.20%

Maturity (Months)

2022-10

Principal

$ 1,412,296

Total short-term borrowings

1,412,296

Shanghai Bank [Member]

Short-term borrowings:

Annual Interest Rate

5.20%

Maturity (Months)

2022-11

Principal

$ 941,531

Total short-term borrowings

$ 941,532

[1]	These borrowings are guaranteed by Guizhou Xiao-I.

Concentration of Credit Risk (Details) - Schedule of single suppliers total purchase - Total Purchase [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Supplier A [Member]
Concentration of Credit Risk (Details) - Schedule of single suppliers total purchase [Line Items]
Total purchase, Amount	$ 11,475,851	$ 3,756,094
Total purchase, Percentage	34.60%	73.80%
Supplier B [Member]
Concentration of Credit Risk (Details) - Schedule of single suppliers total purchase [Line Items]
Total purchase, Amount	$ 7,281,914
Total purchase, Percentage	21.90%
Supplier C [Member]
Concentration of Credit Risk (Details) - Schedule of single suppliers total purchase [Line Items]
Total purchase, Amount	$ 3,402,612
Total purchase, Percentage	10.30%
Supplier D [Member]
Concentration of Credit Risk (Details) - Schedule of single suppliers total purchase [Line Items]
Total purchase, Amount			$ 139,040
Total purchase, Percentage			10.00%
Supplier E [Member]
Concentration of Credit Risk (Details) - Schedule of single suppliers total purchase [Line Items]
Total purchase, Amount			$ 181,046
Total purchase, Percentage			13.00%
Supplier F [Member]
Concentration of Credit Risk (Details) - Schedule of single suppliers total purchase [Line Items]
Total purchase, Amount			$ 550,496
Total purchase, Percentage			39.50%

Organization and Principal Activities (Details) - Schedule of Consolidated Cash Flows Information - Restated [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Condensed Cash Flow Statements, Captions [Line Items]
Net cash used in operating activities	$ (10,923,345)	$ (11,887,122)	$ (3,463,094)
Net cash (used in)/provided by investing activities	(107,122)	77,259	(25,825)
Net cash provided by financing activities	10,757,306	12,192,952	1,792,682
Effect of exchange rate changes	(12,435)	101,728	(797,954)
Net change in cash, cash equivalents and restricted cash	$ (285,596)	$ 484,817	$ (2,494,191)

Accounts Receivable, Net

12 Months Ended

Dec. 31, 2022

Accounts Receivable, Net [Abstract]

ACCOUNTS RECEIVABLE, NET

3.	ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consisted of the following:

	As of December 31,
	2021			2022
Accounts receivable		33,747,099			45,826,900
Allowance for doubtful accounts		(2,562,320	)		(4,464,195	)
	$	31,184,779		$	41,362,705

The Group recorded bad debt expense of $758,019, $270,649 and $2,149,176 for the years ended December 31, 2020, 2021 and 2022, respectively.

Accounts Receivable, Net (Details) - Schedule of accounts receivable, net - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Schedule of Accounts Receivable Net [Abstract]
Accounts receivable	$ 45,826,900	$ 33,747,099
Allowance for doubtful accounts	(4,464,195)	(2,562,320)
Accounts receivable net	$ 41,362,705	$ 31,184,779

Accounts Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2022

Accounts Receivable, Net [Abstract]

Schedule of accounts receivable, net

	As of December 31,
	2021			2022
Accounts receivable		33,747,099			45,826,900
Allowance for doubtful accounts		(2,562,320	)		(4,464,195	)
	$	31,184,779		$	41,362,705

Long-Term Investment (Details)	1 Months Ended		12 Months Ended
Long-Term Investment (Details)	Feb. 28, 2022 USD ($)	Sep. 30, 2015 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Jun. 30, 2020	Jan. 31, 2018
Short-Term Borrowings [Abstract]
Investment agreement to acquire		20.00%
Investment agreement (in Yuan Renminbi) \| ¥		¥ 5,000,000
Registered capital amount (in Yuan Renminbi) \| ¥		¥ 125,000
Percentage in diluted						16.56%	17.60%
Total consideration \| $	$ 2,900,000
Share of loss amount \| $			$ (143,181)	$ (156,630)	$ (207,497)

Condensed Financial Information of the Parent Company (Details) - Schedule of parent company balance sheets (Parentheticals) - Parent Company [Member] - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Condensed Balance Sheet Statements, Captions [Line Items]
Ordinary shares par value (in Dollars per share)	$ 0.00005	$ 0.00005
Ordinary shares authorized	1,000,000,000	1,000,000,000
Ordinary shares issued	22,115,592	22,115,592
Ordinary shares outstanding	22,115,592	22,115,592

Organization and Principal Activities

12 Months Ended

Dec. 31, 2022

Organization and Principal Activities [Abstract]

ORGANIZATION AND PRINCIPAL ACTIVITIES

ORGANIZATION AND PRINCIPAL ACTIVITIES

XIAO-I CORPORATION. (“Xiao-I”, or the “Company”) was incorporated under the laws of the Cayman Islands on August 20, 2018. The Company through its wholly-owned subsidiaries, variable interest entity (“VIE”) and VIE’s subsidiaries (collectively, the “Group”) primarily engages in Internet technology development in the People’s Republic of China (“PRC” or “China”).

As of December 31, 2022, the Company’s major subsidiaries and consolidated VIE are as follows:

Name	Date of Incorporation	Percentage of beneficial ownership for purposes of accounting	Principal Activities
Wholly owned subsidiaries
AI PLUS HOLDING LIMITED (“AI Plus”)	August 30, 2018	100%	Investing holding company
Xiao-i Technology Limited (“Xiao-i Technology”)	December 17, 2018	100%	Investing holding company
Zhizhen Artificial Intelligent Technology (Shanghai) Co. Ltd. (“Zhizhen Technology”) (“WFOE”)	February, 21, 2020	100%	WFOE, a holding company

Name	Date of Incorporation	Percentage of beneficial ownership for purposes of accounting	Principal Activities
VIE
Shanghai Xiao-i Robot Technology Co., Ltd. (“Shanghai Xiao-i”)	August 27, 2009	100%	Internet technology development

Name	Date of Incorporation	Percentage of beneficial ownership for purposes of accounting	Principal Activities
Subsidiaries of VIE
Xiaoi Robot Technology (H.K) Ltd. (“Xiaoi Robot”)	June 3, 2016	100%	Internet technology development
Guizhou Xiao-i Robot Technology Co., Ltd. (“Guizhou Xiao-i”)	July 18, 2016	70%	AI robot development

Reorganization

The Company undertook a reorganization and became the ultimate holding company of AI PLUS, Xiaoi Robot and WFOE, in which the shareholding percentages and rights of each shareholder are the same before and after the Reorganization. Effective on March 29, 2019, shareholders of Shanghai Xiao-i and WFOE entered into a series of contractual arrangements (“VIE Agreements”) which are described below.

The VIE Agreements

The PRC government regulates the telecommunications and internet industry, including software industry, through strict business licensing requirements and other government regulations. These laws and regulations also include limitations on foreign ownership of PRC companies that engage in software business. The Company, AI Plus, Zhizhen Technology, are considered as foreign invested enterprises. To comply with these regulations, the Group conducts the majority of its activities in PRC through Shanghai Xiao-i (the “VIE”), and the VIE’s subsidiaries.

The currently effective contractual arrangements, as described in more detail below, by and among Zhizhen Technology, the VIE, and 61 of the VIE’s shareholders include (i) certain exclusive call option agreement, proxy agreement and share interest pledge agreement, that enable the Company to exercise operational control over the VIE, and (ii) exclusive business cooperation agreement, that enable the Company to realize all of the economic risks and benefits arising from Shanghai Xiao-i and its subsidiaries (excluding non-controlling interests). Therefore, the Group, through its wholly owned subsidiaries AI Plus and Zhizhen Technology, has been determined to be the primary beneficiary of Shanghai Xiao-i and its subsidiaries for accounting purposes and has consolidated Shanghai Xiao-i’s and its subsidiaries’ assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements.

Immediately before and after reorganization, the Company together with its wholly-owned subsidiaries AI Plus and Zhizhen Technology and its VIE were effectively controlled by the same shareholders; therefore, the Reorganization is accounted for in a manner similar to a common control transaction because it is determined that the transfers lack economic substance. The accompanying consolidated financial statements have been prepared as if the current corporate structure has been in existence throughout the periods presented. The consolidation of the Company and its subsidiaries and VIE has been accounted for at historical cost as of the beginning of the first period presented in the accompanying financial statements.

Exclusive Call Option Agreement

Pursuant to the Exclusive Call Option Agreement among Zhizhen Technology, Shanghai Xiao-i and its shareholders, the shareholders irrevocably granted Zhizhen Technology or any third party designated by Zhizhen Technology an option to purchase all or part of their equity interests in Shanghai Xiao-i at any time at a price determined at Zhizhen Technology’s discretion. According to the Exclusive Call Option Agreement, the purchase price to be paid by the Company to each shareholder of Shanghai Xiao-i will be the minimum price permitted by applicable PRC Law at the time when such share transfer occurs. Without Zhizhen Technology’s prior written consent, the shareholders and Shanghai Xiao-i agreed not to, among other things: set encumbrance on, transfer all or part of, or dispose of the equity interests; amend the articles of association of Shanghai Xiao-i; change the registered capital of Shanghai Xiao-i or holding structure; change Shanghai Xiao-i’s business activities; sell, assign, mortgage or dispose of any legal or beneficial rights to or in any of Shanghai Xiao-i’s assets, business, or revenue; incur, assume or guarantee any debts; enter into any material contract; extend any loan or credit to any party, or provide any guarantee or assume any obligation of any party; merge or consolidate with any third party or acquire or invest in any third party; or distribute dividends. The shareholders and Shanghai Xiao-i agreed to manage business and handle financial and commercial affairs prudently and in accordance with relevant laws and codes of practice. This Agreement will continue with full force and effect until the earlier of the date on which Zhizhen Technology has acquired all of the Equity Interests in Shanghai Xiao-i, or this Agreement is terminated by the mutual written consent.

Exclusive Business Cooperation Agreement

On March 29, 2019, Zhizhen Technology entered into an Exclusive Business Cooperation Agreement with Shanghai Xiao-i to enable Zhizhen Technology to engage in the development and operation of the Internet technology development in accordance with applicable laws. Under this Agreement, Zhizhen Technology intends to use its labor, technology and information advantages to provide exclusive technical services, technical consultation and other services to Shanghai Xiao-i, and Shanghai Xiao-i agrees to accept such services. The term of the Services provided by Zhizhen Technology shall be 10 years from the effective date of March 29, 2019, and will be automatically extended after the expiration until when terminated in writing by Zhizhen Technology. Additionally, Zhizhen Technology has the full and exclusive right to manage and direct all cash flow and assets of Shanghai Xiao-i and to direct and administrate the financial affairs and daily operation of Shanghai Xiao-i. Shanghai Xiao-i pays service fees to Zhizhen Technology in an amount determined by Zhizhen Technology in its sole discretion. If Shanghai Xiao-i is unable to pay the service fees due to the actual managing situation, with the written consent of Zhizhen Technology, the unpaid part of the service fees in the previous fiscal year can be deferred to the end of the next year and settled together. During the validity term of this agreement, Zhizhen Technology will bear all the economic benefits and risks arising from the business of Shanghai Xiao-i and its subsidiaries. Zhizhen Technology will provide financial support to Shanghai Xiao-i or its subsidiaries in the event of a loss or serious operational difficulties.

Power of Attorney Agreement

On March 29, 2019, each shareholder of Shanghai Xiao-i, signed the Power of Attorney Agreement to irrevocably entrust Zhizhen Technology or any person(s) designated by Zhizhen Technology to act as its attorney-in-fact to exercise any and all of its rights as a shareholder of Shanghai Xiao-i, including, but not limited to, the right to convene, attend and present the shareholders’ meetings, vote, sign and perform as a shareholder; transfer, pledge or dispose of all the equity interest of Shanghai Xiao-i held by the shareholder; collect the dividend, and participate in litigation procedures. This agreement is effective and irrevocable until all of each shareholder’s equity interest in Shanghai Xiao-i has been transferred to Shanghai Xiao-i or the person(s) designated by Zhizhen Technology.

Share Interest Pledge Agreement

Under the Share Interest Pledge Agreement signed on March 29, 2019 by and among Zhizhen Technology and each shareholder of Shanghai Xiao-i, the shareholders of Shanghai Xiao-i have agreed to pledge 100% equity interest in Shanghai Xiao-i to Zhizhen Technology to guarantee the performance obligations of Shanghai Xiao-i under the Exclusive Business Cooperation Agreement, and the performance obligations of each shareholder under the Exclusive Call Option Agreement. If Shanghai Xiao-i or its shareholders breach their contractual obligations under these agreements, Zhizhen Technology, as pledgee, will have the right to exercise the pledge.

The shareholders also agreed that, without prior written consent of Zhizhen Technology, they will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests. The pledge of equity interests in Shanghai Xiao-i has been registered with the relevant office of the State Administration for Market Regulation in accordance with the Civil Code of the People’s Republic of China.

Spousal Commitment Letters

The spouses of each individual shareholder of Shanghai Xiao-i have each signed Spousal Commitment Letters. Under the Spousal Commitment Letter, the signing spouse unconditionally and irrevocably has agreed to the execution by his or her spouse of the above-mentioned Exclusive Business Cooperation Agreement, Exclusive Call Option Agreement, Power of Attorney Agreement and Share Interest Pledge Agreement, and that his or her spouse may perform, amend or terminate such agreements without his or her consent. In addition, in the event that the spouse obtains any equity interest in Shanghai Xiao-i held by his or her spouse for any reason, he or she agrees to be bound by and sign any legal documents substantially similar to the contractual arrangements entered into by his or her spouse, as may be amended from time to time.

Risks in relation to the VIE structure

The Company believes that the contractual arrangements with its VIE and their respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could, among others:

●

revoke the business licenses and/or operating licenses of the Company;

●

discontinue or place restrictions or onerous conditions on the operations;

●

impose fines, confiscate the income from Zhizhen Technology or the VIE, or impose other requirements with which the Company or the VIE may not be able to comply;

●

require the Company to restructure the ownership structure or operations, including terminate the contractual arrangements with the VIE and deregister the equity pledges of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert operational control over the VIE, or impose restrictions on the Company’s right to collect revenues;

●

impose additional conditions or requirements with which the Company may not be able to comply;

●

require the Company to restructure the operations in such a way as to compel the Company to establish a new enterprise, re-apply for the necessary licenses or relocate our businesses, staff and assets; or

●

restrict or prohibiting the Company use of the proceeds of overseas offering to finance the business and operations in China.

The revenue producing assets that are held by the VIE and the VIE’s subsidiaries primarily comprise of leasehold improvements, electronic equipment, office equipment and software. Substantially all of such assets are recognized in the Group’s consolidated financial statements, except for certain Internet Content Provider Licenses, internally developed software, trademarks and patent applications which were not recorded in the Company’s consolidated balance sheets as they do not meet all the capitalization criteria. The Internet content provision and other licenses are required under relevant PRC laws, rules and regulations for the operation of Internet businesses in the PRC, and therefore are integral to the Company’s operations. The Internet content provision licenses require that core PRC trademark registrations and domain names are held by the VIE and the VIE’s subsidiaries that provide the relevant services. The VIE and the VIE’s subsidiaries also hire assembled work force on sales, research and development and operations whose costs are expensed as incurred.

The Company’s ability to conduct its business may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, The Company may not be able to consolidate its VIE in its consolidated financial statements as it may lose the ability to exert operational control over the VIE and their respective shareholders and it may lose the ability to receive economic benefits from the VIE. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiaries and VIE.

The interests of the shareholders of VIE may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing VIE not to pay the service fees when required to do so. The Company cannot assure that when conflicts of interest arise, shareholders of VIE will act in the best interests of the Company or that conflicts of interests will be resolved in the Company’s favor. The Company believes the shareholders of VIE will not act contrary to any of the contractual arrangements and the exclusive option agreements provide the Company with a mechanism to remove the current shareholders of VIE should they act to the detriment of the Company. The Company relies on certain current shareholders of VIE to fulfill their fiduciary duties and abide by laws of the PRC and act in the best interest of the Company. If the Company cannot resolve any conflicts of interest or disputes between the Company and the shareholders of VIE, the Company would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings.

The following financial statement amounts and balances of the VIE and its subsidiaries were included in the accompanying consolidated financial statements after elimination of intercompany transactions:

Consolidated Balance Sheets Information

	As of December 31,
	2021		2022
Assets
Current assets:
Cash and cash equivalents	$	1,310,737	$	1,025,141
Accounts receivable, net		31,184,779		41,362,705
Amounts due from related parties		391,919		346,517
Inventories		768,762		768,216
Contract costs		1,669,519		2,012,309
Advance to suppliers		90,350		1,115,672
Deferred offering costs		-		1,330,902
Prepaid expenses and other current assets, net		388,844		460,850
Total current assets		35,804,910		48,422,312

Non-current assets:
Property and equipment, net		207,989		219,470
Intangible assets, net		798,459		637,114
Long-term investment		335,448		204,899
Right of use assets		1,194,859		865,399
Deferred tax assets, net		4,906,287		3,888,574
Prepaid expenses and other, non-current assets		3,941,346		3,697,675
Total non-current assets		11,384,388		9,513,131

TOTAL ASSETS	$	47,189,298	$	57,935,443

Liabilities
Current liabilities:
Short-term borrowings	$	9,117,158	$	18,784,459
Accounts payable		5,581,879		9,180,532
Amount due to related parties-current		1,558,642		896,431
Deferred revenue		2,953,238		2,553,808
Accrued expenses and other current liabilities		10,316,428		17,006,680
Convertible loans		5,717,737		3,754,269
Lease liabilities, current		800,658		435,462
Income tax payable		17,904		-
Total current liabilities		36,063,644		52,611,641

Non-current liabilities:
Amount due to related parties-non current		8,905,313		8,581,743
Accrued liabilities, non-current		5,157,971		5,391,664
Lease liabilities, non-current		446,140		300,974
Total non-current liabilities		14,509,424		14,274,381

TOTAL LIABILITIES	$	50,573,068	$	66,886,022

Consolidated Statements of Operations and Comprehensive (loss)/Income

	For the years ended December 31,
	2020			2021		2022
Net Revenue	$	13,856,734		$	32,524,013	$	48,184,958
Net (loss)/income	$	(7,056,042	)	$	3,365,002	$	(5,969,762	)

Consolidated Cash Flows Information

	For the years ended December 31,
	2020			2021			2022
Net cash used in operating activities	$	(3,463,094	)	$	(11,887,122	)	$	(10,923,345	)
Net cash (used in)/provided by investing activities		(25,825	)		77,259			(107,122	)
Net cash provided by financing activities		1,792,682			12,192,952			10,757,306
Effect of exchange rate changes		(797,954	)		101,728			(12,435	)
Net change in cash, cash equivalents and restricted cash	$	(2,494,191	)	$	484,817		$	(285,596	)

As of December 31, 2020, 2021 and 2022, there were no pledge or collateralization of the VIE’s assets that can only be used to settle obligations of the VIE. The amount of the net liabilities of the VIE was $3,383,770 and $8,950,579 as of December 31, 2021 and 2022, respectively. The creditors of the VIE’s third party liabilities did not have recourse to the general credit of the Company in normal course of business. Currently there is a contractual arrangement that would require the Company or its subsidiaries to provide financial support to the VIE. Under the Exclusive Business Cooperation Agreement signed on March 29, 2019 between WFOE and the VIE, WFOE will provide financial support to the VIE or the VIE’s subsidiaries in the event of a loss or serious operational difficulties during the validity term of this agreement.

Consolidated Statements of Changes in Equity - USD ($)	Ordinary shares	Additional paid-in capital	Statutory reserve	Accumulated deficit	Accumulated other comprehensive loss	Total shareholder’s equity/(deficit)	Non-controlling interests	Total
Balance at Dec. 31, 2019	$ 1,106	$ 75,621,294	$ 237,486	$ (69,454,069)	$ (3,186,366)	$ 3,219,451	$ (2,436,086)	$ 783,365
Balance (in Shares) at Dec. 31, 2019	22,115,592
Net income/(loss)				(6,808,365)		(6,808,365)	(247,677)	(7,056,042)
Foreign currency translation adjustment					(218,458)	(218,458)	(139,237)	(357,695)
Balance at Dec. 31, 2020	$ 1,106	75,621,294	237,486	(76,262,434)	(3,404,824)	(3,807,372)	(2,823,000)	(6,630,372)
Balance (in Shares) at Dec. 31, 2020	22,115,592
Net income/(loss)				3,677,813		3,677,813	(312,811)	3,365,002
Foreign currency translation adjustment					(59,599)	(59,599)	(57,692)	(117,291)
Balance at Dec. 31, 2021	$ 1,106	75,621,294	237,486	(72,584,621)	(3,464,423)	(189,158)	(3,193,503)	(3,382,661)
Balance (in Shares) at Dec. 31, 2021	22,115,592
Net income/(loss)				(5,898,535)		(5,898,535)	(106,779)	(6,005,314)
Foreign currency translation adjustment					201,757	201,757	202,059	403,816
Balance at Dec. 31, 2022	$ 1,106	$ 75,621,294	$ 237,486	$ (78,483,156)	$ (3,262,666)	$ (5,885,936)	$ (3,098,223)	$ (8,984,159)
Balance (in Shares) at Dec. 31, 2022	22,115,592

- Definition

Amount of stockholders' equity (deficit), net of receivables from officers, directors, owners, and affiliates of the entity, attributable to both the parent and noncontrolling interests. Amount excludes temporary equity. Alternate caption for the concept is permanent equity.

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+ Details

Accounts Receivable, Net (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accounts Receivable, Net [Abstract]
Bad debt expense	$ 2,149,176	$ 270,649	$ 758,019

Taxation

12 Months Ended

Dec. 31, 2022

Taxation [Abstract]

TAXATION

11.

TAXATION

Cayman Islands

The Company is incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman Islands.

Hong Kong

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. In March 2018, the Hong Kong Government introduced a two-tiered profit tax rate regime by enacting the Inland Revenue (Amendment) (No.3) Ordinance 2018 (the “Ordinance”). Under the two-tiered profits tax rate regime, the first HK dollar 2 million of assessable profits of qualifying corporations is taxed at 8.25% and the remaining assessable profits at 16.5%. The Ordinance is effective from the year of assessment 2018-2019. According to the policy, if no election has been made, the whole of the taxpaying entity’s assessable profits will be chargeable to Profits Tax at the rate of 16.5% or 15%, as applicable. Because the preferential tax treatment is not elected by the Group, all the subsidiaries registered in Hong Kong are subject to income tax at a rate of 16.5%. Payments of dividends by the subsidiary to the Company are not subject to withholding tax in Hong Kong.

PRC

Generally, the Group’s WFOE, VIE and subsidiaries of VIE, which are considered PRC resident enterprises under PRC tax law, are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of 25%.

In accordance with the implementation rules of EIT Laws, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply for the HNTE certificate when the prior certificate expires. The Company’s subsidiary, Shanghai Zhizhen, is eligible to enjoy a preferential tax rate of 15% from 2020 to 2022 to the extent it has taxable income under the EIT Law.

Guizhou Xiao-I was qualified as an eligible software enterprise before the income tax year-end final settlement in 2017. As a result of this qualification, it is entitled to a tax holiday of a full exemption for the years ended December 31, 2017 and 2018, in which its taxable income is greater than zero, followed by a three-year 50% exemption. In 2022, the tax holiday has expired and Guizhou Xiao-I applied qualification of HNTE, which allows Guizhou Xiao-i to enjoy a preferential tax rate of 15% from 2022 to 2024.

The benefit of the preferred tax treatment on net income per share (basic and diluted) was $0.02 for the year ended December 31, 2021. No benefit of preferred tax treatment on net loss per share (basic and diluted) for the years ended December 31, 2020 and 2022.

In general, the PRC tax authority has up to five years to conduct examinations of the Company’s tax filings. Accordingly, the PRC subsidiaries’ and the VIE and subsidiaries of the VIE’s tax years 2016 through 2021 remain open to examination by the taxing jurisdictions. According to PRC tax regulations, the PRC net operating loss can generally carry forward for no longer than five years starting from the year subsequent to the year in which the loss was incurred, and that of high-tech enterprises is no more than 10 years. Carryback of losses is not permitted.

The income tax provision consists of the following components:

	For the years ended December 31,
	2020			2021		2022
Current income tax expenses	$	-		$	17,687	$	2
Deferred income tax (benefits) expenses		(235,854	)		534,668		660,653
Total income tax (benefits) expenses	$	(235,854	)	$	552,355	$	660,655

A reconciliation between the Group’s actual provision for income taxes and the provision at the PRC, mainland statutory rate is as follows:

	For the years ended December 31,
	2020			2021			2022
(Loss)/income before income tax	$	(7,291,896	)	$	3,917,357		$	(5,344,659	)
(Loss)/Income tax expense at statutory tax rate		(1,822,974	)		979,339			(1,336,164	)
Additional deduction for R&D expenses		(343,193	)		(1,005,733	)		(1,087,622	)
Investment loss		51,874			39,158			35,795
Non-deductible expenses		33,392			41,679			278,277
Tax effect of tax rate in a different jurisdiction		13,058			134,570			51,119
Effect of preferential tax rates		157,236			(356,448	)		5,259
Deferred tax effect of tax rate change		-			-			538,660
Change in valuation allowance		459,885			719,790			1,697,503
Write-off of NOL		1,214,868			-			477,828
Income tax (benefit) expense	$	(235,854	)	$	552,355		$	660,655

The significant components of the net deferred tax assets are summarized below:

	As of December 31,
	2021			2022
Deferred tax assets:
Tax losses	$	6,239,757		$	4,475,379
Allowance for doubtful accounts		773,701			1,053,028
Accrued expenses		257,966			716,673
Impairment		310,430			301,150
Non-deductible education expense		818			756
Lease liabilities		191,758			112,203
Amortization of intangible assets		-			972,696
Valuation allowance		(2,685,373	)		(3,611,707	)
Total deferred tax assets	$	5,089,057		$	4,020,178
Deferred tax liabilities:
Right-of-use assets		(182,770	)		(131,604	)
Deferred tax assets, net	$	4,906,287		$	3,888,574

As of December 31, 2021 and 2022, the Group had net operating loss carryforwards of approximately $36,288,770 and $28,198,108, respectively, which arose from the Group’s subsidiaries, the VIE and the VIE’s subsidiaries established in the PRC and Hong Kong. As of December 31, 2021 and 2022, deferred tax assets from the net operating loss carryforwards amounted to $6,239,757 and $4,475,379, respectively. Due to the Group’s history of recurrent losses, the management did not expect the subsidiaries of VIE will generate enough profit to utilize the deferred tax assets in the future. The Group has recognized an increase to the valuation allowance of $570,253, $810,159 and $1,723,347 for the years ended December 31, 2020, 2021 and 2022, respectively.

Changes in valuation allowance are as follows:

	As of December 31,
	2021			2022
Balance at the beginning of the year	$	1,911,048		$	2,685,373
Current year addition		810,159			1,723,347
Current year reduction		(90,370	)		(25,844	)
Deferred tax effect of tax rate change		-			(538,660	)
Exchange rate effect		54,536			(232,509	)
Balance at the end of the year	$	2,685,373		$	3,611,707

As of December 31, 2022, net operating loss carryforwards from PRC will expire, if unused, in the following amounts:

2023	$	322,766
2024		897,460
2025		380,244
2026		407,436
2027		913,779
Thereafter		21,417,987
Total	$	24,339,672

As of December 31, 2022, net operating loss from HK will carry forward indefinitely, in the following amounts:

Net operating loss carryforwards indefinitely			3,858,436
Total		$	3,858,436

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Concentration of Credit Risk (Details) - Schedule of single customers total accounts receivable - Accounts Receivable [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Customer B [Member]
Concentration of Credit Risk (Details) - Schedule of single customers total accounts receivable [Line Items]
Accounts receivable, Amount	$ 12,801,742	$ 15,203,371
Accounts receivable, Percentage	30.90%	48.80%
Customer A [Member]
Concentration of Credit Risk (Details) - Schedule of single customers total accounts receivable [Line Items]
Accounts receivable, Amount	$ 5,279,171	$ 3,138,436
Accounts receivable, Percentage	12.80%	10.10%
Customer C [Member]
Concentration of Credit Risk (Details) - Schedule of single customers total accounts receivable [Line Items]
Accounts receivable, Amount	$ 4,175,607
Accounts receivable, Percentage	10.10%
Customer F [Member]
Concentration of Credit Risk (Details) - Schedule of single customers total accounts receivable [Line Items]
Accounts receivable, Amount	$ 4,523,575
Accounts receivable, Percentage	10.90%

Leases (Details) - Schedule of future minimum payments operating leases - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Schedule of future minimum payments operating leases [Abstract]
2023	$ 509,152
2024	200,912
2025	60,749
Total lease payments	770,813
Less: imputed interest	(34,377)
Total	$ 736,436	$ 1,246,798

Concentration of Credit Risk (Details) - Schedule of single customers total revenue - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Customer A [Member] \| Total Revenue [Member]
Revenue, Major Customer [Line Items]
Total Revenue, Amount	$ 9,824,275	$ 3,363,631
Total Revenue, Percentage	20.40%	10.30%
Customer B [Member] \| Total Revenue [Member]
Revenue, Major Customer [Line Items]
Total Revenue, Amount	$ 5,364,265	$ 13,384,613
Total Revenue, Percentage	11.10%	41.20%
Customer C [Member]
Revenue, Major Customer [Line Items]
Total Revenue, Amount	$ 4,980,628
Total Revenue, Percentage	10.30%
Customer D [Member]
Revenue, Major Customer [Line Items]
Total Revenue, Amount			$ 2,449,557
Total Revenue, Percentage			17.70%
Customer E [Member]
Revenue, Major Customer [Line Items]
Total Revenue, Amount			$ 1,780,014
Total Revenue, Percentage			12.80%

Prepaid Expenses and Other Assets (Details) - Schedule of prepayments and other assets - USD ($)

Dec. 31, 2022

Dec. 31, 2021

Prepaid expenses and other current assets：

Receivables from third parties

^[1]

$ 359,994

$ 2,479,412

Rent deposits

13,629

211,224

Bid security

70,767

Others

87,231

10,119

Prepaid expenses and other current assets, gross

460,854

2,771,522

Bad debt provisions

^[1]

(2,382,674)

Prepaid expenses and other current assets, net

460,854

388,848

Prepaid case acceptance fee

^[2]

3,632,039

3,931,033

Others

65,636

10,313

Prepaid expenses and other non-current assets

3,697,675

3,941,346

Total

$ 4,158,529

$ 4,330,194

[1]

[2]

Taxation (Details) - Schedule of net operating loss carryforwards - PRC [Member]	Dec. 31, 2022 USD ($)
Schedule of net operating loss carryforwards from PRC will expire [Abstract]
2023	$ 322,766
2024	897,460
2025	380,244
2026	407,436
2027	913,779
Thereafter	21,417,987
Total	$ 24,339,672

Intangible Assets, Net (Details) - Schedule of intangible assets, net - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Schedule of Intangible Assets Net [Abstract]
Software	$ 1,009,425	$ 1,092,197
Less: accumulated amortization	(372,311)	(293,738)
Intangible asset, net	$ 637,114	$ 798,459

Concentration of Credit Risk (Tables)

12 Months Ended

Dec. 31, 2022

Concentration of Credit Risk [Abstract]

Schedule of single customers total revenue

	For the Years ended December 31,
	2020					2021					2022
Percentage of the Group’s total revenue	Amount		%			Amount		%			Amount		%
Customer A		-		-			3,363,631		10.3	%		9,824,275		20.4	%
Customer B		-		-			13,384,613		41.2	%		5,364,265		11.1	%
Customer C		-		-			-		-			4,980,628		10.3	%
Customer D		2,449,557		17.70	%		-		-			-		-
Customer E		1,780,014		12.80	%		-		-			-		-

Schedule of single customers total accounts receivable

	As of December 31,
	2021					2022
Percentage of the Group’s accounts receivable	Amount		%			Amount		%
Customer B		15,203,371		48.8	%		12,801,742		30.9	%
Customer A		3,138,436		10.1	%		5,279,171		12.8	%
Customer C		-		-			4,175,607		10.1	%
Customer F		-		-			4,523,575		10.9	%

Schedule of single suppliers total purchase

	For the Years ended December 31,
	2020					2021					2022
Percentage of the Group’s total purchase	Amount		%			Amount		%			Amount		%
Supplier A		-		-			3,756,094		73.8	%		11,475,851		34.6	%
Supplier B		-		-			-		-			7,281,914		21.9	%
Supplier C		-		-			-		-			3,402,612		10.3	%
Supplier D		139,040		10.0	%		-		-			-		-
Supplier E		181,046		13.0	%		-		-			-		-
Supplier F		550,496		39.5	%		-		-			-		-

Related Party Transactions (Details) - Schedule of due from related parties - USD ($)

12 Months Ended

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

Accounts receivable

^[1]

$ 359,994

$ 2,479,412

Bad debt provisions

(20,377)

Total

346,517

391,919

Due to related parties-current

Subtotal-due to related parties-current

^[2]

896,431

1,558,642

Due to related parties-non current

2,054,136

1,053,854

Subtotal-due to related parties-non current

8,581,743

8,905,313

Total due to related parties

9,478,174

10,463,955

Zhejiang Baiqianyin [Member]

Accounts receivable

^[3]

48,860

52,883

Other receivables

^[4]

297,657

316,981

Software and service income

Software and service income

286,875

$ 2,449,560

Technology service fee payable

Interest-free loans from related parties

1,783,326

5,782,216

1,448

Interest-free loans repayment to related parties

1,788,230

5,470,627

Shanghai Aoshu [Member]

Other receivables

^[2]

20,377

22,055

Shanghai Shenghan [Member]

Due to related parties-current

201,465

470,765

Technology service fee payable

Technology service fee payable

465,058

130,356

Interest-free loans repayment to related parties

139,517

Return of inventories to a related party

Return of inventories to a related party

239,330

Shanghai Machinemind Intelligent Technology Co., Ltd. [Member]

Due to related parties-current

76,892

Technology service fee payable

Interest-free loans repayment to related parties

72,819

Jiaxing Sound Core Intelligent Technology Co., LTD [Member]

Due to related parties-current

32,622

98,076

Technology service fee payable

Interest-free loans repayment to related parties

59,444

Zhizhen Guorui (Shanghai) Information Technology Development Co., Ltd. [Member]

Due to related parties-current

97,868

Technology service fee payable

Interest-free loans from related parties

100,315

Jiaxing Chiyu Investment Partnership (limited Partnership) [Member]

Due to related parties-current

434,959

784,610

Technology service fee payable

Interest-free loans from related parties

775,097

Interest-free loans repayment to related parties

297,221

Haiyin Capital Investment (International) Limited [Member]

Due to related parties-current

^[2]

129,517

128,299

Technology service fee payable

Interest-free loans repayment to related parties

126,744

Hui Yuan [Member]

Due to related parties-non current

8,581,743

8,905,313

Technology service fee payable

Interest-free loans from related parties

532,026

9,696,450

Interest-free loans repayment to related parties

169,416

899,111

Tianjin Haiyin [Member]

Technology service fee payable

Interest-free loans from related parties

310,038

Interest-free loans repayment to related parties

310,038

Weng Wei [Member]

Technology service fee payable

Interest-free loans from related parties

74,409

Interest-free loans repayment to related parties

$ 74,409

[1]	Receivables from third parties mainly includes funds lent to third parties. The Group established business partnership with these third parties and provided funds to support their business operation. Due to the third parties deteriorated financial position affected by COVID -19, the Group recorded bad debt expense for receivables from third parties of nil, $1,380,331 and $nil for the years ended December 31, 2020, 2021 and 2022, respectively, and wrote off the receivables and bad debt provision in 2022.
[2]	Other receivable from Shanghai Aoshu was the payment to an employee on behalf of Shanghai Aoshu. For the year ended December 31, the Group made fully provisions of receivables from Shanghai Aoshu.
[3]	In April, 2023, the Group collected accounts receivable from Zhejiang Baiqianyin;
[4]	Other receivable from Zhejiang Baiqianyin consists of the interest-free borrowings for ordinary business. In April, 2023, the Group collected other receivables from Zhejiang Baiqianyin;

Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

16.

COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Group leases offices for operation under operating leases. Future minimum lease payments under non-cancellable operating leases with initial terms in excess of one year was included in Note 12.

Contingencies

In the ordinary course of business, the Group may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. The Group records contingent liabilities resulting from such claims, when a loss is assessed to be probable and the amount of the loss is reasonably estimable.

On August 3, 2020, Shanghai Xiao-i filed a lawsuit with the High People’s Court of Shanghai in China, against Apple Computer Trading (Shanghai) Co., Ltd., Apple, Inc., and Apple Computer Trading (Shanghai) Co., Ltd. (together, “Apple”), demanding that Apple cease its infringement of Shanghai Xiao-i’s intelligent assistant patent (ZL200410053749.9 invention patent) by its Siri (intelligent assistant) (the “Patent Infringement Case”). The lawsuit seeks various remedies, including but not limited to, requiring Apple to stop manufacturing, using, offering to sell, selling or importing products that infringe Shanghai Xiao-i’s patent, and a temporary claim amount of 10 billion yuan (RMB). On August 10, 2020, the High People’s Court of Shanghai formally accepted the Patent Infringement Case filed by Shanghai Xiao-i against Apple. On September 4, 2021, Shanghai Xiao-i filed a behavior preservation application (injunction) with the Shanghai High People’s Court, demanding Apple to immediately stop the patent infringement involving Siri, including but not limited to stopping the production, selling, offering to sell, importing or using of iPhone products that infringe Shanghai Xiao-i’s patent. As of the date of this annual report, the Patent Infringement Case is pending in the High People’s Court of Shanghai.

In the opinion of management, there were no other pending or threatened claims and litigation as of December 31, 2022 and through the issuance date of these consolidated financial statements.

Subsequent Events (Details)	1 Months Ended						4 Months Ended	12 Months Ended
Subsequent Events (Details)	Apr. 30, 2023 USD ($)	Mar. 31, 2023 USD ($) $ / shares shares	Feb. 28, 2023 USD ($)	Feb. 28, 2023 CNY (¥)	Jan. 31, 2023 USD ($)	Jan. 31, 2023 CNY (¥)	Apr. 30, 2023 USD ($)	Dec. 31, 2022 USD ($) $ / shares	May 31, 2023	Jan. 31, 2023 CNY (¥)	Dec. 31, 2021 USD ($) $ / shares
Subsequent Events (Details) [Line Items]
Convertible loans		$ 460,000						$ 3,754,269			$ 5,717,737
Convertible loan	$ 1,770,000
Ordinary shares par value (in Dollars per share) \| $ / shares								$ 0.00005			$ 0.00005
Accounts receivable								$ 26,275,295
Subsequent Event [Member]
Subsequent Events (Details) [Line Items]
Maturity date	May 31, 2023						May 31, 2023
Interest rate	15.00%						15.00%
Depositary shares (in Shares) \| shares		5,700,000
Price of per share (in Dollars per share) \| $ / shares		$ 6.8
Net proceeds approximately		$ 35,440,000
Underwriting discounts and commissions		3,320,000
Initial public offering		$ 24,015,592
Ordinary shares par value (in Dollars per share) \| $ / shares		$ 0.00005
Repaid principle loans banks							$ 2,882,633
Third parties accounted							$ 3,133,371
Loan					$ 724,932					¥ 5
Interest rate percentage			3.45%	3.45%	5.50%				12.00%	5.50%
Repayments and proceeds of loans borrowed			$ 6,234,414	¥ 43
Repayments and proceeds of loans term			4 years 7 months 24 days	4 years 7 months 24 days
Received loan					$ 1,449,864	¥ 10,000,000
Minimum [Member] \| Subsequent Event [Member]
Subsequent Events (Details) [Line Items]
Interest rate	12.00%						12.00%
Maximum [Member] \| Subsequent Event [Member]
Subsequent Events (Details) [Line Items]
Interest rate	15.00%						15.00%

Property and Equipment, Net

12 Months Ended

Dec. 31, 2022

Property and Equipment, Net [Abstract]

PROPERTY AND EQUIPMENT, NET

5.	PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consisted of the following:

	As of December 31,
	2021			2022
Electronic equipment	$	147,406		$	168,937
Office equipment		194,241			240,788
Leasehold improvement		55,857			63,683
Construction in progress		2,088			-
Less: accumulated depreciation		(191,603	)		(253,938	)
Property and equipment, net	$	207,989		$	219,470

Depreciation expense was $68,514, $65,160 and $78,831 for the years ended December 31, 2020, 2021 and 2022, respectively.

Consolidated Statements of Operations and Comprehensive (Loss)/Income - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Net revenues	$ 48,184,958	$ 32,524,013	$ 13,856,734
Cost of revenues	(17,379,144)	(10,885,731)	(7,228,046)
Gross profit	30,805,814	21,638,282	6,628,688
Operating expenses:
Selling expenses	(3,911,818)	(4,620,113)	(4,566,760)
General and administrative expenses	(6,028,637)	(6,657,251)	(5,694,785)
Research and development expenses	(24,001,138)	(5,363,909)	(4,236,723)
Total operating expenses	(33,941,593)	(16,641,273)	(14,498,268)
(Loss)/Income from operations	(3,135,779)	4,997,009	(7,869,580)
Other income/(loss):
Investment losses	(143,181)	(156,630)	(207,497)
Interest expense	(2,440,815)	(1,866,831)	(1,026,636)
Foreign currency exchange gain/(loss)	(68,902)	11,252	41,592
Other income, net	444,018	932,557	1,770,225
Total other income/(loss)	(2,208,880)	(1,079,652)	577,684
(Loss)/Income before income tax expense	(5,344,659)	3,917,357	(7,291,896)
Income tax benefit/(expense)	(660,655)	(552,355)	235,854
Net (loss)/income	(6,005,314)	3,365,002	(7,056,042)
Net loss attributable to non-controlling interests	(106,779)	(312,811)	(247,677)
Net (loss)/income attributable to XIAO-I CORPORATION shareholders	(5,898,535)	3,677,813	(6,808,365)
Other comprehensive (loss)/income
Foreign currency translation change, net of nil income taxes	403,816	(117,291)	(357,695)
Total other comprehensive (loss)/income	403,816	(117,291)	(357,695)
Total comprehensive (loss)/income	(5,601,498)	3,247,711	(7,413,737)
Total comprehensive (loss)/income attributable to non-controlling interests	95,280	(370,503)	(386,914)
Total comprehensive (loss)/income attributable to XIAO-I CORPORATION shareholders	$ (5,696,778)	$ 3,618,214	$ (7,026,823)
(Loss)/Earnings per ordinary share attributable to XIAO-I CORPORATION shareholders
Basic (in Dollars per share)	$ (0.27)	$ 0.17	$ (0.31)
Diluted (in Dollars per share)	$ (0.27)	$ 0.16	$ (0.31)
Weighted average number of ordinary shares outstanding
Basic (in Shares)	22,115,592	22,115,592	22,115,592
Diluted (in Shares)	22,115,592	22,362,552	22,115,592
Cost of sale of software products
Net revenues	$ 3,547,113	$ 14,878,256	$ 5,098,730
Cost of revenues	(888,220)	(771,293)	(2,148,758)
Cost of sale of hardware products
Net revenues	46,295	75,011	415,723
Cost of revenues	(25,141)	(29,970)	(276,261)
Cost of technology development service
Net revenues	16,419,889	9,246,992	6,404,394
Cost of revenues	(12,194,044)	(4,390,825)	(3,604,014)
Cost of M&S service
Net revenues	2,429,526	2,772,795	1,937,887
Cost of revenues	(1,255,973)	(1,862,483)	(1,199,013)
Cost of Sale of cloud platform products
Net revenues	25,742,135	5,550,959
Cost of revenues	$ (3,015,766)	$ (3,831,160)

Condensed Financial Information of the Parent Company (Tables)

12 Months Ended

Dec. 31, 2022

Condensed Financial Information of the Parent Company [Abstract]

Schedule of parent company balance sheets

	As of December 31,
	2021			2022
ASSETS
Cash and cash equivalents	$	1,105		$	1,104
Investment income in subsidiaries		-			-
Prepaid expenses and other current assets, net		4			2
TOTAL ASSETS	$	1,109		$	1,106

LIABILITIES
Investment deficit in subsidiaries		190,267			5,887,042
TOTAL LIABILITIES	$	190,267		$	5,887,042

Shareholders’ deficit
Ordinary shares (par value of $0.00005 per share; 1,000,000,000 shares authorized as of December 31, 2021 and December 31, 2022, respectively; 22,115,592 shares issued and outstanding as of December 31,2021 and December 31, 2022, respectively)		1,106			1,106
Additional paid-in capital		75,621,294			75,621,294
Statutory reserve		237,486			237,486
Accumulated deficit		(72,584,621	)		(78,483,156	)
Accumulated other comprehensive loss		(3,464,423	)		(3,262,666	)
Total shareholders’ deficit	$	(189,158	)	$	(5,885,936	)

The shares and per share information are presented on a retroactive basis to reflect the reorganization completed on March 29, 2019.

Schedule of parent company statements of operations and comprehensive (loss)/income

	Years ended December 31,
	2020			2021		2022
Revenue	$	-		$	-	$	-
Cost of revenue		-			-		-
Gross profit		-			-		-

Operating expenses:
Share of (loss)/income in subsidiaries and VIEs	$	(6,808,365	)	$	3,677,813	$	(5,898,535	)
(Loss)/Income before income tax provision		(6,808,365	)		3,677,813		(5,898,535	)
Provision for income tax		-			-		-
Net (loss)/income	$	(6,808,365	)	$	3,677,813	$	(5,898,535	)

Schedule of parent company statements of cash flow

	Years ended December 31,
	2020		2021		2022
Net cash used in operating activities	$	-	$	-	$	(1	)
Net cash used in investing activities		-		-		-
Net cash provided by financing activities		-		-		-
Net cash inflow	$	-	$	-	$	(1	)

Leases (Details) - Schedule of lease expense - USD ($)	12 Months Ended
Leases (Details) - Schedule of lease expense - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule of lease expense [Abstract]
Operating leases cost excluding short-term rental expense	$ 739,582	$ 1,207,920	$ 1,567,532
Short-term lease cost	51,274	8,991	17,714
Total	$ 790,856	$ 1,216,911	$ 1,585,246

Subsequent Events

12 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

17.

SUBSEQUENT EVENTS

Extension and settlement of convertible loans

From January to April, 2023, Fumei Shi, Sunny Concord International Ltd., Senbiao Hu, Guoqiang Chen and Jun Xu entered into a series of extension agreements with the VIE. In the latest extension agreement in April 2023, Guoqiang Chen, Sunny Concord International Ltd. and Jun Xu extended the maturity date of convertible loans to May 31, 2023 with annual interest rate of 12%, 15% and 15%, respectively. Pursuant to the extension agreements, the loans would be settled in cash without conversion options.

In March, 2023, the VIE has repaid principal and interest of the convertible loans to Senbiao Hu, in amount of US$0.46 million. In April, 2023, the VIE has repaid principal and interest of the convertible loans to Fumei Shi, in amount of US$1.77 million.

List on Nasdaq Global Market

In March, 2023, the Company completed its initial public offering and was listed on the Nasdaq Global Market under the symbol “AIXI”. 5,700,000 American depositary shares (each, an “ADS”, collectively, “ADSs”), each represents one-third of an ordinary shares, were issued at a price of $6.8 per share for net proceeds of approximately $35.44 million, after deducting underwriting discounts, commissions and other offering expense of $3.32 million. After the initial public offering, there were 24,015,592 ordinary shares outstanding, with par value of $0.00005.

Collection of accounts receivable

The Group has collected accounts receivable subsequent to December 31, 2022 amounted to $26,275,295.

Repayments and proceeds of loans

From January to April, 2023, The Group has repaid principle of loans from banks and third parties accounted for $2,882,633 and $3,133,371.

In January, 2023, The Group received a short-term loan $724,932 (RMB5 million) from bank with interest rate 5.50%.

From February to March, 2023, The Group has pledged patents to obtain short-term borrowings from banks accounted for $6,234,414 (RMB43 million) with interest rates range from 3.45% to 4.65%.

In January, 2023, The Group received a loan $1,449,864 (RMB10 million) from a third party.

The Group has evaluated subsequent events through April 28th, 2023, the date of issuance of the revised consolidated financial statements, and noted that there are no other subsequent events.

Summary of Significant Accounting Policies (Details)	12 Months Ended
Summary of Significant Accounting Policies (Details)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Summary of Significant Accounting Policies (Details) [Line Items]
Inventory write-down	$ 154,664
Long term investments interest	20.00%
Number of customers	2	2
Number of performance obligations	2	2
Service period	1 year	1 year
Remaining performance obligation	$ 4,176,929
Cost of revenues	17,379,144		10,885,731	7,228,046
Deferred revenue	2,553,808		2,953,238
Revenue recognized	1,545,866		900,686	1,201,576
Other income	216,893		853,011	(1,699,231)
Underpayment of taxes	$ (14,537)	¥ 100,000
Selling consumer products rate	13.00%	13.00%
General tax payer rate	6.00%	6.00%
Statutory surplus percentage	10.00%	10.00%
General reserve percentage	50.00%	50.00%
Number of reportable segment	1	1
Minimum [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Long term investments interest	20.00%
Remaining performance obligation	$ 47,416
Maximum [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Long term investments interest	50.00%
Remaining performance obligation	$ 4,129,513
VIE [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Statutory surplus percentage	50.00%	50.00%
Sale of cloud platform products [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Number of performance obligations	2	2
Contract balances [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Cost of revenues	$ 17,379,144		$ 10,885,731	$ 7,228,046

Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Schedule of operating lease related assets and liabilities

	As of December 31,
	2021			2022
Right-of-use Assets	$	1,194,859		$	865,399

Lease payment liabilities-current		(800,658	)		(435,462	)
Lease payment liabilities- non-current		(446,140	)		(300,974	)
Total	$	(1,246,798	)	$	(736,436	)

Schedule of lease expense

	For the years ended December 31,
	2020		2021		2022
Operating leases cost excluding short-term rental expense	$	1,567,532	$	1,207,920	$	739,582
Short-term lease cost		17,714		8,991		51,274
Total	$	1,585,246	$	1,216,911	$	790,856

Schedule of future minimum payments operating leases

For the year ended December 31,	Operating Leases
2023	$	509,152
2024		200,912
2025		60,749
Total lease payments		770,813
Less: imputed interest		(34,377	)
Total	$	736,436

Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2022

No.	Name of Related Parties	Relationship
1	Zhejiang Baiqianyin Network Technology Co., Ltd (“Zhejiang Baiqianyin”)	An entity which has a common director of the Board of Directors with the Group
2	Shanghai Shenghan	An entity which the Group holds 16.56% equity interests
3	Shanghai Aoshu Enterprise Management Partnership (Limited Partnership) (“Shanghai Aoshu”)	An entity which is the Group’s employee stock ownership platform, and has a common director of the Board of Directors with the Group
4	Shanghai Machinemind Intelligent Technology Co., Ltd.	An entity which the Company holds 18% equity interests
5	Jiaxing Sound Core Intelligent Technology Co., LTD	An entity which Shanghai Shenghan holds 20% equity interests
6	Hui Yuan	Chairman of the board, one of the major shareholders holding 14.73% equity interests of the Company
7	Weng Wei	CFO of the Company
8	Tianjin Haiyin Equity Investment Fund Partnership (Limited Partnership) (“Tianjin Haiyin”)	A significant shareholder holding 5.18% equity interests of the Company
9	Jiaxing Chiyu Investment Partnership (limited Partnership)	A significant shareholder holding 5.44% equity interests of the Company
10	Haiyin Capital Investment (International) Limited	A subsidiary of Tianjin Haiyin
11	Zhizhen Guorui	An entity which the Group holds 37% equity interests

Schedule of due from related parties

	As of December 31,
	2021		2022
Accounts receivable	$		$
Zhejiang Baiqianyin (a)		52,883		48,860

Other receivables
Zhejiang Baiqianyin (b)		316,981		297,657
Shanghai Aoshu (c)		22,055		20,377
Bad debt provisions		-		(20,377	)
Total	$	391,919	$	346,517

(a).

In April, 2023, the Group collected accounts receivable from Zhejiang Baiqianyin;

(b).

Other receivable from Zhejiang Baiqianyin consists of the interest-free borrowings for ordinary business. In April, 2023, the Group collected other receivables from Zhejiang Baiqianyin;

(c).

Other receivable from Shanghai Aoshu was the payment to an employee on behalf of Shanghai Aoshu. For the year ended December 31, the Group made fully provisions of receivables from Shanghai Aoshu.

	As of December 31,
	2021		2022
Due to related parties-current
Accounts payable
Shanghai Shenghan	$	470,765	$	201,465
Shanghai Machinemind Intelligent Technology Co., Ltd.		76,892		-
Jiaxing Sound Core Intelligent Technology Co., LTD		98,076		32,622
Zhizhen Guorui (Shanghai) Information Technology Development Co., Ltd.		-		97,868

Interest-free loans (c)
Jiaxing Chiyu Investment Partnership (limited Partnership)	$	784,610	$	434,959
Haiyin Capital Investment (International) Limited		128,299		129,517
Subtotal-due to related parties-current		1,558,642		896,431

Due to related parties-non current
Interest-free loans (c)
Hui Yuan	$	8,905,313	$	8,581,743
Subtotal-due to related parties-non current		8,905,313		8,581,743
Total	$	10,463,955	$	9,478,174

	For the years ended December 31,
Nature	2020		2021		2022
Software and service income
Zhejiang Baiqianyin	$	2,449,560	$	286,875	$	-

Technology service fee payable
Shanghai Shenghan	$	130,356	$	465,058	$	-
Zhizhen Guorui (Shanghai) Information Technology Development Co., Ltd.		-		-		100,315

Interest-free loans from related parties
Zhejiang Baiqianyin	$	1,448	$	5,782,216	$	1,783,326
Hui Yuan		-		9,696,450		532,026
Haiyin Capital Investment (International) Limited		-		126,744		-
Jiaxing Chiyu Investment Partnership (limited Partnership)		-		775,097		-
Tianjin Haiyin		-		310,038		-
Weng Wei		-		74,409		-

Interest-free loans repayment to related parties
Zhejiang Baiqianyin	$	-	$	5,470,627	$	1,788,230
Jiaxing Chiyu Investment Partnership (limited Partnership)		-		-		297,221
Hui Yuan		-		899,111		169,416
Jiaxing Sound Core Intelligent Technology Co., LTD		-		-		59,444
Shanghai Shenghan		-		139,517		-
Weng Wei		-		74,409		-
Tianjin Haiyin		-		310,038		-

Return of inventories to a related party
Shanghai Shenghan	$	-	$	-	$	239,330

Debt relief
Shanghai Machinemind Intelligent Technology Co., Ltd.	$	-	$	-	$	72,819

Prepaid Expenses and Other Assets (Tables)

12 Months Ended

Dec. 31, 2022

Prepaid Expenses and Other Assets [Abstract]

Schedule of prepayments and other assets

	As of December 31,
	2021			2022
Prepaid expenses and other current assets：
Receivables from third parties ⁽¹⁾		2,479,412			359,994
Rent deposits		211,224			13,629
Bid security		70,767			-
Others		10,119			87,231
Prepaid expenses and other current assets, gross		2,771,522			460,854
Bad debt provisions ⁽¹⁾		(2,382,674	)		-
Prepaid expenses and other current assets, net	$	388,848		$	460,854
Prepaid expenses and other non-current assets：
Prepaid case acceptance fee ⁽²⁾	$	3,931,033		$	3,632,039
Others		10,313			65,636
Prepaid expenses and other non-current assets		3,941,346			3,697,675
Total	$	4,330,194		$	4,158,529

(1)

(2)

Short-Term Borrowings (Details) - USD ($)	12 Months Ended
Short-Term Borrowings (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Short-Term Borrowings [Abstract]
Interest expenses of short-term borrowings	$ 651,287	$ 625,176	$ 744,761
Weighted average interest rates of short-term loans	4.73%	5.52%	4.67%

Organization and Principal Activities (Tables) - Variable Interest Entity [Member]

12 Months Ended

Dec. 31, 2022

Organization and Principal Activities (Tables) [Line Items]

Schedule of company’s major subsidiaries and consolidated VIE

Name	Date of Incorporation	Percentage of beneficial ownership for purposes of accounting	Principal Activities
Wholly owned subsidiaries
AI PLUS HOLDING LIMITED (“AI Plus”)	August 30, 2018	100%	Investing holding company
Xiao-i Technology Limited (“Xiao-i Technology”)	December 17, 2018	100%	Investing holding company
Zhizhen Artificial Intelligent Technology (Shanghai) Co. Ltd. (“Zhizhen Technology”) (“WFOE”)	February, 21, 2020	100%	WFOE, a holding company

Name	Date of Incorporation	Percentage of beneficial ownership for purposes of accounting	Principal Activities
VIE
Shanghai Xiao-i Robot Technology Co., Ltd. (“Shanghai Xiao-i”)	August 27, 2009	100%	Internet technology development

Name	Date of Incorporation	Percentage of beneficial ownership for purposes of accounting	Principal Activities
Subsidiaries of VIE
Xiaoi Robot Technology (H.K) Ltd. (“Xiaoi Robot”)	June 3, 2016	100%	Internet technology development
Guizhou Xiao-i Robot Technology Co., Ltd. (“Guizhou Xiao-i”)	July 18, 2016	70%	AI robot development

Schedule of consolidated balance sheets Information

	As of December 31,
	2021		2022
Assets
Current assets:
Cash and cash equivalents	$	1,310,737	$	1,025,141
Accounts receivable, net		31,184,779		41,362,705
Amounts due from related parties		391,919		346,517
Inventories		768,762		768,216
Contract costs		1,669,519		2,012,309
Advance to suppliers		90,350		1,115,672
Deferred offering costs		-		1,330,902
Prepaid expenses and other current assets, net		388,844		460,850
Total current assets		35,804,910		48,422,312

Non-current assets:
Property and equipment, net		207,989		219,470
Intangible assets, net		798,459		637,114
Long-term investment		335,448		204,899
Right of use assets		1,194,859		865,399
Deferred tax assets, net		4,906,287		3,888,574
Prepaid expenses and other, non-current assets		3,941,346		3,697,675
Total non-current assets		11,384,388		9,513,131

TOTAL ASSETS	$	47,189,298	$	57,935,443

Liabilities
Current liabilities:
Short-term borrowings	$	9,117,158	$	18,784,459
Accounts payable		5,581,879		9,180,532
Amount due to related parties-current		1,558,642		896,431
Deferred revenue		2,953,238		2,553,808
Accrued expenses and other current liabilities		10,316,428		17,006,680
Convertible loans		5,717,737		3,754,269
Lease liabilities, current		800,658		435,462
Income tax payable		17,904		-
Total current liabilities		36,063,644		52,611,641

Non-current liabilities:
Amount due to related parties-non current		8,905,313		8,581,743
Accrued liabilities, non-current		5,157,971		5,391,664
Lease liabilities, non-current		446,140		300,974
Total non-current liabilities		14,509,424		14,274,381

TOTAL LIABILITIES	$	50,573,068	$	66,886,022

Schedule of consolidated statements of operations and comprehensive (loss)/Income

	For the years ended December 31,
	2020			2021		2022
Net Revenue	$	13,856,734		$	32,524,013	$	48,184,958
Net (loss)/income	$	(7,056,042	)	$	3,365,002	$	(5,969,762	)

Schedule of Consolidated Cash Flows Information

	For the years ended December 31,
	2020			2021			2022
Net cash used in operating activities	$	(3,463,094	)	$	(11,887,122	)	$	(10,923,345	)
Net cash (used in)/provided by investing activities		(25,825	)		77,259			(107,122	)
Net cash provided by financing activities		1,792,682			12,192,952			10,757,306
Effect of exchange rate changes		(797,954	)		101,728			(12,435	)
Net change in cash, cash equivalents and restricted cash	$	(2,494,191	)	$	484,817		$	(285,596	)

Short-Term Borrowings (Tables)

12 Months Ended

Dec. 31, 2022

Short-Term Borrowings [Abstract]

Schedule of short-term borrowings

	Annual Interest Rate	Maturity (Months)	Principal		As of December 31, 2021		As of December 31, 2022
			USD		USD		USD
Short-term borrowings:
Agricultura Bank of China	3.45%	April, 2023		2,029,809		-		2,029,809
Agricultura Bank of China	2.70%	May, 2023		1,449,864		-		1,449,864
Agricultura Bank of China	3.45%	June, 2023		1,449,864		-		1,449,864
Bank of Jiangsu	4.60%	October, 2023		1,449,864		-		1,449,864
CHINA CITIC BANK	4.65%	August, 2023		1,448,414		-		1,448,414
CHINA CITIC BANK	4.65%	September, 2023		1,448,414		-		1,448,414
Shanghai Bank	5.20%	January, 2023		1,304,877		-		1,304,877
Shanghai Bank	4.65%	October, 2023		1,304,877		-		1,304,877
Agricultura Bank of China	4.00%	March, 2023		1,159,891		-		1,159,891
Agricultura Bank of China	2.70%	May, 2023		1,159,891		-		1,159,891
Shanghai Bank	4.65%	November, 2023		869,918		-		869,918
Shanghai Bank	4.65%	November, 2023		724,932		-		724,932
Bank of Nanjing *	5.50%	June, 2023		724,932		-		724,932
Bank of Nanjing *	5.50%	July, 2023		724,932		-		724,932
Bank of Ningbo	5.35%	June, 2023		724,932		-		724,932
China Merchants Bank *	5.05%	August, 2023		704,634		-		664,062
Shanghai Bank	5.20%	January, 2023		144,986		-		144,986
China Merchants Bank *	5.05%	August, 2022		1,004,300		1,004,300		-
China Merchants Bank *	5.05%	September, 2022		1,035,684		1,035,684		-
Bank of Communications	5.31%	February, 2022		627,687		627,687		-
Xiamen International Bank	6.80%	April, 2022		784,609		784,609		-
Shanghai Pudong Development Bank*	5.22%	March, 2022		1,114,145		1,114,145		-
Shanghai Rural Commercial Bank	5.20%	May, 2022		1,412,296		1,412,296		-
Shanghai Bank	5.20%	November, 2021		784,609		784,609		-
Shanghai Bank	5.20%	October, 2022		1,412,296		1,412,296		-
Shanghai Bank	5.20%	November, 2022		941,531		941,532		-
Total						9,117,158		18,784,459

These borrowings are guaranteed by Guizhou Xiao-I.

Taxation (Details) - Schedule of net operating loss from HK will carry forward indefinitely	Dec. 31, 2022 USD ($)
Schedule of net operating loss from HK will carry forward indefinitely [Line Items]
Net operating loss carryforwards indefinitely	$ 3,858,436
Total	$ 3,858,436

Consolidated Balance Sheets - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 1,026,245	$ 1,311,846
Accounts receivable, net	41,362,705	31,184,779
Amounts due from related parties	346,517	391,919
Inventories	768,216	768,762
Contract costs	2,012,309	1,669,519
Deferred offering costs	1,330,902
Advance to suppliers	1,115,672	90,350
Prepaid expenses and other current assets, net	460,854	388,848
Total current assets	48,423,420	35,806,023
Non-current assets:
Property and equipment, net	219,470	207,989
Intangible assets, net	637,114	798,459
Long-term investment	2,852,492	335,448
Right of use assets	865,399	1,194,859
Deferred tax assets, net	3,888,574	4,906,287
Prepaid expenses and other, non-current assets	3,697,675	3,941,346
Total non-current assets	12,160,724	11,384,388
TOTAL ASSETS	60,584,144	47,190,411
Commitments and Contingencies
Current liabilities:
Short-term borrowings	18,784,459	9,117,158
Accounts payable	9,180,532	5,581,879
Amount due to related parties-current	896,431	1,558,642
Deferred revenue	2,553,808	2,953,238
Convertible loans	3,754,269	5,717,737
Accrued expenses and other current liabilities	17,006,713	10,316,432
Lease liabilities, current	435,462	800,658
Income tax payable		17,904
Total current liabilities	52,611,674	36,063,648
Non-current liabilities:
Amount due to related parties-non current	8,581,743	8,905,313
Accrued liabilities, non-current	8,073,912	5,157,971
Lease liabilities, non-current	300,974	446,140
Total non-current liabilities	16,956,629	14,509,424
TOTAL LIABILITIES	69,568,303	50,573,072
Shareholders’ deficit
Ordinary shares (par value of $0.00005 per share; 1,000,000,000 shares authorized as of December 31, 2021 and December 31, 2022, respectively; 22,115,592 shares issued and outstanding as of December 31,2021 and December 31, 2022, respectively)	1,106	1,106
Additional paid-in capital	75,621,294	75,621,294
Statutory reserve	237,486	237,486
Accumulated deficit	(78,483,156)	(72,584,621)
Accumulated other comprehensive loss	(3,262,666)	(3,464,423)
XIAO-I CORPORATION shareholders’ deficit	(5,885,936)	(189,158)
Non-controlling interests	(3,098,223)	(3,193,503)
Total shareholders’ deficit	(8,984,159)	(3,382,661)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$ 60,584,144	$ 47,190,411

Intangible Assets, Net

12 Months Ended

Dec. 31, 2022

Intangible Assets, Net [Abstract]

INTANGIBLE ASSETS, NET

6.	INTANGIBLE ASSETS, NET

	As of December 31,
	2021			2022
Software	$	1,092,197		$	1,009,425
Less: accumulated amortization		(293,738	)		(372,311	)
Intangible asset, net	$	798,459		$	637,114

For the years ended December 31, 2020, 2021 and 2022, amortization expense amounted to $100,281, $107,895 and $103,438, respectively. Future estimated amortization expense of intangible assets is as follows:

2023	$	100,942
2024		100,942
2025		100,942
2026		100,942
2027		100,942
Thereafter		132,404
Total	$	637,114

Summary of Significant Accounting Policies (Details) - Schedule of assets and liabilities translated exchange rates	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule of Assets and Liabilities Translated Exchange Rates [Abstract]
Period end RMB: USD exchange rate	6.8972	6.3726
Average RMB: USD exchange rate	6.729	6.4508	6.9042

Property and Equipment, Net (Details) - Schedule of property and equipment, net - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Less: accumulated depreciation	$ (253,938)	$ (191,603)
Property and equipment, net	219,470	207,989
Electronic equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	168,937	147,406
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	240,788	194,241
Leasehold improvement [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	63,683	55,857
Construction in progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		$ 2,088

Convertible Loans (Details) - Schedule of loan agreements with third parties - USD ($)

12 Months Ended

Dec. 31, 2022

Mar. 31, 2023

Dec. 31, 2021

Convertible loans:

Convertible shares (in Shares)

246,960

Convertible loans

$ 3,754,269

$ 460,000

$ 5,717,737

Fumei Shi [Member]

Convertible loans:

Annual Interest Rate

^[1]

15.00%

Convertible shares (in Shares)

^[1]

73,719

Maturity (Months)

^[1]

2022-12

Convertible loans

^[1]

$ 1,449,863

1,569,218

Guoqiang Chen [Member]

Convertible loans:

Annual Interest Rate

^[2]

12.00%

Convertible shares (in Shares)

^[2]

22,116

Maturity (Months)

^[2]

2023-09

Convertible loans

^[2]

$ 869,918

941,531

Sunny Concord International Ltd [Member]

Convertible loans:

Annual Interest Rate

^[3]

15.00%

Convertible shares (in Shares)

^[3]

36,860

Maturity (Months)

^[3]

2022-12

Convertible loans

^[3]

$ 782,049

774,699

Senbiao Hu [Member]

Convertible loans:

Annual Interest Rate

^[4]

15.00%

Convertible shares (in Shares)

^[4]

18,430

Maturity (Months)

^[4]

2022-11

Convertible loans

^[4]

$ 362,466

392,305

Jun Xu [Member]

Convertible loans:

Annual Interest Rate

^[5]

15.00%

Convertible shares (in Shares)

^[5]

14,744

Maturity (Months)

^[5]

2023-05

Convertible loans

^[5]

$ 289,973

313,844

Jinzhi Li [Member]

Convertible loans:

Annual Interest Rate

^[6]

14.40%

Convertible shares (in Shares)

^[6]

73,719

Maturity (Months)

^[6]

2022-08

Convertible loans

^[6]

1,569,218

Chunhui Li [Member]

Convertible loans:

Annual Interest Rate

^[7]

15.00%

Convertible shares (in Shares)

^[7]

7,372

Maturity (Months)

^[7]

2022-11

Convertible loans

^[7]

$ 156,922

[1]	The loan was extended in January, 2023. Pursuant to the extension agreement, the loan would be settled in cash without the conversion option (Note 17). The principal and interest of the loan were repaid in April, 2023.
[2]	The loan was originally matured before September, 2022 and extended in September 2022. In April 2023, the loan was extended to May 31, 2023 with annual interest rate of 12% (Note 17).
[3]	The loan was extended in January, 2023. Pursuant to the extension agreement, the loan would be settled in cash without the conversion option. In April, 2023, the maturity date of the loan was changed to May 31, 2023 with annual interest rate of 15% (Note 17).
[4]	The loan was extended in February, 2023. Pursuant to the extension agreement, the loan would be settled in cash without the conversion option. The principal and interest of the loan were repaid in March, 2023 (Note 17).
[5]	The loan was originally matured before May 2022 and extended in In August, 2022. In April, 2023, the loan was further extended to May 31, 2023.
[6]	The principal and interest of the loan were repaid in 2022.
[7]	The principal and interest of the loan were repaid in 2022.

Restricted Net Assets

12 Months Ended

Dec. 31, 2022

Restricted Net Assets [Abstract]

RESTRICTED NET ASSETS

13.

RESTRICTED NET ASSETS

A significant portion of the Group’s operations are conducted through its PRC (excluding Hong Kong) VIE, the Group’s ability to pay dividends is primarily dependent on receiving distributions of funds from its VIE and VIE’s subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by its VIE and VIE’s subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations, and after it has met the PRC requirements for appropriation to statutory reserves. Paid in capital of the VIE and VIE’s subsidiaries included in the Group’s consolidated net assets are also non-distributable for dividend purposes.

In accordance with the PRC regulations on Enterprises with Foreign Investment, a WFOE established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A WFOE is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve has reached 50% of its registered capital based on the enterprise’s PRC statutory accounts. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. WFOE is subject to the above mandated restrictions on distributable profits.

Additionally, in accordance with the Company Law of the PRC, a domestic enterprise is required to provide a statutory common reserve of at least 10% of its annual after-tax profit until such reserve has reached 50% of its registered capital based on the enterprise’s PRC statutory accounts. A domestic enterprise is also required to provide for a discretionary surplus reserve, at the discretion of the board of directors. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. All of the Group’s PRC consolidated VIE and VIE’s subsidiaries are subject to the above mandated restrictions on distributable profits.

As a result of these PRC laws and regulations, the Group’s VIE and VIE’s subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. As of December 31, 2021 and 2022, net assets restricted in the aggregate, which include paid-in capital and statutory reserve funds of the Group’s VIE and VIE’s subsidiaries, that are included in the Group’s consolidated net assets were approximately $75,858,780 and $75,858,780, respectively.

Long-Term Investment (Details) - Schedule of group’s long-term investment - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Equity method investments
Equity method investments amount	$ 2,852,492	$ 335,448
Zhizhen Guorui [Member]
Equity method investments
Equity method investments amount	$ 2,647,593
Equity method investments Interest	37.00%
Shanghai Shenghan [Member]
Equity method investments
Equity method investments amount	$ 204,899	$ 335,448
Equity method investments Interest	16.56%	16.56%

Organization and Principal Activities (Details) - Schedule of consolidated statements of operations and comprehensive (loss)/Income - Restated [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Condensed Statement of Income Captions [Line Items]
Net Revenue	$ 48,184,958	$ 32,524,013	$ 13,856,734
Net (loss)/income	$ (5,969,762)	$ 3,365,002	$ (7,056,042)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-URI https://asc.fasb.org/extlink&oid=120399901&loc=d3e537907-122884

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 22: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(1))
-URI https://asc.fasb.org/extlink&oid=126953954&loc=SL114868664-224227

+ Details

Leases (Details) - Schedule of operating lease related assets and liabilities - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Schedule of operating lease related assets and liabilities [Abstract]
Right-of-use Assets	$ 865,399	$ 1,194,859
Lease payment liabilities-current	(435,462)	(800,658)
Lease payment liabilities- non-current	(300,974)	(446,140)
Total	$ (736,436)	$ (1,246,798)

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Schedule of estimated useful lives

Category		Estimated useful lives
Electronic equipment		5 years
Office equipment		5 years
Leasehold improvement		Shorter of the lease term or the estimated useful life of the assets

Category		Estimated useful lives
Software		5 years

Schedule of disaggregation of revenue

	For the years ended December 31,
	2020		2021		2022
By revenue type
Sale of software products	$	5,098,730	$	14,878,256	$	3,547,113
Sale of hardware products		415,723		75,011		46,295
Technology development service		6,404,394		9,246,992		16,419,889
M&S service		1,937,887		2,772,795		2,429,526
Sale of cloud platform products		-		5,550,959		25,742,135
Total	$	13,856,734	$	32,524,013	$	48,184,958

Schedule of assets and liabilities translated exchange rates

	As of December 31,
	2021		2022
Period end RMB: USD exchange rate		6.3726		6.8972

	For the years ended December 31,
	2020		2021		2022
Average RMB: USD exchange rate		6.9042		6.4508		6.7290

Organization and Principal Activities (Details) - Schedule of company’s major subsidiaries and consolidated VIE - Variable Interest Entities [Member]	12 Months Ended
	Dec. 31, 2022
AI PLUS HOLDING LIMITED (“AI Plus”) [Member]
Wholly owned subsidiaries
Date of Incorporation	Aug. 30, 2018
Percentage of beneficial ownership for purposes of accounting	100.00%
Principal Activities	Investing holding company
Xiao-i Technology Limited (“Xiao-i Technology”) [Member]
Wholly owned subsidiaries
Date of Incorporation	Dec. 17, 2018
Percentage of beneficial ownership for purposes of accounting	100.00%
Principal Activities	Investing holding company
Zhizhen Artificial Intelligent Technology (Shanghai) Co. Ltd. (“Zhizhen Technology”) (“WFOE”) [Member]
Wholly owned subsidiaries
Date of Incorporation	Feb. 21, 2020
Percentage of beneficial ownership for purposes of accounting	100.00%
Principal Activities	WFOE, a holding company
Shanghai Xiao-i Robot Technology Co., Ltd. (“Shanghai Xiao-i”) [Member]
Wholly owned subsidiaries
Date of Incorporation	Aug. 27, 2009
Percentage of beneficial ownership for purposes of accounting	100.00%
Principal Activities	Internet technology development
Xiaoi Robot Technology (H.K) Ltd. (“Xiaoi Robot”) [Member]
Wholly owned subsidiaries
Date of Incorporation	Jun. 03, 2016
Percentage of beneficial ownership for purposes of accounting	100.00%
Principal Activities	Internet technology development
Guizhou Xiao-i Robot Technology Co., Ltd. (“Guizhou Xiao-i”) [Member]
Wholly owned subsidiaries
Date of Incorporation	Jul. 18, 2016
Percentage of beneficial ownership for purposes of accounting	70.00%
Principal Activities	AI robot development

Short-Term Borrowings

12 Months Ended

Dec. 31, 2022

Short-Term Borrowings [Abstract]

SHORT-TERM BORROWINGS

8.	SHORT-TERM BORROWINGS

As of December 31, 2021 and 2022, the bank borrowings were for working capital and capital expenditure purposes. Short-term borrowings consisted of the following:

	Annual Interest Rate	Maturity (Months)	Principal		As of December 31, 2021		As of December 31, 2022
			USD		USD		USD
Short-term borrowings:
Agricultura Bank of China	3.45%	April, 2023		2,029,809		-		2,029,809
Agricultura Bank of China	2.70%	May, 2023		1,449,864		-		1,449,864
Agricultura Bank of China	3.45%	June, 2023		1,449,864		-		1,449,864
Bank of Jiangsu	4.60%	October, 2023		1,449,864		-		1,449,864
CHINA CITIC BANK	4.65%	August, 2023		1,448,414		-		1,448,414
CHINA CITIC BANK	4.65%	September, 2023		1,448,414		-		1,448,414
Shanghai Bank	5.20%	January, 2023		1,304,877		-		1,304,877
Shanghai Bank	4.65%	October, 2023		1,304,877		-		1,304,877
Agricultura Bank of China	4.00%	March, 2023		1,159,891		-		1,159,891
Agricultura Bank of China	2.70%	May, 2023		1,159,891		-		1,159,891
Shanghai Bank	4.65%	November, 2023		869,918		-		869,918
Shanghai Bank	4.65%	November, 2023		724,932		-		724,932
Bank of Nanjing *	5.50%	June, 2023		724,932		-		724,932
Bank of Nanjing *	5.50%	July, 2023		724,932		-		724,932
Bank of Ningbo	5.35%	June, 2023		724,932		-		724,932
China Merchants Bank *	5.05%	August, 2023		704,634		-		664,062
Shanghai Bank	5.20%	January, 2023		144,986		-		144,986
China Merchants Bank *	5.05%	August, 2022		1,004,300		1,004,300		-
China Merchants Bank *	5.05%	September, 2022		1,035,684		1,035,684		-
Bank of Communications	5.31%	February, 2022		627,687		627,687		-
Xiamen International Bank	6.80%	April, 2022		784,609		784,609		-
Shanghai Pudong Development Bank*	5.22%	March, 2022		1,114,145		1,114,145		-
Shanghai Rural Commercial Bank	5.20%	May, 2022		1,412,296		1,412,296		-
Shanghai Bank	5.20%	November, 2021		784,609		784,609		-
Shanghai Bank	5.20%	October, 2022		1,412,296		1,412,296		-
Shanghai Bank	5.20%	November, 2022		941,531		941,532		-
Total						9,117,158		18,784,459

These borrowings are guaranteed by Guizhou Xiao-I.

The interest expense of short-term borrowings were $744,761, $625,176 and $651,287 for the years ended December 31, 2020, 2021 and 2022, respectively. The weighted average interest rates of short-term loans outstanding were 4.67%, 5.52% and 4.73% per annum as of December 31, 2020, 2021 and 2022, respectively.

Organization and Principal Activities (Details) - Schedule of consolidated balance sheets Information - Restated [Member] - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 1,025,141	$ 1,310,737
Accounts receivable, net	41,362,705	31,184,779
Amounts due from related parties	346,517	391,919
Inventories,	768,216	768,762
Contract costs	2,012,309	1,669,519
Advance to suppliers	1,115,672	90,350
Deferred offering costs	1,330,902
Prepaid expenses and other current assets, net	460,850	388,844
Total current assets	48,422,312	35,804,910
Non-current assets:
Property and equipment, net	219,470	207,989
Intangible assets, net	637,114	798,459
Long-term investment	204,899	335,448
Right of use assets	865,399	1,194,859
Deferred tax assets, net	3,888,574	4,906,287
Prepaid expenses and other, non-current assets	3,697,675	3,941,346
Total non-current assets	9,513,131	11,384,388
TOTAL ASSETS	57,935,443	47,189,298
Current liabilities:
Short-term borrowings	18,784,459	9,117,158
Accounts payable	9,180,532	5,581,879
Amount due to related parties-current	896,431	1,558,642
Deferred revenue	2,553,808	2,953,238
Accrued expenses and other current liabilities	17,006,680	10,316,428
Convertible loans	3,754,269	5,717,737
Lease liabilities, current	435,462	800,658
Income tax payable		17,904
Total current liabilities	52,611,641	36,063,644
Non-current liabilities:
Amount due to related parties-non current	8,581,743	8,905,313
Accrued liabilities, non-current	5,391,664	5,157,971
Lease liabilities, non-current	300,974	446,140
Total non-current liabilities	14,274,381	14,509,424
TOTAL LIABILITIES	$ 66,886,022	$ 50,573,068

Accrued Expenses and Other Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Accrued Expenses and Other Liabilities [Abstract]

Schedule of accrued expenses and other liabilities

	As of December 31,
	2021		2022
Accrued expenses and other current liabilities:
Loan from third parties ⁽¹⁾	$	4,381,136	$	6,485,125
Payroll payable		1,591,662		4,722,793
Other tax payable		2,777,187		2,852,728
Interest payable		1,053,854		2,054,136
Others		512,593		891,931
Accrued expenses and other current liabilities	$	10,316,432	$	17,006,713
Accrued liabilities, non-current：
Long-term loan from third parties ⁽²⁾		-		3,303,986
Litigation related payable ⁽³⁾		5,157,971		4,769,926
Accrued liabilities, non-current		5,157,971		8,073,912
TOTAL	$	15,474,403	$	25,080,625

(1)

Loan from third parties mainly consisted of the unsecured borrowings from third parties for ordinary business operation. For the borrowings, the interest rates range from 3.8% to 25.55% and the interest expenses were $216,020 $815,994 and $1,013,209 for the years ended December 31, 2020, 2021 and 2022. The borrowings are payable on demand. In April, 2023, the Group made the repayment of principal amounted to $3,133,371 to the third parties.

(2)

Long-term loan from a third party was primarily consisted of:

(i) Long-term loan for the purpose of investing in Zhizhen Guorui in February 2022, amounted to $2,682,248 as of December 31, 2022 (Note 7), with free interest rate in the first three years. The loan is due in five years, and if Zhizhen Guorui declares any cash dividend to the Group, the cash dividend would become the source to repay the loan in the first priority.

(ii) In October 2022, the Group entered into an exclusive license agreement with a third party, under which the term of exclusive license was 2 years, and the third party should pay the license fee of $1,449,864 (RMB10 million) to the Group upon the effective of the agreement. Meanwhile, the same party entered into the agreement to grant the exclusive right to use these patents to the Group for 2 years at the consideration of $63,608 per month, aggregately $1,526,581 (RMB10.5 million). The patents under the agreements were pledged to the third party. The transaction was substantially loan from the third party with the patents pledged. The Group accounted for $1,449,864 (RMB10 million) as the principal of the loan from the third party, and the interests were calculated under effective interest method. In November 2022, the Group entered into another exclusive license agreement with the same party in the similar form to obtain another $1,449,864 (RMB10 million) loan, which was received subsequently in 2023.

(3)

Litigation related payable mainly consisted of the litigation fee of the lawsuit between the Group and Apple paid by the third parties on behalf of the Group.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a).

Basis of presentation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

The accompanying consolidated financial statements contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Group’s ability to operate profitably, to generate cash flows from operations, and its ability to attract investors and to borrow funds on reasonable economic terms.

(b).

Principles of consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIE in which the Company, through its WFOE, has a controlling financial interest, and the VIE’s subsidiaries.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. A VIE is an entity in which the Company, or its WFOE, through contractual arrangements, is fully and exclusively responsible for the management of the entity, absorbs all risk of losses of the entity (excluding non-controlling interests), receives the benefits of the entity that could be significant to the entity (excluding non-controlling interests), and has the exclusive right to exercise all voting rights of the entity, and therefore the Company or its WFOE is the primary beneficiary of the entity for accounting purposes. However, the contractual arrangements with the VIE and its shareholders may not be as effective as equity ownership in providing operational control.

All intercompany transactions and balances among the Company, its subsidiaries, the VIE, and the VIE’s subsidiaries have been eliminated upon consolidation.

(c).

Use of estimates

The preparation of the consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reported periods in the consolidated financial statements and accompanying notes. Significant accounting estimates include, but not limited to, the allowance for doubtful accounts, net realizable value of inventories, depreciable lives and recoverability of property and equipment, the realization of deferred income tax assets and other equity investments, transaction price allocation between software income and maintenance service income. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements.

(d).

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, the Group’s demand deposit placed with financial institutions, which have original maturities of less than three months and unrestricted as to withdrawal and use.

(e).

Restricted cash

Restricted cash represented a time deposit pledged for bank loan facilities within one-year maturities.

(f).

Accounts receivable, net

Accounts receivable, net are stated at the original amount less an allowance for doubtful accounts. Accounts receivable are recognized in the period when the Group has provided services to its customers and when its right to consideration is unconditional. The Group reviews the accounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. The Group considers many factors in assessing the collectability of its receivables, such as the age of the amounts due, the customer’s payment history, credit-worthiness and other specific circumstances related to the accounts. An allowance for doubtful accounts is recorded in the period in which a loss is determined to be probable. Accounts receivable balances are written off after all collection efforts have been exhausted.

(g).

Contract costs

Contract costs represented the costs directly related to a contract with a customer including labor costs and direct materials used in fulfilling the contract and other allocations of costs that relate directly to the contract or to contract activities. The contract costs are determined principally by the specific identification method, and recognize as cost of revenues on a systematic basis that is consistent with the transfer to the customer of the related services.

(h).

Inventories

Inventories, primarily consisting of robot, displayer, server and software, are stated at the lower of cost or net realizable value, with net realized value represented by estimated selling prices in the ordinary course of business, less reasonably predictable costs of disposal and transportation. Cost of inventory is determined using the specific identification method. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving merchandise and damaged products, which is dependent upon factors such as historical and forecasted consumer demand. There was nil, nil and $154,664 of inventory write-down for the year ended December 31, 2020, 2021 and 2022.

(i).

Property and equipment, net

Property and equipment are stated at cost less accumulated depreciation and impairment, if any, and depreciated on a straight-line basis over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its intended use. Estimated useful lives are as follows:

Category		Estimated useful lives
Electronic equipment		5 years
Office equipment		5 years
Leasehold improvement		Shorter of the lease term or the estimated useful life of the assets

Repair and maintenance costs are charged to expenses as incurred, whereas the cost of renewals and betterment that extends the useful lives of property and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the costs, accumulated depreciation and impairment with any resulting gain or loss recognized in the consolidated statements of (loss)/income.

(j).

Intangible assets, net

Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets are amortized using the straight-line approach over the estimated economic useful lives of the assets as follows:

Category		Estimated useful lives
Software		5 years

(k).

Impairment of long-lived assets

The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows. There was no impairment of long-lived assets for the years ended December 31, 2020, 2021 and 2022.

(l).

Long-term investments

For an investee over which the Group holds less than 20% voting interest and has no ability to exercise significant influence, the investments are accounted for under the cost method.

For an investee over which the Group has the ability to exercise significant influence, but does not own a majority equity interest or otherwise control, the Group accounted for those using the equity method. Significant influence is generally considered to exist when the Group has an ownership interest in the voting stock of the investee between 20% and 50%. Other factors, such as representation on the investee’s board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the Group’s share of the investee’s results of operations is reported as share of losses of equity method investments in the consolidated statements of comprehensive (loss)/income.

The process of assessing and determining whether impairment on an investment is other than temporary requires a significant amount of judgment. To determine whether an impairment is other than temporary, management considers whether it has the ability and intent to hold the investment until recovery and whether evidence indicating the carrying value of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the decline in value, any change in value subsequent to the period end, and forecasted performance of the investee. As of December 31, 2020, 2021 and 2022, management believes no impairment charge is necessary.

(m).

Fair value measurement

Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs are:

(a)

Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

(b)

Level 2 — Include other inputs that are directly or indirectly observable in the marketplace.

(c)

Level 3 — Unobservable inputs which are supported by little or no market activity.

Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

Financial assets and liabilities of the Group primarily consist of cash and cash equivalents, accounts receivable, amounts due from related parties, other receivables included in prepayments and other current assets, equity investment, short-term borrowings, accounts payable, amounts due to related parties, other payables included in accrued expenses and other current liabilities. The Group’s non-financial assets, such as property and equipment as well as intangible assets, would be measured at fair value only if they were determined to be impaired.

(n).

Commitments and contingencies

In the normal course of business, the Group is subject to commitments and contingencies, including operating lease commitments, legal proceedings and claims arising out of its business that relate to a wide range of matters, such as government investigations and tax matters. The Group recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Group may consider many factors in making these assessments on liability for contingencies, including historical and the specific facts and circumstances of each matter.

(o).

Revenue recognition

The Group’s revenues are mainly generated from (1) sale of software products; (2) sale of hardware products; (3) technology development services; (4) maintenance and support service, and (5) sale of cloud platform products, etc.

The Group recognizes revenue pursuant to ASC 606, Revenue from Contracts with Customers (“ASC 606”). In accordance with ASC 606, revenues from contracts with customers are recognized when control of the promised goods or services is transferred to the Group’s customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services, reduced by Value Added Tax (“VAT”). To achieve the core principle of this standard, we applied the following five steps:

Identification of the contract, or contracts, with the customer;

Identification of the performance obligations in the contract;

Determination of the transaction price;

Allocation of the transaction price to the performance obligations in the contract; and

Recognition of the revenue when, or as, a performance obligation is satisfied.

The Group enters into two major kinds of revenue arrangements with customers. The first kind of contract can include various combinations of software products, hardware products and maintenance and support service which are generally distinct and accounted for as separate performance obligations. The other kind of contract is sale of cloud platform products, which include software products and cloud platform service as two separate performance obligations. As a result, the Group’s contracts may contain multiple performance obligations. The Group determines whether arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether our commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract.

Sale of software products

The Group’s software products sold to customers comprising customized software products for specific needs. The software products sold by the Group are intended to provide the customer with full control of software, which means that revenues from the sale of such products are recognized at the point-in-time at which the control over the products is transferred to the customer upon the acceptance. Typically, the software delivery period is less than six months from the date of signing the contract. Payments are made by the customers in multiple instalments according to the payment schedule determined in the contract.

Sale of hardware products

Hardware products sold to customers comprising the hardware designed for specific needs. Revenue is recognized at the point-in-time when the customer is able to use and benefit from the hardware products, which is generally upon delivery to the customer.

Technology development services

The technology development service provided to customers comprises customized technology development services for specific needs. Revenue is recognized at the point-in-time when the service is completed and the customer can benefit from it upon acceptance. Payments are made by the customers in multiple installments according to the payment schedule determined in the contract.

Maintenance and support service

Maintenance and support (“M&S”) service is provided for software products contracts and consists of unspecified future software updates, upgrades, and enhancements as well as technical product support services, and the provision of unspecified updates and upgrades on a when-and-if-available basis. Maintenance and support services are renewable, generally on an annual basis, at the option of the customer. Maintenance represents stand-ready obligations for which revenue is recognized ratably over the term of the arrangement.

Sale of cloud platform products

Cloud platform products sold to customers comprising software products uploaded in the cloud platform. The Group does not provide any cancellation and refund provisions to customers. Pursuant to contract terms, customers can benefit from the software products and cloud platform from each on its own, meanwhile the Group fulfils its promise by transferring software products and cloud platform services independently. Therefore, the software products and the cloud platform services are distinct performance obligations. The transaction prices for two performance obligations were determined separately in the contract, which also reflects their stand-alone selling price (“SSP”) respectively. Since customers continuously consume the benefits from both software products and cloud platform, the Group recognizes revenue from sale of cloud platform products over time when the Group provides the customer a right to access the Group’s intellectual property throughout the service period. The timing and pattern of transfer the right to access software products and cloud platform is the same. The service period is usually 1 year and customer made quarterly payment after usage.

Contracts with multiple performance obligations

Most contracts with customers contain multiple performance obligations that are distinct and are accounted for separately. The transaction price is allocated to the separate performance obligations on a relative SSP basis. The Group determines SSP for all performance obligations using observable inputs, such as standalone sales and historical contract pricing. SSP is consistent with the Group’s overall pricing objectives, taking into consideration the type of software products, maintenance and support services, and professional services purchased by the customer. SSP also reflects the amount the Group would charge for that performance obligation if it were sold separately in a standalone sale, and the price the Group would sell to similar customers in similar circumstances.

The following table disaggregates the Group’s revenue for the year ended December 31, 2020, 2021 and 2022:

	For the years ended December 31,
	2020		2021		2022
By revenue type
Sale of software products	$	5,098,730	$	14,878,256	$	3,547,113
Sale of hardware products		415,723		75,011		46,295
Technology development service		6,404,394		9,246,992		16,419,889
M&S service		1,937,887		2,772,795		2,429,526
Sale of cloud platform products		-		5,550,959		25,742,135
Total	$	13,856,734	$	32,524,013	$	48,184,958

Remaining performance obligations

Remaining performance obligations represent the transaction price of orders meeting the definition of a contract in the new revenue standard for which work has not been performed or has been partially performed and excludes unexercised contract options. The Company has elected to apply the practical expedient, which allows companies to exclude remaining performance obligations with an original expected duration of one year or less. The aggregate amount of the transaction price allocated to remaining performance obligations for such contracts with a duration of more than one year was approximately $4,176,929 at December 31, 2022. The Company expects to recognize revenue on approximately $4,129,513 and $47,416 of the remaining performance obligations over the next 12 and 24 months, respectively.

Contract balances

When the Group begins to deliver the products or services pursuant to the performance obligations in the contract, the Group presents the contract in the consolidated balance sheet as a contract asset or a contract liability, depending on the relationship between the Group’s performance and the customer’s payment. The contract assets consist of accounts receivable and contract costs. Accounts receivable represent revenue recognized for the amounts invoiced and/or prior to invoicing when the Group has satisfied its performance obligation and has unconditional right to the payment. Contract costs are deferred for the contract preparation and will be recognized as cost of revenues when goods or services are transferred to customers. During the years ended December 31, 2020, 2021 and 2022, the Group recognized $7,228,046, $10,885,731 and $17,379,144 of contract costs as cost of revenues.

The contract liabilities consist of deferred revenue, which represent the billings or cash received for services in advance of revenue recognition and is recognized as revenue when all of the Group’s revenue recognition criteria are met. The Group’s deferred revenue amounted to $2,953,238 and $2,553,808 as of December 31, 2021 and 2022, respectively. During the years ended December 31, 2020, 2021 and 2022, the Group recognized $1,201,576, $900,686 and $1,545,866 revenue that was included in deferred revenue balance at January 1, 2020,2021 and 2022, respectively.

(p).

Cost of revenues

Cost of revenues consists primarily of (i) purchased software, (ii) payroll, (iii) cloud hosting service fees, and (iv) depreciation and other costs related to the business operation.

(q).

Research and development expenses

Research and development costs are expensed as incurred in accordance with ASC 730. Software development costs required to be capitalized under ASC 985-20. The Company determined that technology feasibility for the software product is not reached. There is no software development costs capitalized for the years ended December 31, 2020, 2021 and 2022. Research and development expenses consist primarily of (i) Software development costs, (ii) payroll and related expenses for research and development professionals, and (iii) depreciation and rental related to technology and development functions. Research and development expenses are expensed as incurred.

(r).

Selling and marketing expenses

Selling and marketing expenses mainly consist of (i) staff cost, rental and depreciation related to selling and marketing functions, and (ii) advertising costs and market promotion expenses. Advertising costs, which consist primarily of online advertisements, are expensed as incurred.

(s).

General and administrative expenses

General and administrative expenses mainly consist of (i) staff cost, rental and depreciation related to general and administrative personnel, (ii) professional service fees, and (iii) other corporate expenses.

(t).

Government grants

Government grant is recognized when there is reasonable assurance that the Group will comply with the conditions attached to it and the grant will be received. Government grant for the purpose of giving immediate financial support to the Group with no future related costs or obligation is recognized in the Group’s consolidated statements of comprehensive (loss)/income when the grant becomes receivable. The Group recognized government grants $1,699,231, $853,011 and $216,893 in other income, net for the years ended December 31, 2020, 2021 and 2022, respectively.

(u).

Employee benefits

The Group’s subsidiaries and VIE and the VIE’s subsidiary in PRC participate in a government mandated, multiemployer, defined contribution plan, pursuant to which certain retirement, medical, housing and other welfare benefits are provided to employees. PRC labor laws require the entities incorporated in the PRC to pay to the local labor bureau a monthly contribution calculated at a stated contribution rate on the monthly basic compensation of qualified employees. The Group has no further commitments beyond its monthly contribution.

(v).

Leases

On January 1, 2020, the Group adopted Accounting Standards Update (“ASU”) 2016-02, Lease (FASB ASC Topic 842). The adoption of Topic 842 resulted in the presentation of operating lease right-of-use (“ROU”) assets and operating lease liabilities on the consolidated balance sheet. The Group has elected the package of practical expedients, which allows the Group not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption date. Lastly, the Group elected the short-term lease exemption for all contracts with lease terms of 12 months or less.

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Group assess whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from the use of the asset and whether it has the right to control the use of the asset.

The right-of-use assets and related lease liabilities are recognized at the lease commencement date. The Group recognizes operating lease expenses on a straight-line basis over the lease term.

Operating lease right-of-use of assets

The right-of-use of asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and less any lease incentive received.

Operating lease liabilities

Lease liability is initially measured at the present value of the outstanding lease payments at the commencement date, discounted using the Group’s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase option that the Group is reasonably certain to exercise.

Lease liability is measured at amortized cost using the effective interest rate method. It is re-measured when there is a change in future lease payments, if there is a change in the estimate of the amount expected to be payable under a residual value guarantee, or if there is any change in the Group assessment of option purchases, contract extensions or termination options.

(w).

Income taxes

The Group accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Group’s operating subsidiaries in PRC are subject to examination by the relevant tax authorities. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000 ($14,537). In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

The Group did not accrue any liability, interest or penalties related to uncertain tax positions in its provision for income taxes line of its consolidated statements of income for the years ended December 31, 2020, 2021 and 2022, respectively. The Group does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.

(x).

Value added tax (“VAT”)

The Group is subject to VAT and related surcharges on revenue generated from sales of products, facilitation services and platform services. The Group records revenue net of VAT. This VAT may be offset by qualified input VAT paid by the Group to suppliers. Net VAT balance between input VAT and output VAT is recorded in the line item of other current assets on the consolidated balance sheets.

The VAT rate is 13% for taxpayers selling consumer products. For revenue generated from services, the VAT rate is 6% depending on whether the entity is a general tax payer, and related surcharges on revenue generated from providing services. Entities that are VAT general taxpayers are allowed to offset qualified input VAT, paid to suppliers against their output VAT liabilities.

(y).

Foreign currency translation

The consolidated financial statements are presented in United States dollars (“USD’’ or “$’’). The functional currency of certain of PRC subsidiaries is the Renminbi (“RMB’’).

Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the reporting period. Capital accounts of the consolidated financial statements are translated into USD from RMB at their historical exchange rates when the capital transactions occurred. Transaction gains and losses are recorded in foreign currency exchange gain/(loss) in the consolidated statements of operations and comprehensive (loss)/income. The rates are obtained from H.10 statistical release of the U.S. Federal Reserve Board.

	As of December 31,
	2021		2022
Period end RMB: USD exchange rate		6.3726		6.8972

	For the years ended December 31,
	2020		2021		2022
Average RMB: USD exchange rate		6.9042		6.4508		6.7290

(z).

Non-controlling interest

For the Group’s majority-owned subsidiaries of VIE, a non-controlling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Group’s consolidated net (loss)/income on the consolidated statements of operation and comprehensive (loss)/income includes the net (loss)/income attributable to non-controlling interests. The cumulative results of operations attributable to non-controlling interests, are recorded as non-controlling interests in the Group’s consolidated balance sheets.

(aa).

Statutory reserves

In accordance with the PRC Company Laws, the Group’s PRC subsidiaries, VIE and the VIE’s subsidiary must make appropriations from their after-tax profits as determined under the generally accepted accounting principles in the PRC (“PRC GAAP”) to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be 10% of the after-tax profits as determined under PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the PRC companies. Appropriation to the discretionary surplus fund is made at the discretion of the PRC companies.

The statutory surplus fund and discretionary surplus fund are restricted for use. They may only be applied to offset losses or increase the registered capital of the respective companies. These reserves are not allowed to be transferred to the Company by way of cash dividends, loans or advances, nor can they be distributed except for liquidation.

As of December 31, 2022, none of the Group’s PRC subsidiaries and VIE entities had a general reserve that reached the 50% of their registered capital threshold. The profit arrived at must be set off against any accumulated losses sustained by the Company in prior years, before allocation is made to the statutory reserve. Therefore, no appropriations from after tax profits were recognized for the years ended December 31, 2021 and 2022.

(bb).

(Loss)/Earnings per share

Basic (loss)/earnings per share is computed by dividing net (loss)/earnings attributable to ordinary shareholders, taking into consideration the deemed dividends to preferred shareholders (if any), by the weighted average number of ordinary shares outstanding during the year using the two-class method. Under the two-class method, net (loss)/income is allocated between ordinary shares and other participating securities based on their participating rights. Shares issuable for little to no consideration upon the satisfaction of certain conditions are considered as outstanding shares and included in the computation of basic loss per share as of the date that all necessary conditions have been satisfied. Net losses are not allocated to other participating securities if based on their contractual terms they are not obligated to share the losses.

Diluted earnings per share is calculated by dividing net loss attributable to ordinary shareholders, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the year. Ordinary equivalent shares consist of ordinary shares issuable upon the conversion of the preferred shares, using the if-converted method, and shares issuable upon the exercise of share options using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such share would be anti-dilutive.

(cc).

Segment reporting

The Group uses the management approach in determining its operating segments. The Group’s chief operating decision maker (“CODM”) identified as the Group’s Chief Executive Officer, relies upon the consolidated results of operations as a whole when making decisions about allocating resources and assessing the performance of the Group. As a result of the assessment made by CODM, the Group has only one reportable segment. The Group does not distinguish between markets or segments for the purpose of internal reporting. As the Group’s long-lived assets are substantially located in the PRC, no geographical segments are presented.

(dd).

Risks and uncertainties

After the initial outbreak of a novel strain of coronavirus (“COVID-19”), from time to time, some instances of COVID-19 infections have emerged in various regions of China, including infections caused by Omicron variants in early 2022. A wave of infections caused by the Omicron variants emerged in Shanghai in early 2022, and a series of restrictions and quarantines were implemented to contain the spread. The COVID-19 outbreak in China made adverse impact on the Group’s financial condition and results of operations. However, in December 2022, Chinese government declared to treat COVID-19 as Category B disease, and authorities dropped quarantine measures against people infected with COVID-19 and stopped designating high-risk and low-risk areas. Hence, the management believed that the adverse impact due to the pandemic was temporary.

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.

(ee).

Recent accounting pronouncements

The Group is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Group does not opt out of extended transition period for complying with any new or revised financial accounting standards. Therefore, the Group’s financial statements may not be comparable to companies that comply with public company effective dates.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326)”, which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Subsequently, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, to clarify that receivables arising from operating leases are within the scope of lease accounting standards. Further, the FASB issued ASU No. 2020-04, ASU 2020-05, ASU 2020-10, ASU 2020-11 and ASU 2021-02 to provide additional guidance on the credit losses standard. For all other entities, the amendments for ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis. The Group will adopt ASU 2016-13 from January 1, 2023. The Group considers the effect of adoption of this ASU was immaterial.

Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Group does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

Related Party Transactions

12 Months Ended

Dec. 31, 2022

RELATED PARTY TRANSACTIONS

14. RELATED PARTY TRANSACTIONS

Related parties

The following is a list of related parties which the Group has transactions with:

No.	Name of Related Parties	Relationship
1	Zhejiang Baiqianyin Network Technology Co., Ltd (“Zhejiang Baiqianyin”)	An entity which has a common director of the Board of Directors with the Group
2	Shanghai Shenghan	An entity which the Group holds 16.56% equity interests
3	Shanghai Aoshu Enterprise Management Partnership (Limited Partnership) (“Shanghai Aoshu”)	An entity which is the Group’s employee stock ownership platform, and has a common director of the Board of Directors with the Group
4	Shanghai Machinemind Intelligent Technology Co., Ltd.	An entity which the Company holds 18% equity interests
5	Jiaxing Sound Core Intelligent Technology Co., LTD	An entity which Shanghai Shenghan holds 20% equity interests
6	Hui Yuan	Chairman of the board, one of the major shareholders holding 14.73% equity interests of the Company
7	Weng Wei	CFO of the Company
8	Tianjin Haiyin Equity Investment Fund Partnership (Limited Partnership) (“Tianjin Haiyin”)	A significant shareholder holding 5.18% equity interests of the Company
9	Jiaxing Chiyu Investment Partnership (limited Partnership)	A significant shareholder holding 5.44% equity interests of the Company
10	Haiyin Capital Investment (International) Limited	A subsidiary of Tianjin Haiyin
11	Zhizhen Guorui	An entity which the Group holds 37% equity interests

Amounts due from related parties

Amounts due from related parties consisted of the following for the periods indicated:

	As of December 31,
	2021		2022
Accounts receivable	$		$
Zhejiang Baiqianyin (a)		52,883		48,860

Other receivables
Zhejiang Baiqianyin (b)		316,981		297,657
Shanghai Aoshu (c)		22,055		20,377
Bad debt provisions		-		(20,377	)
Total	$	391,919	$	346,517

(a).

In April, 2023, the Group collected accounts receivable from Zhejiang Baiqianyin;

(b).

Other receivable from Zhejiang Baiqianyin consists of the interest-free borrowings for ordinary business. In April, 2023, the Group collected other receivables from Zhejiang Baiqianyin;

(c).

Other receivable from Shanghai Aoshu was the payment to an employee on behalf of Shanghai Aoshu. For the year ended December 31, the Group made fully provisions of receivables from Shanghai Aoshu.

Amounts due to related parties

Amount due to related parties consisted of the following for the periods indicated:

	As of December 31,
	2021		2022
Due to related parties-current
Accounts payable
Shanghai Shenghan	$	470,765	$	201,465
Shanghai Machinemind Intelligent Technology Co., Ltd.		76,892		-
Jiaxing Sound Core Intelligent Technology Co., LTD		98,076		32,622
Zhizhen Guorui (Shanghai) Information Technology Development Co., Ltd.		-		97,868

Interest-free loans (c)
Jiaxing Chiyu Investment Partnership (limited Partnership)	$	784,610	$	434,959
Haiyin Capital Investment (International) Limited		128,299		129,517
Subtotal-due to related parties-current		1,558,642		896,431

Due to related parties-non current
Interest-free loans (c)
Hui Yuan	$	8,905,313	$	8,581,743
Subtotal-due to related parties-non current		8,905,313		8,581,743
Total	$	10,463,955	$	9,478,174

(c)

The balance represents the advance funds from related parties for daily operational purposes. The funds are interest-free, unsecured and repayable on demand. Loans from Hui Yuan are not required to be settled within one year.

Significant transactions with related parties

	For the years ended December 31,
Nature	2020		2021		2022
Software and service income
Zhejiang Baiqianyin	$	2,449,560	$	286,875	$	-

Technology service fee payable
Shanghai Shenghan	$	130,356	$	465,058	$	-
Zhizhen Guorui (Shanghai) Information Technology Development Co., Ltd.		-		-		100,315

Interest-free loans from related parties
Zhejiang Baiqianyin	$	1,448	$	5,782,216	$	1,783,326
Hui Yuan		-		9,696,450		532,026
Haiyin Capital Investment (International) Limited		-		126,744		-
Jiaxing Chiyu Investment Partnership (limited Partnership)		-		775,097		-
Tianjin Haiyin		-		310,038		-
Weng Wei		-		74,409		-

Interest-free loans repayment to related parties
Zhejiang Baiqianyin	$	-	$	5,470,627	$	1,788,230
Jiaxing Chiyu Investment Partnership (limited Partnership)		-		-		297,221
Hui Yuan		-		899,111		169,416
Jiaxing Sound Core Intelligent Technology Co., LTD		-		-		59,444
Shanghai Shenghan		-		139,517		-
Weng Wei		-		74,409		-
Tianjin Haiyin		-		310,038		-

Return of inventories to a related party
Shanghai Shenghan	$	-	$	-	$	239,330

Debt relief
Shanghai Machinemind Intelligent Technology Co., Ltd.	$	-	$	-	$	72,819

Convertible Loans (Tables)

12 Months Ended

Dec. 31, 2022

Convertible Loans [Abstract]

Schedule of loan agreements with third parties

	Annual Interest Rate		Convertible shares		Maturity (Months)	As of December 31, 2021		As of December 31, 2022
						USD		USD
Convertible loans:
Fumei Shi ⁽¹⁾		15.00%		73,719	December, 2022		1,569,218		1,449,863
Guoqiang Chen ⁽²⁾		12.00%		22,116	September, 2023		941,531		869,918
SUNNY CONCORD INTERNATIONAL LTD ⁽³⁾		15.00%		36,860	December, 2022		774,699		782,049
Senbiao Hu ⁽⁴⁾		15.00%		18,430	November, 2022		392,305		362,466
Jun Xu ⁽⁵⁾		15.00%		14,744	May, 2023		313,844		289,973
Jinzhi Li ⁽⁶⁾		14.40%		73,719	August, 2022		1,569,218		-
Chunhui Li ⁽⁷⁾		15.00%		7,372	November, 2022		156,922		-
Total				246,960			5,717,737		3,754,269

	(1)	The loan was extended in January, 2023. Pursuant to the extension agreement, the loan would be settled in cash without the conversion option (Note 17). The principal and interest of the loan were repaid in April, 2023.

	(2)	The loan was originally matured before September, 2022 and extended in September 2022. In April 2023, the loan was extended to May 31, 2023 with annual interest rate of 12% (Note 17).

	(3)	The loan was extended in January, 2023. Pursuant to the extension agreement, the loan would be settled in cash without the conversion option. In April, 2023, the maturity date of the loan was changed to May 31, 2023 with annual interest rate of 15% (Note 17).

	(4)	The loan was extended in February, 2023. Pursuant to the extension agreement, the loan would be settled in cash without the conversion option. The principal and interest of the loan were repaid in March, 2023 (Note 17).

	(5)	The loan was originally matured before May 2022 and extended in In August, 2022. In April, 2023, the loan was further extended to May 31, 2023.

	(6)	The principal and interest of the loan were repaid in 2022.

(7)

The principal and interest of the loan were repaid in 2022.

Convertible Loans (Details) ¥ in Billions	12 Months Ended
Convertible Loans (Details) ¥ in Billions	Dec. 31, 2022 USD ($) days shares	Dec. 31, 2022 CNY (¥) days shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	May 31, 2023	Feb. 28, 2023	Jan. 31, 2023
Convertible Loans [Abstract]
Maturity of convertible loans	$ 1,634,715
Working days (in days) \| days	10	10
Interest expenses of convertible loans	$ 686,022		$ 405,316
IPO [Member]
Convertible Loans [Abstract]
Maturity of convertible loans	$ 435,000,000
Conversion of total loans outstanding shares (in Shares) \| shares	165,869	165,869
Variable Interest Entity [Member]
Convertible Loans [Abstract]
Maturity of loans, enterprise market value	$ 435,000,000	¥ 3
Subsequent Event [Member]
Convertible Loans [Abstract]
Interest rate percentage					12.00%	3.45%	5.50%
Annual interest rate percentage					15.00%

Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

LEASES

12.

LEASES

Effective on January 1, 2020, the Company adopted Topic 842. At the inception of a contract, the Group determines if the arrangement is, or contains, a lease. ROU assets represent the Group’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Rent expense is recognized on a straight-line basis over the lease term.

Supplemental balance sheet information related to operating lease was as follows:

	As of December 31,
	2021			2022
Right-of-use Assets	$	1,194,859		$	865,399

Lease payment liabilities-current		(800,658	)		(435,462	)
Lease payment liabilities- non-current		(446,140	)		(300,974	)
Total	$	(1,246,798	)	$	(736,436	)

The weighted-average discount rate for the operating lease was 4.75%,4.75% and 4.83% as of December 31, 2020, 2021 and 2022. The amortization expenses of right-of-use assets were $1,380,588, $1,087,035 and $712,844 for the years ended December 31, 2020, 2021 and 2022.

For the years ended December 31, 2020, 2021 and 2022, the lease expense was as follows:

	For the years ended December 31,
	2020		2021		2022
Operating leases cost excluding short-term rental expense	$	1,567,532	$	1,207,920	$	739,582
Short-term lease cost		17,714		8,991		51,274
Total	$	1,585,246	$	1,216,911	$	790,856

The following is a schedule of future minimum payments under our operating leases:

For the year ended December 31,	Operating Leases
2023	$	509,152
2024		200,912
2025		60,749
Total lease payments		770,813
Less: imputed interest		(34,377	)
Total	$	736,436

Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Principles of consolidation

Principles of consolidation

All intercompany transactions and balances among the Company, its subsidiaries, the VIE, and the VIE’s subsidiaries have been eliminated upon consolidation.

Use of estimates

Use of estimates

Cash and cash equivalents

Cash and cash equivalents

Restricted cash

Restricted cash

Restricted cash represented a time deposit pledged for bank loan facilities within one-year maturities.

Accounts receivable, net

Accounts receivable, net

Contract costs

Contract costs

Inventories

Inventories

Property and equipment, net

Property and equipment, net

Category		Estimated useful lives
Electronic equipment		5 years
Office equipment		5 years
Leasehold improvement		Shorter of the lease term or the estimated useful life of the assets

Intangible assets, net

Intangible assets, net

Category		Estimated useful lives
Software		5 years

Impairment of long-lived assets

Impairment of long-lived assets

Long-term investments

Long-term investments

For an investee over which the Group holds less than 20% voting interest and has no ability to exercise significant influence, the investments are accounted for under the cost method.

Fair value measurement

Fair value measurement

(a)

Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

(b)

Level 2 — Include other inputs that are directly or indirectly observable in the marketplace.

(c)

Level 3 — Unobservable inputs which are supported by little or no market activity.

Commitments and contingencies

Commitments and contingencies

Revenue recognition

Revenue recognition

Identification of the contract, or contracts, with the customer;

Identification of the performance obligations in the contract;

Determination of the transaction price;

Allocation of the transaction price to the performance obligations in the contract; and

Recognition of the revenue when, or as, a performance obligation is satisfied.

Sale of software products

Sale of hardware products

Technology development services

Maintenance and support service

Sale of cloud platform products

Contracts with multiple performance obligations

The following table disaggregates the Group’s revenue for the year ended December 31, 2020, 2021 and 2022:

	For the years ended December 31,
	2020		2021		2022
By revenue type
Sale of software products	$	5,098,730	$	14,878,256	$	3,547,113
Sale of hardware products		415,723		75,011		46,295
Technology development service		6,404,394		9,246,992		16,419,889
M&S service		1,937,887		2,772,795		2,429,526
Sale of cloud platform products		-		5,550,959		25,742,135
Total	$	13,856,734	$	32,524,013	$	48,184,958

Remaining performance obligations

Contract balances

Cost of revenues

Cost of revenues

Cost of revenues consists primarily of (i) purchased software, (ii) payroll, (iii) cloud hosting service fees, and (iv) depreciation and other costs related to the business operation.

Research and development expenses

Research and development expenses

Selling and marketing expenses

Selling and marketing expenses

General and administrative expenses

General and administrative expenses

Government grants

Government grants

Employee benefits

Employee benefits

Leases

Leases

The right-of-use assets and related lease liabilities are recognized at the lease commencement date. The Group recognizes operating lease expenses on a straight-line basis over the lease term.

Operating lease right-of-use of assets

Operating lease liabilities

Income taxes

Income taxes

Value added tax (“VAT”)

Value added tax (“VAT”)

Foreign currency translation

Foreign currency translation

The consolidated financial statements are presented in United States dollars (“USD’’ or “$’’). The functional currency of certain of PRC subsidiaries is the Renminbi (“RMB’’).

	As of December 31,
	2021		2022
Period end RMB: USD exchange rate		6.3726		6.8972

	For the years ended December 31,
	2020		2021		2022
Average RMB: USD exchange rate		6.9042		6.4508		6.7290

Non-controlling interest

Non-controlling interest

Statutory reserves

Statutory reserves

(Loss)/Earnings per share

(Loss)/Earnings per share

Segment reporting

Segment reporting

Risks and uncertainties

Risks and uncertainties

Recent accounting pronouncements

Recent accounting pronouncements

Consolidated Statements of Operations and Comprehensive (Loss)/Income (Parentheticals) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Statement [Abstract]
Sales to related parties		$ 286,875	$ 2,449,560

Condensed Financial Information of the Parent Company (Details) - Schedule of parent company balance sheets - Parent Company [Member] - USD ($)	Dec. 31, 2022	Dec. 31, 2021
ASSETS
Cash and cash equivalents	$ 1,104	$ 1,105
Investment income in subsidiaries
Prepaid expenses and other current assets, net	2	4
TOTAL ASSETS	1,106	1,109
LIABILITIES
Investment deficit in subsidiaries	5,887,042	190,267
TOTAL LIABILITIES	5,887,042	190,267
Shareholders’ deficit
Ordinary shares (par value of $0.00005 per share; 1,000,000,000 shares authorized as of December 31, 2021 and December 31, 2022, respectively; 22,115,592 shares issued and outstanding as of December 31,2021 and December 31, 2022, respectively)	1,106	1,106
Additional paid-in capital	75,621,294	75,621,294
Statutory reserve	237,486	237,486
Accumulated deficit	(78,483,156)	(72,584,621)
Accumulated other comprehensive loss	(3,262,666)	(3,464,423)
Total shareholders’ deficit	$ (5,885,936)	$ (189,158)

Taxation (Details) $ / shares in Units, $ in Millions	12 Months Ended				36 Months Ended
Taxation (Details) $ / shares in Units, $ in Millions	Dec. 31, 2022 HKD ($)	Dec. 31, 2021 USD ($) $ / shares	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2024	Dec. 31, 2022 USD ($)	Dec. 31, 2020 USD ($)
Taxation (Details) [Line Items]
Profits tax rate (in Dollars)	$ 2
Corporation tax percentage	8.25%
Remaining assessable profits percentage	16.50%
Profits tax rate percentage	15.00%
Income tax rate	16.50%
Standards at a rate	25.00%
HNTE certificate is effective years	3 years
Taxable income exemption percentage			50.00%	50.00%
Net income per share (in Dollars per share) \| $ / shares		$ 0.02
PRC tax authority years	5 years
PRC net operating loss years						5 years
High tech enterprises years	10 years
Net operating loss carryforwards (in Dollars)		$ 6,239,757				$ 4,475,379
Valuation allowance (in Dollars)		810,159				1,723,347	$ 570,253
Forecast [Member]
Taxation (Details) [Line Items]
Preferential tax rate					15.00%
Hong Kong [Member]
Taxation (Details) [Line Items]
Profits tax rate percentage	16.50%
PRC [Member]
Taxation (Details) [Line Items]
Net operating loss carryforwards (in Dollars)		$ 36,288,770				$ 28,198,108
Shanghai Zhizhen [Member]
Taxation (Details) [Line Items]
Preferential tax rate						15.00%
High and New Technology Enterprise [Member]
Taxation (Details) [Line Items]
Preferential tax rate	15.00%

Condensed Financial Information of the Parent Company

12 Months Ended

Dec. 31, 2022

Condensed Financial Information of the Parent Company [Abstract]

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

18.

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

The Group performed a test on the restricted net assets of consolidated subsidiary in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements” and concluded that it was applicable for the Group to disclose the financial statements for the parent Company.

PARENT COMPANY BALANCE SHEETS

	As of December 31,
	2021			2022
ASSETS
Cash and cash equivalents	$	1,105		$	1,104
Investment income in subsidiaries		-			-
Prepaid expenses and other current assets, net		4			2
TOTAL ASSETS	$	1,109		$	1,106

LIABILITIES
Investment deficit in subsidiaries		190,267			5,887,042
TOTAL LIABILITIES	$	190,267		$	5,887,042

Shareholders’ deficit
Ordinary shares (par value of $0.00005 per share; 1,000,000,000 shares authorized as of December 31, 2021 and December 31, 2022, respectively; 22,115,592 shares issued and outstanding as of December 31,2021 and December 31, 2022, respectively)		1,106			1,106
Additional paid-in capital		75,621,294			75,621,294
Statutory reserve		237,486			237,486
Accumulated deficit		(72,584,621	)		(78,483,156	)
Accumulated other comprehensive loss		(3,464,423	)		(3,262,666	)
Total shareholders’ deficit	$	(189,158	)	$	(5,885,936	)

The shares and per share information are presented on a retroactive basis to reflect the reorganization completed on March 29, 2019.

PARENT COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)/INCOME

	Years ended December 31,
	2020			2021		2022
Revenue	$	-		$	-	$	-
Cost of revenue		-			-		-
Gross profit		-			-		-

Operating expenses:
Share of (loss)/income in subsidiaries and VIEs	$	(6,808,365	)	$	3,677,813	$	(5,898,535	)
(Loss)/Income before income tax provision		(6,808,365	)		3,677,813		(5,898,535	)
Provision for income tax		-			-		-
Net (loss)/income	$	(6,808,365	)	$	3,677,813	$	(5,898,535	)

PARENT COMPANY STATEMENTS OF CASH FLOW

	Years ended December 31,
	2020		2021		2022
Net cash used in operating activities	$	-	$	-	$	(1	)
Net cash used in investing activities		-		-		-
Net cash provided by financing activities		-		-		-
Net cash inflow	$	-	$	-	$	(1	)

Taxation (Details) - Schedule of changes in valuation allowance - Restated [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Valuation Allowance [Line Items]
Balance at the beginning of the year	$ 2,685,373	$ 1,911,048
Current year addition	1,723,347	810,159
Current year reduction	(25,844)	(90,370)
Deferred tax effect of tax rate change	(538,660)	356,448	$ (157,236)
Exchange rate effect	(232,509)	54,536
Balance at the end of the year	$ 3,611,707	$ 2,685,373	$ 1,911,048

Document And Entity Information	12 Months Ended
Document And Entity Information	Dec. 31, 2022 shares
Document Information Line Items
Entity Registrant Name	XIAO-I CORPORATION
Trading Symbol	AIXI
Document Type	20-F/A
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	24,015,592
Amendment Flag	true
Amendment Description	We are amending our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, as originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 28, 2023 (the “Original Annual Report”), for the purpose of: (1) providing additional clarification and disclosures concerning the risk factor that some of our shareholders are not in compliance with the PRC’s regulations relating to offshore investment activities by PRC residents, (2) adding the diagram of our corporate organizational structure in the forepart of this Form 20-F/A and (3) revising our Consolidated Statements of Operations and Comprehensive (Loss)/Income on page F-4 by separately stating the cost of products sold and cost of services for the periods presented.Other than as set forth above, this Form 20-F/A does not, and does not purport to, amend, update or restate the information in any other item of the Original Annual Report as originally filed with the SEC. As a result, this Form 20-F/A does not reflect any events that may have occurred after the Original Annual Report was filed on April 28, 2023.
Entity Central Index Key	0001935172
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Dec. 31, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Emerging Growth Company	true
Entity Shell Company	false
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Document Registration Statement	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Entity File Number	001-41631
Entity Incorporation, State or Country Code	E9
Entity Address, Address Line One	7th floor, Building 398
Entity Address, Address Line Two	No. 1555 West Jinshajiang Rd
Entity Address, City or Town	Shanghai
Entity Address, Country	CN
Entity Address, Postal Zip Code	201803
Title of 12(b) Security	American Depositary Shares, each representing one-third of an Ordinary Share, par value $0.00005 per share
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Document Accounting Standard	U.S. GAAP
Auditor Firm ID	5395
Auditor Name	Marcum Asia CPAs LLP
Auditor Location	New York, NY
Business Contact [Member]
Document Information Line Items
Entity Address, Address Line One	7th floor, Building 398
Entity Address, Address Line Two	No. 1555 West Jinshajiang Rd
Entity Address, City or Town	Shanghai
Entity Address, Country	CN
Entity Address, Postal Zip Code	201803
Contact Personnel Name	Hui Yuan
City Area Code	86
Local Phone Number	021-39512112
Contact Personnel Fax Number	86 021-39518822

Restricted Net Assets (Details) - USD ($)	12 Months Ended
Restricted Net Assets (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Restricted Net Assets [Abstract]
Annual after-tax profit, percentage	10.00%
Registered capital, percentage	50.00%
Net assets (in Dollars)	$ 75,858,780	$ 75,858,780
WFOE [Member]
Restricted Net Assets [Abstract]
Annual after-tax profit, percentage	10.00%
Registered capital, percentage	50.00%

Consolidated Balance Sheets (Parentheticals) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Ordinary shares, per share (in Dollars per share)	$ 0.00005	$ 0.00005
Ordinary shares, shares authorized	1,000,000,000	1,000,000,000
Ordinary shares, shares issued	22,115,592	22,115,592
Ordinary shares, shares outstanding	22,115,592	22,115,592

Long-Term Investment (Tables)

12 Months Ended

Dec. 31, 2022

Long-Term Investment [Abstract]

Schedule of group’s long-term investment

	As of December 31, 2021					As of December 31, 2022
	USD		Interest %			USD		Interest %
Equity method investments
Zhizhen Guorui		-		-	%		2,647,593		37	%
Shanghai Shenghan		335,448		16.56	%		204,899		16.56	%
Total		335,448					2,852,492

Leases (Details) - USD ($)	12 Months Ended
Leases (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Operating lease discount rate	4.83%	4.75%	4.75%
Amortization expenses of right-of-use assets	$ 712,844	$ 1,087,035	$ 1,380,588

Condensed Financial Information of the Parent Company (Details) - Schedule of parent company statements of operations and comprehensive (loss)/income - Parent Company [Member] - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Condensed Statement of Income Captions [Line Items]
Revenue
Cost of revenue
Gross profit
Operating expenses:
Share of (loss)/income in subsidiaries and VIEs	(5,898,535)	3,677,813	(6,808,365)
(Loss)/Income before income tax provision	(5,898,535)	3,677,813	(6,808,365)
Provision for income tax
Net (loss)/income	$ (5,898,535)	$ 3,677,813	$ (6,808,365)

Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives	12 Months Ended
	Dec. 31, 2022
Schedule of Estimated Useful Lives [Abstract]
Leasehold improvement	Shorter of the lease term or the estimated useful life of the assets
Electronic equipment [Member]
Schedule of Estimated Useful Lives [Abstract]
Estimated useful lives	5 years
Office equipment [Member]
Schedule of Estimated Useful Lives [Abstract]
Estimated useful lives	5 years
Software [Member]
Schedule of Estimated Useful Lives [Abstract]
Estimated useful lives	5 years

Prepaid Expenses and Other Assets (Details) ¥ in Billions	12 Months Ended
Prepaid Expenses and Other Assets (Details) ¥ in Billions	Dec. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Prepaid Expenses and Other Assets [Abstract]
Bad debts			$ 1,380,331
Case acceptance fee	3,600,000
Amount claim	$ 1,450,000,000	¥ 10
Expected year	1 year	1 year
Other current assets write-off	$ 2,201,448

Accrued Expenses and Other Liabilities

12 Months Ended

Dec. 31, 2022

Accrued Expenses and Other Liabilities [Abstract]

ACCRUED EXPENSES AND OTHER LIABILITIES

10.

ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consisted of the following:

	As of December 31,
	2021		2022
Accrued expenses and other current liabilities:
Loan from third parties ⁽¹⁾	$	4,381,136	$	6,485,125
Payroll payable		1,591,662		4,722,793
Other tax payable		2,777,187		2,852,728
Interest payable		1,053,854		2,054,136
Others		512,593		891,931
Accrued expenses and other current liabilities	$	10,316,432	$	17,006,713
Accrued liabilities, non-current：
Long-term loan from third parties ⁽²⁾		-		3,303,986
Litigation related payable ⁽³⁾		5,157,971		4,769,926
Accrued liabilities, non-current		5,157,971		8,073,912
TOTAL	$	15,474,403	$	25,080,625

(1)

(2)

Long-term loan from a third party was primarily consisted of:

(3)

Litigation related payable mainly consisted of the litigation fee of the lawsuit between the Group and Apple paid by the third parties on behalf of the Group.