Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 54

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 54
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 be reasonably estimated. If the Company determines
that a loss is reasonably possible and the loss or range of loss can be reasonably estimated, it discloses the possible loss or range
of loss. Any potential gains associated with legal matters are not recorded until the period in which all contingencies are resolved
and the gain is realized or realizable. Depending on the nature and timing of any such proceedings that may arise, an unfavorable resolution
of a matter could materially affect the Company’s future consolidated results of operations, cash flows or financial position in
a particular period. Except if otherwise indicated, it is not reasonably possible to determine the probability of loss or estimate damages
for any of the matters discussed below, and therefore, the Company has not established reserves for any of these matters.

Xeriant Matter 

On December 6, 2023, Xeriant, Inc. (“Xeriant”)
filed a complaint in the United States District Court for the Southern District of New York against Legacy XTI, two unnamed entities,
and five unnamed individuals. On January 31, 2024, Xeriant filed an amended complaint adding the Company as a defendant. On February 29,
2024, Xeriant filed a second amended complaint, removing the Company and one of the unnamed entities as defendants. The second amended
complaint alleges that Legacy XTI breached several agreements with Xeriant, including a Joint Venture Agreement dated May 31, 2021, a
cross-patent license agreement, an operating agreement, and a letter dated May 17, 2022, which Xeriant claims arose from its introduction
of Legacy XTI to a Nasdaq-listed company as a potential acquirer. Xeriant further alleges that it provided intellectual property, expertise,
and capital in connection with Legacy XTI’s TriFan 600 aircraft and was improperly excluded from a subsequent transaction involving
the TriFan 600 technology as part of Legacy XTI’s merger with the Company. Xeriant asserts causes of action for breach of contract,
fraud, unjust enrichment, and misappropriation of confidential information, and seeks damages in excess of $500 million, along with injunctive
and other equitable relief.

On March 13, 2024, Legacy XTI moved to dismiss
portions of the second amended complaint. The Court denied that motion on January 14, 2025. Legacy XTI filed its answer on January 28,
2025, and subsequently filed an amended answer and counter