Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 49

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 49
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2024, the Company entered into a
consulting agreement with Nadir Ali (the “Ali Consulting Agreement”), the Company’s former Chief Executive Officer.
Mr. Ali, through 3AM, held shares of the Company’s Series 9 Preferred Stock as disclosed in Note 10.

31

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended September 30, 2025
and 2024, the Company recognized compensation expense of $0 and approximately $1.0 million, respectively, which is included in general
and administrative expenses on the condensed consolidated statements of operations, relating to the Ali Consulting Agreement. During
the nine months ended September 30, 2025 and 2024, the Company recognized compensation expense of approximately $2.3 million and $2.6
million, respectively, which is included in general and administrative expenses on the condensed consolidated statements of operations,
relating to the Ali Consulting Agreement. As of December 31, 2024, the Company owed Mr. Ali accrued consulting fees of approximately
$0.2 million, which is included in accounts payable on the accompanying consolidated balance sheets.

Pursuant to the Settlement Agreement (see “Settlement
Agreement” below in this note), as of September 30, 2025, the Company owed Mr. Ali accrued consulting fees of $0.5 million,
which is included in accounts payable on the accompanying condensed consolidated balance sheets.

On July 24, 2023, the compensation committee of
the Board of Legacy Inpixon adopted a Strategic Transaction Bonus Plan, which was amended on March 11, 2024 (the “Strategic Transaction
Bonus Plan”), and was intended to provide incentives to certain employees, including Mr. Ali, and other service providers to remain
with the Company through the consummation of a qualifying transaction. As of December 31, 2024, the Company had a transaction bonus obligation
of approximately $2.1 million payable to Mr. Ali, which is included in accrued expenses and other current liabilities on the accompanying
condensed consolidated balance sheets. On March 31, 2025, the Company repaid the remaining transaction bonus obligation to Mr. Ali pursuant
to the Settlement Agreement (see “Settlement Agreement” below in this note).

Settlement Agreement

On March 27, 2025 (the “Effective Date”),