Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 182

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 182
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 issued in connection with the initial closing of the June Offering. The grant date fair value of the additional Representative’s
Warrants was determined to be approximately $94,000.

Similar to the Placement Agent Warrants issued to ThinkEquity in connection
with January Offering, as described above in this note section, the Representative’s Warrants and the Placement Agent Warrants issued
in connection with the March Offering, June Offering and September Offering were determined to be temporary equity under ASC 718 and therefore
reported in “Mezzanine Equity” on the Company’s condensed consolidated balance sheets. The Common Warrants and Pre-funded
Warrants issued in connection with the March Offering, June Offering and September Offering were determined to be liability classified.
The Common Warrants and Pre-funded Warrants were recognized at fair value at issuance, with a gain in change in fair value of approximately
$2.2 million in the three months ended September 30, 2025 and a loss of $3.3 million for the nine months ended September 30, 2025 reported
in “change in fair value of warrant liability” on the Company’s condensed consolidated statements of operations.

The measurement of fair value of the Representative’s
Warrants issued in connection with the March Offering was determined utilizing a Black-Scholes model considering all relevant assumptions
current at the date of issuance (i.e., share price of $1.09, exercise price of $1.70, term of five years, volatility of 103%, risk-free
rate of 4%, and expected dividend rate of 0%). The measurement of fair value of the Common Warrants issued in connection with the March
Offering was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share
price of $1.09, exercise price of $1.36, term of five years, volatility of 103%, risk-free rate of 4%, and expected dividend rate of
0%).

25

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The measurement of fair value of the Representative’s
Warrants issued in connection with the June Offering was determined utilizing a Black-Scholes model considering all relevant assumptions
current at the date of issuance (i.e., share price of $1.66, exercise price of $2.1875, term of five years, volatility of 106%, risk-free
rate