Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 56

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 56
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 comply with its discovery obligations, including its refusal to
engage a qualified e-discovery vendor and produce electronically stored information in accordance with the Court-ordered ESI Protocol.
By order dated October 23, 2025, the Court granted XTI’s motion and compelled Xeriant to conduct ESI discovery in compliance with
the ESI Protocol, warning that continued noncompliance could result in dismissal of Xeriant’s case.

34

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Auctus Matter 

In connection with the “Xeriant Matter”
described above, on June 12, 2024, the Company received correspondence from legal counsel for Auctus Fund, LLC (“Auctus”),
dated April 3, 2024, asserting that the Company and/or Legacy XTI may have assumed Xeriant’s obligations under a Senior Secured
Promissory Note (the “Note”) issued by Xeriant to Auctus in the original principal amount of $6,050,000, pursuant to a letter
agreement dated May 17, 2022, between Xeriant and Legacy XTI (the “May 17 letter”). Auctus claimed that the outstanding amount
due under the Note, including accrued interest, was $8,435,008.81 as of April 3, 2024.

In July 2024, Legacy XTI responded to Auctus’s
claims, asserting that the May 17 letter is invalid and unenforceable on multiple grounds. Legacy XTI further stated that, even if the
May 17 letter were enforceable, it did not create or trigger any obligation for Legacy XTI to assume Xeriant’s debt under the Note
or otherwise. On May 13, 2025, Auctus filed a lawsuit against Legacy XTI in the District Court of Arapahoe County, Colorado, asserting
a single claim for breach of contract based on its prior allegations. Auctus contends that Legacy XTI is contractually obligated to repay
nearly $9 million in principal and accrued interest, based on Legacy XTI’s entry into a loan agreement with Legacy Inpixon in March
2023 and its subsequent merger with Legacy Inpixon in March 2024.

On June 25, 2025, Legacy XTI filed a motion to
dismiss or,