Company: XTIA
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001213900-25-045396
Chunk: 144

Company: XTI Aerospace, Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 8
Chunk 144
---
 Grafiti LLC on the closing balance sheet is greater or less than $1.0 million. The Company notes that $0.5 million of the receivable
is included in current assets as other receivables on the Company’s condensed consolidated balance sheets as of December 31, 2024,
and the remaining $0.5 million of the receivable is included in long term assets as other assets on the Company’s consolidated balance
sheets as of December 31, 2024.

34

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the Settlement Agreement dated March
27, 2025 (see “Settlement Agreement” above in this note), the Company agreed that, effective as of the Effective Date
of the Settlement Agreement, the Grafiti Purchase Amount shall be deemed to be satisfied in full and no further amounts shall be payable
to the Company by Grafiti Group or any of its affiliated parties pursuant to the Equity Purchase Agreement. As such, the Company reported
$0 receivables due from Grafiti Group or any of its affiliates in its condensed consolidated balance sheets as of March 31, 2025.

Note 18 - Commitments and Contingencies

Litigation

From time to time, the Company is subject to various
claims, charges and litigation matters that arise in the ordinary course of business. The Company records a provision for a liability
when it is both probable that the loss has been incurred and the amount of the loss can 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.

On December 6, 2023, Xeriant filed a complaint against
Legacy XTI, along with two unnamed companies and