Company: XTIA
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001213900-25-045396
Chunk: 225

Company: XTI Aerospace, Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 2
Chunk 225
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 condition and future results.

Adverse judgments or settlements in legal
proceedings could materially harm our business, financial condition, operating results and cash flows.

We may be a party to claims
that arise from time to time in the ordinary course of our business, which may include those related to, for example, our securities offerings,
contracts, sub-contracts, protection of confidential information or trade secrets, adversary proceedings arising from customer bankruptcies,
employment of our workforce and immigration requirements or compliance with any of a wide array of state and federal statutes, rules and
regulations that pertain to different aspects of our business.

Additionally, we are and we
may be made a party to future claims relating to the XTI Merger. On December 6, 2023, Xeriant, Inc. (“Xeriant”) filed a complaint
against Legacy XTI, along with two unnamed companies and five unnamed persons, in the United States District Court for the Southern District
of New York. On January 31, 2024, Xeriant filed an amended complaint, which added us as a defendant. On February 2, 2024, the Court ordered
Xeriant to show cause as to why the amended complaint should not be dismissed without prejudice for lack of subject matter jurisdiction.
On February 29, 2024, Xeriant filed a second amended complaint, which removed us and one of the unnamed companies as defendants. The second
amended complaint alleges that Legacy XTI, through multiple breaches and fraudulent actions, has caused substantial harm to Xeriant and
has prevented it from obtaining compensation owed to it under various agreements entered into between Xeriant and Legacy XTI, including
but not limited to a joint venture agreement, a cross-patent license agreement, an operating agreement, and a letter dated May 17, 2022
(the “May 17 letter”) arising from Xeriant’s introducing Legacy XTI to a Nasdaq listed company as a potential acquirer
of Legacy XTI. In particular, Xeriant contends that Legacy XTI gained substantial advantages from the intellectual property, expertise,
and capital deployed by Xeriant in the design and development of Legacy XTI’s TriFan 600 airplane yet has excluded Xeriant from
the transaction involving the TriFan 600 technology in its merger with us, which has resulted in a breach of the May 17 letter, in addition
to the other aforementioned agreements. Xeriant, in the second amended complaint