Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 207

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 207
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 providers in the United States. Drone Nerds specializes in the wholesale, retail and e-commerce sale of advanced drone systems
and related technologies serving commercial, governmental, and consumer markets, including public safety, construction, energy, and agriculture.
The company operates both an online sales platform and a retail location in South Florida and maintains one of the largest drone inventories
in the U.S., representing over 30 leading brands. Through its nationwide network of sales, marketing, and service professionals, Drone
Nerds delivers comprehensive enterprise drone solutions that improve operational performance and data-driven decision-making for its customers.

The Class B Units of XTI Drones Holdings are exchangeable
at any time after May 1, 2026 for shares of the Company’s common stock on a one-for-one basis, provided that such exchange ratio
is subject to equitable adjustments for stock splits, stock dividends, reclassifications and similar transactions affecting the Company’s
common stock. In addition, on the date that is 15 months after November 10, 2025, all outstanding Class B Units will automatically be
exchanged for shares of the Company’s common stock on a one-for-one basis, subject to the foregoing adjustments. The Drone Nerds
and Anzu Robotics sellers entered into lock-up agreements pursuant to which they agreed not to, without the Company’s prior consent,
sell, transfer or dispose of any shares of common stock until November 10, 2026. Following the exchange of all outstanding Class B Units
into shares of common stock, XTI Drones, LLC will own 100% of the membership interests of XTI Drones Holdings, and Drone Nerds and Anzu
Robotics will be indirect, wholly-owned subsidiaries of the Company.

 The Company incurred fees of approximately $1.2
million owed to ThinkEquity LLC as compensation for advisory services in connection with the Acquisition.

Issuance of Series 10 Convertible Preferred Stock

On November 10, 2025, the Company entered into
a Securities Purchase Agreement with Unusual Machines, Inc. pursuant to which the Company issued Unusual Machines, Inc. 25,000 shares
of Series 10 Convertible Preferred Stock, par value $0.001 per share (the “Series 10 Preferred”), at a stated value of $1,000
per share, for aggregate gross proceeds of $25.0 million in a private placement that closed on November 12, 2025. The Company received
net proceeds from the Series 10