Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 247

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 247
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 the entire outstanding principal amount,
together with all accrued and unpaid interest, of each Note will be repaid on or prior to the one year anniversary of each Note (the “Due
Date”), and (vi) all outstanding accrued interest and the unpaid principal amount of each Note will be due and payable in full on
the earlier of (A) the Due Date, (B) 90 days following a capital raise (or the last capital raise, in connection with a series of transactions,
whether related or unrelated) where the Company or one or more of its affiliates raise, as a result of a single transaction or a series
of transactions occurring pursuant to one or more closings, in any case after the date of the Note, an aggregate amount of $40 million
or more, qualified by the limitation that not more than 20% of net proceeds from any single financing will be applied towards payment
of each Note, or (C) the date on which the Note becomes immediately due and payable as a result of the occurrence of an event of default
thereunder.

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Interest will accrue on the
outstanding principal balance of each Note at an annual rate of 7.25%, computed based upon a 365-day year (the “Interest Rate”).
If interest is not paid as it becomes due, it will be added to the principal. Our failure to pay the principal and interest of each Note
when required will constitute an event of default under the Notes. Upon the occurrence of an event of default (except a Bankruptcy-Related
Event of Default), the lender may declare the entire unpaid balance of principal and accrued but unpaid interest on the Note, and all
other obligations of XTI Drones Holdings under the applicable Note, to be immediately due and payable and/or exercise any other rights
or remedies under any other instrument or applicable law. Upon the occurrence of a Bankruptcy-Related Event of Default, the outstanding
principal amount of the Note together with all accrued and unpaid interest and all other obligations of XTI Drones Holdings under the
Note will become due and payable automatically. Following the occurrence of an event of default, interest will accrue on the outstanding
principal balance of each Note at an annual rate equal to the Interest Rate plus 2.00%. An event of default under the Notes could also
lead to a default under agreements governing our future indebtedness.

We may not have or be able to secure financing
for sufficient funds to satisfy all amounts under the Notes when due. If