Company: XTIA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076767
Chunk: 49

Company: XTI Aerospace, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 49
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 stock units of AVX which amount to less than 5% of the
outstanding shares of AVX on a fully diluted basis. During the six months ended June 30, 2025, the Company did not accrue or pay AVX
any consulting fees. During the year ended December 31, 2024, the Company paid AVX approximately $0.9 million in consulting fees, which
included advance deposits for future services. As of December 31, 2024, the deposit balance for future services was approximately $0.5
million and is included in prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets. In April
2025, the deposit balance of approximately $0.5 million was returned to the Company. As of the date of this report, neither Mr. Brody
nor Mr. Pomeroy has received, and neither is entitled to receive, any compensation or other consideration from AVX, in connection with
services provided by AVX to the Company or otherwise.

On April 18, 2025, XTI Aircraft Company entered
into a novation agreement with AVX and a recruiting firm, pursuant to which AVX assigned to XTI Aircraft Company all of AVX’s rights
and obligations under a talent acquisition engagement agreement with the recruiting firm and, as a result, the recruiting firm will assist
XTI Aircraft Company in hiring an executive for expected fees of approximately $0.1 million.

Agreements with Nadir Ali

On March 12, 2024, the Company entered into a
consulting agreement with Nadir Ali (the “Ali Consulting Agreement”), the Company’s former Chief Executive Officer.
Mr. Ali, through 3AM, held shares of the Company’s Series 9 Preferred Stock as disclosed in Note 10.

30

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended June 30, 2025 and
2024, the Company recognized compensation expense of $0 and approximately $1.3 million, respectively, which is included in general and
administrative expenses on the condensed consolidated statements of operations, relating to the Ali Consulting Agreement. During the
six months ended June 30, 2025 and 2024, the Company recognized compensation expense of approximately $2.3 million and $1.6 million,
respectively, which is included in general and administrative expenses