Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 68

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 68
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zu Robotics
Acquisition” and collectively, the “Acquisitions”), in exchange for aggregate consideration consisting of (i) approximately
$20.0 million in cash, (ii) approximately $11.9 million in the form of two promissory notes (including approximately $1.6 million in working
capital adjustments) and (iii) an aggregate of 6,524,576 Class B Units of XTI Drones Holdings (the “Class B Units”) with a
fair market value of approximately $9.7 million. The aggregate purchase price for each Acquisition is subject to customary post-closing
adjustments.

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 transactions contemplated
by the purchase agreements.

39

Private Placement Investment by Unusual Machines

On November 10, 2025, the
Company entered into a Securities Purchase Agreement (the “PIPE Purchase Agreement”) with Unusual Machines, Inc., a Nevada
corporation (“Unusual Machines”), pursuant to which the Company sold Unusual Machines 25,000 shares of the Company’s
newly designated Series 10 Convertible Preferred Stock, par value $0.001 per share (the “Series 10 Preferred Stock”), at a
subscription amount of $1,000 per share of