Company: XTIA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076767
Chunk: 175

Company: XTI Aerospace, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 175
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encies are resolved
and the gain is realized or realizable. Depending on the nature and timing of any such proceedings that may arise, an unfavorable resolution
of a matter could materially affect the Company’s future consolidated results of operations, cash flows or financial position in
a particular period. Except if otherwise indicated, it is not reasonably possible to determine the probability of loss or estimate damages
for any of the matters discussed below, and therefore, the Company has not established reserves for any of these matters.

Xeriant Matter

On December 6, 2023, Xeriant, Inc. (“Xeriant”)
filed a complaint in the United States District Court for the Southern District of New York against Legacy XTI, two unnamed entities,
and five unnamed individuals. On January 31, 2024, Xeriant filed an amended complaint adding the Company as a defendant. On February 29,
2024, Xeriant filed a second amended complaint, removing the Company and one of the unnamed entities as defendants. The second amended
complaint alleges that Legacy XTI breached several agreements with Xeriant, including a Joint Venture Agreement dated May 31, 2021, a
cross-patent license agreement, an operating agreement, and a letter dated May 17, 2022, which Xeriant claims arose from its introduction
of Legacy XTI to a Nasdaq-listed company as a potential acquirer.

Xeriant alleges that it provided intellectual
property, expertise, and capital in connection with Legacy XTI’s TriFan 600 aircraft and that it was improperly excluded from a
subsequent transaction involving the TriFan 600 technology as part of Legacy XTI’s merger with the Company. Xeriant asserts causes
of action including breach of contract, fraud, unjust enrichment, and misappropriation of confidential information. It seeks damages in
excess of $500 million, injunctive relief, a royalty obligation, and other equitable relief.

On March 13, 2024, Legacy XTI moved to dismiss
portions of the second amended complaint. The Court denied that motion on January 14, 2025. Legacy XTI filed an answer on January 28,
2025, and subsequently filed an amended answer and counterclaims on February 18, 2025. The amended counterclaims, further amended on April
14, 2025, allege that Xeriant breached the Joint Venture Agreement by failing to make required capital contributions of approximately
$4