Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 400

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 3
Chunk 400
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 The court held that, when viewing the allegations in the light most favorable to Auctus, the complaint
plausibly stated claims for relief under Colorado’s notice-pleading standard. The court further denied XTI’s alternative request
for a stay, reasoning that the parties were not identical to those in the federal action and therefore comity and judicial economy did
not warrant a stay. The court nonetheless directed the parties to update it regarding the outcome of the federal case to the extent it
may be dispositive of overlapping issues. Legacy XTI’s answer to the complaint is due November 21, 2025. The Company will continue
to vigorously defend against the claims but cannot predict the timing or outcome of the proceedings or estimate any potential exposure.

Regardless of the merits
of any particular claim, responding to such actions could divert time, resources and management’s attention away from our business
operations, and we may incur significant expenses in defending these lawsuits or other similar lawsuits. The results of litigation and
other legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these legal disputes may result in
adverse monetary damages, penalties or injunctive relief against us, which could have a material adverse effect on our financial condition,
operating results and cash flows. Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make
it more difficult to compete effectively or to obtain adequate insurance in the future.

Furthermore, while we maintain
insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject
to various exclusions as well as deductibles and caps on amounts of coverage. Even if we believe a claim is covered by insurance, insurers
may dispute our entitlement to coverage for a variety of potential reasons, which may affect the timing and, if the insurers prevail,
the amount of our available insurance coverage for a particular claim.

We may also be required to
initiate expensive litigation or other proceedings to protect our business interests. There is a risk that we will not be successful
or otherwise be able to satisfactorily resolve such claims or litigation. Litigation and other legal claims are subject to inherent uncertainties.
Those uncertainties include, but are not limited to, litigation costs and attorneys’ fees, unpredictable judicial or jury decisions
and the differing laws and judicial proclivities regarding damage awards among the states in which we operate. Unexpected outcomes in
such legal proceedings, or changes in management’s evaluation or predictions of the likely outcomes of such proceedings,