Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 365

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 365
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 Exchange
Shares were issued in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act, on the basis that
(a) the Preferred Exchange Shares were issued in exchange for other outstanding securities of the Company, (b) there was no additional
consideration delivered by the holder in connection with the exchange and (c) there were no commissions or other remuneration paid by
the Company in connection with the exchange. The Company notes that the redemption of the Preferred Shares to Common Stock was accounted
for as an extinguishment. During the year ended December 31, 2024, the Company recognized a deemed dividend of $489,506. The deemed
dividends represented the excess fair value of the common shares issued over the carrying amount of the Preferred Shares and were accounted
for as a reduction to additional paid-in capital.

Accrued
Return Conversion to Series 9 Preferred Stock

During
the year ended December 31, 2024, Streeterville and 3AM converted the 10% rate of return that had accrued through December 2024 into
457.00 and 118.82 shares of Series 9 Preferred Stock, respectively.

Series
9 Preferred Stock Redemptions

On
November 17, 2024, the Company entered into a Consent, Waiver and Release Agreement (the “Consent Agreement”) with 3AM
and Streeterville, each as a Required Holder, pursuant to which the Series 9 Holders authorized the Company to raise up to an additional
$5,000,000 under the ATM (the “ATM Increase”) in consideration for the Company’s agreement to pay 20% of the proceeds
it receives from sales under the ATM in connection with the ATM Increase (the “Redemption Proceeds”) to the Series 9
Holders to redeem a portion of their Series 9 Preferred Stock, to be distributed as follows: (i) 75% of the Redemption Proceeds
to Streeterville (15% of all proceeds received from sales under the ATM), and (ii) 25% of the Redemption Proceeds to 3AM (5% of
all proceeds received from sales under the ATM). Distribution payments will be made by wire transfer of immediately available funds weekly
and will be used to partially redeem the Series 9 Preferred Stock.

Pursuant
to the Consent Agreement, the Company delivered an aggregate of $492,331 to Streeterville and $302,116 to