Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 312

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 312
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 closing of qualifying financings or June 30, 2024, (iii) an increase in nonrecurring merger-related transaction costs of
$4.6 million, (iv) an increase in non-cash stock-based compensation expense of approximately $2.5 million, and (v) an aggregate
increase of approximately $8.9 million due to increases in consulting compensation mainly attributable to consulting arrangements entered
into with prior executives of Legacy Inpixon on March 12, 2024, legal and accounting fees relating to capital raising activities during
2024, and public company-related professional fees as the 2023 historical results reflect the operations of a private company, Legacy
XTI.

The $2.5 million
non-cash impairment of intangible assets during the year ended December 31, 2024 related to the Industrial IoT segment’s Aware
assets and its Nanotron business. This impairment was driven by the Company’s strategic decision during Q4 2024 to shift away
from the hardware (Nanotron subsidiary) and Aware business lines and to more of a LaaS business model (Intranav subsidiary).

Other
Income (Expense)

Other income (expense) for
the year ended December 31, 2024 was a gain of $1.4 million compared to a loss of $17.5 million for the comparable period ended December
31, 2023. The gain of $1.4 million for the year ended December 31, 2024 was primarily attributable to the Company recognizing a
gain of approximately $12.9 million relating to the remeasurement of convertible notes payable at fair value and interest income of $0.4
million, which was partially offset by (i) interest expense of approximately $1.1 million, (ii) an increase in the fair value of warrant
liability of approximately $0.3 million, (iii) inducement losses on debt conversions of approximately $6.7 million, (iv) loss on conversion
of the Damon note receivable to equity investment of approximately $2.6 million, and (v) a decrease in fair value of the Damon equity
investment and related warrants of approximately $0.4 million and $0.6 million, respectively, when those assets were re-measured as of
the December 31, 2024 reporting date.

The
loss of $17.5 million for the year ended December 31, 2023 was due primarily to