Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 590

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 590
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,677.36   Expected term   5 years   Volatility   74.10%  Risk-free interest rate   3.54%  Dividend yield   —% 

Stock
Option Exercises

To induce option holders to exercise stock options ahead of the XTI
Merger so to assist the Company in qualifying for a listing on the Nasdaq Capital Market, Legacy XTI entered into exercise letter agreements
with several option holders in February 2024 at reduced exercise prices from the original option agreements. The net impact of these option
inducements to the condensed consolidated statement of operations was not material. In total, 1,038,871 stock options granted under
the 2017 Plan were net exercised into pre-exchange common shares of Legacy XTI immediately prior to the XTI Merger closing time, which
resulted in the issuance of 371 post-merger exchange and post 1-for-250 reverse split common shares.

F-32

XTI
AEROSPACE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Stock-based
Compensation Expense

The
Company incurred the following stock-based compensation charges for the periods indicated below (in thousands):

    Year
    Ended December 31, 

    2024  
    2023 
  
    Employee
    and consultant stock options1 
    $(1,798) 
    $1,645 
  
    Professional fees1 
     270  
     — 
  
    Vesting
    of previously unvested warrants2 
     496  
     — 
  
    Merger-related
    professional fees2 
     5,153  
     — 
  
    Total 
    $4,121  
    $1,645 

1amount included in general and administrative expenses on the consolidated statements of operations

2amount included in merger-related transaction costs on the consolidated statements of operations

As
of December 31, 2024, the total unrecognized compensation expense related to unvested awards was approximately $5.8 million, which
the Company expects to recognize over an estimated weighted average period of 1.78 years.

Stock-based
Compensation Related to Professional Fees

On
July 31, 2024, the Company entered