Company: XTIA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076767
Chunk: 155

Company: XTI Aerospace, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 155
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 award is then ratably recognized as an expense over the period
during which the recipient is required to provide services in exchange for that award.

The Company measures
compensation expense for its non-employee stock-based compensation under ASC 718, “Stock Based Compensation”. The fair value
of the option issued or committed to be issued is used to measure the transaction, as this is more reliable than the fair value of the
services received. The fair value is measured at the value of the Company’s common stock or stock award on the date that the commitment
for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity
instrument is charged directly to stock-based compensation expense and credited to additional paid-in capital.

The assumptions used
in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and
the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based
compensation expense could be materially different for future awards.

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

    For the Three Months Ended June 30,  
    For the Six Months Ended June 30, 

    2025  
    2024  
    2025  
    2024 
  
    Employee and consultant
    stock options1 
    $478  
    $(59) 
    $933  
    $84 
  
    Vesting of previously unvested
    warrants2 
     —  
     —  
     —  
     496 
  
    Professional fees2 
     244  
     —  
     244  
     5,153 
  
    Total 
    $722  
    $(59) 
    $1,177  
    $5,733 

1Amount included in general and administrative expenses on the condensed consolidated statements of operations.

2Amount included in merger-related transaction costs on the condensed consolidated statements of operations for the three and six months ended June 30, 2024.  Amount included in general and administrative expenses on the condensed consolidated statements of operations for the three and six months ended June 30, 2025.

As of June 30, 2025, the total unrecognized compensation expense related
to unvested awards was approximately $4.4 million, which the Company expects to recognize over