Company: XTIA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076767
Chunk: 158

Company: XTI Aerospace, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 158
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 or in part, immediately upon issuance
until the five-year anniversary of the commencement of sales of securities in the March Offering and the June Offering, respectively.

Similar to the Placement Agent Warrants described
above in this note section, the Representative’s Warrants issued in connection with the March Offering and June Offering were determined
to be temporary equity under ASC 718 and therefore reported in “Mezzanine Equity” on the Company’s condensed consolidated
balance sheets, and the Common Warrants and Pre-funded Warrants were determined to be liability classified. The Common Warrants and Pre-funded
Warrants were recognized at fair value at issuance, with the change in fair value of approximately $5.9 million and $5.4 million reported
in “change in fair value of warrant liability” on the Company’s condensed consolidated statements of operations for
the three and six months ended June 30, 2025, respectively.

The measurement of fair value of the Representative’s
Warrants issued in connection with the March Offering was determined utilizing a Black-Scholes model considering all relevant assumptions
current at the date of issuance (i.e., share price of $1.09, exercise price of $1.70, term of five years, volatility of 103%, risk-free
rate of 4%, and expected dividend rate of 0%). The measurement of fair value of the Common Warrants issued in connection with the March
Offering was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share
price of $1.09, exercise price of $1.36, term of five years, volatility of 103%, risk-free rate of 4%, and expected dividend rate of
0%).

The measurement of fair value of the Representative’s Warrants
issued in connection with the June Offering was determined utilizing a Black-Scholes model considering all relevant assumptions current
at the date of issuance (i.e., share price of $1.66, exercise price of $2.1875, term of five years, volatility of 106%, risk-free rate
of 3.8%, and expected dividend rate of 0%). The measurement of fair value of the Common Warrants issued in connection with the June Offering
was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price
of $1.66, exercise price of $2.00, term of five years, volatility of 106%, risk-free