Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 57

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 57
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 in the alternative, to stay the proceedings pending resolution of the Xeriant litigation. Legacy XTI’s motion asserts
that Auctus’ complaint should be dismissed: (i) for lack of standing, because Auctus is neither a party to, nor a third-party beneficiary
of, the May 17 letter; (ii) for failure of a condition precedent, because no obligation ever arose in that the alleged triggering condition—a
business combination involving Legacy XTI and Legacy Inpixon did not occur within the required one-year time frame; (iii) for lack of
valid assignment, because Xeriant’s unilateral assignment of debt to Legacy XTI is void because the underlying Note prohibits assignment
without Auctus’s prior written consent, which is not alleged. On August 5, 2025, Auctus filed a response arguing that it was an
intended third-party beneficiary of the May 17 letter, that the anti-assignment clause does not bar its claims, and that the request for
a stay is unwarranted because the Xeriant litigation involves different parties and broader claims.

On September 12, 2025, Legacy XTI filed a Reply
Brief reinforcing that Auctus lacks standing, that no obligation ever arose under the May 17 Letter because no qualifying transaction
occurred within its one-year term, and that any purported transfer of debt is void under the Note’s anti-assignment clause. The
Reply also emphasized that the enforceability of the May 17 Letter is already before the Southern District of New York and urged dismissal
or a stay to avoid inconsistent rulings.

On October 2, 2025, Legacy XTI filed a Notice
of Supplemental Authority submitting the September 23, 2025 Order of the U.S. District Court for the Southern District of New York, which
denied Xeriant’s motion to dismiss Legacy XTI’s counterclaims and held that XTI had plausibly alleged that the May 17 Letter
expired by its terms and is unenforceable. Legacy XTI asserted that the SDNY ruling directly supports dismissal or a stay because it confirms
that the same alleged contract and issues raised by Auctus are already being adjudicated in the federal case.

On November 7, 2025, the court denied Legacy XTI’s
motion to dismiss or, in the alternative, stay the proceedings. The court held that, when viewing the allegations in the light most favorable
to Auctus, the