Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 605

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 605
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 after the closing date
of the XTI Merger (the payments described in (a) and (b), each an “Equity Payment”). Each Equity Payment may be made, in
Company’s discretion, in (i) cash, (ii) fully vested shares of common stock under the Company’s equity incentive plan, or
a combination of cash and registered shares. As of the date of this report, the Company repaid the initial $1.5 million owed to
Mr. Ali under the Ali Consulting Agreement. During the year ended December 31, 2024, the Company recognized compensation expense of $3.6
million, which is included in general and administrative expenses on the consolidated statements of operations, relating to the Ali Consulting
Agreement. As of December 31, 2024, the Company owed Mr. Ali accrued consulting fees of approximately $0.2 million, which is included
in accounts payable on the accompanying consolidated balance sheets.

On March 27, 2025, the Company entered into a settlement agreement
with 3AM Investments LLC (an entity controlled by Nadir Ali (“Ali”)) (“3AM”), Grafiti Group LLC (“Grafiti
Group”) and Ali (the “Settlement Agreement”). As a result of the Settlement Agreement, the Company has an outstanding
advisory fee obligation to Ali of $1.5 million (the “Deferred Amount”) as of the date of this report, which is due in $500,000
installments on June 30, 2025, September 30, 2025, and December 31, 2025. Upon payment of the Deferred Amount in accordance with the terms
of the Settlement Agreement, the Ali Advisory Fees shall be deemed to be satisfied in full and no further amounts shall be payable by
the Company to Ali or his affiliated parties pursuant to the Ali Consulting Agreement dated March 12, 2024. Refer to Note 23
for further disclosure of the Settlement Agreement. 

 On
July 24, 2023, the compensation committee of the Board (the “Compensation Committee”) adopted a Strategic Transaction Bonus
Plan, which was amended on March 11, 2024, and was intended to provide incentives to certain employees, including Mr. Ali, and other
service providers to remain with the Company through the consummation of a qualifying transaction. As of December 31, 2024, the Company
had