Company: XTIA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076767
Chunk: 176

Company: XTI Aerospace, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 176
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.6 million and by failing to deliver promised intellectual property and strategic support. Legacy XTI further alleges that Xeriant breached
its fiduciary duty by engaging in coercive and self-dealing conduct, including conditioning a strategic introduction on the issuance of
equity and assumption of debt. Legacy XTI seeks declaratory relief confirming that the joint venture has been terminated, that all intellectual
property related to the TriFan 600 belongs solely to Legacy XTI, and that Xeriant has no rights in the TriFan 600 technology.

33

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Xeriant has moved to dismiss Legacy XTI’s amended counterclaims,
and that motion remains pending. The Court has denied Xeriant’s renewed motion to stay discovery.

On July 10, 2025, XTI filed a letter motion requesting a conference
to address: (i) ongoing deficiencies in Xeriant’s discovery responses; and (ii) Xeriant’s untimely service of discovery requests
on XTI, which were served more than three months after the applicable deadline. The Court granted XTI’s letter motion on the same
day, and held a conference on July 18, 2025. During the conference, the Court ordered: (i) an extension of all discovery deadlines by
three months, through November 24, 2025; (ii) an extension of expert discovery through February 16, 2026; and (iii) that the parties finalize
a protective order and Electronically Stored Information (“ESI”) protocol by July 25, 2025. The parties subsequently submitted
a stipulated protective order and ESI protocol, which the Court entered on July 28, 2025. The parties are continuing to exchange written
discovery and will be conducting depositions. 

The litigation remains in the early stages of discovery. The Company
believes the claims against Legacy XTI are without merit and intends to continue to vigorously defend against them. At this time, the
Company is unable to predict the outcome of this matter or estimate the likelihood or magnitude of a potential loss, if any.

Auctus Matter

In connection with the “Xeriant Matter”
described above, on June 12, 2024, the Company received correspondence from legal counsel for Auctus Fund, LLC (“Auctus”),
dated