Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 389

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 389
---
17 letter is invalid and unenforceable on several bases. It further explained that even if it were valid and enforceable,
Legacy XTI does not believe such letter resulted in, or otherwise triggered, the assumption of obligations of Xeriant under the Senior
Secured Promissory Note or any other obligation on the part of Legacy XTI. There have been no further developments on this matter. We
are unable to make a reasonable estimate of a potential loss, if any, on this matter. To the extent suits or actions are commenced with
respect to this matter, we intend to vigorously defend against any and all claims.

On
or about August 1, 2024, Chardan Capital Markets LLC (“Chardan”) commenced an arbitration (the “Arbitration”)
before FINRA against the Company and its subsidiary, XTI Aircraft Company (“Aircraft”). Aircraft and Chardan are parties
to an engagement letter agreement (the “Agreement”). In the Arbitration, Chardan alleges that the Company is bound by the
Agreement even though it did not sign the Agreement, which the Company denies. Chardan further alleges that Aircraft and the Company
breached the Agreement by not making separate payments to Chardan of $200,000, $94,511, $484,044 and $174,000. Chardan also seeks to
recover unspecified amounts relating to an alleged right of first refusal to perform banking services that the Company supposedly did
not honor, including with respect to an At-The-Market securities offering that was underwritten by Maxim. The Company and Aircraft deny
that Chardan performed its duties under the Agreement and otherwise that Chardan is owed any sums under the Agreement. The Company filed
a petition in the U.S. District Court for the Southern District of New York seeking to stay the Arbitration to the extent that it has
been asserted against the Company. On or about January 21, 2025, the Court entered a final judgement that: (a) enjoins Chardan from prosecuting
the arbitration against the Company and (b) declares that the Company has no contractual or other duty to arbitrate with Chardan. The
Aircraft subsidiary remains as a party to the arbitration and intends to defend against the arbitration vigorously. As of December 31,
2024, the Company has accrued $200,000 relating to the Agreement, which is included in accounts payable on the consolidated balance sheets.

Financial
Advisory