Company: XTIA
Filing Date: 2025-06-20
Form Type: S-1/A
Source: 0001213900-25-055855
Chunk: 23

Company: XTI Aerospace, Inc.
Filing Date: 2025-06-20
Form: S-1/A
Chunk 23
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 motion. On May 27, 2025, Xeriant filed a renewed motion to stay discovery,
which the Court denied on May 29, 2025. The case is in its early stages of discovery, and we are unable to estimate the likelihood or
magnitude of a potential adverse judgment. Legacy XTI nevertheless denies the allegations of wrongdoing contained in the second amended
complaint and is vigorously defending against the lawsuit.

<div align='center'>11</div>

In connection with the litigation
matter described in the immediately preceding paragraph, on June 12, 2024, we received a letter from counsel for Auctus Fund, LLC (“Auctus”),
dated April 3, 2024, claiming that, pursuant to the above-referenced May 17 letter by and between Xeriant and Legacy XTI, as a result
of the XTI Merger and Legacy XTI’s entry into a promissory note agreement with Legacy Inpixon in March 2023, XTI Aerospace and Legacy
XTI may have assumed Xeriant’s obligations under that certain senior secured promissory note in the principal amount of $6,050,000
issued by Xeriant to Auctus (the “Senior Secured Promissory Note”), including the obligation to repay Auctus all principal
and accrued and unpaid interest thereunder, which Auctus claims was $8,435,008.81 as of April 3, 2024. In July 2024, Legacy XTI responded
to such letter and indicated that it believes that the May 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. On May 13, 2025,
Auctus filed a lawsuit against Legacy XTI in the District Court of Arapahoe County, Colorado, asserting claims consistent with the position
it had previously set forth in its April 3, 2024 letter, which Legacy XTI disputed in its July 2024 response. In its complaint, Auctus
alleges that it loaned Xeriant over $5 million under the Senior Secured Promissory Note due in October 2022, and that Xeriant