Company: XTIA
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001213900-25-045396
Chunk: 41

Company: XTI Aerospace, Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 1
Chunk 41
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 the XTI Merger, Mr. Pomeroy was appointed as XTI Aerospace’s Chief Executive
Officer.

Transactions with AVX Aircraft Company

On August 27, 2024, the Company entered into an
amended and restated letter agreement with AVX Aircraft Company (“AVX”), which amends and restates the original letter agreement,
dated as of March 25, 2024, by and between the Company and AVX, as subsequently amended, pursuant to which AVX provides consulting and
advisory services to the Company relating to the development and design of the TriFan 600 airplane in exchange for the payment of costs
incurred by AVX (with a target cost of approximately $960,000) plus a fixed fee of 12% of such costs (approximately $115,000) for a total
payment of up to approximately $1.1 million. The Company pays AVX for its actual costs plus the 12% fixed fee on a monthly basis. The
Company’s Chairman and Chief Executive Officer, Scott Pomeroy, and board member, David Brody, also sit on the five-member board
of AVX. Additionally, as of the date of this report, Mr. Brody and his spouse together own approximately 26% of the issued and outstanding
shares of AVX. As a result of a legal financial separation between Mr. Brody and his spouse, Mr. Brody holds approximately 7% of the voting
power of the outstanding securities of AVX and Mr. Brody’s spouse holds approximately 19% of the voting power of the outstanding
securities of AVX. As of the date of this report, Mr. Pomeroy owns restricted stock units of AVX which amount to less than 5% of the outstanding
shares of AVX on a fully diluted basis. During the three months ended March 31, 2025, the Company did not accrue or pay AVX any consulting
fees. During the year ended December 31, 2024, the Company paid AVX approximately $0.9 million in consulting fees, which included advance
deposits for future services. As of March 31, 2025 and December 31, 2024, the deposit balance for future services was approximately $0.5
million and $0.5 million, respectively, and is included in prepaid expenses and other current assets on the accompanying condensed consolidated
balance sheets. Subsequent to March