Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 53

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 53
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 in full and no further amounts shall be payable
to the Company by Grafiti Group or any of its affiliated parties pursuant to the Equity Purchase Agreement. As such, there are no receivables
due from Grafiti Group or any of its affiliates reported in the Company’s condensed consolidated balance sheets as of September
30, 2025.

Note 17 - Commitments and Contingencies

Advisory Agreement

On May 13, 2025, the Company entered into an
advisory agreement with a third-party advisor, pursuant to which the Company agreed to pay $85,000 in cash and issue 125,000 shares of
restricted common stock, subject to certain registration rights, to the advisor in consideration for financial advisory services agreed
to be rendered to the Company pursuant to the advisory agreement. During the three months ended June 30, 2025, the Company paid the $85,000
cash fee and issued 125,000 shares of common stock to the third-party advisor. Fifty percent of the initial cash fee payment, or $42,500,
was subsequently waived and returned to the Company as part of the June Offering closing.

33

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In addition, the Company agreed to reimburse
the advisor for all reasonable travel and other out-of-pocket expenses incurred in connection with the advisory agreement up to a maximum
of $15,000, subject to certain exceptions. The Company also agreed to: (1) pay the advisor a customary fee tail during the 12-month period
following the termination or expiration of the advisory agreement, if applicable; (2) pay an M&A cash fee to the advisor during the
term equal to 3% of the aggregate consideration to the extent the Company enters into a merger or acquisition with a party initially
introduced by the advisor to the Company; and (3) indemnify the advisor in in accordance with the terms and conditions of the advisory
agreement.

The advisory agreement has a term of 180 days,
subject to early termination or further extension, each upon the mutual consent of the parties.

Litigation

From time to time, the Company is subject to
various claims, charges and litigation matters that arise in the ordinary course of business. The Company records a provision for a liability
when it is both probable that the loss has been incurred and the amount of the loss can