Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 401

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 401
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 may be suspended or discontinued at any time and does not obligate the Company
to acquire any amount of common stock.

Streeterville Debt Exchanges and Repayment

Subsequent to December 31, 2024, the Company issued an aggregate of
240,229 shares of common stock (the “Exchange Shares”) to Streeterville Capital, LLC (the “Note Holder”), the
holder of that certain outstanding secured promissory note of the Company issued on May 1, 2024 (the “Original Note”), at
a price between $2.48 and $4.21 per share, in each case equal to the Minimum Price as defined in Nasdaq Listing Rule 5635(d) in accordance
with the terms and conditions of the Exchange Agreements, pursuant to which the Company and the Note Holder agreed to (i) partition new
secured promissory notes in the form of the Original Note in the aggregate original principal amount of $750,000 and then cause the outstanding
balance of the Original Note to be reduced by an aggregate of $750,000; and (ii) exchange the partitioned notes for the delivery of the
Exchange Shares.

On March 31, 2025 and using the net proceeds from
the March 2025 Offering (see “March 2025 Underwritten Offering” below in this note), the Company repaid
the remaining obligation of approximately $2.7 million (which included principal, accrued interest and monitoring fees, and a 15% prepayment
penalty) in respect of the two secured promissory notes issued by the Company to Streeterville Capital, LLC on May 1, 2024 and May 24,
2024.

Settlement Agreement

On March 27, 2025 (the “Effective Date”),
XTI Aerospace, Inc. (the “Company”) entered into a settlement agreement with 3AM Investments LLC (an entity controlled
by Nadir Ali (“Ali”), the Company’s former Chief Executive Officer and a former director of the Company) (“3AM”),
Grafiti Group LLC (“Grafiti Group”) and Ali (the “Settlement Agreement”). The terms of the Settlement Agreement
include:

Preferred Stock Redemption. The
Company and 3AM entered into that certain securities purchase agreement dated as of March 12, 2024 (the “Series 9 Purchase Agreement”),
pursuant to which 3AM acquired 1,500 shares of the Company’s Series 9 Preferred