Company: XTIA
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001213900-25-045396
Chunk: 213

Company: XTI Aerospace, Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 2
Chunk 213
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 to travel, trade show fees and costs, salaries and benefits. Sales and marketing expenses are expensed as incurred.

General and Administrative Expenses

General and administrative
expenses consist primarily of salaries and related costs for personnel in executive, finance, corporate and business development, and
administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters, including
non-capitalizable transaction costs; professional fees for accounting, auditing, tax and administrative consulting services; insurance
costs, facility related expenses including maintenance and allocated expenses for rent and other operating costs.

We anticipate that general
and administrative expenses will increase substantially in the future as we increase our headcount to support continued research and development
and commercialization of the TriFan 600.

Other (Expense) Income

Interest expense, net consists
primarily of (i) interest relating to convertible and promissory notes payable, (ii) amortization of debt discounts relating to warrants
and stock options issued in conjunction with convertible notes, and (iii) interest income on notes receivable.

41

Loss on extinguishment of
debt includes (i) prepayment penalties and other expenses incurred during the three months ended March 31, 2025 as the Company fully repaid
the Streeterville promissory notes before the maturity date, and (ii) inducement losses on debt conversions incurred by Legacy XTI when
it entered into voluntary note conversion letter agreements with several note holders during the first quarter of 2024.

Change in fair value of convertible
notes payable represents the remeasurement of certain Legacy XTI convertible notes to fair value. These notes were converted to equity
prior to the closing of XTI Merger.

Change in fair value of warrant
liability represents the remeasurement of certain outstanding warrants to fair value.

Other consists of miscellaneous income and expense items.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2025 compared
to the Three Months Ended March 31, 2024

The following table sets forth
selected consolidated financial data and as a percentage of period-over-period change:

    Three Months Ended March 31,  

    2025  
    2024  
    $  
    % 
  
    (in thousands, except percentages) 
    Amount  
    Amount  
    Change  
    Change* 
  
    Revenues 
    $484  
    $220  
    $264  
     120.0%
  
    Cost of