Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 609

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 609
---
 Xeriant’s obligations under that certain Senior Secured Promissory Note in the principal amount of
$6,050,000 issued by Xeriant to Auctus, 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. There have been no further developments on this matter. We
are unable to make a reasonable estimate of a potential loss, if any, on this matter. To the extent suits or actions are commenced with
respect to this matter, we intend to vigorously defend against any and all claims.

On
or about August 1, 2024, Chardan Capital Markets LLC (“Chardan”) commenced an arbitration (the “Arbitration”)
before FINRA against the Company and its subsidiary, XTI Aircraft Company (“Aircraft”). Aircraft and Chardan are parties
to an engagement letter agreement (the “Agreement”). In the Arbitration, Chardan alleges that the Company is bound by the
Agreement even though it did not sign the Agreement, which the Company denies. Chardan further alleges that Aircraft and the Company
breached the Agreement by not making separate payments to Chardan of $200,000, $94,511, $484,044 and $174,000. Chardan also seeks to
recover unspecified amounts relating to an alleged right of first refusal to perform banking services that the Company supposedly did
not honor, including with respect to an At-The-Market securities offering that was underwritten by Maxim. The Company and Aircraft deny
that Chardan performed its duties under the Agreement and otherwise that Chardan is owed any sums under the Agreement. The Company filed
a petition in the U.S. District Court for the Southern District of New York seeking to stay the Arbitration to the extent that it has
been asserted against the Company. On or about January 21, 2025, the Court entered a