Company: XTIA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076767
Chunk: 38

Company: XTI Aerospace, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 38
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.4 million reported
in “change in fair value of warrant liability” on the Company’s condensed consolidated statements of operations for
the three and six months ended June 30, 2025, respectively.

The measurement of fair value of the Representative’s
Warrants issued in connection with the March Offering was determined utilizing a Black-Scholes model considering all relevant assumptions
current at the date of issuance (i.e., share price of $1.09, exercise price of $1.70, term of five years, volatility of 103%, risk-free
rate of 4%, and expected dividend rate of 0%). The measurement of fair value of the Common Warrants issued in connection with the March
Offering was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share
price of $1.09, exercise price of $1.36, term of five years, volatility of 103%, risk-free rate of 4%, and expected dividend rate of
0%).

The measurement of fair value of the Representative’s Warrants
issued in connection with the June Offering was determined utilizing a Black-Scholes model considering all relevant assumptions current
at the date of issuance (i.e., share price of $1.66, exercise price of $2.1875, term of five years, volatility of 106%, risk-free rate
of 3.8%, and expected dividend rate of 0%). The measurement of fair value of the Common Warrants issued in connection with the June Offering
was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price
of $1.66, exercise price of $2.00, term of five years, volatility of 106%, risk-free rate of 3.8%, and expected dividend rate of 0%).

The March Offering and the June Offering proceeds
were allocated to each of the warrants and the common stock based on their relative fair value. The grant date fair value of the warrants
and shares of common stock on March 31, 2025 (March Offering) and June 26, 2025 (June Offering) is summarized below in the aggregate and
is reflected as temporary equity (“Mezzanine Equity”) for the Representative’s Warrants, a warrant liability for the
Common Warrants and Pre-funded Warrants, and within additional paid-in capital for the common stock as of June 30, 2025.

    Instrument