Company: XTIA
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001213900-25-045396
Chunk: 32

Company: XTI Aerospace, Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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 the counterparty’s performance is complete. The fair value of the equity
instrument is charged directly to stock-based compensation expense and credited to additional paid-in capital.

The assumptions used
in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and
the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based
compensation expense could be materially different for future awards.

The Company incurred the following stock-based
compensation charges for the periods indicated below (in thousands):

    For the Three Months
Ended March 31, 

    2025  
    2024 
  
    Employee and consultant stock options1 
    $455  
    $143 
  
    Vesting of previously unvested warrants2 
     —  
     496 
  
    Merger-related professional fees2 
     —  
     5,153 
  
    Total 
    $455  
    $5,792 

1Amount included in general and administrative expenses on
the condensed consolidated statements of operations.

2Amount included in merger-related transaction costs on the
condensed consolidated statements of operations.

As of March 31, 2025, the total unrecognized compensation
expense related to unvested awards was approximately $5.2 million, which the Company expects to recognize over an estimated weighted average
period of 1.92 years.

25

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock-based Compensation Related to the XTI
Merger 

Shares of Legacy XTI common stock were issued
to Scott Pomeroy, Chief Executive Officer of the Company and former CFO and board member of Legacy XTI, as transaction compensation immediately
prior to the XTI Merger closing time equal to 1,429 post merger shares of Company common stock. As a result of this share issuance transaction,
the Company recorded $1.9 million of stock-based compensation expense included in the condensed consolidated statement of operations during
the three months ended March 31, 2024.

Shares of Legacy XTI common stock were issued
to Maxim as transaction compensation immediately prior to the XTI Merger closing time equal to 1,539 post merger shares of Company common
stock. As a result of this share issuance transaction, the Company recorded approximately $2.0 million of stock-based compensation expense
included in the