Company: XTIA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076767
Chunk: 207

Company: XTI Aerospace, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 207
---
 results.

Adverse judgments or settlements in legal
proceedings could materially harm our business, financial condition, operating results and cash flows.

We may be a party to claims
that arise from time to time in the ordinary course of our business, which may include those related to, for example, our securities offerings,
contracts, sub-contracts, protection of confidential information or trade secrets, adversary proceedings arising from customer bankruptcies,
employment of our workforce and immigration requirements or compliance with any of a wide array of state and federal statutes, rules and
regulations that pertain to different aspects of our business.

Additionally, we are and we may be made a party to future claims relating
to the XTI Merger. On December 6, 2023, Xeriant, Inc. (“Xeriant”) filed a complaint in the United States District Court for
the Southern District of New York against Legacy XTI, two unnamed entities, and five unnamed individuals. On January 31, 2024, Xeriant
filed an amended complaint adding the Company as a defendant. On February 29, 2024, Xeriant filed a second amended complaint, removing
the Company and one of the unnamed entities as defendants. The second amended complaint alleges that Legacy XTI breached several agreements
with Xeriant, including a Joint Venture Agreement dated May 31, 2021, a cross-patent license agreement, an operating agreement, and a
letter dated May 17, 2022, which Xeriant claims arose from its introduction of Legacy XTI to a Nasdaq-listed company as a potential acquirer.
Xeriant alleges that it provided intellectual property, expertise, and capital in connection with Legacy XTI’s TriFan 600 aircraft
and that it was improperly excluded from a subsequent transaction involving the TriFan 600 technology as part of Legacy XTI’s merger
with the Company. Xeriant asserts causes of action including breach of contract, fraud, unjust enrichment, and misappropriation of confidential
information. It seeks damages in excess of $500 million, injunctive relief, a royalty obligation, and other equitable relief. On March
13, 2024, Legacy XTI moved to dismiss portions of the second amended complaint. The Court denied that motion on January 14, 2025. Legacy
XTI filed an answer on January 28, 2025, and subsequently filed an amended answer and counterclaims on February 18, 2025.