Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 585

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 585
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 Preferred Stock pursuant to which the Company and the holder agreed to exchange 9,790 shares of Series 9 Preferred Stock with an aggregate
stated value of $10,279,500 (the “Preferred Shares”) for 441,391 shares of common stock (the “Preferred Exchange Shares”)
at an effective price per share ranging from $10.00 to $740.00.

The
Company issued the Preferred Exchange Shares to the holder, at which time the Preferred Shares were cancelled. The Preferred Exchange
Shares were issued in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act, on the basis that
(a) the Preferred Exchange Shares were issued in exchange for other outstanding securities of the Company, (b) there was no additional
consideration delivered by the holder in connection with the exchange and (c) there were no commissions or other remuneration paid by
the Company in connection with the exchange. The Company notes that the redemption of the Preferred Shares to Common Stock was accounted
for as an extinguishment. During the year ended December 31, 2024, the Company recognized a deemed dividend of $489,506. The deemed
dividends represented the excess fair value of the common shares issued over the carrying amount of the Preferred Shares and were accounted
for as a reduction to additional paid-in capital.

Accrued
Return Conversion to Series 9 Preferred Stock

During
the year ended December 31, 2024, Streeterville and 3AM converted the 10% rate of return that had accrued through December 2024 into
457.00 and 118.82 shares of Series 9 Preferred Stock, respectively.

Series
9 Preferred Stock Redemptions

On
November 17, 2024, the Company entered into a Consent, Waiver and Release Agreement (the “Consent Agreement”) with 3AM
and Streeterville, each as a Required Holder, pursuant to which the Series 9 Holders authorized the Company to raise up to an additional
$5,000,000 under the ATM (the “ATM Increase”) in consideration for the Company’s agreement to pay 20% of the proceeds
it receives from sales under the ATM in connection with the ATM Increase (the “Redemption Proceeds”) to the Series 9
Holders to redeem a portion of their Series 9 Preferred Stock, to be distributed as follows: (i) 75% of the Redemption Proceeds
to