Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 74

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 74
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 addition to the other aforementioned
agreements. Xeriant, in the second amended complaint, asserts the following causes of action: (1) breach of contract; (2) intentional
fraud; (3) fraudulent concealment; (4) quantum meruit; (5) unjust enrichment; (6) unfair competition/deceptive business practices; and
(7) misappropriation of confidential information, and seeks damages in excess of $500 million, injunctive relief enjoining us from engaging
in any further misconduct, the imposition of a royalty obligation, and such other relief as deemed appropriate by the court. On March
13, 2024, Legacy XTI moved for partial dismissal of the second amended complaint. On January 14, 2025, the Court denied Legacy XTI’s
motion to dismiss the complaint. On January 28, 2025, Legacy XTI filed an answer to the second amended complaint. On January 28, 2025,
Legacy XTI filed an amended answer and counterclaims against Xeriant. The counterclaims assert that Xeriant (1) breached the joint venture
agreement by failing to pay $4,600,000 to fund development of the TriFan 600 technology, and (2) breached its fiduciary duty to XTI by
engaging in bad faith, coercion, and self-dealing, including by appropriating material information for its own use and concealing from
Legacy XTI the identity of a potential strategic partner. On March 18, 2025, Xeriant moved for dismissal of Legacy XTI’s counterclaims.
The case is in its early stages of discovery, and we are unable to estimate the likelihood or magnitude of a potential adverse judgment.
Legacy XTI nevertheless denies the allegations of wrongdoing contained in the second amended complaint and is vigorously defending against
the lawsuit.

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 certain payments to Chardan. Ch