Company: XTIA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076767
Chunk: 57

Company: XTI Aerospace, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 57
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 Auctus’s
claims, asserting that the May 17 letter is invalid and unenforceable on multiple grounds. Legacy XTI further stated that, even if the
May 17 letter were enforceable, it did not create or trigger any obligation for Legacy XTI to assume Xeriant’s debt under the Note
or otherwise.

On May 13, 2025, Auctus filed a lawsuit against
Legacy XTI in the District Court of Arapahoe County, Colorado, asserting a single claim for breach of contract based on its prior allegations.
Auctus contends that Legacy XTI is contractually obligated to repay nearly $9 million in principal and accrued interest, based on Legacy
XTI’s entry into a loan agreement with Legacy Inpixon in March 2023 and its subsequent merger with Legacy Inpixon in March 2024.

On June 25, 2025, Legacy XTI filed a motion to dismiss or, in the alternative,
to stay the proceedings pending resolution of the Xeriant litigation. Legacy XTI’s motion asserts that Auctus’ complaint should
be dismissed: (i) for lack of standing, because Auctus is neither a party to, nor a third-party beneficiary of, the May 17 letter; (ii)
for failure of a condition precedent, because no obligation ever arose in that the alleged triggering condition—a business combination
involving Legacy XTI and Legacy Inpixon did not occur within the required one-year time frame; (iii) for lack of valid assignment, because
Xeriant’s unilateral assignment of debt to Legacy XTI is void because the underlying Note prohibits assignment without Auctus’s
prior written consent, which is not alleged.

On August 5, 2025, Auctus filed a response arguing that it was an intended
third-party beneficiary of the May 17 letter, that the anti-assignment clause does not bar its claims, and that the request for a stay
is unwarranted because the Xeriant litigation involves different parties and broader claims. Legacy XTI believes it has strong counterarguments
and will file a reply in further support of its motion to dismiss or stay.

The litigation remains in the early stages of
discovery. The Company believes that the claims asserted by Auctus are without merit and intends to vigorously defend against the lawsuit.
As of the date of this filing, the Company is unable to predict the outcome of this matter or determine the likelihood or magnitude of