Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 305

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 2
Chunk 305
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 groundwork for an innovative family of versatile aircraft and solutions addressing passenger travel,
logistics, autonomous operations and defense missions that we believe will unlock significant growth and market leadership.

Expanding into autonomous,
remotely operated drones via the acquisition of Drone Nerds was key to our strategic focus. By combining drone technology with VTOL innovation,
we believe we are positioning the Company to accelerate the development of both unmanned aerial vehicles and VTOL solutions, expand its
market presence, and create new revenue-generating opportunities across multiple industries. We will also be opportunistic and may consider
other strategic transactions, which may include, but not be limited to, other alternative investment opportunities, such as minority investments
and joint ventures. If we make any acquisitions in the future, we expect that we may pay for such acquisitions with cash, equity securities
and/or debt in combinations appropriate for each acquisition.

Recent Events

Acquisitions of Drone Nerds and Anzu Robotics

On November 10, 2025, XTI Drones Holdings, LLC,
a Texas limited liability company (“XTI Drones Holdings”) and a subsidiary of our wholly-owned subsidiary, XTI Drones, LLC,
acquired 100% of the issued and outstanding equity interests of two enterprise drone solutions providers, Drone Nerds (as defined above)
and Anzu Robotics, LLC, a Delaware limited liability company (“Anzu Robotics”), pursuant to the terms of two separate membership
interest purchase agreements (such transactions, respectively, the “Drone Nerds Acquisition” and the “Anzu Robotics
Acquisition” and collectively, the “Acquisitions”), in exchange for aggregate consideration consisting of (i) approximately
$20.0 million in cash, (ii) approximately $11.9 million in the form of two promissory notes (including approximately $1.6 million in working
capital adjustments) and (iii) an aggregate of 6,524,576 Class B Units of XTI Drones Holdings (the “Class B Units”) with a
fair market value of approximately $9.7 million. The aggregate purchase price for each Acquisition is subject to customary post-closing
adjustments.

The Class B Units of XTI Drones
Holdings are exchangeable at any time after May 1, 2026 for shares of the Company’s common stock on a one-for-one basis, provided
that such exchange ratio is subject to equitable adjustments for stock splits, stock dividends, reclassifications and similar transactions
affecting the Company’s common stock. In