Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 307

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 2
Chunk 307
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 prior
to the closing of the PIPE Offering, Unusual Machines advanced to the Company $10,500,000 (the “Advance”), which was automatically
applied to the Subscription Amount at the closing of the PIPE Offering. The Company used the Advance to satisfy certain obligations under
Drone Nerds’ and Anzu Robotics’ $25.0 million secured line of credit established pursuant to and evidenced by that certain
Loan Agreement, dated July 10, 2025, by and among Drone Nerds Inc, Anzu Robotics, LLC and Banesco USA (the “Banesco Loan Agreement”),
and the other Loan Documents (as defined in the Banesco Loan Agreement).

The issuance of shares of
common stock upon conversion of, or as a dividend on, the Series 10 Preferred Stock is subject to the Company’s receipt of its shareholders’
approval of the removal of the limitations on conversion set forth in the Certificate of Designation of the Series 10 Preferred Stock,
in compliance with Nasdaq Listing Rule 5635 (the “Shareholder Approval”, and the date the Shareholder Approval is obtained,
the “Shareholder Approval Date”). Pursuant to the PIPE Purchase Agreement, the Company agreed to hold an annual or special
meeting of shareholders no later than January 31, 2026 (the “Shareholder Meeting Deadline”), for the purpose of obtaining
such Shareholder Approval. If Shareholder Approval is not obtained on or prior to the Shareholder Meeting Deadline, the Company is required
to call a special or annual meeting of shareholders 180 days thereafter until such Shareholder Approval is obtained, provided, however,
that such obligation will terminate on the two year anniversary of the closing date of the PIPE Offering.

On the Shareholder Approval
Date, the Series 10 Preferred Stock will automatically convert into shares of common stock. To the extent not converted in connection
with a mandatory conversion, the Series 10 Preferred Stock will be convertible into common stock, from and after the Shareholder Approval
Date, at the option of the holder.

Each outstanding share of
Series 10 Preferred Stock is entitled to receive, in preference to shares of Junior Securities (as defined in the Certificate of Designation),
cumulative dividends (“Preferential Dividends”), payable quarterly in arrears, at an annual rate of 12.0% of the Stated Value.
The Preferential Dividends will be payable, at the option of the Company, either in-kind in shares of common stock, through an