Company: XTIA
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001213900-25-045396
Chunk: 140

Company: XTI Aerospace, Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 8
Chunk 140
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 accompanying condensed consolidated
balance sheets. Subsequent to March 31, 2025, the deposit balance of approximately $0.5 million was returned to the Company. As of the
date of this report, neither Mr. Brody nor Mr. Pomeroy has received, and neither is entitled to receive, any compensation or other consideration
from AVX, in connection with services provided by AVX to the Company or otherwise.

On April 18, 2025, XTI Aircraft Company entered into
a novation agreement with AVX and a recruiting firm, pursuant to which AVX assigned to XTI Aircraft Company all of AVX’s rights
and obligations under a talent acquisition engagement agreement with the recruiting firm and, as a result, the recruiting firm will assist
XTI Aircraft Company in hiring an executive for expected fees of approximately $0.1 million.

Agreements
with Nadir Ali

On March 12, 2024, the Company entered into a consulting agreement
with Nadir Ali (the “Ali Consulting Agreement”), the Company’s former Chief Executive Officer. Mr. Ali, through 3AM,
held shares of the Company’s Series 9 Preferred Stock as disclosed in Note 11.

32

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended March 31, 2025 and
2024, the Company recognized compensation expense of approximately $2.3 million and $0, respectively, which is included in general and
administrative expenses on the condensed consolidated statements of operations, relating to the Ali Consulting Agreement. As of December
31, 2024, the Company owed Mr. Ali accrued consulting fees of approximately and $0.2 million, which is included in accounts payable on
the accompanying consolidated balance sheets and was repaid during the quarter ended March 31, 2025.

Pursuant to the Settlement Agreement (see “Settlement Agreement”
below in this note), as of March 31, 2025, the Company owed Mr. Ali accrued consulting fees of approximately $1.5 million, which is included
in accounts payable on the accompanying condensed consolidated balance sheets.

On July 24, 2023, the compensation committee of
the Board (the “Compensation Committee”) of Legacy Inpixon adopted a Strategic Transaction Bonus Plan, which was amended on
March 11, 2024, and was intended to