Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 58

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 58
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 complaint plausibly stated claims for relief under Colorado’s notice-pleading standard. The court further denied
XTI’s alternative request for a stay, reasoning that the parties were not identical to those in the federal action and therefore
comity and judicial economy did not warrant a stay. The court nonetheless directed the parties to update it regarding the outcome of the
federal case to the extent it may be dispositive of overlapping issues. Legacy XTI’s answer to the complaint is due November 21,
2025.

The Company will continue to vigorously defend
against the claims but cannot predict the timing or outcome of the proceedings or estimate any potential exposure.

No accrual has been recorded for the Xeriant and Auctus matters as
at this time, management cannot reasonably estimate the possible loss or range of loss. Should circumstances change, the Company will
record an accrual in the period such determination is made.

Settlement Agreement with Chardan

On or about August 1, 2024, Chardan Capital Markets
LLC (“Chardan”) commenced an arbitration (the “Arbitration”) before the Financial Industry Regulatory Authority
against the Company and Legacy XTI, related to an engagement letter, dated as of June 7, 2022, by and between Chardan and Legacy XTI,
as amended (the “Engagement Letter”). On or about June 13, 2025, Legacy XTI filed a counterclaim against Chardan for breach
of contract.

On July 8, 2025, Chardan, on the one hand, and
the Company and Legacy XTI, on the other hand, entered into a settlement agreement (the “Chardan Settlement Agreement”), pursuant
to which the parties agreed to resolve and settle all claims and matters between them. Pursuant to the Chardan Settlement Agreement, simultaneous
with the execution thereof, (i) Chardan, the Company and Legacy XTI entered into a mutual release, pursuant to which, Chardan, on the
one hand, and the Company and Legacy XTI, on the other hand, released each other from all claims against each other, including all claims
related to the Arbitration, and (ii) counsel for the parties executed a joint stipulation whereby Chardan and Legacy XTI agreed to dismiss
with prejudice all claims asserted against each other with respect to the Arbitration, which was filed in the Arbitration. None of the
parties made any payments