Company: XTIA
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001213900-25-045396
Chunk: 227

Company: XTI Aerospace, Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 2
Chunk 227
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 $6,050,000
issued by Xeriant to Auctus, including the obligation to repay Auctus all principal and accrued and unpaid interest thereunder, which
Auctus claims was $8,435,008.81 as of April 3, 2024. In July 2024, Legacy XTI responded to such letter and indicated that it believes
that the May 17 letter is invalid and unenforceable on several bases. It further explained that even if it were valid and enforceable,
Legacy XTI does not believe such letter resulted in, or otherwise triggered, the assumption of obligations of Xeriant under the Senior
Secured Promissory Note or any other obligation on the part of Legacy XTI. There have been no further developments on this matter. We
are unable to make a reasonable estimate of a potential loss, if any, on this matter. To the extent suits or actions are commenced with
respect to this matter, we intend to vigorously defend against any and all claims.

On or about August 1, 2024,
Chardan Capital Markets LLC (“Chardan”) commenced an arbitration (the “Arbitration”) before FINRA against the
Company and its subsidiary, XTI Aircraft Company (“Aircraft”).  Aircraft and Chardan are parties to an engagement letter
agreement (the “Agreement”).  In the Arbitration, Chardan originally alleged that the Company was bound by the Agreement
even though it did not sign the Agreement, which the Company denied.   Chardan further alleged that Aircraft and the Company
breached the Agreement by not making separate payments to Chardan of $200,000, $94,511, $484,044.40 and $174,000.  Chardan also
sought to recover unspecified amounts relating to an alleged right of first refusal to perform banking services (the “ROFR”)
that the Company supposedly did not honor, including with respect to an At-The-Market securities offering that was underwritten by The
Maxim Group LLC (the “ATM”).  The Company filed a petition in the U.S. District Court for the Southern District of New
York (the “Court”) seeking to stay the Arbitration to the extent that it was asserted against the Company. On or about January
21, 2025, the Court entered a final judgment that: (a) enjoins Chardan from prosecuting the Arbitration