Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 370

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 370
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 at reduced exercise prices from the original option agreements. The net impact of these option
inducements to the condensed consolidated statement of operations was not material. In total, 1,038,871 stock options granted under
the 2017 Plan were net exercised into pre-exchange common shares of Legacy XTI immediately prior to the XTI Merger closing time, which
resulted in the issuance of 371 post-merger exchange and post 1-for-250 reverse split common shares.

F-32

XTI
AEROSPACE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Stock-based
Compensation Expense

The
Company incurred the following stock-based compensation charges for the periods indicated below (in thousands):

    Year
    Ended December 31, 

    2024  
    2023 
  
    Employee
    and consultant stock options1 
    $(1,798) 
    $1,645 
  
    Professional fees1 
     270  
     — 
  
    Vesting
    of previously unvested warrants2 
     496  
     — 
  
    Merger-related
    professional fees2 
     5,153  
     — 
  
    Total 
    $4,121  
    $1,645 

1amount included in general and administrative expenses on the consolidated statements of operations

2amount included in merger-related transaction costs on the consolidated statements of operations

As
of December 31, 2024, the total unrecognized compensation expense related to unvested awards was approximately $5.8 million, which
the Company expects to recognize over an estimated weighted average period of 1.78 years.

Stock-based
Compensation Related to Professional Fees

On
July 31, 2024, the Company entered into an advisory agreement with a third-party advisor, pursuant to which the Company issued 4,000 shares
valued at approximately $0.3 million of restricted common stock to the advisor in consideration for financial advisory and business
development services agreed to be rendered to the Company pursuant to the agreement.

Stock-based
Compensation Related to the XTI Merger

Shares
of Legacy XTI common stock were issued to Scott Pomeroy, Chief Executive Officer of the Company and former CFO and board