Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 62

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 62
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TI Drones, LLC, acquired 100%
of the issued and outstanding equity interests of two enterprise drone solutions providers, Drone Nerds, LLC (“Drone Nerds”),
a Florida limited liability company, and Anzu Robotics, LLC (“Anzu Robotics”), a Delaware limited liability company (the “Acquisition”)
for total purchase consideration of $40.0 million, which was comprised of $20.0 million in cash, $11.9 million in the form of two promissory
notes (including approximately $1.6 million in working capital adjustments), and $9.7 million in the form of equity consideration, specifically
an aggregate of 6,524,576  Class B Units of XTI Drones Holdings (the “Class B Units”).

 Drone Nerds is one of the largest drone distributors
and solutions providers in the United States. Drone Nerds specializes in the wholesale, retail and e-commerce sale of advanced drone systems
and related technologies serving commercial, governmental, and consumer markets, including public safety, construction, energy, and agriculture.
The company operates both an online sales platform and a retail location in South Florida and maintains one of the largest drone inventories
in the U.S., representing over 30 leading brands. Through its nationwide network of sales, marketing, and service professionals, Drone
Nerds delivers comprehensive enterprise drone solutions that improve operational performance and data-driven decision-making for its customers.

The Class B Units of XTI Drones Holdings are exchangeable
at any time after May 1, 2026 for shares of the Company’s common stock on a one-for-one basis, provided that such exchange ratio
is subject to equitable adjustments for stock splits, stock dividends, reclassifications and similar transactions affecting the Company’s
common stock. In addition, on the date that is 15 months after November 10, 2025, all outstanding Class B Units will automatically be
exchanged for shares of the Company’s common stock on a one-for-one basis, subject to the foregoing adjustments. The Drone Nerds
and Anzu Robotics sellers entered into lock-up agreements pursuant to which they agreed not to, without the Company’s prior consent,
sell, transfer or dispose of any shares of common stock until November 10, 2026. Following the exchange of all outstanding Class B Units
into shares of common stock, XTI Drones, LLC will own 100% of the membership interests of XTI Drones Holdings, and Drone Nerds