Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 137

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 137
---
 the Company’s common stock under its “at-the-market” offering program (the “ATM”) through Maxim,
as the Company’s exclusive sales agent, up to a maximum offering amount of approximately $83.3 million, pursuant to that certain
Equity Distribution Agreement, dated as of July 22, 2022, by and between the Company and Maxim, as amended from time to time (the “Equity
Distribution Agreement”). The term of the Equity Distribution Agreement expired on December 31, 2024. Maxim was entitled to compensation
at a fixed commission rate of 3.0% of the gross sales price per share sold excluding Maxim’s costs and out-of-pocket expenses incurred
in connection with its services, including the fees and out-of-pocket expenses of its legal counsel.

During the year ended December 31, 2024, the Company
sold 998,447 shares of common stock under the Equity Distribution Agreement at per share prices between approximately $10.02 and $337.36,
resulting in net proceeds to the Company of approximately $22.2 million.

F-26

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

Note
Conversion

Immediately prior to the effective time of the
XTI Merger on March 12, 2024, certain convertible notes (collectively classified as “convertible notes, at fair value”) with
an aggregate principal and interest balance of $16.8 million were converted into Legacy XTI shares, which converted into an aggregate
of 3,005 shares of the Company’s common stock at the effective time of the XTI Merger. Immediately prior to the conversion,
the convertible notes, at fair value were marked to market resulting in a gain of $12.9 million, which is included in change in
fair value of convertible notes payable in the other income and expense section of the consolidated statements of operations. As a result
of the conversions, the notes were satisfied in full and therefore relieved the Company of all obligations.

Note
Inducements

To
induce certain note holders to convert their outstanding note balances into shares of Legacy XTI common stock ahead of the XTI Merger,
Legacy XTI entered into voluntary note conversion letter agreements in February 2024 as detailed in the below table. Per the letter agreements,
some