Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 341

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 341
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 Board of Directors exercised reasonable judgment and considered a number of objective and
                                            subjective factors to determine the best estimate of the fair market value, which included
                                            important developments in Legacy XTI’s operations, actual operating results, financial
                                            performance, external market conditions, equity market conditions of comparable public companies,
                                            and the lack of marketability of Legacy XTI’s common stock.

●Expected
                                            Term – The Company’s expected term represents the period that the Company’s
                                            stock-based awards are expected to be outstanding and is determined using the simplified
                                            method (based on the mid-point between the vesting date and the end of the contractual term).

●Expected
                                            Volatility – Because Legacy XTI was privately held prior to the XTI Merger and
                                            did not have an active trading market for its common stock, the expected volatility was estimated
                                            based on the average volatility for publicly traded companies that the Company considers
                                            to be comparable, over a period equal to the expected term of the stock option grants.

●Risk-Free
                                            Interest Rate – The risk-free interest rate is based on the U.S. Treasury zero
                                            coupon issues in effect at the time of grant for periods corresponding with the expected
                                            term of option.

●Expected
                                            Dividend – The Company has never paid dividends on its common stock and has no
                                            plans to pay dividends on its common stock. Therefore, the Company used an expected dividend
                                            yield of zero.

F-16

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

Net
Loss Per Share

Net
loss per share attributable to common stockholders is computed using the two-class method required for multiple classes of common stock
and participating securities. The Company’s participating securities included the Company’s convertible preferred stock and
preferred stock. Neither the holders of convertible preferred stock, preferred stock nor the holders of the Company’s common stock
warrants have a contractual obligation to share in losses.

Basic
net loss per share attributable to common stockholders is calculated by dividing the net loss, as adjusted for any dividends on the preferred
stock for the period, attributable to common stockholders by the weighted-average number of shares of common stock outstanding during
the period, adjusted for outstanding shares that are subject to repurchase or outstanding shares that are contingently returnable by
the holder.