XTI Aerospace Acquires Stratos Jet Group Assets

TL;DR

XTI Aero just bought Stratos Jet Group assets, big move for their aerospace game.

AI Summary

XTI Aerospace, Inc. announced on March 11, 2024, the completion of its acquisition of the assets of Stratos Jet Group, LLC. This transaction is expected to significantly expand XTI's capabilities in the aerospace sector. The filing also details changes in the company's control and executive compensation arrangements.

Why It Matters

This acquisition marks a significant strategic move for XTI Aerospace, potentially enhancing its market position and operational capacity within the aerospace industry.

Risk Assessment

Risk Level: medium — Acquisitions carry inherent integration risks and the financial impact on XTI Aerospace is yet to be fully realized.

Key Players & Entities

• XTI Aerospace, Inc. (company) — Registrant
• Stratos Jet Group, LLC (company) — Acquired entity
• 20240311 (date) — Completion date of acquisition

FAQ

Key Financial Figures

• $7,535,701 — l to an aggregate outstanding amount of $7,535,701, into shares of XTI common stock immedi
• $51,658 — aining principal and interest amount of $51,658, were assumed by the Company at the Eff
• $175,000 — ly prior to the Effective Time, all but $175,000 of the total principal and accrued inte
• $175,000 b — em 5.02 of this Form 8-K. The remaining $175,000 became payable in cash by XTI upon consum
• $9,801,521 — er 2023 Note in the aggregate amount of $9,801,521 for 9,801.521 shares of Series 9 Prefer
• $1,000 — ed Stock, based on an exchange price of $1,000 per share of Series 9 Preferred Stock.
• $1,500,000, b — red Stock for a total purchase price of $1,500,000, based on a purchase price of $1,000 per s
• $20,000 — e Company will pay him a monthly fee of $20,000. If the Company terminates the Ali Cons
• $1,500,000 — any shall pay Mr. Ali (a) the amount of $1,500,000 due three months following the Closing,
• $4,500,000 — losing, and (b) the aggregate amount of $4,500,000, payable in 12 equal monthly installmen
• $375,000 — ble in 12 equal monthly installments of $375,000 each, starting four months after the Ef
• $83,333 — services, the Company will pay her (i) $83,333 per month for the first six months of t
• $300 — ndermon Consulting Agreement), and (ii) $300 per hour for services performed on an a
• $60,000 — 022, XTI paid Mr. Brody compensation of $60,000 and 100,000, respectively, and owed Mr.
• $320,000 — owed Mr. Brody accrued compensation of $320,000 and $260,000, respectively, under Mr. B

Filing Documents

• ea0201784-8k_xtiaero.htm (8-K) — 95KB
• ea020178401ex3-1_xtiaero.htm (EX-3.1) — 73KB
• ea020178401ex3-2_xtiaero.htm (EX-3.2) — 3KB
• ea020178401ex3-3_xtiaero.htm (EX-3.3) — 2KB
• ea020178401ex3-4_xtiaero.htm (EX-3.4) — 9KB
• ea020178401ex10-1_xtiaero.htm (EX-10.1) — 29KB
• ea020178401ex10-2_xtiaero.htm (EX-10.2) — 31KB
• ea020178401ex10-3_xtiaero.htm (EX-10.3) — 145KB
• ea020178401ex10-4_xtiaero.htm (EX-10.4) — 93KB
• ea020178401ex10-5_xtiaero.htm (EX-10.5) — 86KB
• ea020178401ex10-6_xtiaero.htm (EX-10.6) — 51KB
• ea020178401ex10-7_xtiaero.htm (EX-10.7) — 13KB
• ea020178401ex10-8_xtiaero.htm (EX-10.8) — 13KB
• ea020178401ex10-9_xtiaero.htm (EX-10.9) — 66KB
• ea020178401ex10-10_xtiaero.htm (EX-10.10) — 10KB
• ex3-2_001.jpg (GRAPHIC) — 2779KB
• ex3-2_002.jpg (GRAPHIC) — 1929KB
• ex3-2_003.jpg (GRAPHIC) — 1395KB
• ex3-3_001.jpg (GRAPHIC) — 2438KB
• ex3-3_002.jpg (GRAPHIC) — 2011KB
• 0001213900-24-023130.txt ( ) — 15647KB
• xtia-20240311.xsd (EX-101.SCH) — 3KB
• xtia-20240311_def.xml (EX-101.DEF) — 26KB
• xtia-20240311_lab.xml (EX-101.LAB) — 36KB
• xtia-20240311_pre.xml (EX-101.PRE) — 25KB
• ea0201784-8k_xtiaero_htm.xml (XML) — 5KB

01 Entry

Item 1.01 Entry into a Material Definitive Agreement. The information contained in the Introductory Note of this Current Report on Form 8-K is incorporated by reference herein to the extent required to be disclosed under this Item 1.01. Second Amendment to Merger Agreement On March 12, 2024, the Company, Merger Sub and XTI entered into a Second Amendment to Merger Agreement (the "Merger Agreement Amendment"). The Merger Agreement Amendment amended the original Merger Agreement, as amended by the First Amendment to Merger Agreement dated December 30, 2023, to provide, among other things, (i) adjustments for the issuance of shares of the Company's newly designated non-convertible Series 9 preferred stock ("Series 9 Preferred Stock") to the Note Holder (as defined below) in the exchange ratio calculation and (ii) the extension of the deadline to file a resale registration statement covering the shares issued in the Merger that were not registered on the Company's registration statement on Form S-4 filed in connection with the Merger to ten business days after the Company files its Form 10-K for the year ended December 31, 2023. The foregoing description of the Merger Agreement Amendment does not purport to be complete and is qualified in its entirety by the full text of the Second Amendment to Merger Agreement, which is filed as Exhibit 10.1 to this current report on Form 8-K and is incorporated herein by reference. 1 Exchange Agreement On March 12, 2024, the Company and Streeterville Capital, LLC (the "Note Holder"), the holder of an outstanding promissory note issued on December 30, 2023 (as amended, the "December 2023 Note"), entered into an Exchange Agreement, pursuant to which the Note Holder exchanged the remaining balance of principal and accrued interest under the December 2023 Note in the aggregate amount of $9,801,521 for 9,801.521 shares of Series 9 Preferred Stock, based on an exchange price of $1,000 per share of Series 9 Preferred Stock. Followi

01 Completion

Item 2.01 Completion of Acquisition or Disposition of Assets. The information contained in the Introductory Note and Item 1.01 of this current report on Form 8-K is incorporated by reference herein to the extent required to be disclosed under this Item 2.01.

02 Unregistered

Item 3.02 Unregistered Sales of Equity Securities. The information contained in the Introductory Note, Item 1.01, Item 5.02 and Item 5.03 of this current report on Form 8-K is incorporated by reference herein to the extent required to be disclosed under this Item 3.02. The offer and sale of 2,182,403 shares of common stock pursuant to the Merger Agreement to stockholders of XTI that executed a written consent of the majority stockholders of XTI approving the Merger, and the offer and sale of shares of Series 9 Preferred Stock to the Purchaser pursuant to the Securities Purchase Agreement, have been conducted in reliance on an exemption from registration provided by Section 4(a)(2) of the Securities Act on the basis that such XTI stockholders and the Purchaser are accredited investors and the Company did not engage in any general solicitation in connection with such offer and sale. In addition, the issuance of shares of Series 9 Preferred Stock to the Note Holder has been conducted in reliance on an exemption from registration under Section 3(a)(9) of the Securities Act, on the basis that (a) the shares of Series 9 Preferred Stock were issued in exchange for the December 2023 Note issued by the Company; (b) there is no additional consideration being delivered by the Note Holder in connection with the exchange; and (c) there are no commissions or other remuneration being paid in connection with the exchange. 4

03 Material

Item 3.03 Material Modifications to Rights of Security Holders To the extent required by Item 3.03 of Form 8-K, the information regarding the Reverse Stock Split and the Certificate of Designation contained in Item 5.03 of this current report on Form 8-K is incorporated by reference herein.

01 Changes

Item 5.01 Changes in Control of Registrant. The information contained in the Introductory Note, Item 1.01 and Item 5.02 of this current report on Form 8-K is incorporated by reference herein to the extent required to be disclosed under this Item 5.01. As a result of the Merger, a change in control of the Company has occurred, and XTI is now a wholly owned subsidiary of the Company. Following the issuance of shares under the Merger Agreement, Inpixon security holders immediately prior to the Effective Time retained beneficial prior to the Effective Time acquired beneficial ownership of shares of common stock amounting to approximately 75% of the outstanding common stock of the Company on a fully-diluted basis.

02 Departure

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers The information contained in Item 1.01 of this Current Report on Form 8-K relating to arrangements with Mr. Ali and Ms. Loundermon is incorporated by reference herein to the extent required to be disclosed under this Item 5.02. Director and Officer Appointments; Board Composition In connection with the consummation of the Merger and as contemplated by the Merger Agreement, as of the Effective Time, Mr. Nadir Ali and Ms. Wendy Loundermon resigned as Chief Executive Officer and Chief Financial Officer of the Company, respectively. Following their resignations, the board of directors of the Company (the "Board") appointed Mr. Scott Pomeroy as Chief Executive Officer of the Company and Ms. Brooke Martellaro as Chief Financial Officer of the Company. Also at the Effective Time, Messrs. Nadir Ali and Tanveer Khader and Ms. Wendy Loundermon resigned as directors of the Company. These resignations were not because of a disagreement with the Company on any matter relating to the Company's operations, policies or practices. Following the foregoing resignations, the Board appointed Messrs. Scott Pomeroy, Soumya Das and David Brody as directors to the Board. Messrs. Kareem Irfan and Leonard Oppenheim continue to serve on the Board following the Closing. Mr. Brody has also been appointed to the Company's Audit Committee, its Compensation Committee and its Nominating and Corporate Governance Committee, effective as of the Effective Time. The Board determined that Mr. Brody is independent within the meaning of Nasdaq Listing Rule 5605(a)(2). Messrs. Oppenheim and Irfan will continue to serve on the Company's Audit Committee and Mr. Irfan will continue to serve on the Company's Compensation Committee. Information about the business experience of Messrs. Pomeroy, Das and Brody and Ms. Martellaro are described in the proxy

03. Amendments

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year Certificate of Designation for Series 9 Preferred Stock On March 12, 2024, the Company filed the Certificate of Designations of Preferences and Rights of Series 9 Preferred Stock (the "Certificate of Designation"), with the Secretary of State of Nevada, designating 20,000 shares of preferred stock, par value $0.001 of the Company, as Series 9 Preferred Stock. Each share of Series 9 Preferred Stock has a stated face value of $1,050.00 ("Stated Value"). The Series 9 Preferred Stock is not convertible into shares of common stock of the Company. Each share of Series 9 Preferred Stock will accrue a rate of return on the Stated Value in the amount of 10% per year, compounded annually to the extent not paid, and pro rata for any fractional year periods (the "Preferred Return"). The Preferred Return will accrue on each share of Series 9 Preferred Stock from the date of issuance and shall be payable on a quarterly basis, either in cash or through the issuance of an additional number of shares of Series 9 Preferred Stock equal to (i) the Preferred Return then accrued and unpaid, divided by (ii) the Stated Value, at the Company's discretion. 6 Commencing on the one-year anniversary of the respective issuance date of each share of Series 9 Preferred Stock, each such share of Series 9 Preferred Stock shall accrue an automatic quarterly dividend, based on three quarters of 91 days each and the last quarter of 92 days (or 93 days for leap years), which shall be calculated on the Stated Value of such share of Series 9 Preferred Stock, and which shall be payable in additional shares of Series 9 Preferred Stock, based on the Stated Value, or in cash as set forth in the Certificate of Designation (each, as applicable, the "Quarterly Dividend"). For the period beginning on the one-year anniversary of the issuance date of a share of Series 9 Preferred Stock to the two-year anniversary of the issua

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