XTI Aerospace Inc

a) The information set forth below is included herein for the purpose of voluntarily providing disclosure under "Item 3.02 - Unregistered Sales of Equity Securities.” of Form 8-K.

On August 6, 2024, the Company entered into an exchange agreement with a holder of shares of the Company’s Series 9 Preferred Stock pursuant to which the Company and the holder agreed to exchange 225 shares of Series 9 Preferred Stock with an aggregate stated value of $236,250 (the “Preferred Shares”) for 1,133,093 shares of common stock (the “Exchange Shares”) at an effective price per share of $0.2085. The Company issued the Exchange Shares to the holder on August 7, 2024, at which time the Preferred Shares were cancelled. The Exchange Shares were issued in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act, on the basis that (a) the Exchange Shares were issued in exchange for other outstanding securities of the Company, (b) there was no additional consideration delivered by the holder in connection with the exchange and (c) there were no commissions or other remuneration paid by the Company in connection with the exchange.

As of August 14, 2024, the Company had 35,380,840 shares of common stock outstanding. Because the Exchange Shares constitute less than 5% of the Company’s outstanding common stock, the disclosure under this Item 3.02 is being disclosed voluntarily.

c) Insider trading arrangements

None of the Company’s directors or officers adopted, modified orterminated a Rule 10b-5 trading arrangement or a non-Rule 10b-5 trading arrangement during the fiscal quarter ended June 30, 2024, as such terms are defined under Item 408(a) of Regulation S-K.