XTI Aerospace, Inc.

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, 2026, as such terms are defined under Item 408(a) of Regulation S-K.

The information set forth below is included herein for the purpose of providing the disclosure required under “Item 1.01. Entry into a Material Definitive Agreement” and“Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant” of Form 8-K.

Limited Waiver Agreements

On October 16, 2026, XTI Drones Holdings, LLC (“XTI Drones Holdings”), our majority-owned subsidiary, entered into Limited Waiver Agreements, dated as of October 16, 2026 (the “Waivers”) with The Origin Group DN, Inc. and The Origin Group AZ, Inc. (together, the “Holders”), the holders of the promissory notes issued by XTI Drones Holdings on November 10, 2025 in connection with its acquisition of Drone Nerds, LLC and Anzu Robotics, LLC (the “Seller Notes”). Jeremy Schneiderman, our Interim Chief Executive Officer, serves as chief executive officer of, and has an economic interest in, the Holders, which also hold 6,524,576 Class B Units of XTI Drones Holdings. On September 30, 2026, XTI Drones Holdings did not make scheduled principal payments under the Seller Notes totaling $1.5 million, together with accrued interest, that were due on September 30, 2026, and events of default occurred under the Seller Notes on October 11, 2026, following the expiration of the ten-day grace period. Under the Waivers, the Holders agreed, during a waiver period that began on September 30, 2026, not to accelerate the Seller Notes, charge default interest, charge costs of collection or exercise other remedies as a result of the missed payments, and agreed that nonpayment of the balance due at maturity on November 10, 2026 will not constitute an event of default during the waiver period. The waiver period ends on the earliest of (i) the execution of definitive documents restructuring the Seller Notes, (ii) the tenth day after either party notifies the other in writing that it is ending restructuring negotiations and (iii) December 31, 2026. If the waiver period ends without a restructuring, an event of default will be deemed to exist, and the missed installments and the remaining balance of the Seller Notes (approximately $4.5 million of principal in the aggregate), together with accrued interest, which will have accrued at the default rate of 9.25% per annum from October 10, 2026, will become due on the last day of the waiver period. The Waivers do not address the cross-defaults and other events of default under our credit facility with JPMorgan Chase Bank, N.A. that resulted from the missed payments, which have not been waived. The Waivers were reviewed and approved by the Audit Committee of our Board of Directors. The foregoing description is qualified in its entirety by reference to the Waivers, copies of which are filed as Exhibits 10.9 and 10.10 to this Quarterly Report and incorporated herein by reference.

Sale of Note Receivable

On October 19, 2026, the Company entered into a Consent, Exchange and Amendment Agreement with Valkyrie Sciences Holdings, LLC and Valkyrie Andromeda Corporation (collectively, "Valkyrie"), and Reliable Equity, LLC (the “Purchaser”), and an Amended and Restated Convertible Promissory Note with Valkyrie Sciences Holdings, LLC, pursuant to which the Company agreed to sell to the Purchaser $1.0 million in principal amount of the $2.0 million convertible promissory note issued to the Company by Valkyrie for a purchase price of $1.0 million in cash. There is no relationship between Valkyrie and the Purchaser. In connection with the transaction, the Company agreed to forgive approximately $0.05 million of accrued interest on the note. It also agreed to extend to January 15, 2027 the maturity date of the portion of the note it retains, which consists of the remaining $1.0 million of principal plus approximately $0.15 million of accrued interest. The sale closed on October 20, 2026. The foregoing description is qualified in its entirety by reference to the agreements memorializing this transaction, copies of which will be filed as an exhibit to the Company’s next periodic report.