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Item 9A. Controls and Procedures

2024-04-16 compared with 2023-04-17 · 584 added, 269 removed, 639 unchanged (57% of the section changed)

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Management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on the assessment, management has concluded that its internal control over financial reporting was effective as of December 31, 2022 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S.

Based on the assessment, management has concluded that its internal control over

financial reporting was effective as of December 31, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S.

Changes in Internal Control over Financial Reporting

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OTHER INFORMATION

At-The-Market (ATM) Program

On July 22, 2022, we entered into an Equity Distribution Agreement (the "Sales Agreement") with Maxim Group LLC ("Maxim") under which we may offer and sell shares of our common stock having an aggregate offering price of up to $25 million (the "Shares") from time to time through Maxim, acting exclusively as our Sales Agent (the "ATM Offering").

Maxim is 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.

We have issued 9,655,207 shares of common stock in connection with the ATM Offering since January 1, 2023, in connection with the ATM Offering at per share price between $1.15 and $1.86, resulting in gross proceeds to the Company of approximately $15.4 million.

The information set forth below is included herein for the purpose of providing the disclosure required under “Item 3.02 – Unregistered Sales of Equity Securities.” of Form 8-K.

We issued an aggregate of 850,000 shares of common stock (the “Exchange Common Shares”) to the holder of that certain outstanding promissory note of the Company issued on July 22, 2022 (the “July 2022 Note”), at a price of $0.3336 per share, which is equal to the Minimum Price as defined in Nasdaq Listing Rule 5635(d) in connection with the terms and conditions of an Exchange Agreement, dated April 13, 2023, pursuant to which we and the holder agreed to (i) partition new promissory notes in the form of the July 2022 Note in the aggregate original principal amount equal to approximately $0.3 million and then cause the outstanding balance of the July 2022 Note to be reduced by an aggregate of approximately $0.3 million;

and (ii) exchange the partitioned notes for the delivery of the Exchange Common Shares.

The offer and sale of the Exchange Common Shares was not registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on an exemption from registration under Section 3(a)(9) of the Securities Act, in that (a) the Exchange Common Shares were issued in exchanges for partitioned notes which are other outstanding securities of the Company;

(b) there was no additional consideration of value delivered by the holder in connection with the exchanges;

and (c) there were no commissions or other remuneration paid by the Company in connection with the exchanges.

After taking into account the issuance of the Exchange Common Shares, the Company will have 18,059,673 shares of common stock outstanding.

The information set forth below is included herein for the purpose of providing the disclosure required under “Item 3.01 – Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard;

Transfer of Listing.” of Form 8-K.

On April 14, 2023, the Company received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business days beginning on March 2, 2023, and ending on April 13, 2023, the Company no longer meets the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided a period of 180 calendar days, or until October 11, 2023, in which to regain compliance.

In order to regain compliance with the minimum bid price requirement, the closing bid price of our common stock must be at least $1 per share for a minimum of ten consecutive business days during this 180-day period.

In the event that the Company does not regain compliance within this 180-day period, the Company may be eligible to seek an additional compliance period of 180 calendar days if it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and provides written notice to Nasdaq of its intent to cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary.

However, if it appears to the Nasdaq staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq will provide notice to the Company that our common stock will be subject to delisting.

The letter does not result in the immediate delisting of our common stock from the Nasdaq Capital Market.

The Company intends to monitor the closing bid price of our common stock and consider its available options in the event that the closing bid price of our common stock remains below $1 per share.

None of the Company’s directors or officers adopted , modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended December 31, 2023, 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.

” of Form 8-K.

On April 15, 2024, we entered into an amendment (the “Warrant Amendment”), effective as of March 11, 2024, with a counterparty located in the southwest region of the United States (“Counterparty A”) to a warrant to purchase 567,467 shares of our common stock (the “Counterparty A Warrant”), which was originally issued by Legacy XTI on February 2, 2022, amended on April 3, 2022 and assumed by us in connection with the closing of the XTI Merger on March 12, 2024.

The Warrant Amendment modifies the vesting criteria with respect to the shares of common stock underlying the Counterparty A Warrant.

As amended by the Warrant Amendment, (i) one-third of the shares represented by the Counterparty A Warrant vested upon the execution and delivery of the conditional aircraft purchase contract (the “Aircraft Purchase Agreement”), dated February 2, 2022, by and between Legacy XTI and Counterparty A, relating to the purchase of 100 TriFan 600 aircraft, (ii) one-sixth of the shares vested on March 11, 2024 and (iii) one-third of the shares will vest upon the acceptance of delivery and final purchase of the first TriFan 600 aircraft by Counterparty A pursuant to the Aircraft Purchase Agreement.

The Warrant Amendment requires the parties to agree on an initial strategic public and industry announcement within 90 days of March 11, 2024 or such other time as the parties may mutually agree.

The foregoing description of the Warrant Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Warrant Amendment, a copy of which is filed as Exhibit 4.31 hereto and is incorporated herein by reference.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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Name Age Position

Nadir Ali 53 Chief Executive Officer and Director

Soumya Das 49 Chief Operating Officer

Wendy Loundermon 51 Chief Financial Officer and Director, Secretary of Inpixon

Leonard Oppenheim 75 Director

Scott Pomeroy 62 Chief Executive Officer, Chairman and Director

Brooke Turk 58 Chief Financial Officer

Michael Hinderberger 62 Chief Executive Officer, XTI Aircraft Company

Soumya Das 51 Chief Executive Officer, Real Time Location System Division, and Director

David Brody 75 Director

Kareem Irfan 63 Director

Tanveer Khader 53 Director

Ali has served as our Chief Executive Officer and as a member of our Board since September 2011.

As the Chief Executive Officer of Inpixon, Mr.

Ali is responsible for establishing the vision, strategy and the operational aspects of Inpixon.

Ali works with the Inpixon executive team to deliver both operational and strategic leadership and has over 20 years of experience in the consulting and high-tech industries.

From November 2015 until the completion of the Sysorex Spin-off in August 2018, Mr.

Ali served as the Chief Executive Officer of Sysorex Inc.

SYSX) and he served as a member of board of directors until May 14, 2021.

Ali is also the Managing Director of 3AM LLC, a company that advises and invests in certain asset classes including real estate and other asset classes since April 26, 2011.

Ali also serves in the capacities set forth below for each of our following direct and indirect subsidiaries (a) director of Inpixon India Limited since April 1, 2005 (b) Managing Director of Inpixon GmbH since May 8, 2020, (c) Managing Director of Inpixon GmbH since May 8, 2020, (d) Managing Director of Inpixon Limited since May 13, 2020, (e) Managing Director of Nanotron Technologies GmbH since October 6, 2020, (f) director of Game Your Game, Inc.

since April 9, 2021, (g) director of Active Mind Technology Ltd.

and (h) Managing Director of IntraNav GmbH.

From 1998 to 2001, Mr.

Ali was the co-founder and Managing Director of Tira Capital, an early stage technology fund.

Immediately prior thereto, Mr.

Ali served as Vice President of Strategic Planning for Isadra, Inc., an e-commerce software start-up, which was acquired by VerticalNet.

From 1995 through 1998, Mr.

Ali was Vice President of Strategic Programs at Sysorex Information Systems, a computer systems integrator, which was acquired by Vanstar Government Systems in 1997.

Ali received a Bachelor of Arts degree in Economics from the University of California at Berkeley in 1989.

Ali’s valuable entrepreneurial, management, mergers and acquisitions and technology experience together with his in-depth knowledge of the business of Inpixon led us to the conclusion that he should serve as a member of our Board.

Das has served as our Chief Operating Officer since February 2018 and served as our Chief Marketing Officer from November 2016 until March 2021.

Prior to joining Inpixon, from November 2013 until January 2016, Mr.

Das was the Chief Marketing Officer of Identiv, a security technology company.

Scott Pomeroy, Chairman and Chief Executive Officer .

Pomeroy served as Legacy XTI's Chief Financial Officer under a consulting arrangement since July 1, 2022 and as a director of Legacy XTI since February 2023 and was appointed as our Chief Executive Officer and as Chair of the Board effective as of the effective time of the XTI Merger.

Pomeroy has served on several boards of directors, including the board of directors of AVX Aircraft Company since 2009.

Pomeroy was the CFO of Dex Media, overseeing equity and debt capital raises of more than $10 billion, and was CEO and founder of Local Insight Media.

He also co-founded Gen3 Financial Services, a boutique merchant bank providing financial and business advisory services in connection with capital raising to clients in a variety of industries including aerospace.

He led capital raising efforts for a $50 million fund in 2021-22.

Pomeroy began his career at KPMG Peat Marwick.

He has a BBA in Accounting from the University of New Mexico and is a Certified Public Accountant.

We believe that Mr.

Pomeroy’s over 35 years’ experience in launching new businesses, raising capital, and serving as founder and CEO, President, and Chief Financial Officer of several companies qualifies him to serve on our Board.

Brooke Turk, Chief Financial Officer.

Turk served as a consultant for Legacy XTI since August 2023 and was appointed as our Chief Financial Officer effective as of the effective time of the XTI Merger.

Turk has provided CFO services to multiple companies as a member of Springboard Ventures since August 2011.

Turk has acted as the chief financial officer or fractional chief financial officer of several businesses, including MADSKY from March 2017 to October 2018, The Champion Group from April 2020 to present, Catalyst Solutions from February 2022 to March 2023, and CB Scientific, Inc.

from November 2021 to present.

Over her 32-year career, Ms.

Turk has played a key role in multiple corporate transactions — including mergers, acquisitions and divestitures;

restructures and reorganizations;

debt and equity capital raises, a Chapter 11 bankruptcy and an IPO.

Turk began her career at Arthur Andersen.

She received a Master of Science in Business Administration from Colorado State University and a Bachelor of Arts in Organizational Communication from Western Colorado University and is a Certified Public Accountant..

Michael Hinderberger, Chief Executive Officer of XTI Aircraft Company .

Hinderberger was named Chief Executive Officer of Legacy XTI on July 1, 2022 after serving as Legacy XTI’s SVP of Engineering and Technology since July 2021.

He is responsible for all matters related to the development of the TriFan 600 aircraft and Legacy XTI's operations.

Prior to joining Legacy XTI, from 2014 to 2021 he was Chief Engineer for Aerion Supersonic Corporation where he was instrumental in transitioning the Aerion AS-2 aircraft from an R&D project into a full-scale development program.

Hinderberger has led major development projects at Gulfstream, Hawker Beechcraft, Rolls Royce, and Piper Aircraft.

Hinderberger has a Bachelor of Science degree in Mechanical Engineering from the University of Cincinnati and a Master of Science degree in Technical Management from Embry Riddle Aeronautical University.

Soumya Das, Chief Executive Officer of Real Time Location System Division and Director.

Das served as our Chief Operating Officer from February 2018 until the effective time of the XTI Merger, and was appointed as the Chief Executive Officer of Real Time Location System Division and a member of our Board effective as of the effective time of the XTI Merger.

Das also currently serves as the Managing Director of our wholly owned subsidiary Inpixon GmbH and its wholly owned subsidiary IntraNav GmbH.

He previously served as our Chief Marketing Officer from November 2016 until March 2021.

Prior to joining the Company, from November 2013 until January 2016, Mr.

Das was the Chief Marketing Officer

of Identiv, a security technology company.

From January 2012 until October 2013, Mr.

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Das was the Vice President, Marketing and Strategy of CrownPeak, a provider of web content management solutions, from April 2010 until January 2012.

Das has also served as a member of the board of Museum on Mile since January 4, 2019, and President of Take 1 Down Foundation, a California non-profit, since March 2016.

Das has also served as a member of the board of Museum on Mile since January 4, 2019.

Das earned an MBA from Richmond College, London, United Kingdom, and Bachelor of Business Management from Andhra University in India.

Wendy Loundermon

Loundermon, who was appointed our Principal Financial and Accounting Officer on July 19, 2017, has overseen all of Inpixon’s finance, accounting and HR activities from 2002 until October 2014 at which time she became the Vice President of Finance until December 2014.

From January 2015 and October 2015, she was appointed Interim CFO of the Company.

Thereafter, she continued with the Company as Vice President of Finance and was re- appointed as CFO on September 16, 2019.

She was also appointed as a member of our Board on May 14, 2019.

Loundermon has over 20 years of finance and accounting experience.

She is currently responsible for the preparation and filing of financial statements and reports for all companies, tax return filings, and managing the accounting staff.

Loundermon received a Bachelor of Science degree in Accounting and a Master of Science degree in Taxation from George Mason University.

Loundermon’s extensive knowledge about the Company and strong financial experience provides her with the qualifications and skills to serve as a director of our Company.

Oppenheim has served as a member of our Board since July 2011.

Oppenheim retired from business in 2001 and has since been active as a private investor.

From 1999 to 2001, he was a partner in Faxon Research, a company offering independent research to professional investors.

From 1983 to 1999, Mr.

Oppenheim was a principal in the Investment Banking and Institutional Sales division of Montgomery Securities.

Prior to that, he was a practicing attorney.

Oppenheim is a graduate of New York University Law School.

Oppenheim served on the Board of Apricus Biosciences, Inc.

APRI), a publicly held bioscience company, from June 2005 to May 2014.

Oppenheim’s public company board experience is essential to the Company.

Oppenheim also meets the Audit Committee Member requirements as a financial expert.

Oppenheim’s public company board experience and financial knowledge provide him with the qualifications and skills to serve as a director of our Company.

We believe that Mr.

Das’s experience in managing and operating high growth public companies qualifies him to serve on our Board.

Non-Executive Directors

David Brody, Director.

Brody is the founder of Legacy XTI, previously served as its Chairman of its Board and was appointed as a member of our Board effective as of the effective time of the XTI Merger.

He designed the initial TriFan 600 configuration, technology and performance objectives.

He formed the initial leadership team, filed for patents and began development of the TriFan aircraft in 2014.

Brody is also the founder of the advanced technology helicopter company, AVX Aircraft Company (an engineering design and U.S.

defense contractor) and was its Chairman and Chief Executive Officer until 2013 and continues to serve on the AVX board.

Brody, a lawyer, practiced law in Denver from 1974 to 2021, including with the international law firm, Hogan Lovells US LLP from 2013-2021.

An inventor, he holds several patents for inventions in aircraft technology and other fields.

He has a Bachelor of Arts degree in Political Science and Philosophy from the University of Colorado in Boulder, and a Juris Doctorate from American University Law School in Washington D.C.

We believe that Mr.

Brody’s experience in the legal field, in the aerospace industry and as a founder of XTI qualifies him to serve on the combined company’s board of directors.

Kareem Irfan, Director.

Irfan has served as a member of our Board since July 2014.

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Irfan is a graduate of DePaul University College of Law, holds a MS in Computer Engineering from the University of Illinois, and a BS in Electronics Engineering from Bangalore University.

Irfan’s extensive experience in advising information technology companies, managing corporate governance and regulatory management policies, including over 30 years as a business strategist and over fifteen years of executive management leadership give him strong qualifications and skills to serve as a director of our Company.

Khader has served as a member of our Board since July 2014.

Since 2010, Mr.

Khader has been the Executive Vice President of Systat Software Inc., a company offering scientific software products for statisticians and researchers.

Prior thereto he was Senior Vice President from 2008-2010, Vice President from 2004-2008, and General Manager from 2002-2004.

Khader holds a BE in Engineering from Bangalore University and a degree in Business Administration from St.

Joseph’s Commerce College.

Khader’s extensive experience with software development, data analytics and strategic planning give him the qualifications and skills to serve as director of our Company.

Family Relationships

There are no family relationships between any of our directors and executive officers.

Our Board may establish the authorized number of directors from time to time by resolution.

The current authorized number of directors is five (5).

Our current directors, if elected, will continue to serve as directors until the next annual meeting of stockholders and until his or her successor has been elected and qualified, or until his or her earlier death, resignation, or removal.

In accordance with the terms of our bylaws, as amended, our Board is divided into three classes, Class I, Class II and Class III, with members of each class serving staggered three-year terms.

Upon the expiration of the term of a class of directors, directors in that class will be eligible to be elected for a new three-year term at the annual meeting of stockholders in the year in which their term expires.

The directors are divided among the three classes as follows:

• the Class I directors are Scott Pomeroy and Soumya Das, and their terms will expire at our annual meeting of stockholders to be held in 2024;

• the Class II director is Kareem Irfan, and his term will expire at our annual meeting of stockholders to be held in 2025;

• the Class III director is David Brody and his term will expire at our annual meeting of stockholders to be held in 2026.

We expect that any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.

The division of our Board into three classes with staggered three-year terms may delay or prevent a change of our’s management or a change in control.

We expect that in the first meeting of the newly comprised Board following the closing of the XTI Merger, the Board will reevaluate board committee chairs and composition.

We continue to review our corporate governance policies and practices by comparing our policies and practices with those suggested by various groups or authorities active in evaluating or setting best practices for corporate governance of public companies.

Based on this review, we have adopted, and will continue to adopt, changes that the Board believes are the appropriate corporate governance policies and practices for our Company.

Our Board held ten (10) meetings during 2022 and acted through seven (7) written consents.

Our Board held four (4) meetings during 2023 and acted through twenty-one (21) written consents.

No member of our Board attended fewer than 75% of the aggregate of (i) the total number of meetings of the Board (held during the period for which he or she was a director) and (ii) the total number of meetings held by all committees of the Board on which such director served (held during the period that such director served).

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In determining the independence of our directors, we apply the definition of “independent director” provided under the listing rules of Nasdaq.

Pursuant to these rules, the Board has determined that all of the directors currently serving on the Board are independent within the meaning of Nasdaq Listing Rule 5605 with the exception of Nadir Ali and Wendy Loundermon, who are executive officers.

Pursuant to these rules, the Board has determined that all of the directors currently serving on the Board are independent within the meaning of Nasdaq Listing Rule 5605 with the exception of Scott Pomeroy and Soumya Das, who are executive officers.

Committees of our Board

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the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee.

We expect that the newly comprised Board following the closing of the XTI Merger will reevaluate board committee chairs and composition.

Audit Committee

The Audit Committee consists of Leonard Oppenheim, Tanveer Khader, and Kareem Irfan, all of whom are “independent” as defined under section 5605(a)(2) of the Nasdaq Listing Rules.

Oppenheim is the Chairman of the Audit Committee.

In addition, the Board has determined that Leonard Oppenheim qualifies as an “audit committee financial expert” as defined in the rules of the SEC.

The Audit Committee operates pursuant to a charter, which can be viewed on our website at http://www.inpixon.com (under “Investors”).

The Audit Committee met four (4) times during 2022.

The Audit Committee consists of David Brody and Kareem Irfan, both of whom are “independent” as defined under section 5605(a)(2) of the Nasdaq Listing Rules.

The Board has determined that Mr.

Irfan qualifies as an “audit committee financial expert” as defined in the rules of the SEC.

The Audit Committee operates pursuant to a charter, which can be viewed on our website at http://www.xtiaerospace.com (under “Investors”).

The Inpixon Audit Committee met four (4) times during 2023.

All members attended more than 75% of such committee meetings.

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As it deems appropriate, the Audit Committee is authorized to engage outside auditors, counsel, or other experts.

A copy of the charter of the Audit Committee is available on our website at http://www.inpixon.com (under "Investors").

A copy of the charter of the Audit Committee is available on our website at http://www.xtiaerospace.com (under "Investors").

Leonard Oppenheim, a former independent director and the former Chairman of the Audit Committee, resigned from the Board effective as of March 31, 2024.

On April 4, 2024, the Company received a notification letter from the Listing Qualifications Department of Nasdaq that due to Mr.

Oppenheim's resignation, the Company no longer complies with Nasdaq’s independent director and audit committee requirements as set forth in Listing Rule 5605 as the Board is not comprised of a majority of “independent directors” (as that term is defined in Nasdaq Listing Rule 5605(a)(2)) as required by Nasdaq Listing Rule 5605(b)(1) and the Audit Committee is not comprised of at least three independent directors as required by Nasdaq Listing Rule 5605(c)(2)(A).

Consistent with Nasdaq Listing Rules 5605(b)(1)(A) and 5605(c)(4), Nasdaq has provided the Company a cure period in order to regain compliance (i) until the earlier of the Company’s next annual shareholders’ meeting or March 31, 2025, or (ii) if the next annual shareholders’ meeting is held before September 27, 2024, then the Company must evidence compliance no later than September 27, 2024.

The Company intends to appoint an additional independent director to the Board and the Audit Committee prior to the end of the cure period.

In addition, the Company will appoint a new Chairman of the Audit Committee as expeditiously as possible.

Compensation Committee

The Compensation Committee consists of Kareem Irfan, Leonard Oppenheim and Tanveer Khader, all of whom are “independent” as defined in section 5605(a)(2) of the Nasdaq Listing Rules.

Irfan is the Chairman of the Compensation Committee.

The Compensation Committee met two (2) times during 2022.

The Compensation Committee consists of Kareem Irfan and David Brody each of whom are “independent” as defined in section 5605(a)(2) of the Nasdaq Listing Rules.

Brody is the current Chairman of the Compensation Committee.

The Inpixon Compensation Committee met four (4) times during 2023.

All members attended 75% or more of such committee meetings.

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• ensure that a significant portion of executive compensation is reasonably related to the long-term interest of our stockholders.

A copy of the charter of the Compensation Committee is available on our website at http://www.inpixon.com (under “Investors”).

A copy of the charter of the Compensation Committee is available on our website at http://www.xtiaerospace.com (under “Investors”).

The Compensation Committee may form and delegate a subcommittee consisting of one or more members to perform the functions of the Compensation Committee.

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Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee, or the “Governance Committee,” consists of Tanveer Khader, Leonard Oppenheim and Kareem Irfan, all of whom are “independent” as defined in section 5605(a)(2) of the Nasdaq Listing Rules.

Khader is the Chairman of the Governance Committee.

The Nominating and Corporate Governance Committee, or the “Governance Committee,” consists of David Brody, who is “independent” as defined in section 5605(a)(2) of the Nasdaq Listing Rules.

Brody is the Chairman of the Governance Committee.

The Nominating and Corporate Governance Committee did not meet in person during 2023 and acted by written consent one (1) time during 2023.

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• provide oversight to the strategic planning process conducted annually by our management.

A copy of the charter of the Governance Committee is available on our website at http://www.inpixon.com (under “Investors”).

A copy of the charter of the Governance Committee is available on our website at http://www.xtiaerospace.com (under “Investors”).

Stockholder Communications

Two-way communication is important for maintaining transparency and resolving any grievances with stockholders.

Stockholders may communicate with the members of the Board, either individually or collectively, by writing to the Board at 2479 E.

Bayshore Road, Suite 195, Palo Alto, CA 94303.

Stockholders may communicate with the members of the Board, either individually or collectively, by writing to the Board at 8123 InterPort Blvd., Suite C, Englewood, Colorado 80112.

These communications will be reviewed by the Secretary as agent for the non-employee directors in facilitating direct communication to the Board.

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The Governance Committee will consider director candidates recommended by stockholders.

If a director candidate is recommended by a stockholder, the Governance Committee expects to evaluate such candidate in the same manner it evaluates director candidates it identifies.

If a director candidate is recommended by a stockholder, the Governance Committee expects to evaluate such candidate in the same manner it evaluates

director candidates it identifies.

Stockholders desiring to make a recommendation to the Governance Committee should follow the procedures set forth above regarding stockholder nominations for directors.

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The Code is periodically reviewed by the Board.

A copy of the Code is available on our website at http://www.inpixon.com (under "Investors").

A copy of the Code is available on our website at http://www.xtiaerospace.com (under "Investors").

In the event we determine to amend or waive certain provisions of the Code, we intend to disclose such amendments or waivers on our website within four (4) business days following such amendment or waiver or as otherwise required by the Nasdaq Listing Rules.

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Our Board’s overall risk oversight, which focuses primarily on risks and exposures associated with current matters that may present material risk to our operations, plans, prospects or reputation, is supplemented by the various committees.

Our Audit Committee discusses with management and our independent registered public accounting firm our risk management guidelines and policies, our major financial risk exposures and the steps taken to monitor and control such exposures.

Our Audit Committee discusses with management and our

independent registered public accounting firm our risk management guidelines and policies, our major financial risk exposures and the steps taken to monitor and control such exposures.

Our Compensation Committee oversees risks related to our compensation programs and discusses with management its annual assessment of our employee compensation policies and programs.

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Board Leadership Structure

The Chairman of the Board presides at all meetings of the Board, unless such position is vacant, in which case, the Chief Executive Officer of the Company presides.

The office of Chairman of the Board has been vacant since the resignation of Abdus Salam Qureishi in September 2016.

The Company has no fixed policy with respect to the separation of the offices of the Chairman of the Board and Chief Executive Officer.

Our Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board, as our Board believes it is in the best interest of the Company to make that determination based on the position and direction of the Company and the membership of the Board.

Our Board has determined that having an employee director serve as Chairman is in the best interest of our stockholders at this time because of the efficiencies achieved in having the role of Chief Executive Officer and Chairman combined, and because the detailed knowledge of our day-to-day operations and business that the Chief Executive Officer possesses greatly enhances the decision-making processes of our board of directors as a whole.

The Chairman of the Board and the other members of the Board work in concert to provide oversight of our management and affairs.

Our Board encourages communication among its members and between management and the Board to facilitate productive working relationships.

Working with the other members of the Board, our Chairman also strives to ensure that there is an appropriate balance and focus among key board responsibilities such as strategic development, review of operations and risk oversight.

EXECUTIVE COMPENSATION

The table below sets forth, for the last two fiscal years, the compensation earned by (i) each individual who served as our principal executive officer and (ii) our two other most highly compensated executive officers, other than our principal

executive officer, who were serving as an executive officer at the end of the last fiscal year.

Set forth below is information regarding the historical compensation of certain Inpixon executive officers prior to the completion of the XTI Merger.

In addition, set forth below is information regarding the historical compensation of Legacy XTI executive officers prior to completion of the XTI Merger, and employment and compensatory arrangements we have made with our executive officers following the completion of the XTI Merger, both of which we are voluntarily providing.

Inpixon Executive Compensation

Together, these individuals are sometimes referred to as the “Named Executive Officers.”

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Nadir Ali, 2023 $ 280,000 $ 2,451,225 (5) $ — $ — $ 754,399 (3) $ 3,485,624

Chief Executive Officer 2021 $ 280,000 $ 215,000 $ 2,745,000 (1) $ 523,500 (1) $ 312,157 (3) $ 4,075,657

Former Chief Executive Officer 2022 $ 280,000 $ 220,000 $ — $ 370,005 (1) $ 294,610 (3) $ 1,164,615

Soumya Das 2023 $ 312,000 $ 288,863 $ — $ — $ 106,897 (2) $ 707,760

Chief Operating Officer 2021 $ 312,000 $ 292,800 $ 1,372,500 (1) $ 209,400 (1) $ 12,000 (2) $ 2,198,700

Former Chief Operating Officer 2022 $ 312,000 $ 280,838 $ — $ 185,023 (1) $ 12,000 (2) $ 789,861

Wendy Loundermon 2023 $ 300,000 $ 530,175 (6) $ — $ — $ 203,035 (4) $ 1,033,210

Chief Financial Officer 2021 $ 280,000 $ 110,000 $ 1,372,500 (1) $ 261,750 (1) $ 24,232 (4) $ 2,048,482

(1) The fair value of employee restricted stock and option grants are estimated on the date of grant using the Black-Scholes option pricing model with key weighted average assumptions, expected stock volatility and risk free interest rates based on US Treasury rates from the applicable periods.

The fair value of each share underlying the restricted stock awards was $1.83.

(2) Automobile allowance.

(3) Accrued vacation paid as compensation, automobile allowance and housing allowance.

(4) Accrued vacation paid as compensation.

Former Chief Financial Officer 2022 $ 300,000 $ 150,000 $ — $ 185,023 (1) $ 24,519 (4) $ 659,542

(1) The fair value of employee option grants are estimated on the date of grant using the Black-Scholes option pricing model with key weighted average assumptions, expected stock volatility and risk free interest rates based on US Treasury rates from the applicable periods.

(2) The 2022 amount represents automobile allowance.

The 2023 amount includes a $12,000 automobile allowance and CVH unit grants valued at $94,897, which is the fair market value at the date of grant.

(3) The 2022 amount includes $54,611 of accrued vacation paid as compensation, a $12,000 automobile allowance and a $227,999 housing allowance.

The 2023 amount includes $51,970 of accrued vacation paid as compensation, a $12,000 automobile allowance, a $227,999 housing allowance, and CVH unit grants valued at $462,430, which is the fair market value at the date of grant.

(4) The 2022 amount represents accrued vacation paid as compensation.

The 2023 amount includes $21,635 of accrued vacation paid as compensation and CVH unit grants valued at $181,400, which is the fair market value at the date of grant.

(5) Bonus earned under Completed Transaction Bonus Plan.

(6) Bonus earned under Completed Transaction Bonus Plan and employment agreement.

Outstanding Equity Awards at Fiscal Year-End

Other than as set forth below, there were no outstanding unexercised options, unvested stock, and/or equity incentive plan awards issued to our Named Executive Officers as of December 31, 2022.

Option Awards Stock Awards

Name Grant Date Number of

exercisable Number of

unexercisable Equity

of restricted

Nadir Ali 08/14/2013 1 (1) — — 146,450,902.50 08/14/2023 — —

04/17/2015 2 (2) — — 125,839,291.50 04/17/2025 — —

05/17/2018 5 (1) — — 42,795.00 05/17/2028 — —

01/25/2019 149 (3) — — 7,627.50 01/25/2029 — —

05/10/2019 149 (3) — — 2,531.25 05/10/2029 — —

05/08/2020 13,335 (4) — (4) — 82.50 05/08/2030 — —

08/16/2021 9,452 (5) 10,549 (5) — 77.25 08/16/2031 — —

01/08/2022 24,453 (3) 2,214 (3) — 39.75 01/08/2032 — —

Soumya Das 02/03/2017 1 (1) — — 14,102,680.50 02/03/2027 — —

05/17/2018 4 (1) — — 42,795.00 05/17/2028 — —

01/25/2019 90 (3) — — 7,627.50 01/25/2029 — —

05/10/2019 90 (3) — — 2,531.25 05/10/2029 — —

05/08/2020 6,667 (4) — (4) — 82.50 05/08/2030 — —

08/16/2021 3,791 (5) 4,210 (5) — 77.25 08/16/2031 — —

01/08/2022 12,233 (3) 1,102 (3) — 39.75 01/08/2032 — —

Wendy Loundermon 11/18/2013 1 (1) — — 138,857,152.50 11/18/2023 — —

05/09/2014 1 (1) — — 263,069,208.00 05/09/2024 — —

08/05/2015 1 (2) — — 94,921,875.00 08/05/2025 — —

02/25/2016 1 (2) — — 28,205,361.00 02/25/2026 — —

07/20/2016 1 (2) — — 25,493,305.50 07/20/2026 — —

05/17/2018 4 (1) — — 42,795.00 05/17/2028 — —

01/25/2019 105 (3) — (3) — 7,627.50 01/25/2029 — —

05/10/2019 105 (3) — (3) — 2,531.25 05/10/2029 — —

05/08/2020 6,667 (4) — (4) — 82.50 05/08/2030 — —

08/16/2021 4,726 (5) 5,275 (5) — 77.25 08/16/2031 — —

01/08/2022 12,233 (3) 1,102 (3) — 39.75 01/08/2032 — —

(1) This option is 100% vested.

(2) This option vests 1/48 th per month.

(3) This option vests 1/12 th per month.

(4) This option vests 1/24th per month.

(5) This option vests 1/36th per month.

There were no outstanding unexercised options, unvested stock, and/or equity incentive plan awards issued to our Named Executive Officers as of December 31, 2023.

Employment Agreements and Arrangements

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Ali serves as President.

The employment agreement was

assumed by the Company and Mr.

The employment agreement was assumed by the Company and Mr.

Ali became CEO in September 2011.

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Ali’s employment is terminated without Cause (as defined), he will receive his base salary for 12 months from the date of termination.

Ali’s employment agreement provides that he will not compete with the Company and will be subject to non-solicitation provisions relating to employees, consultants and customers, distributors, partners, joint ventures or suppliers of the Company during the term of his employment or consulting relationship with the Company.

Ali’s employment agreement provides that he will not compete with the Company and will be subject to non-solicitation provisions relating to employees, consultants and customers, distributors,

partners, joint ventures or suppliers of the Company during the term of his employment or consulting relationship with the Company.

On April 17, 2015, the compensation committee approved the increase of Mr.

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Ali’s annual salary to $280,000 and an auto allowance of $1,000 a month.

On February 27, 2023, the Company entered into a Limited Liability Company Unit Transfer and Joinder Agreement with Mr.

Ali, pursuant to which (i) the Company transferred 219,999 Class A Units of Cardinal Venture Holdings LLC, a Delaware limited liability company (“CVH”), to Mr.

Ali in connection with Mr.

Ali’s services performed for and on behalf of the Company as an employee and a director of the Company and (ii) Mr.

Ali became a member of CVH and a party to the Amended and Restated Limited Liability Company Agreement of CVH, dated as of September 30, 2020 (the “CVH LLC Agreement”).

The fair market value of the Class A Units at the date of grant is $462,430.

In addition, Mr.

Ali beneficially owned membership interests in CVH through 3AM LLC, a Delaware limited liability company and a founding member of CVH.

CVH was dissolved as of December 31, 2023.

On March 12, 2024, the Company and Mr.

Ali entered into an amendment (the “Ali Employment Agreement Amendment”) to Mr.

Ali’s Amended and Restated Employment Agreement dated May 15, 2018, to provide for payment of his cash severance thereunder on or as soon as practicable following the date that is 21 days following the XTI Merger.

Ali was also a participant of the Completed Transaction Bonus Plan pursuant to which he received a cash bonus in an aggregate amount of 3.5% of the $70,350,000 transaction value of the Enterprise Apps Spin-off.

Ali is a participant of the Contemplated Transaction Plan pursuant to which he is eligible for (a) a cash bonus in an aggregate amount of 3.5% of the transaction value attributed to a Contemplated Transaction less $6.5 million;

(b) a cash bonus in an aggregate amount equal to 100% of his aggregate annual base salary and target bonus amount following the closing of a Contemplated Transaction and (c ) an award (the “Award”) of fully vested shares of Company common stock (“Shares”) issued under the Inpixon 2018 Employee Stock Incentive Plan or any successor equity incentive plan adopted by the Company (the “Equity Plan”) on the date that is three (3) months following the Closing of the XTI Merger (the “Grant Date”) covering a number of shares having a fair market value (based on the closing price per Share on the Grant Date) equal to $1,023,600.

Notwithstanding the foregoing, Nadir Ali shall not be eligible to receive the Award if his Consulting Agreement with the Company dated as of March 12, 2024 (the “Consulting Agreement”), terminates before the Grant Date due to (a) Company Good Reason (as defined in the Consulting Agreement) or (b) termination by Nadir Ali for any reason other than Consultant Good Reason (as defined in the Consulting Agreement).

The XTI Merger is a Contemplated Transaction.

(See Part II, Item 7, " Recent Events - Transaction Bonus Plan in connection with Future Strategic Transactions" for a description of the Contemplated Transaction Plan.)

On November 4, 2016, and effective as of November 7, 2016, Mr.

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Das’ employment agreement to make the following changes to his compensation effective May 14, 2018:

(1) increase in base salary to $275,000 per year, (2) have up to $50,000 in MBO’s annually, (3) commissions equal to 2% of recognized revenue associated with the IPA product line paid quarterly and subject to the Company policies in connection with commissions payable and (4) provide a transportation allowance of $1,000 per month.

the Company policies in connection with commissions payable and (4) provide a transportation allowance of $1,000 per month.

On May 10, 2019, the Company amended Mr.

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Das resigned from his position as Chief Marketing Officer.

On February 27, 2023, the Company entered into a Limited Liability Company Unit Transfer and Joinder Agreement with Mr.

Das, pursuant to which (i) the Company transferred 50,000 Class A Units of CVH to Mr.

Das in connection with Mr.

Das’ services performed for and on behalf of the Company as an employee of the Company and (ii) Mr.

Das became a member of CVH and a party to the CVH LLC Agreement.

The fair market value of the Class A Units at the date of grant is $94,897.

CVH was dissolved as of December 31, 2023.

Das is a participant of the Contemplated Transaction Plan pursuant to which he is eligible for a cash bonus in an aggregate amount equal to 100% of his aggregate annual base salary and target bonus amount following the closing of a Contemplated Transaction and any applicable Qualifying Transaction.

The XTI Merger qualifies as a Contemplated Transaction.

(See Part II, Item 7, " Recent Events - Transaction Bonus Plan in connection with Future Strategic Transactions" for a description of the Contemplated Transaction Plan.)

Wendy Loundermon

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Loundermon’s salary was increased to $228,500 effective April 1, 2017, $250,000 effective March 1, 2018, $280,000 effective January 2021 and $300,000 effective January 2022.

On February 27, 2023, the Company entered into a Limited Liability Company Unit Transfer and Joinder Agreement with Ms.

Loundermon, pursuant to which (i) the Company transferred 100,000 Class A Units of CVH to Ms.

Loundermon in connection with Ms.

Loundermon’s services performed for and on behalf of the Company as an employee and a director of the Company and (ii) Ms.

Loundermon became a member of CVH and a party to the CVH LLC Agreement.

The fair market value of the Class A Units at the date of grant is $181,400.

CVH was dissolved as of December 31, 2023.

On March 12, 2024, the Company and Ms.

Loundermon entered into an amendment (the “Loundermon Employment Agreement Amendment”) to Ms.

Loundermon’s Employment Agreement dated October 1, 2014 (as amended), to provide for payment of her cash severance thereunder on or as soon as practicable following the date that is 21 days following the XTI Merger.

Loundermon was also a participant of the Completed Transaction Bonus Plan pursuant to which she received a cash bonus in an aggregate amount of 0.5% of the $70,350,000 transaction value of the Enterprise Apps Spin-off.

Loundermon is a participant of the Contemplated Transaction Plan pursuant to which she is eligible for (a) a cash bonus in an aggregate amount of 0.5% of the transaction value attributed to a Contemplated Transaction and (b) a cash bonus in an aggregate amount equal to 100% of her aggregate annual base salary and target bonus amount following the closing of a Contemplated Transaction.

The XTI Merger qualifies as a Contemplated Transaction.

(See Part II, Item 7, " Recent Events - Transaction Bonus Plan in connection with Future Strategic Transactions" for a description of the Contemplated Transaction Plan.)

Employee Stock Incentive Plans

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Amount of Shares of Common Stock.

The number of shares of our common stock currently available for issuance under the 2018 Plan is 43,000,000, which number is automatically increased on the first day of each quarter through October 1, 2028, by a number of shares of common stock equal to the least of (i) 3,000,000 shares, (ii) twenty percent (20%) of the outstanding shares of common stock on the last day of the immediately preceding calendar quarter, or (iii) such number of shares that may be determined by the Board.

The number of shares of our common stock available for issuance under the 2018 Plan as of April 3, 2024 is 64,146,695, which number is automatically increased on the first day of each quarter through October 1, 2028, by a number of shares of common stock equal to the least of (i) 3,000,000 shares, (ii) twenty percent (20%) of the outstanding shares of common stock on the last day of the immediately preceding calendar quarter, or (iii) such number of shares that may be determined by the Board.

The amount of shares available for issuance is not adjusted in connection with a change in the outstanding shares of common stock by reason of stock dividends, stock splits, reverse stock splits, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations or liquidations;

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(2) Represents 0 shares of common stock available for future issuance in connection with equity award grants under the 2011 Plan and 62,162,813 shares of common stock available for future issuance in connection with equity award grants under the 2018 Plan.

(3) Represents shares of common stock issuable upon the exercise of stock options granted to Nadir Ali on August 14, 2013 outside of the 2011 Plan and the 2018 Plan.

Director Compensation

Legacy XTI Executive Compensation

Legacy XTI’s named executive officers for 2023 are:

• Scott Pomeroy - Mr.

Pomeroy is our current Chief Executive Officer.

Pomeroy was appointed as Legacy XTI's Chief Financial Officer in July 2022.

• Michael Hinderberger - Mr.

Hinderberger is Legacy XTI's current Chief Executive Officer.

Hinderberger was Legacy XTI's “Principal Executive Officer” at the end of 2022.

Hinderberger was serving as Legacy XTI's SVP of Engineering and Technology beginning August 2021 until he was named CEO on July 1, 2022.

We refer to these executives as the Legacy XTI named executive officers.

Legacy XTI Executive Compensation Program Overview

Legacy XTI's compensation program had two primary objectives:

(1) to attract, motivate and retain our employees and (2) to align their interests with those of our stockholders.

Base Salary .

Base salaries were intended to provide a level of compensation sufficient to attract and retain an effective management team, when considered in combination with the other components of the executive compensation program.

In general, Legacy XTI provided a base salary level designed to reflect each executive officer’s scope of responsibility and accountability.

Please see the “Base Salary” column in the Summary Compensation Table for the base salary amounts received by each Legacy XTI named executive officer in 2023 and 2022.

No Legacy XTI named executive officers received or earned cash or non -cash bonuses with respect to fiscal year 2023.

Alignment of interests .

Each of Legacy XTI's named executive officers has received certain equity awards as a form of long-term incentive compensation, which Legacy XTI believed served to align the interests of its employees with those of iequity holders.

Summary Compensation Table

The following table sets forth information about the annual compensation of the Legacy XTI named executive officers during our last two completed fiscal years.

Base Salary ($)

Cash Bonus ($)

Option Awards (1) ($)

Total compensation ($)

Legacy XTI Named Executive Officers:

Scott Pomeroy

$ 210,000 $ — $ — $ 210,000

(Chief Financial Officer) (2)

$ 105,000 $ — $ 6,358 $ 111,358

Michael Hinderberger

$ 350,000 $ — $ 356,360 $ 706,360

(Chief Executive Officer)

$ 337,500 $ — $ 2,234,590 $ 2,572,090

(1) Stock option awards are reported at grant date fair value in the year granted, in accordance with FASB ASC Topic 718.

Pomeroy was appointed as Legacy XTI's Chief Financial Officer in July 2022.

Legacy XTI Employment Agreements

Scott Pomeroy - Mr.

Pomeroy entered into a consulting agreement dated July 1, 2022, as amended effective January 1, 2023, that provided for his engagement as Legacy XTI’s Chief Financial Officer.

The agreement provided that Mr.

Pomeroy receive a monthly compensation of $17,500.

Pursuant to the consulting agreement and in connection with the closing of the XTI Merger, Mr.

Pomeroy received 4,000,000 shares of Legacy XTI common stock.

Upon closing of the XTI Merger, these Legacy XTI shares were exchanged for 357,040 shares of XTI Aerospace common stock in accordance with the exchange ratio pursuant to the XTI Merger Agreement.

Effective upon closing time of the XTI Merger, Mr.

Pomeroy was appointed as XTI Aerospace's Chief Executive Officer.

It is anticipated that the Company and Mr.

Pomeroy will enter into an employment agreement on terms to be approved by the Board but which are expected to provide for an annual base salary of approximately $400,000 and a cash bonus target in an amount of up to 150% of base salary upon the satisfaction of certain performance criteria and milestones which shall be determined and approved by the Compensation Committee.

Michael Hinderberger - Mr.

Hinderberger entered into an employment agreement dated July 1, 2022 that provides for his employment as Legacy XTI’s Chief Executive Officer.

The agreement provides that Mr.

Hinderberger will receive an annual base salary of $350,000, which may be increased by the board of directors.

Hinderberger is also entitled to receive an annual bonus up to $350,000 based on achieving financing goals (40%) and TriFan 600 aircraft development milestones (60%) as outlined in the agreement.

The calculated annual bonus payout amount is subject to approval by Legacy XTI's board of directors.

Hinderberger’s employment agreement term ends on July 31, 2024 and automatically renews thereafter for one additional one-year period unless either party provides at least 60 days’ prior notice of non-renewal.

The agreement provides that if Mr.

Hinderberger is terminated without cause (other than due to death or disability) or if he resigns for good reason (as such terms are defined in the agreement), then Mr.

Hinderberger will be entitled to (i) a cash payment equal to 12 months of base salary in effect at the time of termination and (ii) a cash payment for any unused vacation at the time of termination.

In addition, and if Mr.

Hinderberger is terminated for good reason, he is entitled to receive reimbursements of COBRA premium cost applicable to Mr.

Hinderberger (and any dependents) for a period of six months after termination of employment.

The agreement contains customary confidentiality obligations, non-solicitation and non-competition restrictions.

Legacy XTI maintains a qualified 401(k) savings plan that provides eligible employees with an opportunity to save for retirement on a tax advantaged basis.

For the year ending December 31, 2023, Legacy XTI did not make matching employer contributions to the 401(k) plan on behalf of Michael Hinderberger.

Option Awards

During fiscal years 2023 and 2022, the Legacy XTI named executive officers were awarded the following stock options:

Number of Options

Option Exercise Price ($)

Date of Exercisability

Scott Pomeroy

1.67 100% on Grant Date

Michael Hinderberger

100% on Grant Date

Michael Hinderberger

100% on Grant Date

Michael Hinderberger

100% on Jan 1, 2023

Michael Hinderberger

Performance Vesting

Outstanding Option Awards at Fiscal Year-End

The following table sets forth information about the outstanding stock options of the named executive officers as of our last completed fiscal year-end:

Number of securities underlying unexercised options (#) exercisable

Number of securities underlying unexercised options (#) un-exercisable

Option Exercise Price ($)

Option expiration date

Scott Pomeroy

Michael Hinderberger

Executive Compensation Arrangements - Post-Closing Arrangements

As of the Effective Time, the Board appointed Scott Pomeroy as our Chief Executive Officer of the Company, Brooke Turk as our Chief Financial Officer, and Soumya Das as the Chief Executive Officer of Real Time Location System Division.

Michael Hinderberger continued in his role as Chief Executive Officer of XTI Aircraft Company.

We intend to develop an executive compensation program that is designed to align compensation with our business objectives and the creation of stockholder value, while enabling us to attract, motivate and retain individuals who contribute to the long - term success of the combined company.

We intend to enter into employment agreements with our executive officers that are consistent with that program.

Decisions on the executive compensation program will be made by the compensation committee of the board of directors.

Our employment agreements with Messrs.

Das and Hinderberger are still in effect as of the date of this report.

Until we enter into a new employment agreement with Mr.

Pomeroy, he will continue to receive compensation in accordance with the terms of his existing consulting agreement.

Incentive Plan

Under our 2018 Plan, we are authorized to grant cash and equity incentive awards to eligible employees, consultants, and non-employee directors in order to attract, motivate and retain the talent for which we compete.

Inpixon Director Compensation

The following table provides certain summary information concerning compensation awarded to, earned by or paid to our Directors in the year ended December 31, 2023 except Nadir Ali and Wendy Loundermon, whose aggregate compensation information has been disclosed above.

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(1) The fair value of the director option grants are estimated on the date of grant using the Black-Scholes option pricing model with key weighted average assumptions, expected stock volatility and risk free interest rates based on US Treasury rates from the applicable periods.

(2) Leonard Oppenheim resigned from the Board, effective as of March 31, 2024.

Directors are entitled to reimbursement of ordinary and reasonable expenses incurred in exercising their responsibilities and duties as a director.

Effective July 1, 2015, the Board approved the following compensation plan for the independent directors payable in accordance with each independent director’s services agreement:

Reverse Splits basis) of the Company’s common stock under the 2011 Plan and restricted stock awards of 20,000 shares (on a pre-Reverse Splits basis) of common stock under the 2011 Plan, which are granted in four equal installments on a quarterly basis and are each 100% vested upon grant.

$30,000 per year for their services rendered on the Board, $15,000 per year for service as the audit committee chair, $10,000 per year for service as the compensation committee chair, $6,000 per year for service on the audit committee, $4,000 per year for service on the compensation committee, $2,500 per year for service on the nominating committee, a one-time non-qualified stock option grant to purchase 20,000 shares (on a pre-Reverse Splits basis) of the Company’s common stock under the 2011 Plan and restricted stock awards of 20,000 shares (on a pre-Reverse Splits basis) of common stock under the 2011 Plan, which are granted in four equal installments on a quarterly basis and are each 100% vested upon grant.

On January 25, 2019, each independent director entered into an amendment to his respective director services agreement pursuant to which the Company agreed to grant each independent director, so long as such director continues to fulfill his duties and provide services pursuant to their services agreement, an annual non-qualified stock option to purchase up to 20,000 shares of common stock in lieu of the above-mentioned equity awards.

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The Amended Director Services Agreement supersedes and replaces all prior agreements by and between the Company and Mr.

During the year ended December 31, 2022, the Board of Directors awarded each independent director an aggregate of 534 non-qualified stock options.

The independent directors did not receive any restricted stock awards during the year ended December 31, 2022.

During the year ended December 31, 2023, no independent director was awarded any stock options or restricted stock awards.

Legacy XTI Director Compensation

Historically, Legacy XTI did not pay cash or equity compensation to any of its directors for their services as directors.

Commencing on January 1, 2022, we agreed to pay David Brody $10,000 per month for providing legal and strategic consulting services to XTI.

Legacy XTI reimbursed its directors for reasonable expenses incurred during the course of their performance.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information as of March 26, 2023, regarding the beneficial ownership of our common stock by the following persons:

The following table sets forth certain information as of April 3, 2024, regarding the beneficial ownership of our common stock by the following persons:

• our Named Executive Officers;

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Except as indicated in the footnotes to the following table, subject to applicable community property laws, each stockholder named in the table has sole voting and investment power.

Unless otherwise indicated, the address for each stockholder listed is c/o Inpixon, 2479 E.

Bayshore Road, Suite 195, Palo Alto, California 94303.

Shares of common stock subject to options, warrants, or other rights currently exercisable or exercisable within 60 days of March 26, 2023, are deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the stockholder holding the options, warrants or other rights, but are not deemed outstanding for computing the percentage of any other stockholder.

Unless otherwise indicated, the address for each stockholder listed is c/o XTI Aerospace, Inc., 8123 InterPort Blvd., Suite C, Englewood, Colorado 80112.

Shares of common stock subject to options, warrants, or other rights currently exercisable or exercisable within 60 days of April 3, 2024, are deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the stockholder holding the options, warrants or other rights, but are not deemed outstanding for computing the percentage of any other stockholder.

The information provided in the following table is based on our records, information filed with the SEC, and information furnished by our stockholders.

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Named Executive Officers and Directors

Nadir Ali 66,193 (2) *

Leonard Oppenheim 2,680 (3) *

Kareem Irfan 2,679 (4) *

Tanveer Khader 2,680 (5) *

Dave Brody 2,497,799 (2) 25.18 %

Scott Pomeroy 357,574 (3) 3.60 %

Brooke Turk — *

Michael Hinderberger 216,136 (4) 2.13 %

Soumya Das — *

Kareem Irfan 1 *

Nadir Ali 643 (5) *

Wendy Loundermon 70 *

All executive officers and directors as a group (6 persons) 137,256 (8) *

All current executive officers and directors as a group (7 persons) 3,071,510 (6) 30.30 %

Greater than 5% shareholders

Robert Denehy 812,025 8.19 %

NMV Aero Technologies LLC 667,099 (7) 6.71 %

Daniel Potter 1,020,564 10.29 %

* Represents beneficial ownership of less than 1%.

(1) Based on 16,478,252 shares outstanding as of March 26, 2023.

(2) Includes (i) 13,649 shares of common stock held of record by Nadir Ali, (ii) 52,542 shares of common stock issuable upon exercise of options exercisable within 60 days of March 26, 2023, (iii) 1 share of common stock held of record by Lubna Qureishi, Mr.

Ali’s wife, and (iv) 1 share of common stock held of record by the Qureishi Ali Grandchildren Trust, of which Mr.

Ali is the joint-trustee (with his wife Lubna Qureishi) of the Qureishi Ali Grandchildren Trust and has shared voting and investment control over the shares held.

Excludes an additional 7,768 shares of common stock underlying options that are not exercisable within 60 days of March 26, 2023.

(3) Includes (i) 2 shares of common stock held of record by Mr.

Oppenheim, and (ii) 2,678 shares of common stock issuable upon exercise of options exercisable within 60 days of March 26, 2023.

(4) Includes (i) 1 share of common stock held of record by Mr.

Irfan and (ii) 2,678 shares of common stock issuable upon exercise of options exercisable within 60 days of March 26, 2023.

(5) Includes (i) 1 share of common stock owned directly by SyHolding Corp., (ii) 1 share of common stock held of record by Mr.

Khader and (iii) 2,678 shares of common stock issuable upon exercise of options exercisable within 60 days of March 26, 2023.

Tanveer Khader holds the power to vote and dispose of the SyHolding Corp.

(1) Based on 9,919,411 shares outstanding as of April 3, 2024.

(2) Includes (i) 1,338,897 shares of common stock held indirectly through the Jason S.

Brody 2019 Trust, of which Mr.

Brody is the trustee, (ii) 843,505 shares of common stock held indirectly through the David E.

Brody 2019 Spousal Trust, of which Susan R.

Brody's spouse is the trustee, (iii) 49,093 shares held by Susan R.

Brody, and (iv) 266,304 shares of common stock held directly by David Brody.

(3) Includes (i) 357,039 shares of common stock held of record by Mr.

Das, (ii) 25,093 shares of common stock issuable upon exercise of options exercisable within 60 days of March 26, 2023.

Excludes an additional 3,095 shares of common stock underlying options that are not exercisable within 60 days of March 26, 2023.

(7) Includes (i) 6,790 shares of common stock held of record by Ms.

Loundermon and (ii) 26,338 shares of common stock issuable upon exercise of options exercisable within 60 days of March 26, 2023.

Excludes an additional 3,884 shares of common stock underlying options that are not exercisable within 60 days of March 26, 2023.

(8) Includes (i) 25,247 shares of common stock held directly, or by spouse or relative, (ii) 2 shares of common stock held of record by entities, and (iii) 112,007 shares of common stock issuable upon exercise of options exercisable within 60 days of March 26, 2023.

Pomeroy, and (ii) 535 shares of common stock issuable upon exercise of options exercisable within 60 days of April 3, 2024.

(4) Includes 216,136 shares of common stock issuable upon exercise of options exercisable within 60 days of April 3, 2024.

(5) Includes (i) 641 shares of common stock held of record by Nadir Ali, (ii) 1 share of common stock held of record by Lubna Qureishi, Mr.

Ali’s wife, and (iii) 1 share of common stock held of record by the Qureishi Ali Grandchildren Trust, of which Mr.

Ali is the joint-trustee (with his wife Lubna Qureishi) of the Qureishi Ali Grandchildren Trust and has shared voting and investment control over the shares held.

Ali also indirectly owns 1,500 shares of Series 9 Preferred Stock

through 3AM Investments LLC that are not included in this table because they are not convertible into common stock, have no voting rights except as required by law, and are not registered under Section 12 of the Exchange Act.

(6) Excludes beneficial ownership of Mr.

Ali, our former Chief Executive Officer, and Ms.

Loundermon, our former Chief Financial Officer.

Includes (i) 672,437 shares of common stock held directly, or by spouse or relative, (ii) 2,182,402 shares of common stock held of record by entities, and (iii) 216,671 shares of common stock issuable upon exercise of options exercisable within 60 days of April 3, 2024.

(7) Includes (i) 649,249 shares of common stock and (ii) 17,850 shares of common stock issuable upon exercise of warrants exercisable within 60 days of April 3, 2024.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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The Board has not adopted any specific procedures for conducting reviews of potential conflicts of interest and considers each transaction in light of the specific facts and circumstances presented.

However, to the extent a potential related party transaction is presented to the Board, the Company expects that the Board would become fully informed regarding the potential transaction

and the interests of the related party, and would have the opportunity to deliberate outside of the presence of the related party.

However, to the extent a potential related party transaction is presented to the Board, the Company expects that the Board would become fully informed regarding the potential transaction and the interests of the related party, and would have the opportunity to deliberate outside of the presence of the related party.

The Company expects that the Board would only approve a related party transaction that was in the best interests of the Company, and further would seek to ensure that any completed related party transaction was on terms no less favorable to the Company than could be obtained in a transaction with an unaffiliated third party.

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For the period from January 1, 2022, through the date of this report (the “Reporting Period”), described below are certain transactions or series of transactions between us and certain related persons.

Sysorex Transactions

Sysorex Revolving Loan

On December 31, 2018, the Company and Sysorex entered into a note purchase agreement (the “Note Purchase Agreement”) pursuant to which the Company agreed to purchase from Sysorex at a purchase price equal to the Loan Amount (as defined below), a secured promissory note (the “Secured Note”) for up to an aggregate principal amount of $3 million (the “Principal Amount”), including any amounts advanced through the date of the Secured Note (the “Prior Advances”), to be borrowed and disbursed in increments (such borrowed amount, together with the Prior Advances, collectively referred to as the “Loan Amount”), with interest to accrue at a rate of 10% percent per annum on all such Loan Amounts, beginning as of the date of disbursement with respect to any portion of such Loan Amount.

In addition, Sysorex agreed to pay $20,000 to the Company to cover the Company’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of the Secured Note (the “Transaction Expense Amount”), all of which amount is included in the Principal Amount.

Sysorex may borrow repay and borrow under the Secured Note, as needed, for a total outstanding balance, exclusive of any unpaid accrued interest, not to exceed the Principal Amount at any one time.

All sums advanced by the Company to the Maturity Date (as defined below) pursuant to the terms of the Note Purchase Agreement will become part of the aggregate Loan Amount underlying the Secured Note.

All outstanding principal amounts and accrued unpaid interest owing under the Secured Note shall become immediately due and payable on the earlier to occur of (i) 24 month anniversary of the date the Secured Note is issued (the “Maturity Date”), (ii) at such date when declared due and payable by the Company upon the occurrence of an Event of Default (as defined in the Secured Note), or (iii) at any such earlier date as set forth in the Secured Note.

All accrued unpaid interest shall be payable in cash.

On February 4, 2019, the Secured Note was amended to increase the maximum principal amount that may be outstanding at any time under the Secured Note from $3 million to $5 million.

On April 2, 2019, the Secured Note was amended to increase the maximum principal amount that may be outstanding at any time under the Secured Note from $5 million to $8 million.

On May 22, 2019, the Secured Note was amended to increase the maximum principal amount that may be outstanding at any time under the Secured Note from $8 million to $10 million.

The largest aggregate principal amount owed by Sysorex to the Company during the Reporting Period was approximately $10 million, the amount of principal paid during the Reporting Period was approximately $1.8 million and the interest paid during the Reporting Period was $0.

The amount owed by Sysorex to the Company as of December 31, 2021 was approximately $7.7 million.

These amounts exclude $275,000 of additional interest that the Company is contractually entitled to accrue from October 1, 2019 through December 31, 2019 and approximately $1.1 million of additional interest from January 1, 2020 through December 31, 2020 in accordance with the terms of the Sysorex Note, but did not accrue due to the uncertainty of repayment.

The Secured Note has been classified as “held for sale” and the Company, with the assistance of a third-party valuation firm, estimated the fair value of such using Sysorex financial projections, a discounted cash flow model and a 12.3% discount rate.

As a result, the Company established a full valuation allowance as of December 31, 2021.

We are required to periodically re-evaluate the carrying value of the note and the related valuation allowance based on various factors, including, but not limited to, Sysorex’s performance and collectability of the note.

Sysorex’s performance

against those financial projections will directly impact future assessments of the fair value of the note.

On March 1, 2020, the Company amended the Secured Note to extend the maturity date of the Secured Note to December 31, 2022, to increase the default interest rate from 18% to 21% or the maximum rate allowable by law and to require a cash payment to the Company by Sysorex against the Loan Amount in an amount equal to no less than 6% of the aggregate gross proceeds raised following the completion of any financing, or series of related financings, in which Sysorex raised aggregate gross proceeds of at least $5 million.

Sysorex Receivable

On February 20, 2019, the Company, Sysorex and Atlas Technology Group, LLC (“Atlas”) entered into a settlement agreement resulting in a net award of $941,796 whereby Atlas agreed to accept an aggregate of 16,655 shares of freely-tradable common stock of the Company in full satisfaction of the award (the "Atlas Settlement Agreement").

The Company and Sysorex each agreed pursuant to the terms and conditions of that certain Separation and Distribution Agreement, dated August 7, 2018, as amended, that 50% of the costs and liabilities related to the arbitration action would be shared by each party following the Spin-off.

As a result, Sysorex owed the Company $0.6 million as of December 31, 2020 for the settlement plus the interest accrued during the fiscal year ended December 31, 2020 of $0.1 million.

Sysorex Settlement

On April 14, 2021, the Company entered into a Securities Settlement Agreement (the “SSA”) and a Rights Letter Agreement (the “RLA”), each with Sysorex, whereby Sysorex agreed to satisfy in full its outstanding debt, in the aggregate amount of $9.1 million as of March 31, 2021, owed to us under that certain secured promissory note, originally dated December 31, 2018, as amended from time to time, and in connection with the Atlas Debt Settlement.

To effect the Debt Settlement, Sysorex agreed to issue to us (i) pursuant to the terms of the SSA, 12,972,189 shares of its common stock, $0.00001 par value per share, and (ii) rights to acquire 3,000,000 additional shares of its common stock pursuant to the terms of the RLA.

The Debt Settlement was entered into in connection with Sysorex’s closing of a reverse triangular merger with TTM Digital Assets & Technologies, Inc.

In connection with the Debt Settlement, the Company also entered into a Registration Rights Agreement, dated as of April 14, 2021 (the “RRA”), with Sysorex and certain other shareholders of Sysorex (the “Holders”).

Pursuant to the terms of the RRA, Sysorex was required, subject to certain limitations, to register the resale of the shares of common stock held by the Company, with the U.S.

Securities and Exchange Commission (the “SEC”), 90 days following April 14, 2021.

Also, under the RRA, if Sysorex determines to prepare and file with the SEC a registration statement relating to an offering of any of its equity securities, for its own account or the account of others, then the Company will have the right, subject to certain limitations, to require Sysorex to include in such registration statement all or any part of the shares of common stock held by it.

Nadir Ali, Chief Executive Officer and member of the Board, was a member of the board of directors of Sysorex until his resignation on May 14, 2021.

Nadir Ali entered into a consulting agreement with Sysorex, pursuant to which he agreed to provide certain business services specified in the agreement for the benefit of Sysorex in exchange for shares of Sysorex’s common stock.

The consulting agreement was terminated on October 14, 2021.

Systat License Acquisition

On June 30, 2020 (the "Closing Date"), pursuant to the terms and conditions of that certain Exclusive Software License and Distribution Agreement, dated as of on June 19, 2020, with an effective date of June 1, 2020 (as amended, the “License Agreement”), with Cranes Software International Ltd., a company organized under the laws of India (“Cranes”) and Systat Software, Inc., a Delaware corporation (“Systat,” and together with Cranes, the “Systat Parties”).

In accordance with the terms of the License Agreement, on June 30, 2020 (the “License Closing Date”), we acquired (a) an exclusive, worldwide license to use, modify, develop market and distribute certain software, software source, user documentation and related Systat intellectual property, and (b) an exclusive, worldwide sub-license to use, modify, develop, market and distribute software, software source, user documentation and related intellectual property license to Systat by Cranes (collectively, the "Licenses").

In exchange for the Licenses, we paid $2.2 million in cash and we partitioned a portion of the outstanding balance of the Sysorex Note into a new note in an amount equal to $3 million in principal plus accrued interest (the “Closing Note”) and assigned the Closing Note and all rights and obligations thereunder to Systat in accordance with the terms and conditions of that

certain Promissory Note Assignment and Assumption Agreement.

Pursuant to the License Agreement, we partitioned and assigned to Systat an additional $3.3 million of the principal balance underlying the Sysorex Note as follows:

(i) $1.3 million on the three month anniversary of the Closing Date, (ii) $1.0 million on the six month anniversary of the Closing Date and (iii) $1.0 million on March 19, 2021.

In addition, in connection with an amendment to License Agreement dated February 22, 2021, we exercised our option to purchase a portion of the underlying assets of the Sysorex Note, including certain software, trademarks, solutions, domain names and websites from Systat in exchange for $900,000 in cash consideration.

Systat License Agreement

Nadir Ali, the Company's Chief Executive Officer and a member of the Board, is a related party in connection with the acquisition of the Licenses as a result of his service as a director of Sysorex, the issuer of the Sysorex Note that was assigned in accordance with the terms and conditions of the License Agreement.

In addition, Tanveer Khader and Kareem Irfan, members of our Board, are also related parties in connection with the acquisition of the Licenses as a result of their respective employment relationships with the Systat Parties.

Consulting Agreements

On March 12, 2024, the Company entered into a Consulting Agreement with Mr.

Nadir Ali (the “Ali Consulting Agreement”), the Company's former Chief Executive Officer.

Pursuant to the Ali Consulting Agreement, following the Closing of the XTI Merger, Mr.

Ali will provide consulting services to the Company for 15 months or until earlier termination in accordance with its terms (the “Ali Consulting Period”).

During the Ali Consulting Period, the Company will pay him a monthly fee of $20,000.

If the Company terminates the Ali Consulting Agreement during the first six months of the Ali Consulting Period without Company Good Reason (as defined in the Ali Consulting Agreement), the Company will be required to pay all consulting fees that would be due for such six-month period.

Ali terminates the Ali Consulting Agreement during the Ali Consulting Period for Consultant Good Reason (as defined in the Ali Consulting Agreement), the Company will be required to pay all consulting fees that would be due for the remainder of the Ali Consulting Period, including the Equity Payment described below, including the Equity Payment described below.

In addition, the Company shall pay Mr.

Ali (a) the amount of $1,500,000 due three months following the Closing, and (b) the aggregate amount of $4,500,000, payable in 12 equal monthly installments of $375,000 each, starting four months after the Effective Date (the payments described in (a) and (b), each an “Equity Payment”).

Each Equity Payment may be made, in

Company’s discretion, in (i) cash, (ii) fully vested shares of common stock under the Company’s equity incentive plan and registered on a registration statement on Form S-8 or another appropriate form (“Registered Shares”), or a combination of cash and Registered Shares.

Ali must continue to provide consulting services to the Company on the date of payment of an Equity Payment to receive the Equity Payment, unless the Company terminates the Ali Consulting Agreement without Company Good Reason or Mr.

Ali terminates the Ali Consulting Agreement for Consulting Good Reason, in which case the Equity Payments would become due and payable in full.

To the extent all or a portion of an Equity Payment is made in shares, such shares will be valued based on the closing price per share on the date on which the Equity Payment is made.

Subject to compliance with Section 15(b)(13) of the Exchange Act, if Mr.

Ali provides services involving the identification of prospective merger or acquisition targets for the Company or its affiliates, it is intended that he be eligible for a bonus upon the successful delivery of services.

The specifics of the bonus will be negotiated and mutually agreed upon by the Company and Mr.

On March 12, 2024, the Company also entered into a Consulting Agreement with Ms.

Wendy Loundermon (the “Loundermon Consulting Agreement”), the Company's former Chief Financial Officer.

Pursuant to the Loundermon Consulting Agreement, following the Closing, Ms.

Loundermon will provide consulting services to the Company for one year or until earlier termination in accordance with its terms (the “Loundermon Consulting Period”).

As compensation for Ms.

Loundermon ’s c onsulting services , the Company will pay her (i) $83,333 per month for the first six months of the Loundermon Consulting Period for services she perform s on an as-needed basis during the Loundermon Consulting Period regarding the transition of the management of the Company’s financial reporting function to ensure continuity of business operations (with such advisory fees payable , subject to certain conditions, pursuant to the payment schedule set forth in the Loundermon Consulting Agreement), and (ii) $300 per hour for services performed on an as needed basis regarding the preparation and filing of Company’s public company financial reporting and compliance matters including accounting, payroll, audit and tax compliance functions.

If, during the first six months of the Loundermon Consulting Period, the Company terminates the Consulting Agreement without Company Good Reason (as defined in the Loundermon Consulting Agreement) or Ms.

Loundermon terminates the Loundermon Consulting Agreement for Consultant Good Reason (as defined in the Consulting Agreement), the Company will be required to pay all advisory fees that would be due for such six month period.

Securities Purchase Agreement

On March 12, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an entity controlled by the Company’s former director and Chief Executive Officer, Mr.

Nadir Ali (the “Purchaser”).

Pursuant to the Securities Purchase Agreement, the Purchaser purchased 1,500 shares of Series 9 Preferred Stock for a total purchase price of $1,500,000, based on a purchase price of $1,000 per share of Series 9 Preferred Stock.

The Company agreed that the Purchaser will be deemed a “Required Holder” as defined in the Certificate of Designations of Preferences and Rights of Series 9 Preferred Stock as long as the Purchaser holds any shares of Series 9 Preferred Stock.

The Securities Purchase Agreement sets forth certain restrictions on the Company’s use of the proceeds from the sale of the Series 9 Preferred Stock pursuant thereto, including that the proceeds must be used in connection with the redemption of the Series 9 Preferred Stock pursuant to the Certificate of Designation or working capital purposes, and may not, without the consent of the required holders of Series 9 Preferred Stock, be used for, among other things, (i) the redemption of any XTI Aerospace common stock or common stock equivalents, (ii) the settlement of any outstanding litigation, or (iii) for the repayment of debt for borrowed money to any officer or director, or XTI Merger-transaction related bonuses to any employee or vendor except for such non-merger transaction related bonuses as may be payable to participants pursuant to the Company’s existing employee bonus plan.

Subscription of Units of, and Loan to, Cardinal Venture Holdings

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As a result of the closing of the Business Combination, the loan was repaid on March 15, 2023.

On February 27, 2023, the Company entered into Limited Liability Company Unit Transfer and Joinder Agreements with certain of the Company’s employees (the “Transferees”), pursuant to which (i) the Company transferred all of its Class A Units of CVH (the “Class A Units”), an aggregate of 599,999 Class A Units, to the Transferees as bonus consideration in connection with each Transferee’s services performed for and on behalf of the Company as an employee, as applicable, and (ii)

each Transferee became a member of CVH and a party to the Amended and Restated Limited Liability Company Agreement of CVH, dated as of September 30, 2020.

Nadir Ali, the Company's Chief Executive Officer and a director, beneficially owns membership interest in CVH through 3AM LLC, a Delaware limited liability company and a founding member of CVH ("3AM"), which may, in certain circumstances, be entitled to manage the affairs of CVH.

Nadir Ali, the Company's former Chief Executive Officer and a former director, beneficially owned membership interests in CVH through 3AM LLC, a Delaware limited liability company and a founding member of CVH ("3AM").

Ali's relationship may create conflict of interest between Mr.

Ali's obligation to our company and its shareholders and his economic interests and possible fiduciary obligation in CVH through 3AM.

For example, Mr.

Ali may be in a position to influence or manage the affairs of CVH in a manner that may be viewed as contrary to the best interest of either the Company or CVH and their respective stakeholders.

Ali's obligation to our company and its shareholders and his economic interests and possible fiduciary obligation to 3AM.

CVH was dissolved as of December 31, 2023.

Enterprise Apps Spin-off and Business Combination

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Effective as of the closing of the Merger, Design Reactor, entered into a consulting agreement with 3AM, pursuant to which Mr.

Ali will provide advisory services following the closing of the Business Combination in exchange for $180,000 in consulting fees.

Ali provideed advisory services following the closing of the Business Combination in exchange for $180,000 in consulting fees.

CVH Class A Unit Transfers

On February 27, 2023, the Company entered into Limited Liability Company Unit Transfer and Joinder Agreements with certain of the Company’s employees and directors (the “Transferees”), pursuant to which (i) the Company transferred all of its Class A Units of CVH (the “Class A Units”), an aggregate of 599,999 Class A Units, to the Transferees as bonus consideration in connection with each Transferee’s services performed for and on behalf of the Company as an employee, as applicable, and (ii) each Transferee became a member of CVH and a party to the Amended and Restated Limited Liability Company Agreement of CVH, dated as of September 30, 2020.

The following table sets forth the number of Class A Units awarded to each Transferee pursuant to the terms of their respective Transfer Agreement:

Name Title Number of Class A Units

Nadir Ali Chief Executive Officer, Director 219,999

Wendy Loundermon Chief Financial Officer, Director 100,000

Soumya Das Chief Operating Officer 50,000

Solutions Divestiture

Grafiti Group Equity Purchase Agreement

On February 21, 2024, the Company completed the disposition of the remaining portion of the Shoom, SAVES, and GYG business lines and assets (the "Grafiti Group Divestiture") that were excluded from the Grafiti Holding Transaction in accordance with the terms and conditions of an Equity Purchase Agreement, dated February 16, 2024, by and among Inpixon (“Seller”), Grafiti LLC, and Grafiti Group LLC (a newly formed entity controlled by Nadir Ali, the Company's CEO and a director) (“Buyer”).

Pursuant to the terms of the Equity Purchase Agreement, Buyer acquired from 100% of the equity interest in Grafiti LLC, including the assets and liabilities primarily relating to Inpixon’s Saves, Shoom and Game Your Game business, including 100% of the equity interests of Inpixon India, Grafiti GmbH (previously Inpixon GmbH) and Game Your Game, Inc.

from the Company for a minimum purchase price of $1.0 million paid in two annual cash installments of $0.5 million due within 60 days after December 31, 2024 and 2025.

The purchase price and annual cash installment payments will be (i) increased for 50% of net income after taxes, if any, from the operations of Grafiti LLC for the years ended December 31, 2024 and 2025;

(ii) decreased for the amount of transaction expenses assumed;

(iii) increased or decreased by the amount working capital of Grafiti LLC on the closing balance sheet is greater or less than $1.0 million.

Transition Services Agreement

On February 21, 2024, in connection with the closing of the Grafiti Group Divestiture, Grafiti LLC and Inpixon entered into a Transition Services Agreement (the “Grafiti Transition Services Agreement”) with respect to services to be provided for a period of one year following closing.

Pursuant to the Grafiti Transition Services Agreement, the Company will provide contracted IT and accounting services to Grafiti LLC and Grafiti LLC will provide certain accounting and payroll services, in each case on an hourly as needed basis to ensure the orderly transition of the business.

Sublease Arrangement

The Company and Grafiti LLC have also arranged for the Company to sublease office space in Palo Alto, CA from Grafiti LLC at a cost of 50% of monthly rent and operating expenses as of February 1, 2024.

The cost is estimated at approximately $5,800 per month.

Legacy XTI Transactions

During the years ended December 31, 2023 and 2022, Legacy XTI paid its Chief Operating Advisor consultant, Charlie Johnson, who was then a board member and stockholder of Legacy XTI, compensation of $60,000 and $30,000, respectively.

As of December 31, 2023 and December 31, 2022, Legacy XTI owed Mr.

Johnson accrued compensation of $120,000 and $60,000, respectively.

Pursuant to an amendment to the consulting agreement in 2024, the Company paid $60,000 to Mr.

Johnson in March 2024 and the remaining accrued compensation balance of $60,000 was waived.

Transactions with Mr.

Replacement Note

Legacy XTI entered into an amended convertible note agreement with Mr.

Brody, its founder, Chairman and majority shareholder, in 2021 that consolidated a number of his outstanding notes (the “2021 Note”).

On October 1, 2023, the existing 2021 Note was replaced by a new convertible note with a principal balance of $1,079,044 (2021 Note principal of $1,007,323 plus accrued interest of $71,721) (the “Brody Note”) and with a maturity date defined as the earlier of (i) a closing of a merger with a company whose shares are traded on a public stock exchange, or (ii) March 31, 2024 (as amended).

The Brody Note accrued interest at a rate of 4% compounded annually, provided that on and after the maturity date interest the note shall accrue from and after such date on the unpaid principal and all accrued but unpaid interest of the note at a rate of 10% per annum.

The Brody Note provided that at any time prior to the maturity date, Mr.

Brody may convert all or a portion of the outstanding note balance into shares of Legacy XTI at a conversion price equal to $1.00.

Prior to Closing, Mr.

Brody elected to convert all except $175,000 of the Brody Note.

On March 11, 2024, Legacy XTI and Mr.

Brody entered into an Amendment No.

1 (the “Brody Note Amendment”) to the Brody Note pursuant to which Mr.

Brody converted $922,957 principal amount of the Brody Note and accrued and unpaid interest thereon, into shares of Legacy XTI common stock at a rate of $0.3094 in principal amount per share, and Legacy XTI agreed to pay Mr.

Brody the remaining $175,000 in principal amount at the time of Closing.

The shares issued as consideration under the Brody Note Amendment converted into 266,273 shares of XTI Aerospace common stock in accordance with the exchange ratio pursuant to the XTI Merger Agreement.

After the Closing of the Merger, the Company assumed the Brody Note as Maker, and the Company and Mr.

Brody entered into Amendment No.

2 (the “Brody Note Second Amendment”) to the Brody Note which extended the maturity date for the $175,000 payment to April 1, 2024.

January 2023 Note

In connection with the XTI Merger, the Company assumed a Promissory Note issued by XTI to Mr.

Brody on January 5, 2023 (the “January 2023 Note”), with an outstanding principal balance of $125,000 along with an interest balance of $10,058 calculated as of April 30, 2024.

On March 27, 2024, Mr.

Brody and the Company entered into an amendment to the January 2023 Note which extended the Maturity Date to April 30, 2024.

Consulting Agreement

Brody provided legal and strategic consulting services to Legacy XTI under a consulting agreement.

During the years ended December 31, 2023 and 2022, Legacy XTI paid Mr.

Brody compensation of $60,000 and $100,000, respectively.

As of December 31, 2023 and December 31, 2022, Legacy XTI had payable amounts owed to Mr.

Brody of $320,000 and $260,000, respectively, under his consulting agreement.

Pursuant to an amendment to the consulting agreement, these accrued amounts were waived by Mr.

Brody and the consulting agreement terminated in connection with the closing of the XTI Merger.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Set forth below are approximate fees billed and accrued for services rendered by Marcum LLP, our independent registered public accounting firm, for the fiscal years ended December 31, 2022 and 2021.

Inpixon incurred the following fees for services rendered by Marcum LLP, Inpixon's independent registered public accounting firm, for the fiscal years ended December 31, 2023 and 2022.

Audit Fees(1) $ 318,554 $ 289,410

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The “Audit Fees” are the aggregate fees of Marcum attributable to professional services rendered in 2023 and 2022 for the audit of our annual financial statements in our annual reports on Form 10-K, for review of financial statements included in our quarterly reports on Form 10-Q or for services that are normally provided by Marcum in connection with statutory and regulatory filings or engagements for that fiscal year.

These fees include fees billed for professional services rendered by

Marcum for the review of registration statements or services that are normally provided in connection with statutory and regulatory filings or engagements for those fiscal years.

These fees include fees billed for professional services rendered by Marcum for the review of registration statements or services that are normally provided in connection with statutory and regulatory filings or engagements for those fiscal years.

Audit-Related Fees .

Marcum billed us for professional services that were reasonably related to the performance of the audit or review of financial statements for fiscal years ended 2023 and 2022, which are not included under Audit Fees above including the filing of our registration statements, including our Registration Statement on Form S-3.

This amount also includes audit fees related to acquisitions.

This amount also includes audit fees related to acquisitions and fees for special audits related to our transactions.

Marcum did not perform any tax advice or planning services in 2023 or 2022.

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

XTI AEROSPACE, INC.

April 16, 2024 By:

/s/ Nadir Ali

/s/ Scott Pomeroy

Scott Pomeroy

Chief Executive Officer

Each person whose signature appears below constitutes and appoints Nadir Ali and Wendy Loundermon, and each of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue thereof.

Each person whose signature appears below constitutes and appoints Scott Pomeroy and Brooke Turk, and each of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature Title Date

/s/ Nadir Ali Chief Executive Officer and Director April 17, 2023

Nadir Ali (Principal Executive Officer)

/s/ Wendy Loundermon Chief Financial Officer and Director April 17, 2023

Wendy Loundermon (Principal Financial and Accounting Officer)

/s/ Leonard A.

Oppenheim Director April 17, 2023

/s/ Kareem Irfan Director April 17, 2023

/s/ Tanveer Khader Director April 17, 2023

Tanveer Khader

/s/ Scott Pomeroy

Chief Executive Officer, Chairman and Director

April 16, 2024

Scott Pomeroy

(Principal Executive Officer)

/s/ Brooke Turk

Chief Financial Officer

April 16, 2024

(Principal Financial and Accounting Officer)

/s/ David Brody

Director April 16, 2024

/s/ Soumya Das

Director April 16, 2024

/s/ Kareem Irfan

Director April 16, 2024

EXHIBIT INDEX

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8-K 001-36404 2.3 September 26, 2022

Agreement and Plan of Merger, dated July 24, 2023, among Inpixon, Superfly Merger Sub Inc.

and XTI Aircraft Company.

8-K 001-36404 2.1 July 25, 2023

First Amendment to Merger Agreement, dated December 30, 2023, by and between Inpixon, Superfly Merger Sub Inc.

and XTI Aircraft Company.

2.27† Second Amendment to Merger Agreement, dated March 12, 2024, by and between Inpixon, Superfly Merger Sub Inc.

and XTI Aircraft Company.

8-K 001-36404 10.1 March 15, 2024

Separation Agreement, dated as of October 23, 2023, by and between Inpixon and Grafiti Holding Inc.

8-K 001-36404 2.1 October 23, 2023

Business Combination Agreement, dated as of October 23, 2023, by and among Inpixon, Grafiti Holding Inc., 1444842 B.C.

and Damon Motors Inc.

8-K 001-36404 2.2

October 23, 2023

2.30† Equity Purchase Agreement, dated as of February 16, 2024, by and among Inpixon, Grafiti LLC and Grafiti Group LLC.

8-K 001-36404 2.1 February 23, 2024

3.1 Restated Articles of Incorporation.

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8-K 001-36404 3.1 December 2, 2022

C ertificate of Designations of Preferences and Rights of Series 9 Preferred Stock .

8-K 001-36404

March 15, 2024

C ertificate of Amendment (Reverse Stock Split).

8-K 001-36404

March 15, 2024

C ertificate of Amendment (Name Change).

8-K 001-36404

March 15, 2024

Bylaws, as amended.

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3.2 September 13, 2021

By-Laws Amendment No.

8-K 001-36404

September 19, 2023

By-Laws Amendment No.

8-K 001-36404

September 19, 2023

B ylaws Amendment.

8-K 001-36404

March 15, 2024

4.1 Specimen Stock Certificate of the Company.

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3.1 January 15, 2019

4.4 Form of Warrant

8-K 001-36404 4.1 April 24, 2018

Promissory Note, dated as of December 21, 2018

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8-K 001-36404 4.1 March 20, 2020

4.13 Form of Warrant

8-K 001-36404 4.1 September 13, 2021

Series 7 Convertible Preferred Stock Certificate of Designation, filed with the Secretary of State of the State of Nevada and effective September 13, 2021

1 unchanged sentence

Description of Registrant's Securities

4.16 Form of Warrant

8-K 001-36404 4.1 March 22, 2022

Series 8 Convertible Preferred Stock Certificate of Designation, filed with the Secretary of State of the State of Nevada and effective March 22, 2022

4 unchanged sentences

8-K 001-36404 4.1 October 20, 2022

4.20 Form of Pre-Funded Warrants

8-K 001-36404 4.2 October 20, 2022

Promissory Note, dated as of December 30, 2022

8-K 001-36404 4.1 December 30, 2022

Common Stock Purchase Warrant

001-36404 4.7

Form of New Warrant.

001-36404 4.1 December 15, 2023

Promissory Note, dated effective as of January 5, 2023

Amendment No.

1 to Promissory Note, dated as of March 27, 2024, by and between XTI Aerospace, Inc.

Unsecured Convertible Promissory Note, dated as of October 1, 2023.

Amendment No.

1 to Unsecured Convertible Promissory Note, dated as of March 12, 2024, by and between XTI Aircraft Company and David E.

Amendment No.

2 to Unsecured Convertible Promissory Note, dated as of March 27, 2024, by and between XTI Aerospace, Inc.

Form of Warrant initially issued by XTI Aircraft Company and assumed by the Registrant.

F orm of Amendment No.

2 to Warrant initially issued by XTI Aircraf t Company and assumed by the Registrant.

10.1+ Amended and Restated 2011 Employee Stock Incentive Plan.

S-8 333-195655 10.22 May 2, 2014

10.2+ Form of Incentive Stock Option Agreement.

8-K 001-36404 10.9 October 27, 2014

F orm of Incentive Stock Option Agreement.

001-36404 10.9 October 27, 2014

10.3+ Form of Non-Qualified Stock Option Agreement.

9 unchanged sentences

10.8+ 2018 Employee Stock Incentive Plan Form of Restricted Stock Award Agreement.

10-K 001-36404 10.6 10-K March 31, 2021

10-K 001-36404 10.6 March 31, 2021

10.9+ Director Services Agreement with Leonard A.

90 unchanged sentences

8-K 001-36404 10.1 December 30, 2022

Form of Amendment No.

1 to Common Stock Purchase Warrants.

8-K 001-36404 10.1 February 28, 2023

Form of Limited Liability Company Unit Transfer and Joinder Agreement.

8-K 001-36404 10.2 February 28, 2023

Employee Matters Agreement, dated March 14, 2023, by and among KINS, KINS Merger Sub Inc., Inpixon, and Legacy CXApp.

8-K 001-36404 10.1 March 20, 2023

Tax Matters Agreement, dated March 14, 2023, by and among KINS, Inpixon, and Legacy CXApp.

8-K 001-36404 10.2 March 20, 2023

Transition Services Agreement, dated March 14, 2023, by and between Inpixon and Legacy CXApp.

8-K 001-36404 10.3 March 20, 2023

Warrant Purchase Agreement

10-Q 001-36404 10.6 May 16, 2023

Placement Agency Agreement

10-Q 001-36404 10.7 May 16, 2023

Amendment #2 to Promissory Note, dated as of May 16, 2023.

8-K 001-36404 10.1 May 19, 2023

Amendment to Promissory Note, dated as of May 16, 2023.

8-K 001-36404 10.2 May 19, 2023

Amendment No.

1 to Equity Distribution Agreement, dated as of June 13, 2023, by and between Inpixon and Maxim Group LLC.

8-K 001-36404 10.1 June 13, 2023

Form of Amendment Agreement.

8-K 001-36404 10.1 June 21, 2023

XTI Amended and Restated Senior Secured Note with Loan Schedule.

10-Q 001-36404 10.23 November 20, 2023

Form of Security and Pledge Agreement.

8-K 001-36404 10.2 July 25, 2023

Inpixon Transaction Bonus Plan, dated July 24, 2023.

8-K 001-36404 10.3 July 25, 2023

Inpixon Transaction Bonus Plan, dated July 24, 2023.

8-K 001-36404 10.4 July 25, 2023

First Amendment to Employment Agreement, dated July 24, 2023, between Inpixon and Wendy Loundermon.

8-K 001-36404 10.5 July 25, 2023

Form of Securities Purchase Agreement by and between Damon Motors Inc.

8-K 001-36404 10.1 October 23, 2023

Form of Convertible Promissory Note to be issued by Damon Motors Inc.

8-K 001-36404 10.2 October 23, 2023

Form of Common Share Purchase Warrant to be issued by Damon Motors Inc.

8-K 001-36404 10.3 October 23, 2023

Form of Securityholder Support Agreement by and among Inpixon, Grafiti Holding Inc., Damon Motors Inc.

and certain securityholders.

8-K 001-36404 10.4 October 23, 2023

Form of Lockup Agreement by and among Grafiti Holding Inc., Damon Motors and certain securityholders who are insiders.

8-K 001-36404 10.5 October 23, 2023

Form of Lockup Agreement by and among Grafiti Holding Inc., Damon Motors and certain securityholders who are not insiders.

8-K 001-36404 10.6 October 23, 2023

Form of Inducement Agreement by and between Inpixon and the Holder.

8-K 001-36404 10.1 December 15, 2023

Amendment No.

2 to Equity Distribution Agreement, dated as of June 13, 2023, by and between Inpixon and Maxim Group LLC.

8-K 001-36404 10.1 January 3, 2024

Liquidating Trust Agreement, dated as of December 27, 2023, by and among Inpixon, Grafiti Holding Inc.

and the sole original trustee named therein.

8-K 001-36404 10.2 January 3, 2024

First Amendment to Senior Secured Promissory Note, dated as of December 30, 2023, by and between Inpixon and XTI Aircraft Company.

8-K 001-36404 10.3 January 3, 2024

Second Amendment to Senior Secured Promissory Note, dated as of February 2, 2024, by and between Inpixon and XTI Aircraft Company.

8-K 001-36404 10.1 February 5, 2024

Exchange Agreement, dated March 12, 2024, by and between Inpixon and Streeterville Capital, LLC.

8-K 001-36404 10.2 March 15, 2024

Securities Purchase Agreement, dated March 12, 2024, by and between Inpixon and 3AM Investments LLC.

8-K 001-36404 10.3 March 15, 2024

Form of Indemnification Agreement.

8-K 001-36404 10.4 March 15, 2024

Consulting Agreement, dated March 12, 2024, by and between XTI Aerospace, Inc.

and Nadir Ali.

8-K 001-36404 10.5 March 15, 2024

Consulting Agreement, dated March 12, 2024, by and between XTI Aerospace, Inc.

and Wendy Loundermon.

8-K 001-36404 10.6 March 15, 2024

Amendment to Employment Agreement, dated March 12, 2024, by and between Inpixon and Nadir Ali.

8-K 001-36404 10.7 March 15, 2024

Amendment to Employment Agreement, dated March 12, 2024, by and between Inpixon and Wendy Loundermon.

8-K 001-36404 10.8 March 15, 2024

Amendment to Inpixon Transaction Bonus Plan, dated March 11, 2024.

8-K 001-36404 10.9 March 15, 2024

Form of Acknowledgement Agreement.

8-K 001-36404 10.10

March 15, 2024

Aircraft Purchase Agreement, dated February 2, 2022, between XTI Aircraft Company and Counterparty A.

S-1 333-273964 10.62 October 6, 2023

Consulting Services Agreement, dated July 5, 2022, by and between XTI Aircraft Company and Waymaker Capital, LLC.

Consulting Agreement, dated August 16, 2023, by and between XTI Aircraft Company and Playa Property Management, LLC, d/b/a Springboard Ventures.

Employment Agreement, dated July 28, 2022, but effective as of July 1, 2022, by and between XTI Aircraft Company and Michael Hinderberger.

21.1 List of Subsidiaries of the Company.

5 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XTI Aerospace, Inc.

Clawback Policy.

101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) X

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures