XTI Aerospace, Inc., a company specializing in computer programming services, has announced the issuance of new shares as part of an exchange agreement with a preferred stockholder.
On Wednesday, the company issued 2,802,491 shares of common stock to a holder of its Series 9 Preferred Stock. This transaction was conducted at an effective price per share of $0.1124, equating to an aggregate stated value of $315,000 for the 300 shares of Series 9 Preferred Stock that were returned and canceled.
The exchange, which took place on October 23, 2024, was executed under the terms of an exchange agreement. The newly issued shares, referred to as the Preferred Exchange Shares, were allocated based on an exemption from registration under Section 3(a)(9) of the Securities Act of 1933.
This exemption applies because the shares were exchanged for other securities of the company without additional consideration from the holder and the payment of commissions or other remuneration by the company in connection with the exchange.
Following the completion of this transaction, XTI Aerospace reported that as of October 24, 2024, the total number of common stock shares outstanding for the company amounted to 56,775,250. This move signifies a change in the company's capital structure, as it continues to navigate the market dynamics of the tech and aerospace sectors.
The information regarding this equity securities transaction is based on a press release statement and has been filed with the Securities and Exchange Commission.
In other recent news, XTI Aerospace has been actively involved in a series of significant developments. The company has extended the maturity date for its bridge notes and issued new equity shares. Furthermore, XTI Aerospace has entered into a second amendment to its Business Combination Agreement with Damon Motors Inc., introducing new conditions and extending the termination date of the agreement.
Additionally, XTI Aerospace has appointed Tobin Arthur as its Chief Strategy Officer and established a Corporate Advisory Board, led by Michael Tapp from Palingen Capital. The company is also engaged in a legal dispute with Chardan Capital Markets LLC over compensation claims.
In terms of product development, XTI Aerospace has filed a non-provisional patent application for its TriFan 600 vertical takeoff and landing aircraft, potentially generating approximately $1 billion in revenue through a conditional purchase agreement with Mesa Air Group (NASDAQ:MESA), Inc. for up to 100 TriFan 600 aircraft.
These are the recent developments for XTI Aerospace.
InvestingPro Insights
XTI Aerospace's recent share issuance comes amid challenging financial circumstances, as revealed by InvestingPro data. The company's market capitalization stands at a modest $3.67 million, reflecting its current struggles. InvestingPro Tips indicate that XTI is "quickly burning through cash" and that "short term obligations exceed liquid assets," which may explain the need for the recent equity transaction.
The stock's performance has been particularly concerning, with InvestingPro data showing a staggering 97.34% price decline over the past year. This aligns with the InvestingPro Tip that the stock is "trading near 52-week low." Additionally, the company's financial health appears precarious, with an operating income margin of -1394.9% for the last twelve months as of Q2 2024, suggesting significant operational challenges.
Despite these headwinds, it's worth noting that XTI Aerospace "holds more cash than debt on its balance sheet," which could provide some financial flexibility. For investors considering the stock's potential, the RSI suggests it may be in oversold territory, according to another InvestingPro Tip.
For a more comprehensive analysis, InvestingPro offers 15 additional tips on XTI Aerospace, providing deeper insights into the company's financial position and market performance.
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