ENGLEWOOD, Colo. - XTI Aerospace, Inc. (NASDAQ: XTIA), the developer of the TriFan 600 vertical takeoff and landing (VTOL) aircraft, has announced a tentative agreement for a strategic equity investment of up to $55 million from FC Imperial Limited, an affiliate of FinExic Concordia Group.
The investment, still subject to finalization, is intended to advance the TriFan 600's development, potentially accelerating the project through key milestones.
The TriFan 600, designed to combine the vertical lift capability of a helicopter with the speed and range of a fixed-wing aircraft, is positioned to create a new category in aviation—the vertical lift crossover airplane (VLCA). XTI has been working with the investment team for over a year, during which extensive technical and financial evaluations have been conducted.
Scott Pomeroy, XTI's chairman and CEO, expressed optimism that the additional capital would significantly expedite the TriFan's development process, including the completion of preliminary and critical design review phases. This progression is crucial for the assembly of XTI's Test Aircraft No. 1.
The proposed investment is structured to distribute capital at a post-money valuation of $275 million, a figure that aligns with a fairness opinion provided to the Inpixon (NASDAQ:XTIA) Board of Directors before its merger with XTI Aircraft Company. This valuation marks a significant increase from the $100 million valuation at the company's last private capital raise.
Anindya Chakraborty of the Investor Consortium highlighted the TriFan's unique attributes, suggesting its potential for widespread adoption in various global markets and applications ranging from healthcare and emergency services to luxury travel.
The terms of the agreement include the issuance of convertible preferred stock, with the potential conversion into common stock through defined events, pending the execution of a definitive purchase agreement. Further details are expected to be disclosed in a Current Report on Form 8-k to be filed with the Securities and Exchange Commission.
XTI Aerospace, based near Denver, Colorado, also operates Inpixon, a business unit specializing in real-time location systems (RTLS) technology.
This press release contains forward-looking statements regarding the potential investment and development of XTI's technology. The consummation of the investment is contingent upon the completion of requisite processes, including a definitive purchase agreement, and there is no guarantee the transaction will occur as proposed.
The information in this article is based on a press release statement.
In other recent news, XTI Aerospace, Inc. has made significant strides in its operations and partnerships. The company has amended its business combination agreement with Damon Motors Inc., extending the potential merger deadline to September 30, 2024. This amendment adjusts terms including consent rights and share issuance, and also extends the maturity date of the Bridge Notes to the same date.
In addition, XTI Aerospace has filed a non-provisional patent application for its TriFan 600 vertical takeoff and landing (VTOL) aircraft, demonstrating its ongoing commitment to innovation. This move follows the company's conditional purchase agreement with Mesa Air Group (NASDAQ:MESA), Inc. for up to 100 TriFan 600 aircraft, a deal that could potentially generate approximately $1 billion in revenue.
Further, XTI Aerospace has announced a strategic partnership with AVX Aircraft Company to expedite the development and certification of the TriFan 600. This collaboration aims to leverage AVX's advanced vertical lift technology expertise, which is expected to streamline the project timeline and reduce costs.
In other recent developments, XTI Aerospace has welcomed Tensie Axton, a finance expert, to its Board of Directors. Axton's addition is expected to bring valuable expertise to the company, particularly in capital markets, mergers and acquisitions, investor relations, and strategic planning. These are among the recent developments for XTI Aerospace.
InvestingPro Insights
XTI Aerospace, Inc. (NASDAQ: XTIA) has been in the spotlight with its innovative TriFan 600 VTOL aircraft and the recent tentative agreement for a strategic equity investment. While the company's ambitions are high, a closer examination of its financial health using InvestingPro data reveals challenges that investors should be aware of.
Despite the potential for a significant cash infusion, XTI Aerospace operates with a substantial debt burden and is quickly burning through cash, as indicated by an InvestingPro Tip. This is important for investors to consider, especially when looking at the company's future financial obligations. Moreover, the stock has experienced considerable price volatility, a factor that can affect investment decisions, as highlighted in another InvestingPro Tip.
InvestingPro data shows a market capitalization of $11.86 million USD, which reflects the company's current valuation in the market. The P/E ratio stands at -1.1 for the last twelve months as of Q3 2023, pointing to the company's lack of profitability during this period. Furthermore, the 1 Month Price Total Return as of mid-2023 has seen a dramatic decrease of -52.73%, suggesting a significant drop in investor confidence or market valuation in the short term.
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With a total of 12 additional InvestingPro Tips available, investors can gain a comprehensive understanding of the company's financial position and market performance, which could be crucial in making informed decisions about their investment strategies.
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