XTI Aerospace Announces Closing of Public Offering

Rhea-AI Summary

XTI Aerospace (XTIA) has announced the closing of its public offering, raising approximately $4 million in gross proceeds. The offering consisted of 2,941,200 shares of common stock (or pre-funded warrants) and warrants at a combined price of $1.36 per share.

The warrants are immediately exercisable for five years with an exercise price of $1.36 per share. The company plans to use the net proceeds for general working capital, corporate purposes, and to fully repay outstanding secured promissory notes. ThinkEquity served as the sole book-running manager for the offering.

The securities were offered through a shelf registration statement on Form S-3, filed with the SEC on May 31, 2024, and declared effective on June 18, 2024.

Positive

• Secured $4 million in gross proceeds from public offering
• Will repay outstanding secured promissory notes, reducing debt burden
• Warrants are immediately exercisable, providing potential additional capital

Negative

• Dilutive effect on existing shareholders due to issuance of 2.94M new shares
• Low offering price of $1.36 per share indicates weak market valuation
• Additional dilution possible if warrants are exercised

Insights

Financial Analyst

XTI Aerospace's $4 million public offering represents a significant capital event that requires careful analysis. The company issued 2,941,200 shares (or pre-funded warrants) plus warrants to purchase an additional 2,941,200 shares at $1.36 per share.

Given XTIA's $9 million market cap, this offering represents substantial dilution of approximately 30% to existing shareholders. However, this must be balanced against the stated use of proceeds, which includes debt elimination through the "full repayment of outstanding secured promissory notes." This debt clearance will strengthen the balance sheet by reducing liabilities and interest expenses.

The dual-purpose allocation between working capital and debt repayment suggests financial restructuring rather than pure growth investment. Without specific figures on their current debt load, it's difficult to determine exactly how much capital will remain for operations after debt repayment.

The warrant structure creates potential for future capital influx if XTIA's stock price exceeds the $1.36 exercise price, providing a secondary financing mechanism without immediate dilution. These warrants remain exercisable for five years, giving the company a long-term potential capital source if performance improves.

This financing appears to be a necessary balance sheet fortification rather than an opportunistic capital raise, aimed at providing operational runway while eliminating debt obligations.

Aerospace Industry Expert

This $4 million capital raise for XTI Aerospace must be viewed through the lens of VTOL development economics. Vertical takeoff and landing aircraft development is extraordinarily capital-intensive, typically requiring tens to hundreds of millions in funding before reaching commercial viability.

For a VTOL developer with a $9 million market cap, this raise likely represents essential operational capital rather than significant advancement funding. The decision to allocate proceeds to debt repayment is particularly telling - it suggests prioritizing financial stability over accelerated development.

VTOL technology companies typically follow extended development cycles with multiple funding rounds. This offering appears to be an intermediary raise focused on extending runway and removing debt constraints rather than funding major development milestones.

For context, successful VTOL development programs from companies like Joby Aviation and Archer have required capital bases in the hundreds of millions. XTI's positioning as a "pioneer in VTOL and powered-lift aircraft solutions" suggests they're competing in this capital-intensive market, but their funding scale indicates they likely remain in early development phases.

While this financing provides short-term stability, the relatively modest amount raised suggests XTI will require significantly more capital in the future to achieve commercial viability in the competitive VTOL space.

ENGLEWOOD, Colo., March 31, 2025 /PRNewswire/ -- XTI Aerospace, Inc. (Nasdaq: XTIA), ("XTI" or the "Company"), a pioneer in VTOL and powered-lift aircraft solutions, today announced the closing of its underwritten public offering of 2,941,200 shares of common stock (or pre-funded warrants ("Pre-Funded Warrants") in lieu thereof) and warrants to purchase up to 2,941,200 shares of common stock at a combined public offering price of $1.36 per share (inclusive of the Pre-Funded Warrant exercise price) and associated warrant. The warrants have an exercise price of $1.36 per share and are immediately exercisable upon issuance for a period of five years following the date of issuance. All of the shares (or Pre-Funded Warrants) and warrants in the offering were offered by the Company. Total gross proceeds from the offering, before deducting the underwriting discount and other offering expenses, were approximately $4 million.

The Company intends to use the net proceeds from the offering primarily for general working capital and general corporate purposes, and the full repayment of the Company's outstanding secured promissory notes.

ThinkEquity acted as the sole book-running manager for the offering.

The securities were offered and sold pursuant to a shelf registration statement on Form S-3 (File No. 333-279901), including a base prospectus, filed with the U.S. Securities and Exchange Commission (the "SEC") on May 31, 2024, as amended on June 14, 2024, and declared effective on June 18, 2024. The offering was made only by means of a written prospectus. A prospectus supplement and accompanying prospectus describing the terms of the offering have been filed with the SEC on its website at www.sec.gov. Copies of the prospectus supplement and the accompanying prospectus relating to the offering may also be obtained, when available, from the offices of ThinkEquity, 17 State Street, 41^st Floor, New York, New York 10004.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About XTI Aerospace, Inc.

XTI Aerospace (XTIAerospace.com) (Nasdaq: XTIA) is the parent company of XTI Aircraft Company, an aviation business based near Denver, Colorado, currently developing the TriFan 600, a fixed-wing business aircraft designed to have the vertical takeoff and landing (VTOL) capability of a helicopter, speeds of 345 mph and a range of 700 miles, creating an entirely new category – the vertical lift crossover airplane (VLCA). Additionally, the Inpixon (inpixon.com) business unit of XTI Aerospace is a leader in real-time location systems (RTLS) technology with customers around the world who use the Company's location intelligence solutions in factories and other industrial facilities to help optimize operations, increase productivity, and enhance safety. For more information about XTI Aerospace, please visit XTIAerospace.com and HangerXStudios.com (aviation innovation podcast), and follow the company on LinkedIn, Instagram, X, and YouTube.

Forward Looking Statements

This press release contains certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. All statements other than statements of historical fact contained in this press release, including without limitation, statements regarding XTI's anticipated use of net proceeds from the offering are forward-looking statements.

Some of these forward-looking statements can be identified by the use of forward-looking words, including "believe," "continue," "could," "would," "will," "estimate," "expect," "intend," "plan," "target," "projects," or the negatives of these terms or variations of them or similar expressions. All forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. All forward-looking statements are based upon estimates, forecasts, and assumptions that, while considered reasonable by XTI and its management, are inherently uncertain, and many factors may cause the actual results to differ materially from current expectations. XTI undertakes no obligation to revise any forward-looking statements in order to reflect events or circumstances that might subsequently arise. Readers are urged to carefully review and consider the risk factors discussed from time to time in XTI's filings with the SEC, including those factors discussed under the caption "Risk Factors" in its most recent annual report on Form 10-K, filed with the SEC on April 16, 2024, and in subsequent reports filed with or furnished to the SEC.

Contacts:
General inquiries:
Email: contact@xtiaerospace.com
Web: https://xtiaerospace.com/contact

Investor Relations:
Crescendo Communications
Tel: +1 212-671-1020
Email: XTIA@crescendo-ir.com

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SOURCE XTI Aerospace, Inc.

FAQ

How much did XTI Aerospace (XTIA) raise in its March 2025 public offering?

XTI Aerospace raised approximately $4 million in gross proceeds through its March 2025 public offering.

What is the exercise price and duration of XTIA's warrants from the March 2025 offering?

The warrants have an exercise price of $1.36 per share and are exercisable for five years from the date of issuance.

How will XTI Aerospace use the proceeds from its 2025 public offering?

The proceeds will be used for general working capital, corporate purposes, and full repayment of outstanding secured promissory notes.

How many shares were offered in XTIA's March 2025 public offering?

The offering included 2,941,200 shares of common stock (or pre-funded warrants) and warrants to purchase up to 2,941,200 shares.