8-K: XTI Aerospace Resolves Arbitration with Chardan Capital Markets Without Financial Payment

XTI Aerospace, Inc. and its subsidiary XTI Aircraft Company have successfully settled an arbitration with Chardan Capital Markets LLC, resulting in a mutual release of claims and no financial payments by any party.

Summary

• XTI Aerospace, Inc. (the Company) and its subsidiary, XTI Aircraft Company (Aircraft), have reached a settlement agreement with Chardan Capital Markets LLC (Chardan) regarding an arbitration initiated by Chardan on or about August 1, 2024.
• The arbitration stemmed from an engagement letter dated June 7, 2022, between Chardan and Aircraft.
• A U.S. District Court had previously enjoined Chardan from prosecuting the arbitration against the Company and declared the Company had no contractual duty to arbitrate on January 21, 2025.
• Chardan subsequently filed an Amended Statement of Claim solely against Aircraft on April 30, 2025.
• Aircraft had filed counterclaims against Chardan for breach of contract on June 13, 2025.
• Under the settlement agreement entered into on July 8, 2025, all parties entered into a mutual release of claims, and Chardan and Aircraft agreed to dismiss all asserted claims with prejudice.
• Crucially, none of the parties made any payments in connection with the settlement, and no party owes any amount or debt to another.
• The original engagement letter between Chardan and Aircraft has been terminated and is no longer in effect.

Sentiment

Score: 8

Explanation: The resolution of a legal dispute without any financial outlay is a significant positive for the company, removing a potential liability and uncertainty.

Positives

• Successful resolution of an ongoing arbitration without any financial payments by XTI Aerospace or its subsidiary.
• Mutual release of all claims between Chardan, XTI Aerospace, and XTI Aircraft Company.
• Termination of the engagement letter, removing any future obligations related to it.
• Avoidance of potential legal costs and uncertainties associated with continued litigation.

Negatives

• The company was involved in an arbitration, indicating a past dispute that required legal resolution.

Future Outlook

No specific forward-looking statements or guidance beyond the resolution of this particular legal matter.

Management Comments

• The report was signed by Brooke Turk, Chief Financial Officer of XTI Aerospace, Inc.

Industry Context

This specific legal settlement is primarily an internal corporate governance and legal matter for XTI Aerospace and does not directly reflect broader industry trends in aerospace or capital markets, beyond the general need for companies to manage legal disputes.

Corporate Governance

Legal Proceedings

• Arbitration commenced by Chardan Capital Markets LLC against XTI Aerospace, Inc. and XTI Aircraft Company on or about August 1, 2024, related to an engagement letter dated June 7, 2022.
• U.S. District Court for the Southern District of New York enjoined Chardan from prosecuting the arbitration against XTI Aerospace, Inc. and declared XTI Aerospace, Inc. had no duty to arbitrate on January 21, 2025.
• Chardan filed an Amended Statement of Claim solely against XTI Aircraft Company on April 30, 2025.
• XTI Aircraft Company filed counterclaims against Chardan for breach of contract on June 13, 2025.
• All claims were resolved and settled through a settlement agreement on July 8, 2025, involving a mutual release of claims and dismissal with prejudice, with no payments made by any party.

Stakeholder Impact

• Shareholders: Positive impact due to the elimination of a potential legal liability and associated costs, reducing uncertainty.
• Management: Resolution allows management to focus on core business operations without the distraction of ongoing litigation.

Next Steps

• Filing of a joint stipulation by counsel for Chardan and Aircraft to dismiss with prejudice all claims asserted against each other with respect to the Arbitration.

Key Dates

Recommendation

Keywords

XTI Aerospace, XTI Aircraft Company, Chardan Capital Markets, arbitration, settlement, legal dispute, engagement letter, FINRA, SEC filing, 8-K, corporate governance, litigation