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ENGLEWOOD, CO - XTI Aerospace, Inc., a company specializing in computer programming services, is currently embroiled in a legal dispute with Chardan Capital Markets LLC overcompensation claims. The controversy stems from a disagreement regarding additional compensation under an engagement letter between Chardan and XTI Aerospace's wholly-owned subsidiary, XTI Aircraft Company.
On August 15, 2024, Chardan filed a statement of claim with the Financial Industry Regulatory Authority (FINRA) against both XTI Aerospace and XTI Aircraft. Chardan is seeking approximately $950,000 in cash payments, which they assert is owed under the terms of the engagement letter signed on June 7, 2022. The claim also includes demands for further unspecified fees related to alleged tail period and right of first refusal provisions within the same agreement.
XTI Aerospace received a letter from Chardan's counsel in June 2024, demanding a cash payment of $200,000 and threatening to initiate arbitration if their demands were not met. XTI Aerospace has disputed owing any compensation to Chardan, indicating that they believe the claims to be meritless. The company, along with XTI Aircraft, intends to vigorously defend against the action brought forth by Chardan.
In other recent news, XTI Aerospace has been involved in several significant developments. The company has issued shares in equity transactions, resulting in a total of 34,242,861 shares of common stock outstanding. Furthermore, XTI Aerospace has extended its potential merger deadline with Damon Motors Inc. to September 30, 2024, adjusting terms including consent rights and share issuance.
In addition, XTI Aerospace has filed a non-provisional patent application for its TriFan 600 vertical takeoff and landing (VTOL) aircraft and secured a 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.
The company has also formed a strategic partnership with AVX Aircraft Company to expedite the development and certification of the TriFan 600. XTI Aerospace has also announced a tentative agreement for a strategic equity investment of up to $55 million from FC Imperial Limited, an affiliate of FinExic Concordia Group.
Lastly, XTI Aerospace has welcomed Tensie Axton, a finance expert, to its Board of Directors. These are the recent developments for XTI Aerospace.
InvestingPro Insights
In light of the ongoing legal dispute facing XTI Aerospace, investors and stakeholders may find it beneficial to consider the company's financial health and market performance. According to recent data from InvestingPro, XTI Aerospace's market capitalization stands at a modest $8.6 million. This relatively low market cap, coupled with a negative P/E ratio of -0.31, suggests that the company is not currently profitable. The negative P/E ratio is further corroborated by the company's performance over the last twelve months, which shows that XTI Aerospace has not been profitable during this period.
InvestingPro Tips indicate that XTI Aerospace has experienced a significant return over the last week, yet the stock has fared poorly over the last month, with a price total return of -30.44%. This volatility may be a point of concern for potential investors. Furthermore, the company's short-term obligations exceed its liquid assets, which could present challenges in meeting immediate financial liabilities, especially in the context of potential legal compensation claims.
For those considering XTI Aerospace as an investment opportunity, additional InvestingPro Tips are available, providing deeper insights into the company's financial status and market performance. With a total of 14 tips listed on the InvestingPro platform, investors can gain a more comprehensive understanding of the company's position within the industry.
It's important to note that these financial metrics and tips should be considered in the context of the company's current legal dispute, which could have significant financial implications depending on the outcome. As the situation develops, investors may wish to keep a close watch on both the legal proceedings and the company's financial health.
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