XTI Aerospace appoints Michael A. Tapp as chief operating officer

XTI Aerospace, Inc. (NASDAQ:XTIA), a $41 million market cap company currently facing significant challenges with a 96% stock decline over the past year, announced the appointment of Michael A. Tapp as chief operating officer, effective Monday. The company entered into an employment agreement with Tapp on Friday, with terms retroactive to Monday. According to InvestingPro analysis, XTI is rapidly burning through cash while maintaining weak overall financial health.

According to a press release statement included in a recent SEC filing, Tapp, 55, previously served as chairman of XTI Aerospace’s Corporate Advisory Board since September 2024. His background includes roles as an operating partner at Palingen Capital, a similar position at HBC Investments, and nearly a decade in senior executive roles at Interstate Battery. He has also served on various corporate advisory boards and investment committees.

Under the employment agreement, Tapp will receive an annualized base salary of $600,000, subject to yearly review with the chief executive officer and approval by the board. He is eligible for quarterly performance bonuses based on mutually agreed milestones, with total bonuses not to exceed 100% of his base salary per year. This compensation comes as the company reported just $3.04 million in revenue over the last twelve months, with InvestingPro data showing analysts expect sales to decline this year. If the company completes an acquisition or investment of $10 million or more, Tapp will receive a bonus equal to 25% of his base salary.

Tapp will also receive 1,613,000 stock options with an exercise price of $2.00 per share, nearly matching the current trading price of $2.01. One-third of these options vested immediately, with the remainder vesting in equal quarterly installments over two years. For deeper insights into XTIA’s valuation and 12 additional key metrics, visit InvestingPro. The options expire ten years from the grant date.

The agreement provides for 30 paid vacation days per year, participation in company benefit plans, reimbursement of business expenses, and relocation expenses if the company moves its headquarters outside a defined area in the Dallas-Fort Worth metroplex. The initial term of the agreement is three years, with automatic one-year renewals unless notice is given at least 90 days prior to the end of a term.

Severance terms include salary and bonus payments under certain termination scenarios, and immediate vesting of unvested company securities in the event of a change in control or specified terminations. The agreement is governed by Texas law and includes a non-solicitation provision for one year after employment ends.

The company also entered into a side letter with Tapp, agreeing that failure to relocate its headquarters to the specified area by March 31, 2026, or moving outside the Dallas-Fort Worth area during the agreement term, would be considered a material breach. The company will cover Tapp’s annual YPOi & chapter membership fees.

This information is based solely on a press release statement filed with the SEC.

In other recent news, XTI Aerospace has announced the selection of Garmin’s G700 TXi avionics system for its TriFan 600 aircraft, highlighting a significant development in its aircraft design. The company has also updated its 2018 Employee Stock Incentive Plan, allowing the board to delegate grant authority to company officers while maintaining certain restrictions. Additionally, XTI Aerospace has modernized its bylaws to align with Nevada corporate practices, introducing new procedures for shareholder proposals and director nominations. In regulatory news, the Federal Aviation Administration has released draft rules for Beyond Visual Line of Sight drone operations, which XTI Aerospace acknowledged in a statement. Furthermore, XTI Aerospace has partnered with design firm IDEO to enhance the design experience of its TriFan 600 aircraft and future xVTOL aircraft. These recent developments reflect XTI Aerospace’s ongoing efforts to innovate and align with industry standards.

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