ENGLEWOOD, Colo., Apr. 1, 2025 /PRNewswire/ — XTI Aerospace, Inc. (Nasdaq: XTIA) (“XTI” or the “Company”), a pioneer in VTOL and powered-lift aircraft solutions, today released the following letter from the Company Chairman and CEO Scott Pomeroy to shareholders.
Dear Shareholders,
It has been just over a year since I was appointed Chief Executive Officer of XTI Aerospace, coinciding with our Nasdaq listing. For several years, I had recognized the promise of the TriFan 600 vertical take-off and landing aircraft, having served on the board of AVX Aircraft Company since 2009. Admittedly, I was less familiar with the significant hurdles we would have to overcome before we might be assessed based on the merits of our business model.
When XTI commenced trading on Nasdaq on March 13, 2024, the day after I had been named CEO, XTI assumed post-merger obligations to the holders of equity-based or equity-linked financing instruments and commitments to pre-reverse merger management of approximately $30 million. The nature and size of these obligations significantly limited access to fundamentally minded capital, leaving our ability to meet these obligations and advance the business largely limited to our ability to sell our stock at-the-market.
On January 7, 2025, our common stock traded approximately a billion shares, and we sold $20 million in value of common stock at-the-market. At that time, even after using 20% of proceeds towards those obligations, our total obligations still exceeded $7 million after these payments and represented outstanding balances of these stock and cash obligations to prior management and secured debt incurred subsequent to closing the merger. Shortly thereafter, on January 10, 2025, we effected a reverse split to regain compliance with Nasdaq listing standards. On a post reverse split basis, investors had purchased our common stock at an effective price of $13.75 per share.
On February 3, 2025, we announced key product and engineering milestones and our goals by which we believe investors should measure us during 2025. Since that time, we have advised you that we have accomplished several milestones advancing progress of the TriFan 600 as we seek to validate technology protected by our intellectual property, and we have made key hires to support execution of our business strategy.
On March 10, 2025, the Nasdaq, which had already corrected more than 10% from its December peak, slid another 4%, in the largest one-day decline since September 2022. With our common stock trading at roughly $2.60 per share, on March 18, 2025, we announced that our Board had authorized a share repurchase program, giving us the opportunity to purchase our common stock in the open market for a 12-month period extendable to 18 months. We had concluded that following an approximately 80% drop in our share price just since January 2025, that the public market was valuing us a measurable discount to cash and intrinsic value. Yet, the Nasdaq continued to decline and with it, our share price.
Given the market volatility and the volume of comments we reviewed, which were posted by you, our valued shareholders on Stocktwits and other commonly used forums, we recognized that as long as stock-based obligations existed, even at reduced levels, we could not be judged by you on the fundamental merits of our business. This was ever more apparent when the market did not respond as expected when on March 19, 2025, we announced our achievement of a major regulatory milestone, acceptance by the Federal Aviation Administration of our Type Certification application on March 17, 2025. I recognize that many of you understand our industry, so you know this is a key accomplishment in advancement of commercial launch. Therefore, as announced on March 31, 2025, we raised an additional $4 million in a public offering in order to repay in full our outstanding secured promissory notes and further our goal of retiring all remaining equity-based financing instruments and common stock obligations to the management team responsible for our public vehicle pre-reverse merger and paying down cash obligations to prior management.
I know this has not been an easy road for any of you or us for that matter, but I am pleased to report that we no longer have any stock-based financing obligations or common stock obligations to that prior management team. In fact, while we still have more than $8 million in cash on hand, adequate to sustain operations well into Q4 2025, I am pleased to share with you that our historical cash obligations are just $1.5 million, and we expect that these obligations will be fully paid in 2025. Relief of the stock obligations also means that our valuable intellectual property portfolio is now largely unencumbered by secured debt.
We continue to strongly believe our shares are massively undervalued by all reasonable valuation frameworks. We are launching a focused non-deal roadshow to build awareness in the institutional investor community, targeting 100 investor meetings in April and May, and we will be introducing a new investor deck that reflects an exciting vision for XTI Aerospace.
We appreciate your continued support as we work toward executing our shared vision and delivering long-term shareholder value. We hear you and appreciate your support of American ingenuity and American innovation at XTI Aerospace.
We are listening. We welcome your feedback at Contact XTI.
We look forward to flying with you. Thank you for being a part of this journey.
Sincerely,
Scott Pomeroy, CEO
XTI Aerospace