Chardan is seeking approximately $950,000 in cash payments that it claims it is owed under the Engagement Letter plus an unspecified amount of additional fees pursuant to certain alleged tail period and right of first refusal provisions in the Engagement Letter. The Company and XTI Aircraft believe that Chardan's claims are meritless and intend to vigorously defend the action.
As disclosed in June 2024, XTI Aerospace received a letter from counsel for Chardan Capital Markets LLC seeking additional compensation under that certain engagement letter, dated as of June 7, 2022, by and between Chardan and XTI Aircraft, the Company's wholly-owned subsidiary, as amended, including a cash payment of $200,000, and threatening to file an arbitration with the Financial Industry Regulatory Authority. The Company responded to the letter, disputing that it owes any compensation to Chardan.
