XTI Aerospace, Inc.

As of October 11, 2026, the aggregate outstanding principal amount of the DN Note and the AR Note was approximately $4.51 million, including unpaid interest added to principal.

Cross-Default Under Credit Agreement

As previously disclosed in the Current Report on Form 8-K filed by the Company with the SEC on February 17, 2026, Drone Nerds and Anzu Robotics (together with Drone Nerds, the “Borrowers”), each a subsidiary of the Company, XTI Drones Holdings and the other loan parties party thereto, and JPMorgan Chase Bank, N.A. (the “Lender”) are parties to a Credit Agreement, dated as of February 11, 2026 (the “Credit Agreement”), which provides for a secured asset-based revolving credit facility with commitments of up to $20.0 million, subject to a borrowing base.

XTI Drones Holdings is a loan party and guarantor under the Credit Agreement. The obligations under the Credit Agreement are secured by substantially all of the assets of the Borrowers and certain of the other loan parties, including the equity interests in the Borrowers held by XTI Drones Holdings.

Under the Credit Agreement, an event of default occurs if any loan party fails to make any payment in respect of certain material indebtedness, which includes the DN Note, when due, subject to any applicable grace periods, or if any event or condition occurs that enables the holder of such material indebtedness to cause it to become due prior to its scheduled maturity. Accordingly, the default under the DN Note also resulted in events of default under the Credit Agreement (the “Cross-Defaults”). In addition, certain other events of default have occurred, or may be asserted by the Lender to have occurred, under the Credit Agreement in connection with the Note Defaults (any such events of default, together with the Cross-Defaults, the “Credit Agreement Defaults”). Any such other events of default would not be cured by a waiver of the Note Defaults by the DN Seller or the AR Seller.

Discussions with Note Holders and Lender

The Company and XTI Drones Holdings have agreed with the DN Seller and the AR Seller on the terms of a temporary waiver of the Note Defaults, subject to the execution of a waiver agreement, and the parties intend to pursue a restructuring of the DN Note and the AR Note. The Borrowers have notified the Lender of the Note Defaults and intend to seek a waiver of the Credit Agreement Defaults from the Lender. Under the Credit Agreement, certain amendments of, and certain payments under, the DN Note and the AR Note may require the Lender’s consent. There can be no assurance that agreements will be reached with the DN Seller, the AR Seller or the Lender on acceptable terms, or at all.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that address operating performance, events or developments that the Company expects or anticipates will occur in the future are forward-looking statements, including statements regarding the Company’s discussions with the DN Seller, the AR Seller and the Lender, the expected signing of the term sheet and the waivers described above, any waiver of the Note Defaults or the Credit Agreement Defaults, any amendment of the payment terms of the DN Note and the AR Note, and the potential consequences of the Note Defaults and the Credit Agreement Defaults. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to the Company’s management. Management believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from the Company’s historical experience and its present expectations or projections. Such