The Company has three Employee Stock Incentive plans. The Company assumed Legacy XTI's 2017 Employee and Consultant Stock Ownership Plan (the "2017 Plan") in connection with the XTI Merger. Legacy Inpixon had put in place a 2011 Employee Stock Incentive Plan (the "2011 Plan") and a 2018 Employee Stock Incentive Plan (the "2018 Plan" and together with the 2011 Plan, the "Legacy Inpixon Option Plans"). The Company determined that activity within the 2011 Plan is not material.

During 2017, Legacy XTI adopted the 2017 Plan, which was amended in 2021 to increase the maximum shares eligible to be granted under the 2017 Plan. The Company may issue awards in the form of restricted stock units and stock options to employees, directors, and consultants. Under the 2017 Plan, stock options are generally granted with an exercise price equal to the estimated fair value of the Company’s common stock, as determined by the Company’s Board of Directors on the date of grant. Options generally have contractual terms of ten years. Incentive stock options (ISO) may only be granted to employees, whereas all other stock awards may be granted to employees, directors, consultants and other key stakeholders. As of September 30, 2024, there are no unallocated shares available for future grants under the 2017 Plan.

In February 2018, Legacy Inpixon adopted the 2018 Plan which is utilized for employees, corporate officers, directors, consultants and other key persons employed. The 2018 Plan provides for the granting of incentive stock options, NQSOs, stock grants and other stock-based awards, including Restricted Stock and Restricted Stock Units (as defined in the 2018 Plan). As of September 30, 2024, there are no unvested Restricted Stock or Restricted Stock Units outstanding under the 2018 Plan.

Incentive stock options granted under the Legacy Inpixon Option Plans are granted at exercise prices not less than 100% of the estimated fair market value of the underlying common stock at date of grant. The exercise price per share for incentive stock options may not be less than 110% of the estimated fair value of the underlying common stock on the grant date for any individual possessing more that 10% of the total outstanding common stock of the Company. Options granted under these Legacy Inpixon Option Plans vest over periods ranging from immediately to four years and are exercisable over periods not exceeding ten years.

The aggregate number of shares that may be awarded under the 2018 Plan as of September 30, 2024 was 67,148,179. As of September 30, 2024, 52,370,064 shares of common stock were available for future grant under the 2018 Plan.


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (In millions)
Beginning balance as of January 1, 2024	1,161,687	$	17.95	6.7	$	—
Legacy Inpixon stock options from merger	1,148	61.67
Granted	12,565,606	0.47
Exercised	(92,718)	0.00
Expired	(242)	19,043.35
Forfeited	(853,299)	8.83
Ending balance as of September 30, 2024	12,782,182	$	1.87	9.6	$	—

Options vested and exercisable as of September 30, 2024	852,174	15.13		7.6	—

The Board approved awards of options to certain Company executives under the 2018 Plan. Each option has an exercise price of $0.473 per share. The options will vest 1/3rd annually over three years starting from the vesting commencement date. The options expire ten years from the grant date. Options were granted as follows:


Grantee	Grant Date	Vesting Start Date	Options Granted
Chief Executive Officer of XTI Aerospace, Inc.	6/12/2024	6/12/2024	2,812,500
Chief Financial Officer of XTI Aerospace, Inc.	6/12/2024	6/12/2024	1,640,625
Chief Executive Officer of the XTI Aerospace, Inc. Real-Time Location System Division	6/12/2024	6/12/2024	975,000
Chief Strategy Officer of XTI Aerospace, Inc.	9/19/2024	8/1/2024	1,171,875
Total Granted			6,600,000


Fair value of common stock	$0.191 - $0.473
Exercise price	$0.191 - $0.473
Expected term	10.0 years
Volatility	95.06% - 96.17%
Risk-free interest rate	3.58% - 4.32%
Dividend yield	—	%

To induce option holders to exercise stock options ahead of the XTI Merger so to assist the Company in qualifying for a listing on the Nasdaq Capital Market, Legacy XTI entered into exercise letter agreements with several option holders in February 2024 at reduced exercise prices from the original option agreements. The net impact of these option inducements to the condensed consolidated statement of operations was not material. In total, 1,038,871 stock option granted under the 2017 Plan were net

exercised into pre-exchange common shares of Legacy XTI immediately prior to the XTI Merger closing time, which resulted in the issuance of 92,728 post merger exchange common shares.


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2024		2023		2024		2023
Employee and consultant stock options1	$	(2,159)	$	164	$	(2,075)	$	2,766
Professional fees1	270		—		270		—
Vesting of previously unvested warrants2	—		—		496		—
Merger-related professional fees2	—		—		5,153		—
Total	$	(1,889)	$	164	$	3,844	$	2,766

As of September 30, 2024, the total unrecognized compensation expense related to unvested awards was $6.4 million, which the Company expects to recognize over an estimated weighted average period of 1.94 years.

Shares of Legacy XTI common stock were issued to Scott Pomeroy, Chief Executive Officer of the Company and former CFO and board member of Legacy XTI, as transaction compensation immediately prior to the XTI Merger closing time equal to 357,039 post merger shares of Company common stock. As a result of this share issuance transaction, the Company recorded $1.9 million of stock-based compensation expense included in the condensed consolidated statement of operations during the nine months ended September 30, 2024.

Shares of Legacy XTI common stock were issued to Maxim as transaction compensation immediately prior to the XTI Merger closing time equal to 385,359 post merger shares of Company common stock. As a result of this share issuance transaction, the Company recorded $2.03 million of stock-based compensation expense included in the condensed consolidated statement of operations during the nine months ended September 30, 2024.

Shares of Legacy XTI common stock were issued to Chardan Capital Markets LLC as transaction compensation immediately prior to the XTI Merger closing time equal to 189,036 post merger shares of Company common stock. As a result of this share issuance transaction, the Company recorded $1.0 million of stock-based compensation expense included in the condensed consolidated statement of operations during the nine months ended September 30, 2024.