XTI Aerospace, Inc. disclosed on October 11, 2026, that its subsidiary XTI Drones Holdings failed to make required September 30, 2026, principal payments on two promissory notes, resulting in a formal default that also triggered cross-defaults under a $20 million credit agreement with JPMorgan Chase Bank, N.A.
The default stems from two notes issued in November 2025 to finance acquisitions of Drone Nerds, LLC, and Anzu Robotics, LLC. XTI Drones Holdings issued a note to The Origin Group DN, Inc., with an original principal amount of $10,976,284.58, and a note to The Origin Group AZ, Inc., with an original principal amount of $954,459.53. Both notes carried a 7.25% annual interest rate and were scheduled for final maturity on November 10, 2026.
XTI Drones Holdings was required to pay a $1,380,000 principal installment under the Drone Nerds note and a $120,000 installment under the Anzu Robotics note by September 30, 2026. The company did not make these payments. Under the terms of both notes, a payment failure constitutes an event of default if it continues for ten days. This ten-day period expired on October 10, 2026, causing the notes to default on October 11, 2026.
As of the filing date, the aggregate outstanding principal on both notes was approximately $4.51 million, a figure that includes unpaid interest added to principal. The default has increased the interest rate on these balances from 7.25% to a default rate of 9.25% per annum. The sellers of the notes now have the option to declare the entire unpaid principal and accrued interest immediately due and payable.
The note defaults also activated cross-default provisions in a credit agreement dated February 11, 2026. This agreement provides a secured asset-based revolving credit facility with commitments up to $20.0 million. The facility is secured by substantially all assets of the borrower subsidiaries, including equity interests held by XTI Drones Holdings.
Because the credit agreement defines an event of default as including failures to pay material indebtedness when due, the note defaults resulted in cross-defaults under the credit agreement. Additional defaults may be asserted by JPMorgan Chase Bank in connection with these events. While these defaults continue, the lender is not obligated to make new loans or issue letters of credit.
The loan parties are restricted from making dividends or distributions to XTI Aerospace or paying other indebtedness without the lender's consent. This restriction applies even to regularly scheduled payments on subordinated debt. Consequently, XTI Drones Holdings may require JPMorgan Chase Bank's consent to pay the missed September amounts and any remaining balance due at the November 10 maturity date.
JPMorgan Chase Bank retains several rights during this period, including terminating its commitment, declaring all outstanding amounts under the credit agreement immediately due and payable, and requiring cash collateral for outstanding letters of credit. The lender may also charge default interest at an additional 2.00% per annum and exercise secured creditor rights, such as selling collateral or collecting accounts receivable directly from customers.
As of the date of the Form 8-K filing, neither The Origin Group DN, Inc., nor The Origin Group AZ, Inc., had demanded immediate payment or formally declared the notes accelerated.