The complaint, filed by the Law Offices of Howard G. Smith, centers on allegations that XTI Aerospace provided misleading information regarding its business operations between April 15 and August 17, 2026. Plaintiffs contend that company executives failed to disclose internal activities that necessitated formal board oversight, casting doubt on the firm's overall disclosure controls. These lapses reportedly hindered the company's ability to file earnings reports on schedule, rendering previous optimistic statements about the firm's financial health unfounded.

Legal representatives for the plaintiffs argue that these undisclosed factors artificially inflated the stock price, ultimately harming investors when the reality of the internal governance issues surfaced. Affected shareholders are not required to take immediate action to remain part of the class, though those seeking a primary role in the litigation must contact the firm before the October deadline.