After we realized we couldn't beat the Xsotan at the time, we decided to flee.
Back when the Xsotan first arrived, a part of the then galactic federation decided to flee the galaxy, trying to stay safe from the alien invaders. While doing so they left behind a path of beacons, so those coming behind could find where they went and reunite. Reward: XSTN-I
As most quests, the start of these can be found in hidden mass systems. Equip a scanner upgrade with deep scan range and visit the yellow blips on the map.
The start beacons can be found in hidden mass systems at a distance of more than 200 from the core. They're easy to spot on the sector map - some of them blink. (zoom out to spot them) The beacons are numbered, e.g. #35 X=65 and #37 Y=97 - find beacons until you have the same numbered coordinates (Example #24 X=27, #24 Y=233). Go to that location (can be found via mission menu-> show on map). You'll find a beacon in that sector with new coordinates. Follow them. Repeat that until you've reached the final sector (somewhere near the very edge of the map). Talk to the communication beacon until it says it'll drop some Xsotan technology. The XSTN-I upgrade has appeared somewhere in the sector now and can be picked up by the player.
There could be a chance that the last sector has nothing, this means you have to start over.
The last sector can have the coordinates of a space-time rift, meaning the player is unable to reach the final sector, and therefor has to start over.
As of version 0.23.2 it is possible to repeat the dialogue over and over again before the upgrade is collected to get an infinite amount of upgrades.