Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 528

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part II, Item 1
Chunk 528
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 not limited to, litigation costs and attorneys’ fees, unpredictable judicial or jury decisions
and the differing laws and judicial proclivities regarding damage awards among the states in which we operate. Unexpected outcomes in
such legal proceedings, or changes in management’s evaluation or predictions of the likely outcomes of such proceedings, could
have a material adverse effect on our business, financial condition, results of operations and cash flows. Our current financial status
may increase our default and litigation risks and may make us more financially vulnerable in the face of threatened litigation.

Drone Nerds operates in evolving markets,
which makes it difficult to evaluate its business and future prospects.

Drone Nerds’ drone,
camera and sensor technologies and software and training, operational support and repair services are and will be sold in new and rapidly
evolving markets. The commercial unmanned aerial vehicles (“UAV”) industry is in the early stages of customer adoption and
the FAA’s definition of regulations relating to the integration of commercial drones into the U.S. National Airspace System is rapidly
evolving. Accordingly, Drone Nerds’ business and future prospects may be difficult to evaluate. We cannot accurately predict the
extent to which demand for the drone systems and solutions will increase, if at all. The challenges, risks and uncertainties frequently
encountered by companies in rapidly evolving markets could impact our ability to do the following in connection with our acquisition of
Drone Nerds:

●Generate
sufficient revenue to maintain its historical profitability;

●Acquire
and maintain market share;

●Achieve
or manage growth in our business operations;

●Renew
contracts;

54

●Successfully
stock for the commercial market products and end-to-end solutions;

●Adapt
to new or changing polices and spending priorities of current and prospective clients; and

●Access
to additional financing or capital when required and on reasonable terms.

If we fail to address these
and other challenges, risks and uncertainties successfully, our business, results of operations and financial condition would be materially
harmed.

The supplier base of Drone Nerds is highly
concentrated. In addition, Drone Nerds is subject to risks arising from ongoing regulatory discussions and potential legislative actions
targeting its primary supplier from China, SZ DJI Technology Co, Ltd. and affiliates (“DJI”), who represented a majority of
Drone Nerds’ vendor purchases during the 1H 2025.

Drone Nerds has relationships with various global
suppliers of drones and electronics, however the top 1