Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 346

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 2
Chunk 346
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 the purposes of the unaudited pro forma condensed combined financial information
included in our Current Report on Form 8-K filed with the SEC on November 12, 2025, the Company has assumed the excess consideration over
the net assets acquired is goodwill. The Company will perform a more comprehensive assessment of assets acquired that may result in other
intangible assets being identified in that analysis. If the Acquisitions do not yield expected returns or fair value estimates deteriorate,
we may be required to take charges to our results of operations based on this impairment assessment process, which could adversely affect
our results of operations.

As a result of these risks, the acquisitions of
Drone Nerds and Anzu Robotics and integration may not contribute to our earnings as expected, we may not achieve expected revenue synergies
or our return on invested capital targets when expected, or at all, and we may not achieve the other anticipated strategic and financial
benefits of the acquisitions.

The risks arising with respect to the historic
business and operations of Drone Nerds and Anzu Robotics may be different from what we anticipate, which could significantly increase
the costs and decrease the benefits of the acquisitions and materially and adversely affect our operations going forward.

Although we performed significant financial, legal,
technological and business due diligence with respect to Drone Nerds and Anzu Robotics, we may not have appreciated, understood or fully
anticipated the extent of the risks associated with the acquisitions. We have secured indemnification for certain matters in connection
with the Drone Nerds and Anzu Robotics acquisitions in order to mitigate the consequences of breaches of representations, warranties and
covenants under the applicable acquisition agreements and the risks associated with historic operations, including those with respect
to compliance with laws, accuracy of financial statements, financial reporting controls and procedures, tax matters and undisclosed liabilities,
and certain matters known to us. We believe that the indemnification provisions of the acquisition agreements, together with insurance
policies that we have in place will limit the economic consequences of the issues we have identified in our due diligence to acceptable
levels. Notwithstanding our exercise of due diligence and risk mitigation strategies, the Drone Nerds and Anzu Robotics acquisitions may
expose us to unanticipated risks or unknown or contingent liabilities and the costs associated with these risks or liabilities may be
greater than we anticipate. We may not be able to contain or control the costs associated with unanticipated risks or liabilities, which
could materially and adversely affect our business, liquidity, capital resources or results of operations.

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