Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 40

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 40
---
 impair our ability to adequately manage and complete existing projects and to accept new customer engagements. Such inability
may also force us to increase our hiring of independent contractors, which may increase our costs and reduce our profitability on customer
engagements. In the event we are unable to attract, hire and retain the requisite personnel and subcontractors, we may experience delays
in completing contracts in accordance with project schedules and budgets, which may have an adverse effect on our business, financial
condition and operating results, harm our reputation and cause us to curtail our pursuit of new contracts.

If
we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), applicable
restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our
business, financial condition and results of operations.

Under
Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes
of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing,
reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding
or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total
assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Although we have made certain strategic investments
in the past, we do not currently believe that we are an “investment company,” as such term is defined in either of those
sections of the 1940 Act.

We
intend to conduct our operations so that we will not be deemed an investment company. However, if we were to be deemed an investment
company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates,
could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial
condition and results of operations.

We
may be subject to damages resulting from claims that the Company or our employees have wrongfully used or disclosed alleged trade secrets
of their former employers.

We
may be subject to claims that the Company or our employees may have inadvertently or