Company: XTIA
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001213900-25-045396
Chunk: 19

Company: XTI Aerospace, Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 1
Chunk 19
---
 As A Service Revenue’s performance obligation is
satisfied evenly over the service period using a time-based measure because the Company is providing continuous access to its service
and revenue is recognized over time.

15

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Deferred revenue

As of December 31, 2024 and March 31, 2025,
the Company had approximately $0.5 million and $0.8 million, respectively, in deferred revenue. This deferred revenue balance relates
to cash received in advance for product maintenance services and professional services provided by the Company’s technical staff.
The fair value of the deferred revenue approximates the services to be rendered. The Company expects to satisfy its remaining performance
obligations for these maintenance services and professional services and recognize the deferred revenue and related contract costs over
the next twelve months.

Note 5 – Merger Transaction

The XTI Merger was accounted for as a reverse
merger in accordance with GAAP. Under this method of accounting, Legacy Inpixon was treated as the “acquired” company for
financial reporting purposes. This determination is primarily based on the fact that subsequent to the XTI Merger, Legacy XTI maintains
control of the Board of Directors and management of the Company, and the preexisting shareholders of Legacy XTI have majority voting rights
of the Company. For accounting purposes, the acquirer is the entity that has obtained control of another entity and, thus, consummated
a business combination. Accordingly, Legacy XTI’s assets and liabilities are recorded at carrying value and the assets and liabilities
associated with Legacy Inpixon are recorded at estimated fair value as of the acquisition date. The excess of the purchase price over
the estimated fair value of the net assets acquired, if applicable, is recognized as goodwill.

The below summarizes the total consideration transferred
in the business combination (in thousands):

    Fair value of common stock 
    $10,939 
  
    Fair value of warrants 
     3,250 
  
    Fair value of preferred stock 
     11,302 
  
    Fair value of debt assumed 
     114 
  
    Total consideration 
    $25,605 

The Company determined the estimated fair value
of common stock included in consideration to be calculated based on Legacy Inpixon’s common stock outstanding of 2,075,743 multiplied
by the price of Legacy In