Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 467

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 4
Chunk 467
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 Nerds business involves
significant risks and uncertainties that may not be covered by insurance or indemnification.

Drone Nerds has developed and sold products and
services in circumstances where insurance or indemnification may not be available, for example, in connection with the collection and
analysis of various types of information. In addition, its products and services raise questions with respect to issues of civil liberties,
intellectual property, trespass, conversion, and similar concepts, which may create legal issues. Indemnification to cover potential claims
or liabilities resulting from the failure of any technologies that we deploy may be available in certain circumstances but not in others.
Currently, the uncrewed aerial systems industry lacks a formative insurance market. We may not be able to maintain insurance to protect
against all operational risks and uncertainties that our customers confront. Substantial claims resulting from an accident, product failure,
or personal injury or property liability arising from our products and services in excess of any indemnity or insurance coverage (or for
which indemnity or insurance coverage is not available or is not obtained) could harm our financial condition, cash flows and operating
results. Any accident, even if fully covered or insured, could negatively affect our reputation among our customers and the public, and
make it more difficult for us to compete effectively.

55

The Drone Nerds and Anzu Robotics acquisitions
may trigger contractual rights under certain agreements.

Drone Nerds and Anzu Robotics are parties to certain
agreements that may contain termination or other rights following a “change in control” or “sale of all or substantially
all” of such party’s assets. Any counterparty to such agreements may request modifications of its respective agreements as
a condition to granting a waiver or consent under such agreements, or they may elect not to grant a waiver or consent. To the extent any
counterparty to such agreements requests modifications of its respective agreements as a condition to granting a waiver or consent under
such agreements, Drone Nerds and Anzu Robotics will use reasonable efforts to accommodate such modification, but such modifications may
not be satisfactory to such counterparty or may not occur. There is no assurance that such counterparties will not assert otherwise and
seek to exercise any such rights, including termination rights where available, that the exercise of any such rights will not adversely
affect Drone Nerds or Anzu Robotics or that any modifications of such agreements will not materially and adversely affect the Company.

For example, the documentation governing Drone
Nerds’ and Anzu Robotics’ $25