Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 50

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 50
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, the products sold by us or through third parties. Product liability claims may be time-consuming, cost-intensive,
and may result in awarding of substantial damages to the plaintiff or demands for a product recall. Certain of our contract obligations
with vendors, suppliers, or manufacturers require us to provide warranties against such claims. We cannot assure you that protections
are sufficient against any product liability claim filed by or against us. In a few countries, strict liability is imposed even if an
injury to the end user of a defective product was not caused by an act of the supplier, manufacturer, or seller. A successful claim or
claims brought against us in an amount exceeding available insurance coverage or protections under our contractual relationships could
subject us to significant liabilities and could have a material adverse effect on our business, financial condition, results of operations,
and growth prospects.

Defects,
errors, or vulnerabilities in our products or services or the failure of such products or services to prevent a security breach, could
harm our reputation and adversely affect our results of operations.

Because
our location based security products and services are complex, they have contained and may contain design or manufacturing defects or
errors that are not detected until after their commercial release and deployment by customers. Defects may cause such products to be
vulnerable to advanced persistent threats (“APTs”) or security attacks, cause them to fail to help secure information or
temporarily interrupt customers’ networking traffic. Because the techniques used by hackers to access sensitive information change
frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques and provide
a solution in time to protect customers’ data. In addition, defects or errors in our subscription updates or products could result
in a failure to effectively update customers’ hardware products and thereby leave customers vulnerable to APTs or security attacks.

Any
defects, errors or vulnerabilities in our products could result in:

●expenditure
                                            of significant financial and product development resources in efforts to analyze, correct,
                                            eliminate, or work-around errors or defects or to address and eliminate vulnerabilities;

●delayed
                                            or lost revenue;

●loss
                                            of existing or potential customers or partners;

●increased
                                            warranty claims compared with historical experience, or increased cost of servicing warranty
                                            claims, either of which would adversely affect gross margins; and

●litigation,
                                            regulatory inquiries, or investigations that may be costly and harm our reputation.

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Our
current research and development efforts