Company: XTIA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076767
Chunk: 183

Company: XTI Aerospace, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 183
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minimize downtime, and ensure compliance with industry regulations.

We report financial results for two segments: Commercial
Aviation and Industrial IoT. For Industrial IoT, we generate revenue from sales of hardware, software licenses and professional services.
During the quarter ended December 31, 2024, we began exploring strategic options to wind down and/or sell the hardware portions of our
Industrial IoT business segment in order to shift its focus towards the sales of software products. For Commercial Aviation, the segment
is pre-revenue as we are currently developing the TriFan 600 airplane.

 Key Factors Affecting Operating Results

We believe that the growth
of our business and our future success are dependent upon many factors, including our ability to retain and develop engineering internal
and third-party resources, secure strategic partnerships with suppliers, expand the number of customer purchase orders, locate a facility
for further aircraft development and testing, expand on that facility or locate to a new facility for commercial production, build-out
production assembly lines in a timely manner, develop ancillary service offerings related to the TriFan 600 such as flight training and
maintenance products, and secure the needed financing to achieve FAA certification.

While each of these areas
presents significant opportunities for us, they also pose material challenges and risks that we must successfully address to achieve FAA
certification of the TriFan 600 and further reach our current aircraft delivery forecasts.

37

Corporate Strategy Update

Our primary focus is to power
what we term the Vertical Economy™ by delivering high-performance xVTOL solutions that scale from aircraft to innovative technologies
and infrastructure. We identify seven areas that comprise the Vertical Economy: manned aircraft, unmanned aircraft, power technology,
airspace and infrastructure management, artificial intelligence, aircraft advanced materials and next gen manufacturing. The term “xVTOL”
is intended to encompass the broad spectrum of vertical lift technologies within the Vertical Economy, including various aircraft types
(e.g., electric VTOL, regional VTOL and drones), operational models (manned and unmanned), supporting technologies (e.g., propulsion systems
and aerospace-related artificial intelligence technologies) and customer applications. With the TriFan 600 as our flagship commercial
aviation product, we are laying the groundwork for an innovative family of versatile aircraft and solutions addressing passenger travel,
logistics, autonomous operations and defense missions that we believe will unlock significant growth and market leadership.

Expanding into autonomous,
remotely operated drones is key to our strategic focus. By combining drone technology with VTOL innovation, we believe we are positioning