Company: XTIA
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001213900-25-045396
Chunk: 54

Company: XTI Aerospace, Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 1
Chunk 54
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, we generate revenue from sales of hardware, software licenses
and professional services. During the quarter ended December 31, 2024, the Company began exploring strategic options to wind down and/or
sell the hardware portions of the Company’s 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.

38

Corporate Strategy Update

The Company’s
primary focus is to power the vertical economy by delivering high-performance VTOL solutions that scale from aircraft to innovative technologies
and infrastructure. 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 the Company to accelerate the development of both unmanned aerial vehicles (UAV) and VTOL solutions, expand its market
presence, and create new revenue-generating opportunities across multiple industries. We will also be opportunistic and may consider other
strategic transactions, which may include, but not be limited to other alternative investment opportunities, such as minority investments
and joint ventures. If we make any acquisitions in the future, we expect that we may pay for such acquisitions with cash, equity securities
and/or debt in combinations appropriate for each acquisition.

Recent Events

January 2025 Registered Direct Offering, March
2025 Underwritten Offering and Debt Repayment

On January 7