Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 24

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 24
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 would be beneficial to our business.

Operating
aircraft carries a degree of inherent risk. Accidents or incidents involving VTOL aircraft, us or our competitors could have a material
adverse effect on our business, financial condition and results of operations.

Test
flying a prototype aircraft is inherently risky, and accidents or incidents involving our aircraft are possible. Any such occurrence
would negatively impact our development, testing and certification efforts, and could result in re-design, certification delay and/or
postponements or delays to the sales of our aircraft.

14

The
operation of an aircraft is subject to various risks, and we expect demand for our aircraft to be impacted by accidents or other safety
issues regardless of whether such accidents or issues involve our aircraft. Such accidents or incidents could also have a material impact
on our ability to obtain certification from the FAA and/or international regulators for our aircraft, or to obtain such certification
in a timely manner. Such events could impact confidence in a particular aircraft type or the air transportation services industry as
a whole, particularly if such accidents or disasters were due to a safety fault. We believe that regulators and the general public are
still forming opinions about the safety and utility of various new types of VTOL aircraft, particularly “air taxis”, which
are also known as “eVTOLs.” An accident or incident involving either our VTOL aircraft or an eVTOL aircraft during these
early stages of opinion formation could have a disproportionate impact on the longer-term view of the advanced VTOL aircraft market generally.

There
may be heightened public skepticism of new types of VTOL aircraft and its adopters. In particular, there could be negative public perception
surrounding air taxis, including the overall safety and the potential for injuries or death occurring as a result of accidents involving
them, regardless of whether any such safety incidents involve our aircraft. Any of the foregoing risks and challenges could adversely
affect the combined company’s prospects, business, financial condition and results of operations.

We are at risk of adverse publicity stemming from any public incident
involving our company, our people, our brand or other companies in our industry. Such an incident could involve the actual or alleged
behavior of any of our employees or third-party contractors. Further, if our personnel, our TriFan 600 airplane or other types of aircraft
are involved in a public incident, accident, catastrophe or regulatory enforcement action, we could be exposed to significant reputational
harm and potential legal liability. The insurance we carry may