Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 23

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 23
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    2026 
     224 
  
    2027 
     224 
  
    2028 
     224 
  
    2029 
     173 
  
    2030 and thereafter 
     266 
  
    Total 
    $1,169 

The Company tests for impairment if a change
in circumstances or the occurrence of events indicates that potential impairment exists. In accordance with ASC 360, the Company first
performed a qualitative assessment to determine if there were any indicators of impairment that would require a quantitative analysis
to be performed. The results of the qualitative analysis performed by the Company determined there was no triggering event during the
three months ended September 30, 2025. However, a triggering event was identified by the Company during the first and second quarters
of 2025, in the form of a current period operating and cash flow loss, a consistent history of operating losses, and the revenue results
for the current period missing forecasted targets due to (i) the sales cycle to close transactions taking longer than anticipated and
(ii) supply chain issues causing delays in our delivery of Nanotron product to customers. Based on a quantitative assessment, the Company
recorded an impairment to its Trade Names & Trademarks, Proprietary Technology, and In-Process Research and Development of $0.1 million,
$0.3 million, and $0.2 million, respectively, during the nine months ended September 30, 2025, which is included in ‘Impairment
of intangible assets’ in the unaudited condensed consolidated statements of operations. These assets were part of the Company’s
Industrial IoT segment.

The Company assessed the fair value of the Trade
Names & Trademarks, Proprietary Technology, and In-Process Research and Development by using an income approach in the form of a
relief from royalty model, which considered a specified royalty rate, discount rate reflecting the risk inherent in future cash flows,
perpetual growth rate, and projected future economic and market conditions. The inputs for the fair value calculations included a 3%
terminal growth rate, discount rate of 29%, and a royalty rate of 2% and 10% for Tradenames and Trademarks and Proprietary Technology,
respectively. Management’s estimates of projected cash flows include, but are not limited to, future earnings of the reporting
unit using revenue growth rates, gross margins, and other cost assumptions consistent with the reporting unit’s historical