Company: XTIA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076767
Chunk: 268

Company: XTI Aerospace, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 268
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 next twelve months.

Customer Deposits

As of June 30, 2025, we received
conditional pre-orders under a combination of non-binding aircraft purchase agreements, reservation deposit agreements, options and letters
of intent for aircraft, which generated approximately $1.4 million
of cash from customer deposits. These funds from customer reservation deposits will not be recorded as revenue until the orders for aircraft
are delivered, which may not be for many years or at all if we do not deliver the aircraft. The deposits prioritize orders when the aircraft
becomes available for delivery. Customers making deposits are not obligated to purchase aircraft until they execute a definitive purchase
agreement. Customers may request a return of their refundable deposit any time up until the execution of a purchase agreement. Customers’
request for a return of their refundable deposits could adversely affect our liquidity resources, and we may be financially unable to
return such deposits.

Commitment to Nadir Ali

As disclosed in Note 17 of
the condensed consolidated financial statements, the Company has a remaining commitment to pay Nadir Ali deferred consulting fees of $1,000,000
by wire transfer of immediately available funds in two equal installments of $500,000 each on September 30, 2025 and December 31, 2025.

Risks and Uncertainties; Sources of Liquidity

As of June 30, 2025, the Company
has working capital of approximately $2.4 million, adjusted to $16.9 million when excluding derivative warrant liabilities, and cash and
cash equivalents of approximately $20.0 million. For the six months ended June 30, 2025, the Company had a net loss of approximately $33.7
million. During the six months ended June 30, 2025, the Company used approximately $22.0 million of cash for operating activities.

There can be no assurances
that the Company will ever earn revenues sufficient to support its operations, or that it will ever be profitable. In order to continue
its operations, the Company has historically supplemented the revenues it earned with proceeds from the sale of our equity and debt securities
and proceeds from loans and bank credit lines. The Company has incurred net losses and negative operating cash flows from operations since
the XTI Merger completed on March 12, 2024, and the Company expects to continue to incur losses and negative operating cash flows for
the foreseeable future until it commences sustainable commercial operations of the TriFan 600 airplane.