Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 74

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 74
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 regular basis, we review the accounting policies, assumptions, estimates
and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with GAAP. However, because
future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates,
and such differences could be material.

The significant accounting
policies of the Company are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results
of Operations,” section of the Company’s annual report on Form 10-K for the year ended December 31, 2024. There
have been no significant changes to the Company’s critical accounting policies and estimates. However, the Company did identify
an impairment as described below.

41

Valuation of Long-lived and Intangible Assets
and Goodwill

We periodically review long-lived
assets and certain identifiable intangible assets for impairment in accordance with Accounting Standards Codification (“ASC”)
360, “Property, Plant, and Equipment.” Goodwill and intangible assets not subject to amortization are reviewed annually for
impairment in accordance with ASC 350, “Intangibles – Goodwill and Other,” or more often if there are indications of
possible impairment.

The analysis to determine
whether or not an asset is impaired requires significant judgments that are dependent on internal forecasts, including estimated future
cash flows, estimates of long-term growth rates for our business, the expected life over which cash flows will be realized and assumed
royalty and discount rates. Changes in these estimates and assumptions could materially affect the determination of fair value and any
impairment charge. While the fair value of these assets are less than their carrying value based on our current estimates and assumptions,
materially different estimates and assumptions in the future in response to changing economic conditions, changes in our business or
for other reasons could result in the recognition of impairment losses higher than the amount currently recorded.

For assets to be held and
used, including acquired intangible assets subject to amortization, we initiate our review whenever events or changes in circumstances
indicate that the carrying amount of these assets may not be recoverable. Recoverability of an asset is measured by comparison of its
carrying amount to the expected future undiscounted cash flows that the asset is expected to generate. Any impairment to be recognized
is measured by the amount by which the carrying amount of the asset exceeds its fair value. Significant management judgment is required
in this process.

For intangible assets not
subject to amortization