Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 311

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 2
Chunk 311
---
 the anticipated demand for the TriFan 600.

TriFan 600 Engineering Update

We remain focused on advancing
the TriFan 600 toward certification and commercialization, with Q3 marking notable progress in both engineering development and regulatory
engagement activities. During the quarter ended September 30, 2025, we completed initial flight operations for our Sparrow (1:15 scale
model) and Kestrel (1:12 scale model) subscale aircraft prototypes, the results of which validated key design elements of the TriFan 600
under flight conditions. We will continue our subscale aircraft program efforts as we progress toward building our full-scale, piloted
TriFan 600 demonstrator, which we expect to complete in 2027.

We maintain active monthly engagement
with the FAA, including ongoing support for Tech Fam sessions with agency subject matter experts. These interactions support continued
progress in development and help confirm that our approach remains consistent with applicable regulatory requirements.

Critical Accounting Policies and Estimates

Our condensed consolidated
financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). In connection
with the preparation of our consolidated financial statements, we are required to make assumptions and estimates about future events,
and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our
assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant
at the time our consolidated financial statements are prepared. On a 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.” Good