Company: XTIA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076767
Chunk: 144

Company: XTI Aerospace, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 144
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 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.

In accordance with ASC 350, given a triggering
event was identified, the Company performed a quantitative goodwill impairment analysis related to its Industrial IoT reporting unit,
which concluded the carrying amount of the reporting unit exceeded its estimated fair value, indicating that the goodwill of the reporting
unit was impaired. Therefore, the Company recorded an impairment loss of $4.05 million during the three and six months ended June 30,
2025, related to its Industrial IoT reporting unit.

The Company utilized an income approach to assess the fair value of
the reporting unit as of June 30, 2025. The income approach considered the discounted cash flow model, considering projected future cash
flows (including timing and profitability), 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 of the reporting unit included a 3% terminal
growth rate and a discount rate of 29%. Management’s estimates of projected cash flows related to the reporting unit 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 trends, and working capital requirements and future capital expenditures necessary to fund
future operations. The assumptions in the fair value measurement reflects the current market environment, industry-specific factors and
company-specific factors.

16

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets

Intangible assets at June 30, 2025 and December 31,
2024 consisted of the following (in thousands):

     June 30, 2025      Gross Amount   Accumulated Amortization   Impairment   Net Carrying Amount   Remaining Weighted Average Useful Life   Patents  $468   $(199)  $-   $269    9.3   Trade Name/Trademarks   486    (181)   (115)   190    4.6   Proprietary Technology   1,395    (439)