Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 338

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 338
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 cash flows based on assumed long-term growth rates and demand trends; expected future investments
to grow new units; and estimated discount rates. For the market approach, the Company uses internal analyses based primarily on market
comparables. The Company bases these assumptions on its historical data and experience, third party appraisals, industry projections,
micro and macro general economic condition projections, and its expectations. For the year ended December 31, 2024, the Company estimated
the fair value of a reporting unit with 100% weighting to the income approach.

The
Company reviews its long-lived assets, inclusive of its right-of-use assets, for impairment whenever events or changes in circumstances
indicate the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by comparison of
the carrying amount of an asset to the future undiscounted cash flows expected to be generated from the use of the asset and its eventual
disposition. If the carrying amount of an asset group exceeds its estimated future undiscounted cash flows, an impairment charge is recognized
for the amount by which the carrying amount of the asset group exceeds its fair value.

For
the year ended December 31, 2024, the Company determined that its long-lived assets were impaired by $2.5 million. For the year ended
December 31, 2023, the Company determined none of its long-lived assets were impaired.

F-14

XTI
AEROSPACE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Revenue
Recognition

In
accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when the
customer obtains control of promised goods, in an amount that reflects the consideration that it expects to receive in exchange for those
goods. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs
the following five steps: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii)
determine the transaction price, including variable consideration, if any, (iv) allocate the transaction price to the performance obligations
in the contract, and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the
five-step model to contracts