Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 66

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 66
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ting-edge technologies such as IoT, AI, and big data analytics to provide real-time tracking and monitoring of assets, machines, and
people within industrial environments. With our RTLS solutions, businesses can achieve improved operational efficiency, enhanced safety
and reduced costs. By having real-time visibility into operations, industrial organizations can make informed, data-driven decisions,
minimize downtime, and ensure compliance with industry regulations.

Drone Nerds, LLC (“Drone
Nerds”), a Florida limited liability company founded in 2014 and headquartered in Dania Beach, Florida, is one of the largest drone
distributors and solutions providers in the United States. Drone Nerds specializes in the wholesale, retail and e-commerce sale of advanced
drone systems and related technologies serving commercial, governmental, and consumer markets, including public safety, construction,
energy, and agriculture. The company operates both an online sales platform and a retail location in South Florida and maintains one of
the largest drone inventories in the U.S., representing over 30 leading brands. Through its nationwide network of sales, marketing, and
service professionals, Drone Nerds delivers comprehensive enterprise drone solutions that improve operational performance and data-driven
decision-making for its customers.

We currently report financial
results for two segments: Commercial Aviation and Industrial IoT. For Industrial IoT, we generate revenue from sales of hardware, software
licenses and professional services. During the quarter ended December 31, 2024, we began exploring strategic options to wind down and/or
sell the hardware portions of our Industrial IoT business segment in order to shift our focus towards the sales of software products.
For Commercial Aviation, the segment is pre-revenue as we are currently developing the TriFan 600 airplane. As of the date of this filing,
we have not yet assessed the impact of the recent acquisitions of Drone Nerds and Anzu Robotics to our future segment reporting.

38

Key Factors Affecting Operating Results

We believe that the growth
of our business and our future success are dependent upon many factors, including our ability to retain and develop engineering internal
and third-party resources, secure strategic partnerships with suppliers, expand the number of customer purchase orders, locate a facility
for further aircraft development and testing, expand on that facility or locate to a new facility for commercial production, build-out
production assembly lines in a timely manner, develop ancillary service offerings related to the TriFan 600 such as flight training and
maintenance products, and secure the needed financing to achieve FAA certification.

While each of these