Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 164

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 164
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 services are also contracted on the fixed fee and time and materials basis. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. The Company has elected the practical expedient to recognize revenue for the right to invoice because the Company’s right to consideration corresponds directly with the value to the customer of the performance completed to date, in which revenue is recognized over time.

(3)Software As A Service Revenue’s performance obligation is satisfied evenly over the service period using a time-based measure because the Company is providing continuous access to its service and revenue is recognized over time.

13

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Deferred revenue

As of September 30, 2025 and December 31,
2024, the Company had approximately $0.7 million and $0.5 million, respectively, in deferred revenue. This deferred revenue balance relates
to cash received in advance for product maintenance services and professional services provided by the Company’s technical staff.
The fair value of the deferred revenue approximates the services to be rendered. The Company expects to satisfy its remaining performance
obligations for these maintenance services and professional services and recognize the deferred revenue and related contract costs over
the next twelve months.

Note 5 - Proforma Financial Information

The XTI Merger was accounted for as a reverse
merger under U.S. GAAP. For financial reporting purposes, Legacy Inpixon is treated as the “acquired” company. As a result,
the Company’s consolidated financial statements include the operating results of Legacy Inpixon only from March 12, 2024, the merger
closing date. The following unaudited proforma financial information presents the consolidated results of operations of the Company and
Legacy Inpixon for the three months and nine months ended September 30, 2024, as if the XTI Merger had occurred as of the beginning of
the first period presented (January 1, 2024) instead of on March 12, 2024. The proforma information does not necessarily reflect the
results of operations that would have occurred had the entities been a single company during those periods.

The proforma financial information for the Company
and Legacy Inpixon is as follows (in thousands):

    For the Three Months Ended 
    September 30, 2024  
    For the  Nine Months Ended 
    September 30, 202