Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 84

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 84
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 Maintenance Services evenly over time using the output method
                                            (days of software provided) because we provide continuous service, and the customer simultaneously
                                            receives and consumes the benefits provided by our performance as the services are performed.

We
also consider whether an arrangement has any discounts, material rights, or specified future upgrades that may represent additional performance
obligations. We offer discounts in the form of prompt payment discounts and rebates for a decrease in service level percentages. We have
determined that the most likely amount method is most useful for contracts that provides these discounts and rebates as the contracts
have two potential outcomes and a significant reversal in the amount of cumulative revenue recognized is not expected to occur. Discounts
have not historically been significant, but we continue to monitor and evaluate these estimates based on historical experience, anticipated
performance, and our best judgment. Renewals or extensions of licenses are evaluated as distinct licenses (i.e., a distinct good or service),
and revenue attributed to the distinct good or service cannot be recognized until (1) the entity provides the distinct license (or makes
the license available) to the customer and (2) the customer is able to use and benefit from the distinct license. If any of these judgments
were to change it could cause a material increase or decrease in the amount of revenue we report in a particular period.

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 ASC 360, “Property,
Plant, and Equipment.” Goodwill and intangible assets not subject to amortization are reviewed annually for impairment in accordance
with ASC 350, “Intangibles – Goodwill and Other,” or more often if there are indications of possible impairment.

The
analysis to determine whether or not an asset is impaired requires significant judgments that are dependent on internal forecasts, including
estimated future cash flows, estimates of long-term growth rates for our business, the expected life over which cash flows will be realized
and assumed royalty and discount rates. Changes in these estimates and assumptions could materially affect the determination of fair
value and any impairment charge. While the fair value of these assets exceeds their carrying value based on our current estimates and
assumptions, materially different estimates and assumptions in the future in response to changing economic conditions, changes in our
business or for other reasons could result in the recognition of impairment losses.

For
assets to be held and used, including acquired intangible assets subject to amortization