Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 471

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 4
Chunk 471
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 Mexico, Europe, and
China, and adverse responses by foreign governments to U.S. trade policies, among other possible changes. China is currently a leading
global source of hardware products, including the hardware products that we use. As the implementation of tariffs is ongoing, more tariffs
may be added in the future. These tariffs could have an adverse impact on our business, results of operations, prospects and financial
condition, and if we are unable to pass such price increases through to our customers, it would likely increase our cost of sales and,
as a result, decrease our gross margins, operating income and net income. As of the date of this report, discussions remain ongoing in
respect of certain trade restrictions and tariffs on imports from Canada, China, Mexico and Europe, as well as retaliatory tariffs enacted
in response to such actions. In light of these events, there continues to exist significant uncertainty about the future relationship
between the U.S. and other countries with respect to such trade policies, treaties, and tariffs. These developments, or the perception
that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets,
and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors
could depress economic activity and restrict our access to suppliers or customers and, in turn, have a material adverse effect on the
business and financial condition of such suppliers and customers or other counterparties we do business with, which in turn would negatively
impact us.

57

Deteriorating macroeconomic conditions, including
slower growth or a recession, inflation, changes in the U.S. presidential administration, bank failures, supply chain disruption, increases
in interest rates, increases to fuel and other energy costs or vehicle costs, geopolitical events, including escalating tariff and non-tariff
trade measures imposed by the U.S., Mexico, China, Canada and other countries, the potential for new or unforeseen conflicts such as the
impact of the Russia and Ukraine conflict and Hamas and Israel conflict, changes in the labor market, or decreases in government spending
power, could in the future result in a decline in customer spending, which could materially adversely affect our business, results of
operations, prospects and financial condition. A trade war, other governmental action related to tariffs or trade agreements, changes
in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development
and investment