Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 115

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 115
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 subsequent to December 31, 2024, along with repaying and settling
certain debt and other obligations during March 2025 (refer to Note 23). This, along with the Company’s ability to defer or eliminate
certain operating expenses that are under its control and the revenues expected to be generated by the Industrial IoT segment lead the
Company to believe it has the ability to mitigate such concerns for a period of at least one year from the date these financial statements
are issued. 

Use
of Estimates

The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during each of the reporting periods. Actual results could differ from those estimates. The
Company’s significant estimates consist of:

    ●
    the
    valuation of stock-based compensation;

    ●
    the
    valuation of the Company’s common stock issued and assets acquired in transactions, including acquisitions;

    ●
    
    the
    valuation of equity securities; 

    ●
    
    the
    valuation of convertible notes receivable; 

    ●
    
    the
    valuation of warrant liabilities and assets; 

    ●

    the valuation of convertible notes payable, at fair value;

    ●
    
    the
    valuation of loan conversion derivatives; and 

    ●
    
    the
    valuation allowance for deferred tax assets. 

F-12

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

Cash
and Cash Equivalents

Cash
consists primarily of demand deposit bank accounts, which, from time to time, may exceed federally insured limits. The Company considers
all highly liquid investments with an original maturity from date of purchase of three months or less, or that are readily convertible
into known amounts of cash, to be cash equivalents.

Credit
Risk and Concentrations

Financial
instruments that subject the Company to credit risk consist principally of trade accounts receivable and cash and cash equivalents. The
Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk.
The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and