Company: XTIA
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001213900-25-045396
Chunk: 109

Company: XTI Aerospace, Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 8
Chunk 109
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 consolidated financial statements have
been prepared using the accounting records of Legacy XTI and as of March 12, 2024 (the effective date of the XTI Merger) and forward,
the accounting records of XTI Aerospace, Inc. (formerly known as Inpixon), Inpixon GmbH (formerly known as Nanotron Technologies GmbH),
Inpixon Holding UK Limited, and Intranav GmbH. All material inter-company balances and transactions have been eliminated.

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 convertible notes receivable;

●the valuation of convertible notes payable, at fair value;

●the valuation of warrant liabilities; and

●the valuation allowance for deferred tax assets.

9

XTI AEROSPACE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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, based upon factors surrounding the credit risk of its customers, establishes an allowance for credit losses.

The customers who account for 10% or more of the
Company’s revenue for the three months ended March 31, 2025 or March 31, 2024 or 10% or more of the Company’s outstanding receivable balance
as of March 31, 2025 or March 31, 2024 are presented as follows:

    Percentage of revenues  
    Percentage of accounts payable 

    Three Months Ended March 31,  
    As of March 31, 

    Vendor 
    2025   
    2024   
    2025  
    2024 

    A 
     23% 
     **  
     34