Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 37

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 37
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 make certain products.
The wider implications of the conflict have contributed to inflation driving up the costs of labor and materials required to make our
products. The fluidity and continuation of the Russian conflict may result in additional economic sanctions and other impacts which could
have a negative impact on the Company’s financial condition, results of operations and cash flows, including decreased sales; supply
chain and logistics disruptions; volatility in foreign exchange rates and interest rates; inflationary pressures on materials and labor;
and heightened cybersecurity threats. The overall impact on our business of these events continues to remain uncertain and there are
no assurances that we will be able to continue to experience the same growth or not be materially adversely affected.

Changes in U.S. and foreign government administrative
policy, including the imposition of or increases in tariffs and changes to existing trade agreements, and other changes to macroeconomic
conditions could have a material adverse effect on global economic conditions and our business, results of operations, prospects and financial
condition.

As a result of changes to
U.S. and foreign government administrative policy, there may be changes to existing trade agreements, greater restrictions on free trade
generally, the imposition of or significant increases in tariffs on goods imported into the U.S., particularly those manufactured in Canada,
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 Annual Report
on Form 10-K, 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,