Company: XTIA
Filing Date: 2025-05-19
Form Type: 10-Q
Source: 0001213900-25-045396
Chunk: 57

Company: XTI Aerospace, Inc.
Filing Date: 2025-05-19
Form: 10-Q
Item: Part I, Item 1
Chunk 57
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 application for the TriFan 600 on March 17, 2025.

Critical Accounting Policies and Estimates

Our condensed consolidated
financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). In connection
with the preparation of our consolidated financial statements, we are required to make assumptions and estimates about future events,
and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our
assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant
at the time our consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates
and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with GAAP. However, because
future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and
such differences could be material.

The significant accounting policies of the Company
are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” section
of the Company’s annual report on Form 10-K for the year ended December 31, 2024. There have been no significant changes
to the Company’s critical accounting policies and estimates except for the valuation of long-lived and intangible assets and goodwill
as noted below.

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 Accounting Standards Codification (“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 are less than 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