Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 39

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 39
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 the early years following
an acquisition. This is because the fair values of these assets align very closely with what we paid to acquire the reporting units to
which these assets are assigned. As a result, the difference between the carrying value of the reporting unit and its fair value (typically
referred to as “headroom”) is smaller at the time of acquisition. Until this headroom grows over time, due to business growth
or lower carrying value of the reporting unit, a relatively small decrease in reporting unit fair value can trigger impairment charges.
When impairment charges are triggered, they tend to be material due to the size of the assets involved. Our business could be adversely
affected, and impairment of goodwill could be triggered, if any of the following were to occur: higher attrition rates than planned as
a result of the competitive environment or our inability to provide products and services that are competitive in the marketplace, lower-than-planned
adoption rates by customers, higher-than-expected expense levels to provide services to customers, sustained declines in our stock price
and related market capitalization and changes in our business model that may impact one or more of these variables. During the years
ended December 31, 2024 and 2023, we recorded an impairment charge to our intangible assets of approximately $2.5 million and zero, respectively.

21

Our
business depends on experienced and skilled personnel, and if we are unable to attract and integrate skilled personnel, it will be more
difficult for us to manage our business and complete contracts.

The
success of our business and ability to expand our operations depend on our ability to attract, retain, train, educate, and motivate highly
skilled employees, including employees who may become part of our organization in connection with our acquisitions. The increase in demand
for engineering, software, sales, consulting, technology integration and managed services has further increased the need for employees
with specialized skills or significant experience in these areas. Competition for personnel with skill sets specific to our industries
is high, and identifying candidates with the appropriate qualifications can be costly and difficult. We may not be able to hire the necessary
personnel to implement our business strategy given our anticipated hiring needs, or we may need to provide higher compensation or more
training to our personnel than we currently anticipate. Furthermore, the industry turnover rates for these types of employees are high
and we may not be successful in retaining, training or motivating our employees. Any inability to attract, retain, train and motivate
employees could