Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 335

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 2
Chunk 335
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adverse monetary damages, penalties or injunctive relief against us, which could have a material adverse effect on our financial condition,
operating results and cash flows. Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make
it more difficult to compete effectively or to obtain adequate insurance in the future.

Furthermore, while we maintain
insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject
to various exclusions as well as deductibles and caps on amounts of coverage. Even if we believe a claim is covered by insurance, insurers
may dispute our entitlement to coverage for a variety of potential reasons, which may affect the timing and, if the insurers prevail,
the amount of our available insurance coverage for a particular claim.

We may also be required to
initiate expensive litigation or other proceedings to protect our business interests. There is a risk that we will not be successful
or otherwise be able to satisfactorily resolve such claims or litigation. Litigation and other legal claims are subject to inherent uncertainties.
Those uncertainties include, but are not limited to, litigation costs and attorneys’ fees, unpredictable judicial or jury decisions
and the differing laws and judicial proclivities regarding damage awards among the states in which we operate. Unexpected outcomes in
such legal proceedings, or changes in management’s evaluation or predictions of the likely outcomes of such proceedings, could
have a material adverse effect on our business, financial condition, results of operations and cash flows. Our current financial status
may increase our default and litigation risks and may make us more financially vulnerable in the face of threatened litigation.

Drone Nerds operates in evolving markets,
which makes it difficult to evaluate its business and future prospects.

Drone Nerds’ drone,
camera and sensor technologies and software and training, operational support and repair services are and will be sold in new and rapidly
evolving markets. The commercial unmanned aerial vehicles (“UAV”) industry is in the early stages of customer adoption and
the FAA’s definition of regulations relating to the integration of commercial drones into the U.S. National Airspace System is rapidly
evolving. Accordingly, Drone Nerds’ business and future prospects may be difficult to evaluate. We cannot accurately predict the
extent to which demand for the drone systems and solutions will increase, if at all. The challenges, risks and uncertainties frequently
encountered by companies in rapidly evolving markets could impact our ability to do the following in connection with our acquisition of
Drone Nerds