Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 69

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 69
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 accurately and timely could harm our reputation and adversely
affect the trading price of our common stock.

Effective
internal controls are necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial
reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed,
and our business and reputation with investors may be harmed. With each prospective acquisition we may make we will conduct whatever
due diligence is necessary or prudent to assure us that the acquisition target can comply with the internal controls requirements of
the Sarbanes-Oxley Act. Notwithstanding our diligence, certain internal controls deficiencies may not be detected. As a result, any internal
control deficiencies may adversely affect our financial condition, results of operations and access to capital. We have not performed
an in-depth analysis to determine if historical undiscovered failures of internal controls exist, and may in the future discover areas
of our internal controls that need improvement.

If
we are unable to maintain effective internal controls, we may not have adequate, accurate or timely financial information, and we may
be unable to meet our reporting obligations as a public company, including the requirements of the Sarbanes-Oxley Act, we may be unable
to accurately report our financial results in future periods, or report them within the timeframes required by the requirements of the
SEC, Nasdaq or the Sarbanes-Oxley Act. Failure to comply with the Sarbanes-Oxley Act, when and as applicable, could also potentially
subject us to sanctions or investigations by the SEC or other regulatory authorities. Any failure to maintain or implement required new
or improved controls, or any difficulties we encounter in their implementation, could result in identification of additional material
weaknesses or significant deficiencies, cause us to fail to meet our reporting obligations or result in material misstatements in our
financial statements. Furthermore, if we cannot provide reliable financial reports or prevent fraud, our business and results of operations
could be harmed and investors could lose confidence in our reported financial information.

Public
company compliance may make it more difficult to attract and retain officers and directors.

The
Sarbanes-Oxley Act and rules implemented by the SEC have required changes in corporate governance practices of public companies. As a
public company, these rules and regulations increase our compliance costs and may make it more difficult and expensive for us to maintain
our director and officer liability insurance and we may be required to accept reduced policy limits and coverage or