Company: XTIA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112615
Chunk: 211

Company: XTI Aerospace, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 211
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 operates both an online sales platform and a retail location in South Florida and maintains one of
the largest drone inventories in the U.S., representing over 30 leading brands. Through its nationwide network of sales, marketing, and
service professionals, Drone Nerds delivers comprehensive enterprise drone solutions that improve operational performance and data-driven
decision-making for its customers.

We currently report financial
results for two segments: Commercial Aviation and Industrial IoT. For Industrial IoT, we generate revenue from sales of hardware, software
licenses and professional services. During the quarter ended December 31, 2024, we began exploring strategic options to wind down and/or
sell the hardware portions of our Industrial IoT business segment in order to shift our focus towards the sales of software products.
For Commercial Aviation, the segment is pre-revenue as we are currently developing the TriFan 600 airplane. As of the date of this filing,
we have not yet assessed the impact of the recent acquisitions of Drone Nerds and Anzu Robotics to our future segment reporting.

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Key Factors Affecting Operating Results

We believe that the growth
of our business and our future success are dependent upon many factors, including our ability to retain and develop engineering internal
and third-party resources, secure strategic partnerships with suppliers, expand the number of customer purchase orders, locate a facility
for further aircraft development and testing, expand on that facility or locate to a new facility for commercial production, build-out
production assembly lines in a timely manner, develop ancillary service offerings related to the TriFan 600 such as flight training and
maintenance products, and secure the needed financing to achieve FAA certification.

While each of these areas
presents significant opportunities for us, they also pose material challenges and risks that we must successfully address to achieve
FAA certification of the TriFan 600 and further reach our current aircraft delivery forecasts.

Corporate Strategy Update

Our primary focus is to power
what we term the Vertical Economy™ by delivering high-performance xVTOL solutions that scale from aircraft to innovative technologies
and infrastructure. We identify seven areas that comprise the Vertical Economy: manned aircraft, unmanned aircraft, power technology,
airspace and infrastructure management, artificial intelligence, aircraft advanced materials and next gen manufacturing. The term “xVTOL”
is intended to encompass the broad spectrum of vertical lift technologies within the Vertical Economy, including various aircraft types
(e.g., electric VTOL, regional VTOL and drones), operational models (manned and unmanned), supporting technologies (e.g., propulsion systems
and aerospace-related