Company: XTIA
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032213
Chunk: 9

Company: XTI Aerospace, Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 9
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ators, resellers and distributors. Indirect sales partners may provide a range of pre- and post-sales services to our customers
including system design, installation, commissioning and service.

Direct
sales representatives are compensated with a base salary and may participate in incentive plans such as commissions or bonuses.

We
market our products through industry-focused as well as account-based marketing strategies which utilize SEO, advertising, social media,
trade shows, conferences, webinars and other media.

Our
RTLS products are primarily sold on a license and SaaS mode, which we call “location as a service” or “LaaS.”
In our licensing model, we also typically charge an annual maintenance fee. The LaaS model is typically for a 3-5 year contract and includes
license to use, maintenance and hardware upgrades. The LaaS model generates a recurring revenue stream.

Customers

TriFan
600

We previously had a pre-sales program that included refundable deposits
for the TriFan 600 airplane that we intend to reopen later in 2025. Most pre-orders do not include deposits. Pre-sale agreements generally
provide customers a delivery slot for their airplanes. The deposits we have received do not create an obligation on the part of the customer
to purchase an airplane, and a customer may request the full return of its refundable deposit. Most pre-orders are subject to the execution
of a definitive purchase agreement between us and each party that contains the final terms for the purchase of our TriFan 600 airplane,
including, but not limited to, the final number of airplanes to be purchased and the timing for delivery of the airplanes. As of the date
of this filing, we have conditional pre-orders under a combination of aircraft purchase agreements, non-binding reservation deposit agreements
and options for the delivery of more than 290 airplanes.

We have non-binding purchase orders for the purchase of 140 TriFan
600 airplanes, including a non-binding pre-order for the purchase of 100 TriFan 600 airplanes by Mesa Airlines, Inc. (“Mesa”)
pursuant to that certain conditional aircraft purchase agreement, dated February 2, 2022, by and among Legacy XTI, Mesa Airlines and Mesa
Air Group, Inc. Mesa’s purchase obligations under such agreement are conditioned upon, among other things, certification of our
airplane by the FAA and the agreement by the parties of all material terms of the transaction including, but not limited to, delivery
dates, airplane specifications, warranties, remedies, milestones relating to