XTI Aerospace (XTIA) FY2025 10-K Risk Factors: 49 New, 26 Dropped

What the changes say

XTI Aerospace pivoted toward unmanned aerial systems distribution and services through Drone Nerds, while pausing the TriFan 600 program.

What changed since the prior 10-K

New

NewRisks Related to Our Business and Industries
Our ability to continue funding our operations and execute our long-term development strategy depends on our ability to maintain sufficient liquidity and obtain additional capital over time
We need additional capital to fund operations, support our UAS distribution growth, and resume the TriFan 600 aircraft program.
NewRisks Related to Our Business and Industries
Our UAS business operates in a rapidly evolving market and is subject to risks related to changes in technology, customer demand, regulatory developments and procurement requirements
Our UAS business operates in a rapidly evolving market with uncertain customer adoption and evolving FAA regulations.
NewRisks Related to Our Business and Industries
Our UAS operations are subject to evolving federal, state, local and international regulatory requirements, and changes in such regulations or our inability to comply with them could adversely affect our business
Our UAS operations face extensive federal, state, and local regulations regarding airspace usage, operator certifications, and product authorizations.
NewRisks Related to Our Business and Industries
Our UAS business depends on relationships with key suppliers and manufacturers, and adverse regulatory developments or other disruptions affecting those suppliers could materially adversely affect our business, financial condition and results of operations
Top suppliers represented 49%, 13%, and 6% of our purchases, and key partner DJI faces U.S. government watchlists and FCC restrictions.
NewRisks Related to Our Business and Industries
Our UAS operations involve assembly, configuration, integration, repair and service activities that expose us to operational, quality and execution risks that could adversely affect our business
UAS assembly, repair, and integration activities expose us to technical errors, quality control failures, and potential liability claims.
NewRisks Related to Our Business and Industries
We may experience losses or reduced margins if we are unable to accurately forecast demand for UAS products or manage our inventory effectively
Inaccurate forecasting of UAS product demand can lead to excess or obsolete inventory or lost sales.
NewRisks Related to Our Business and Industries
Our UAS distribution and services business depends on third-party manufacturers, software platforms and OEM policies, and adverse changes in those relationships could materially adversely affect our business, financial condition and results of operations
Changes to third-party manufacturer policies, firmware updates, or pricing structures could reduce our UAS margins and product access.
NewRisks Related to Our Business and Industries
We may be unable to effectively manage the growth and operational complexity of our expanding UAS distribution and services business
Rapid expansion of our UAS distribution and services business strains management, warehouse capacity, and internal controls.
NewRisks Related to Our Business and Industries
Our UAS business requires us to maintain inventory, and we may incur losses due to excess inventory, obsolescence or changes in market demand
Regulatory changes or import restrictions could render our inventory of drone platforms and components obsolete or unsellable.
NewRisks Related to Our Business and Industries
We may incur costs to support warranties, provide service, repairs, maintenance and technical support for UAS products we distribute or service, and failures in these activities could adversely affect our business, financial condition and results of operations
We incur labor and logistics costs supporting manufacturer warranties and providing repair and maintenance services for UAS products.
NewRisks Related to Our Business and Industries
Licenses and regulatory authorizations required for certain UAS products may be difficult to obtain in the future, which could adversely affect our ability to sell certain products
Delays or denials of FCC equipment authorizations or operational waivers could prevent us from selling certain UAS products.
NewRisks Related to Our Business and Industries
The nature of our UAS business and, to the extent we resume the TriFan 600 program, aircraft development activities involves significant risks and uncertainties, including product liability exposure, that may not be covered by insurance or indemnification
Product liability claims arising from drone malfunctions, operator errors, or battery incidents may not be fully covered by insurance.
NewRisks Related to Our Business and Industries
Our business may be dependent on a limited number of significant customers, and the loss of one or more such customers could adversely affect our operating results
NewRisks Related to Our Business and Industries
If we are unable to collect our receivables in a timely manner, our liquidity, working capital and results of operations could be adversely affected
NewRisks Related to Our Business and Industries
Defects, errors or vulnerabilities in the products we distribute, service or develop, or the failure of such products to perform as expected, could harm our reputation and adversely affect our results of operations
NewRisks Related to Our Business and Industries
If the UAS products and solutions we distribute and support do not effectively interoperate with our customers’ systems and operational requirements, deployments could be delayed or cancelled, which would harm our financial condition, operating results and growth prospects
NewRisks Related to Our Business and Industries
We have no guarantee of receiving government contracts, and our failure to do so would materially harm our revenues and growth prospects
NewRisks Related to Our Business and Industries
Government contracts are subject to termination for convenience, funding reductions, and regulatory changes that could eliminate anticipated revenues without recourse
NewRisks Related to Our Business and Industries
The defense procurement process is lengthy, unpredictable, and resource-intensive, and we may expend significant capital pursuing contracts that are never awarded
NewRisks Related to Our Business and Industries
We operate in a highly competitive market for autonomous unmanned systems, and many of our competitors have substantially greater resources, established relationships, and proven contract histories
NewRisks Related to Our Business and Industries
Our autonomous systems may fail to meet evolving military performance, reliability, and interoperability requirements, which could disqualify us from contract competitions or result in contract termination
NewRisks Related to Our Business and Industries
We may be unable to obtain or maintain the security clearances, certifications, and regulatory authorizations required to pursue and perform classified or sensitive government programs
NewRisks Related to Our Business and Industries
We are subject to the risk that changes in U.S. defense spending, budget sequestration, or shifts in national security priorities will reduce or eliminate the market for our products and services
NewRisks Related to Our Business and Industries
We may rely on teaming arrangements and subcontracts with prime contractors whose decisions and performance are outside of our control and who may become our competitors
NewRisks Related to Our Business and Industries
Our ability to scale ADS operations is dependent on recruiting and retaining personnel with specialized expertise in autonomous systems, defense engineering, and government program management — talent that is in high demand and limited supply
NewRisks Related to Our Business and Industries
The TriFan 600 aircraft program has been paused, and if resumed, may never achieve certification, commercial production or market acceptance
NewRisks Related to Our Business and Industries
The strategic reorientation of our former XTI Aircraft division toward unmanned systems development introduces significant new execution risks
NewRisks Related to Our Business and Industries
In addition, we have devoted significant financial and engineering resources to the TriFan 600 program, and if the program is not resumed, we may not realize a return on those investments
NewRisks Related to Our Business and Industries
Our drone operations may be adversely affected by weather conditions and other environmental factors beyond our control
NewRisks Related to Our Business and Industries
We operate in highly competitive markets characterized by rapid technological change, and we may be required to reduce prices or modify our offerings to remain competitive, which could adversely affect our results of operations
NewRisks Related to Our Business and Industries
If we are unable to obtain and maintain adequate facilities and infrastructure, we may be unable to effectively store, service, repair and distribute UAS products or develop and manufacture our products as our business grows
NewRisks Related to Our Business and Industries
Our UAS operations depend on trained drone operators, technicians and other qualified personnel, and competition for such personnel is significant. If the TriFan 600 program is resumed, pilot and mechanic availability could affect the commercialization of the aircraft
NewRisks Related to Our Business and Industries
Our research and development efforts may not produce successful products or capabilities that result in significant revenue, cost savings or other benefits
NewRisks Related to Our Business and Industries
The ongoing impact of geopolitical conflicts, including the Russia-Ukraine conflict and conflicts in the Middle East, may adversely affect our business, operations and financial condition
NewRisks Related to Our Business and Industries
Our business is subject to U.S. and foreign trade compliance, sanctions, import/export and anti-corruption laws, and violations of these laws or changes in their application could harm our business
NewRisks Related to Our Business and Industries
These laws and regulations are complex, frequently changing, and may be subject to inconsistent interpretation and enforcement. Compliance requires significant management attention and resources, and any failure to maintain effective compliance programs, controls, training and oversight could expose us to liability
NewRisks Related to Our Business and Industries
Changes in U.S. administrative policy, including tariffs, import restrictions, trade agreements and other trade measures, could adversely affect our supply chain economics and financial performance
NewRisks Related to Our Business and Industries
Any of these factors could have a material adverse effect on our business, financial condition and results of operations
NewRisks Related to Our Business and Industries
In connection with our acquisition of Drone Nerds, we issued equity interests that are exchangeable into shares of our common stock. The exchange of such equity interests and the exercise of outstanding warrants could result in additional dilution and increased volatility in the market price of our common stock
NewRisks Related to Our Business and Industries
Our asset-based revolving credit facility contains borrowing base limitations, financial and operational covenants, and is secured by substantially all of the assets of our UAS operations, and any default could materially adversely affect our liquidity and operations
NewRisks Related to Our Business and Industries
We may be unable to repay the Notes issued in connection with the Drone Nerds acquisition
NewRisks Related to Our Business and Industries
We have completed several strategic transactions, including acquisitions and dispositions, which may make it difficult for investors to evaluate our business and prospects, and future acquisitions or dispositions could disrupt our business and harm our financial condition or operating results
NewRisks Related to Our Business and Industries
We may make strategic investments in early-stage companies or technologies that fail to generate returns or result in significant losses or impairment charges
NewRisks Related to Our Business and Industries
Our business depends on experienced and skilled personnel, and if we are unable to attract, retain and integrate such personnel, or if we lose key personnel, our operations and strategic execution may be adversely affected
NewRisks Related to Our Business and Industries
We have been and may in the future be subject to government or regulatory investigations or inquiries and may be required to comply with requests for information by regulators, and any resulting enforcement action could have a materially adverse effect on us
NewRisks Related to Our Business and Industries
We rely on key information technology systems and third-party cloud service providers, and any disruption, failure, or degradation of these systems could adversely affect our operations and financial results
NewRisks Related to Our Business and Industries
We may be unable to maintain effective internal control over financial reporting and disclosure controls and procedures, which could adversely affect our ability to accurately report our financial results and maintain investor confidence
NewRisks Related to Our Business and Industries
Any of the foregoing risks could result in supply chain disruptions, increased costs, production delays, reduced demand, regulatory investigations or other business interruptions, which could have a material adverse effect on our business, financial condition and results of operations
NewRisks Related to Our Securities
The Class B Units of XTI Drones Holdings, LLC issued in connection with our acquisition of Drone Nerds are exchangeable into shares of our common stock and will be automatically exchanged in February 2027, which will result in dilution to our existing stockholders

Dropped

DroppedRisks Related to Our Business and Industry
We have a limited operating history and have not yet manufactured any non-prototype aircraft, delivered any aircraft to customers or generated any revenues from our aircraft business, and we may never develop or manufacture any VTOL aircraft according to our current development schedule, or at all
Limited operating history and no aircraft delivered or manufactured.
DroppedRisks Related to Our Business and Industry
We will require FAA certification, and a delay in receiving such certification could adversely affect our prospects, business, financial condition and results of operations
Requirement for expensive and time-consuming FAA type certification for TriFan 600.
DroppedRisks Related to Our Business and Industry
We have a history of losses, and in order to successfully execute our business plan, we will need to raise additional capital through additional debt or equity financing, which may otherwise not be available on reasonable terms or at all
History of net losses and accumulated deficit of approximately $93.6 million.
DroppedRisks Related to Our Business and Industry
As a result of our failure to timely file a Current Report on Form 8-K, we are currently ineligible to use Form S-3 until August 2025, which may impair our ability to raise capital on terms favorable to us, in a timely manner or at all
Ineligibility to use Form S-3 until August 2025 due to a late Form 8-K filing.
DroppedRisks Related to Our Business and Industry
Operating aircraft carries a degree of inherent risk. Accidents or incidents involving VTOL aircraft, us or our competitors could have a material adverse effect on our business, financial condition and results of operations
Inherent risks of test flying prototype aircraft causing development delays.
DroppedRisks Related to Our Business and Industry
We operate in highly competitive markets and we may be required to reduce the prices for some of our products and services to remain competitive, which could adversely affect our results of operations
Competition in aircraft manufacturing markets requiring potential price reductions.
DroppedRisks Related to Our Business and Industry
The market for a civilian long-range fixed-wing VTOL airplane is new and untested. If such market does not respond at the level we expect or if it fails to grow as large as we expect, our business, financial condition and results of operations could be harmed
Untested civilian long-range fixed-wing VTOL airplane market.
DroppedRisks Related to Our Business and Industry
Developing new products and technologies entails significant risks and uncertainties
Significant risks, delays, and cost overruns in developing new aircraft technologies.
DroppedRisks Related to Our Business and Industry
If we are unable to obtain and maintain adequate facilities and infrastructure, we may be unable to develop and manufacture the aircraft as expected, and our aircraft may require maintenance at frequencies or at costs that are greater than expected
Risks of obtaining and maintaining adequate manufacturing facilities and infrastructure.
DroppedRisks Related to Our Business and Industry
There may be a shortage of pilots and mechanics who meet the training standards required, which could reduce our ability to sell our aircraft at scale and on our expected timelines
Shortage of qualified pilots and aviation mechanics in the industry.
DroppedRisks Related to Our Business and Industry
Operations could be adversely affected by interruptions of production that are beyond our control
Production interruptions and component shortages from third-party aircraft suppliers.
DroppedRisks Related to Our Business and Industry
Market and regulatory trends to reduce climate change may not evolve in the direction and within the timing expected, which could have a negative impact in our business plan
DroppedRisks Related to Our Business and Industry
Accordingly, our business and success faces risks from uncertainties inherent to developing companies in a competitive environment. There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability
DroppedRisks Related to Our Business and Industry
These factors could cause us to not fully realize the anticipated financial and/or strategic benefits of the acquisitions, which could have a material adverse effect on our business, financial condition and/or results of operations
DroppedRisks Related to Our Business and Industry
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
DroppedRisks Related to Our Business and Industry
The loss of key personnel may adversely affect our operations
Climate change regulations impacting our business plan.
DroppedRisks Related to Our Business and Industry
Any failures or interruptions in our services or systems could disrupt our business and impair our ability to effectively provide our RTLS services and products to our customers, which could damage our reputation and adversely affect our revenues and profitability
DroppedRisks Related to Our Business and Industry
The competitiveness of our RTLS business depends significantly on our ability to keep pace with the rapid changes in the RTLS industry. Failure by us to anticipate and meet our customers’ technological needs could adversely affect our competitiveness and growth prospects
DroppedRisks Related to Our Business and Industry
Our RTLS business currently has a limited number of customers, the importance of which may vary dramatically from year to year, and a loss of one or more of these key customers may adversely affect our operating results
DroppedRisks Related to Our Business and Industry
If we cannot collect our receivables or if payment is delayed, our business may be adversely affected by our inability to generate cash flow, provide working capital or continue our business operations
DroppedRisks Related to Our Business and Industry
We may be subject to product liability due to manufacturing or design defects for which product liability insurance may not be sufficient
DroppedRisks Related to Our Business and Industry
Defects, errors, or vulnerabilities in our products or services or the failure of such products or services to prevent a security breach, could harm our reputation and adversely affect our results of operations
DroppedRisks Related to Our Business and Industry
If the general level of advanced attacks declines, or is perceived by current or potential customers to have declined, this could harm our location based security and detection operating segment, and our financial condition, operating results and growth prospects
DroppedRisks Related to Our Business and Industry
If our location-based security and detection products do not effectively interoperate with our customers’ IT infrastructure, installations could be delayed or cancelled, which would harm our financial condition, operating results and growth prospects
DroppedRisks Related to Our Business and Industry
Any actual or perceived failure by us to comply with our privacy policy or legal or regulatory requirements in one or multiple jurisdictions could result in proceedings, actions or penalties against us
DroppedRisks Related to Our Business and Industry
A regional or global health pandemic, such as the COVID-19 pandemic, could severely affect our business, results of operations and financial condition

Reworded

100% rewrittenRisks Related to Our Business and Industries
Difficult conditions in the global economy and capital markets may materially adversely affect our business, results of operations and access to capital
Updated to specifically target demand for UAS products, government budgets, and customer enterprise capital spending amid macroeconomic uncertainty.
Was: Difficult conditions in the global capital markets and the economy generally may materially adversely affect our business and results of operations, and we do not expect these conditions to improve in the near future
99% rewrittenRisks Related to Our Business and Industries
Insurance and contractual protections may not cover product liability, operational claims, lost revenue, increased expenses or liquidated damages, which could adversely affect our financial results
Expanded to cover product liability claims from distributing, servicing, and repairing drone systems, software, and future aircraft.
Was: Insurance and contractual protections may not always cover potential claims, lost revenue, increased expenses or liquidated damages payments, which could adversely affect our financial results
98% rewrittenRisks Related to Our Business and Industries
Misuse of our products could harm our reputation and result in litigation, regulatory enforcement actions or reduced demand for our products and services
Shifted focus from location-based security products to drone and sensor misuse violating privacy, surveillance, and export control laws.
Was: Misuse of our products could harm our reputation and result in litigation or enforcement action or reduced demand for our services
94% rewrittenRisks Related to Our Business and Industries
Adverse judgments or settlements in legal proceedings could materially harm our business, financial condition, operating results and cash flows
Added a specific legal proceeding reference regarding a February 2026 Texas lawsuit against Anzu Robotics for DTPA violations.
87% rewrittenRisks Related to Our Business and Industries
Digital threats such as cyber-attacks, data protection breaches, computer viruses or malware affecting our systems, our customers’ systems or cloud-based services could result in liability for us, damage our reputation or otherwise harm our business
Added specific risks regarding UAS distribution collecting sensitive operational and geospatial data, alongside aircraft engineering data.
Was: Digital threats such as cyber-attacks, data protection breaches, computer viruses or malware on our customers ’ networks, or in cloud-based services provided by or enabled by us, could result in liability for us, damage our reputation or otherwise harm our business
84% rewrittenRisks Related to Our Business and Industries
Investors’ expectations and regulatory requirements relating to environmental, social and governance (“ESG”) matters may impose additional costs and expose us to new risks
Updated ESG risk to include evolving reporting standards, regulatory requirements, and third-party sustainability assessments.
Was: Investors’ expectations of our performance relating to environmental, social and governance (“ESG”) factors may impose additional costs and expose us to new risks
81% rewrittenRisks Related to Our Business and Industries
A significant portion of the purchase price related to our strategic acquisitions was allocated to goodwill and intangible assets that are subject to periodic impairment evaluations, and an impairment loss could have a material adverse impact on our financial condition and results of operations
Clarified that goodwill and intangible asset impairment risk is higher in early years following strategic acquisitions due to small valuation buffers.
Was: A significant portion of the purchase price related to our strategic acquisitions prior to the XTI Merger was allocated to goodwill and intangible assets that are subject to periodic impairment evaluations. An impairment loss could have a material adverse impact on our financial condition and results of operations
81% rewrittenRisks Related to Our Business and Industries
Our ability to use net operating loss carryforwards and other tax attributes may be limited
Updated tax attribute language to cover potential Section 382 ownership changes from business combinations, equity financings, and preferred stock.
Was: Our ability to use net operating loss carryforwards and certain other tax attributes may be limited
74% rewrittenRisks Related to Our Business and Industries
We are subject to risks associated with climate change, including the potential increased impacts of severe weather events on our operations and infrastructure, and market and regulatory trends relating to sustainability and emissions reduction may not evolve as expected
Was: We are subject to risks associated with climate change, including the potential increased impacts of severe weather events on our operations and infrastructure
73% rewrittenRisks Related to Our Business and Industries
If we do not adequately protect our intellectual property rights, we may experience a loss of revenue and our operations and growth prospects may be materially harmed
65% rewrittenRisks Related to Our Business and Industries
We may be subject to claims that we or our employees have wrongfully used or disclosed alleged trade secrets of their former employers
Was: We may be subject to damages resulting from claims that the Company or our employees have wrongfully used or disclosed alleged trade secrets of their former employers
58% rewrittenRisks Related to Our Business and Industries
The growth of our UAS business depends on increasing sales to existing customers and obtaining new customers, which, if unsuccessful, could limit our financial performance
Was: The growth of our RTLS business is dependent on increasing sales to our existing customers and obtaining new customers, which, if unsuccessful, could limit our financial performance
41% rewrittenRisks Related to Our Business and Industries
We may enter into joint venture, teaming and other arrangements, and these activities involve risks and uncertainties, and a failure of any such relationship could have material adverse results on our business and results of operations
Was: We may enter into joint venture, teaming and other arrangements, and these activities involve risks and uncertainties. A failure of any such relationship could have material adverse results on our business and results of operations

All 78 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business and Industries

01Our ability to continue funding our operations and execute our long-term development strategy depends on our ability to maintain sufficient liquidity and obtain additional capital over timeNew
02Our UAS business operates in a rapidly evolving market and is subject to risks related to changes in technology, customer demand, regulatory developments and procurement requirementsNew
03Our UAS operations are subject to evolving federal, state, local and international regulatory requirements, and changes in such regulations or our inability to comply with them could adversely affect our businessNew
04Our UAS business depends on relationships with key suppliers and manufacturers, and adverse regulatory developments or other disruptions affecting those suppliers could materially adversely affect our business, financial condition and results of operationsNew
05Our UAS operations involve assembly, configuration, integration, repair and service activities that expose us to operational, quality and execution risks that could adversely affect our businessNew
06We may experience losses or reduced margins if we are unable to accurately forecast demand for UAS products or manage our inventory effectivelyNew
07Our UAS distribution and services business depends on third-party manufacturers, software platforms and OEM policies, and adverse changes in those relationships could materially adversely affect our business, financial condition and results of operationsNew
08We may be unable to effectively manage the growth and operational complexity of our expanding UAS distribution and services businessNew
09Our UAS business requires us to maintain inventory, and we may incur losses due to excess inventory, obsolescence or changes in market demandNew
10We may incur costs to support warranties, provide service, repairs, maintenance and technical support for UAS products we distribute or service, and failures in these activities could adversely affect our business, financial condition and results of operationsNew
11Licenses and regulatory authorizations required for certain UAS products may be difficult to obtain in the future, which could adversely affect our ability to sell certain productsNew
12The nature of our UAS business and, to the extent we resume the TriFan 600 program, aircraft development activities involves significant risks and uncertainties, including product liability exposure, that may not be covered by insurance or indemnificationNew
13The growth of our UAS business depends on increasing sales to existing customers and obtaining new customers, which, if unsuccessful, could limit our financial performance58% rewritten
14Our business may be dependent on a limited number of significant customers, and the loss of one or more such customers could adversely affect our operating resultsNew
15If we are unable to collect our receivables in a timely manner, our liquidity, working capital and results of operations could be adversely affectedNew
16Defects, errors or vulnerabilities in the products we distribute, service or develop, or the failure of such products to perform as expected, could harm our reputation and adversely affect our results of operationsNew
17If the UAS products and solutions we distribute and support do not effectively interoperate with our customers’ systems and operational requirements, deployments could be delayed or cancelled, which would harm our financial condition, operating results and growth prospectsNew
18We have no guarantee of receiving government contracts, and our failure to do so would materially harm our revenues and growth prospectsNew
19Government contracts are subject to termination for convenience, funding reductions, and regulatory changes that could eliminate anticipated revenues without recourseNew
20The defense procurement process is lengthy, unpredictable, and resource-intensive, and we may expend significant capital pursuing contracts that are never awardedNew
21We operate in a highly competitive market for autonomous unmanned systems, and many of our competitors have substantially greater resources, established relationships, and proven contract historiesNew
22Our autonomous systems may fail to meet evolving military performance, reliability, and interoperability requirements, which could disqualify us from contract competitions or result in contract terminationNew
23We may be unable to obtain or maintain the security clearances, certifications, and regulatory authorizations required to pursue and perform classified or sensitive government programsNew
24We are subject to the risk that changes in U.S. defense spending, budget sequestration, or shifts in national security priorities will reduce or eliminate the market for our products and servicesNew
25We may rely on teaming arrangements and subcontracts with prime contractors whose decisions and performance are outside of our control and who may become our competitorsNew
26Our ability to scale ADS operations is dependent on recruiting and retaining personnel with specialized expertise in autonomous systems, defense engineering, and government program management — talent that is in high demand and limited supplyNew
27The TriFan 600 aircraft program has been paused, and if resumed, may never achieve certification, commercial production or market acceptanceNew
28The strategic reorientation of our former XTI Aircraft division toward unmanned systems development introduces significant new execution risksNew
29In addition, we have devoted significant financial and engineering resources to the TriFan 600 program, and if the program is not resumed, we may not realize a return on those investmentsNew
30Our drone operations may be adversely affected by weather conditions and other environmental factors beyond our controlNew
31We operate in highly competitive markets characterized by rapid technological change, and we may be required to reduce prices or modify our offerings to remain competitive, which could adversely affect our results of operationsNew
32If we are unable to obtain and maintain adequate facilities and infrastructure, we may be unable to effectively store, service, repair and distribute UAS products or develop and manufacture our products as our business growsNew
33Our UAS operations depend on trained drone operators, technicians and other qualified personnel, and competition for such personnel is significant. If the TriFan 600 program is resumed, pilot and mechanic availability could affect the commercialization of the aircraftNew
34Our research and development efforts may not produce successful products or capabilities that result in significant revenue, cost savings or other benefitsNew
35If we do not adequately protect our intellectual property rights, we may experience a loss of revenue and our operations and growth prospects may be materially harmed73% rewritten
36Our ability to use net operating loss carryforwards and other tax attributes may be limited81% rewritten
37We may enter into joint venture, teaming and other arrangements, and these activities involve risks and uncertainties, and a failure of any such relationship could have material adverse results on our business and results of operations41% rewritten
38We are subject to risks associated with climate change, including the potential increased impacts of severe weather events on our operations and infrastructure, and market and regulatory trends relating to sustainability and emissions reduction may not evolve as expected74% rewritten
39Investors’ expectations and regulatory requirements relating to environmental, social and governance (“ESG”) matters may impose additional costs and expose us to new risks84% rewritten
40Insurance and contractual protections may not cover product liability, operational claims, lost revenue, increased expenses or liquidated damages, which could adversely affect our financial results99% rewritten
41The ongoing impact of geopolitical conflicts, including the Russia-Ukraine conflict and conflicts in the Middle East, may adversely affect our business, operations and financial conditionNew
42Our business is subject to U.S. and foreign trade compliance, sanctions, import/export and anti-corruption laws, and violations of these laws or changes in their application could harm our businessNew
43These laws and regulations are complex, frequently changing, and may be subject to inconsistent interpretation and enforcement. Compliance requires significant management attention and resources, and any failure to maintain effective compliance programs, controls, training and oversight could expose us to liabilityNew
44Changes in U.S. administrative policy, including tariffs, import restrictions, trade agreements and other trade measures, could adversely affect our supply chain economics and financial performanceNew
45Difficult conditions in the global economy and capital markets may materially adversely affect our business, results of operations and access to capital100% rewritten
46Any of these factors could have a material adverse effect on our business, financial condition and results of operationsNew
47In connection with our acquisition of Drone Nerds, we issued equity interests that are exchangeable into shares of our common stock. The exchange of such equity interests and the exercise of outstanding warrants could result in additional dilution and increased volatility in the market price of our common stockNew
48Our asset-based revolving credit facility contains borrowing base limitations, financial and operational covenants, and is secured by substantially all of the assets of our UAS operations, and any default could materially adversely affect our liquidity and operationsNew
49We may be unable to repay the Notes issued in connection with the Drone Nerds acquisitionNew
50We have completed several strategic transactions, including acquisitions and dispositions, which may make it difficult for investors to evaluate our business and prospects, and future acquisitions or dispositions could disrupt our business and harm our financial condition or operating resultsNew
51A significant portion of the purchase price related to our strategic acquisitions was allocated to goodwill and intangible assets that are subject to periodic impairment evaluations, and an impairment loss could have a material adverse impact on our financial condition and results of operations81% rewritten
52We may make strategic investments in early-stage companies or technologies that fail to generate returns or result in significant losses or impairment chargesNew
53Our business depends on experienced and skilled personnel, and if we are unable to attract, retain and integrate such personnel, or if we lose key personnel, our operations and strategic execution may be adversely affectedNew
54If we were deemed to be an investment company under the Investment Company Act of 1940, applicable restrictions could make it impractical for us to continue our business as contemplated
55We may be subject to claims that we or our employees have wrongfully used or disclosed alleged trade secrets of their former employers65% rewritten
56We have been and may in the future be subject to government or regulatory investigations or inquiries and may be required to comply with requests for information by regulators, and any resulting enforcement action could have a materially adverse effect on usNew
57Adverse judgments or settlements in legal proceedings could materially harm our business, financial condition, operating results and cash flows94% rewritten
58We rely on key information technology systems and third-party cloud service providers, and any disruption, failure, or degradation of these systems could adversely affect our operations and financial resultsNew
59Digital threats such as cyber-attacks, data protection breaches, computer viruses or malware affecting our systems, our customers’ systems or cloud-based services could result in liability for us, damage our reputation or otherwise harm our business87% rewritten
60We may be unable to maintain effective internal control over financial reporting and disclosure controls and procedures, which could adversely affect our ability to accurately report our financial results and maintain investor confidenceNew
61Any of the foregoing risks could result in supply chain disruptions, increased costs, production delays, reduced demand, regulatory investigations or other business interruptions, which could have a material adverse effect on our business, financial condition and results of operationsNew
62Misuse of our products could harm our reputation and result in litigation, regulatory enforcement actions or reduced demand for our products and services98% rewritten

Risks Related to Our Securities

63Delisting from Nasdaq could also result in other negative consequences, including the potential loss of confidence by suppliers, customers and employees, the loss of institutional investor interest and fewer business development opportunities
64Our stock price may be volatile, and your investment may suffer a decline in value as a result of the volatility of our stock
65Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline
66Sales of our common stock or other securities, or the perception that future sales may occur, may cause the market price of our common stock to decline, even if our business is doing well
67There may be future sales or other dilution of our equity, which may adversely affect the market price of our common stock
68The Class B Units of XTI Drones Holdings, LLC issued in connection with our acquisition of Drone Nerds are exchangeable into shares of our common stock and will be automatically exchanged in February 2027, which will result in dilution to our existing stockholdersNew
69We may issue debt and equity securities or securities convertible into equity securities, any of which may be senior to our common stock as to distributions and in liquidation, which could negatively affect the value of our common stock
70If our common stock becomes subject to the penny stock rules, it would become more difficult to trade our shares
71We do not intend to pay cash dividends to our stockholders, so it is unlikely that stockholders will receive any return on their investment in our Company prior to selling our stock
72Some provisions of our articles of incorporation and bylaws may deter takeover attempts, which may inhibit a takeover that stockholders consider favorable and limit the opportunity of our stockholders to sell their shares at a favorable price
73Nevada Anti-Takeover Law may discourage acquirers and eliminate a potentially beneficial sale for our stockholders
74The limitation of liability, or our indemnification, of our officers and directors may cause us to use corporate resources in a manner that conflicts with the interests of our stockholders
75The obligations associated with being a public company require significant resources and management attention, which may divert from our business operations
76Public company compliance may make it more difficult to attract and retain officers and directors
77If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline
78We may be or may become the target of securities litigation, which is costly and time-consuming to defend

Other XTI Aerospace 10-Ks

FY2024 10-K risk factors
55 risks
XTI Aerospace faces intense capital constraints, reporting $35.6 million in losses for 2024 and relying heavily on external financing. The company depends entirely on successfully developing, certifying, and manufacturing its unproven TriFan 600 VTOL aircraft. Regulatory approvals from the FAA are critical and subject to costly delays.
Filed Apr 15, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.