Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2025

Summary of Significant Accounting Policies [Abstract]

Liquidity

Liquidity

As of September 30, 2025, the Company had cash and cash equivalents of approximately $32.2 million. For the nine months ended September 30, 2025, the Company had a net loss of approximately $47.2 million. During the nine months ended September 30, 2025, the Company used approximately $30.4 million of cash for operating activities. As of September 30, 2025, the Company’s net working capital was approximately $1.1 million, representing an increase of approximately $9.9 million from December 31, 2024.

There can be no assurances that the Company will ever earn revenues sufficient to support its operations, or that it will ever be profitable. In order to continue its operations, the Company has supplemented the revenues it earned with proceeds from the sale of its equity securities and proceeds from loans.

The Company’s recurring losses and utilization of cash in its operations are indicators of going concern issues. However, the Company’s current liquidity position was favorably impacted by the cash raised through equity offerings and cash received from warrant exercises aggregating approximately $62.8 million during the nine months ended September 30, 2025, along with repaying and settling certain debt and other obligations during March 2025. The impact of these financings and warrant exercises to the Company’s cash position and overall net working capital position, along with the Company’s ability to defer or eliminate certain operating expenses that are under its control and the revenues expected to be generated by the Industrial IoT segment lead the Company to believe it has the ability to mitigate such concerns for a period of at least one year from the date these financial statements are issued.

Consolidations

Consolidations

The condensed consolidated financial statements have been prepared using the accounting records of Legacy XTI and as of March 12, 2024 (the effective date of the XTI Merger) and forward, the accounting records of XTI Aerospace, Inc. (formerly known as Inpixon) and its subsidiaries, including Inpixon GmbH (formerly known as Nanotron Technologies GmbH), Inpixon Holding UK Limited, and Intranav GmbH. All material inter-company balances and transactions have been eliminated.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during each of the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates consist of:

● the valuation of stock-based compensation;

● the valuation of the Company’s common stock issued and assets acquired in transactions, including acquisitions;

● the valuation of convertible notes receivable;

● the valuation of convertible notes payable, at fair value;

● the valuation of goodwill and intangible assets;

● the valuation of warrant liabilities; and

● the valuation allowance for deferred tax assets.

Credit Risk and Concentrations

Credit Risk and Concentrations

Financial instruments that subject the Company to credit risk consist principally of trade accounts receivable and cash and cash equivalents.

The Company maintains its cash and cash equivalents primarily with high-credit-quality financial institutions in the United States and Germany. Cash balances maintained with financial institutions in the United States are generally in excess of federally insured limits. The Company mitigates its credit risk by limiting its exposure to any single financial institution and by monitoring the credit quality of its counterparties. The Company places its cash with financial institutions that have long-term credit ratings of at least A- or equivalent, as assigned by major credit rating agencies.

The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk. The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for credit losses.

The customers who account for 10% or more of the Company’s revenue or 10% or more of the Company’s outstanding accounts receivable balance are presented as follows for the periods indicated:

	Percentage of revenues
	For the three months ended September 30,						For the nine months ended September 30,						Percentage of accounts receivable
Customer	2025			2024			2025			2024			As of September 30, 2025			As of December 31, 2024
A		45	%		25			34	%		23	%		49	%		31	%
B		15	%		**			13	%		**			**			**
C		10	%		25	%		13	%		16	%		16	%		22	%
D		**			**			10	%		**			11	%		**
E		**			**			**			**			10	%		**

** Represents less than 10% of the total for the respective period.

The vendors who account for 10% or more of the Company’s purchases or 10% or more of the Company’s outstanding payable balance are presented as follows for the periods indicated:

Percentage of purchases

For the three months ended September 30,

For the nine months ended September 30,

Percentage of accounts payable

Vendor

2025

2024

2025

2024

As of September 30, 2025

As of December 31, 2024

A

11

%

**

**

**

**

**

B

**

**

**

**

18

%

**

C

**

**

**

**

14

%

**

D

**

**

**

**

25

%

11

%

E

**

**

**

**

**

31

%

**Represents less than 10% of the total for the respective period

Intangible Assets and Goodwill

Intangible Assets and Goodwill

Finite-lived intangible assets primarily consist of developed technology, patents, customer relationships, and trade names/trademarks. They are amortized ratably over a range of 5 to 15 years, which approximates customer attrition rate and technology obsolescence.

The Company tests goodwill for potential impairment at least annually, or more frequently if an event or other circumstance indicates that the Company may not be able to recover the carrying amount of the net assets of the reporting unit. In evaluating goodwill for impairment, the Company may assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. If the Company bypasses the qualitative assessment, or if the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company performs a quantitative impairment test by comparing the fair value of a reporting unit with its carrying amount.

The Company calculates the estimated fair value of a reporting unit using a weighting of the income and market approaches. For the income approach, the Company uses internally developed discounted cash flow models that include the following assumptions, among others: projections of revenues, expenses, and related cash flows based on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount rates. For the market approach, the Company uses internal analyses based primarily on market comparables. The Company bases these assumptions on its historical data and experience, third party appraisals, industry projections, micro and macro general economic condition projections, and its expectations.

The Company reviews its long-lived assets, inclusive of its right-of-use assets, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated from the use of the asset and its eventual disposition. If the carrying amount of an asset group exceeds its estimated future undiscounted cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value.

For the nine months ended September 30, 2025, the Company determined that its long-lived assets were impaired by approximately $0.6 million. For the nine months ended September 30, 2025, the Company determined that its goodwill was impaired by approximately $4.05 million. There was no impairment recorded for the three months ended September 30, 2025 or 2024.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

No new accounting standards were adopted in the nine months ended September 30, 2025.

Recently Issued Accounting Standards Not Yet Adopted

Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures, which includes amendments to require the disclosure of certain specific costs and expenses that are included in a relevant expense caption on the face of the income statement. Specific costs and expenses that would be required to be disclosed include: purchases of inventory, employee compensation, depreciation and intangible asset amortization. Additionally, a qualitative description of other items is required, equal to the difference between the relevant expense caption and the separately disclosed specific costs. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, and are applied either prospectively or retrospectively at the option of the Company. The Company is evaluating the impact of the amendments on our condensed consolidated financial statements and disclosures.

In December 2023, the FASB also issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The standard is effective for the Company for annual periods beginning after December 15, 2024. The Company is evaluating the impact of ASU 2023-09 on our consolidated financial statements and disclosures.