What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-04-15 compared with 2024-04-16 · 510 added, 270 removed, 20 unchanged (98% of the section changed)

Following the closing of the XTI Merger, we are primarily an aircraft development company.

We also provide real-time location systems (“RTLS”) for the industrial sector, which was our focus prior to the closing of the XTI Merger.

Headquartered in Englewood, Colorado, the Company is developing a vertical takeoff and landing ("VTOL") aircraft that takes off and lands like a helicopter and cruises like a fixed-wing business aircraft.

We believe our initial configuration, the TriFan 600, will be one of the first civilian fixed-wing VTOL aircraft that offers the speed and comfort of a business aircraft and the range and versatility of VTOL for a wide range of customer applications, including private aviation for business and high net worth individuals, emergency medical services, and commuter and regional air travel.

Since 2013, we have been engaged primarily in developing the design and engineering concepts for the TriFan 600, building and testing a two-thirds scale unmanned version of the TriFan 600, generating pre-orders for the TriFan 600, and seeking funds from investors to enable the Company to build full-scale piloted prototypes of the TriFan 600, and to eventually engage in commercial development of the TriFan 600.

Our RTLS solution leverages cutting-edge technologies such as IoT, AI, and big data analytics to provide real-time tracking and monitoring of assets, machines, and people within industrial environments.

With our RTLS, businesses can achieve improved operational efficiency, enhanced safety and reduced costs.

By having real-time visibility into operations, industrial organizations can make informed, data-driven decisions, minimize downtime, and ensure compliance with industry regulations.

Our full-stack industrial IoT solution provides end-to-end visibility and control over a wide range of assets and devices.

It is designed to help organizations optimize their operations and gain a competitive edge in today's data-driven world.

The turn-key platform integrates a range of technologies, including RTLS, sensor networks, edge computing, and big data analytics, to provide a comprehensive view of an organization's operations.

We help organizations track the location and status of assets in real-time, identify inefficiencies, and make decisions that drive business growth.

Our IoT stack covers all the technology layers, from the edge devices to the cloud.

It includes hardware components such as sensors and gateways, a robust software platforms for data management and analysis, and a user-friendly dashboard for real-time monitoring and control.

Our solutions also offer robust security features, to help ensure the protection of sensitive data.

Additionally, our RTLS provides scalability and flexibility, allowing organizations to easily integrate it with their existing systems and add new capabilities as their needs evolve.

In addition to our Indoor Intelligence technologies and solutions, we previously offered:

• Digital solutions (eTearsheets;

eInvoice, adDelivery) or cloud-based applications and analytics for the advertising, media and publishing industries through our advertising management platform which was referred to as Shoom by Inpixon;

• A comprehensive set of data analytics and statistical visualization solutions for engineers and scientists which was referred to as SAVES by Inpixon.

The Company notes that during the fourth quarter and as of December 31, 2023, the Shoom and SAVES operating segments and a portion of the Indoor Intelligence segment, have been disposed of or met the held for sale criteria and represent a strategic shift in the Company's operations, and therefore are presented as discontinued operations.

As such, these disposal groups have been excluded from both continuing operations and segment results for all periods presented.

In addition, the Company also notes that as of December 31, 2023, the divesiture of our enterprise apps business, which was completed in the first quarter of 2023, is presented as discontinued operations and as such, have been excluded from both continuing operations and segment results for all periods presented.

This divestiture represents a portion of the Indoor Intelligence operating segment.

Therefore, apart from our aircraft and development and manufacturing business which commenced as part of our XTI merger in 2024, only the Indoor Intelligence operating segment remains as of December 31, 2023.

The Air Travel Market

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In today’s regional air travel market, customers have two choices – either a fixed-wing airplane which requires a runway, or a helicopter which is slower, comparatively expensive, and relatively range limited.

What we intend to bring to market is a unique “crossover” aircraft combining the speed, range and comfort of a fixed-wing business airplane with the point-to-point VTOL capability of a helicopter.

Our target customers for the TriFan 600 include business jet and helicopter operators, major and regional airlines, companies which own and operate their own fleet of aircraft, including private jets and helicopters, air medical operators, and individuals.

In terms of current market size, the 2023 year-end General Aviation Aircraft Shipment Reports of the General Aviation Aircraft Manufacturers Association ("GAMA") reports total general (civilian, non-commercial) aircraft and helicopter shipments billings at approximately $28.3 billion for 2023, an approximate 3.4% increase from 2022.

We believe the anticipated differentiating performance capabilities of the TriFan 600 – the unique versatility delivered by combining the best of a helicopter and a business aircraft in one platform which we expect will result in significant time and cost savings – will be attractive to customers and disruptive in existing markets.

As of the date of this filing, we have conditional pre-orders under a combination of aircraft purchase agreements, non-binding reservation deposit agreements, options and letters of intent for the delivery of more than 700 aircraft.

One purchaser located in the southwest region of the United States is a party to a non-binding pre-order for 100 aircraft.

We have entered into non-binding options to purchase for an aggregate of 452 aircraft with potential purchasers located in the northeast, southwest and west coast regions of the United States.

We have entered into non-binding aircraft reservation deposit agreements for an aggregate of 114 aircraft with potential purchasers located in the United Kingdom, Ireland, Australia, Dubai, India, Japan, Brazil, and the United States.

Customers making reservation deposits are not obligated to purchase aircraft until they execute a definitive purchase agreement.

We have written letters of intent (without deposits) with customers for an additional 105 aircraft.

Customers may request a return of their refundable deposits any time up until the execution of a purchase agreement.

These conditional orders and reservations represent the potential of more than $7.0 billion in future gross revenue upon delivery of those aircraft, based on our current list price of $10 million per aircraft assuming we are able to execute on the development program for the TriFan 600, secure FAA certification, and deliver these aircraft.

For more details regarding the nature of the conditional pre-orders, please see “- Key Agreement .”

In contrast to the eVTOL (electric vertical takeoff and landing) aircraft, which are short-range air taxis for urban transport being developed by other companies (and not yet certified by the FAA), the TriFan 600 is expected to have significantly greater range of 700 miles in addition to the flexibility to take off and land either vertically or conventionally.

With our initial configuration of two turboshaft engines, we expect that our customers will be able to use much of the existing infrastructure on the ground, including more than 5,000 existing helipads in the U.S.

alone, as well as other landing areas where it is safe and legal to land and take off, including job sites, grassy areas, driveways, backyards, other paved and improved surfaces, hospital helipads and regional airports, which may not contain the requisite charging infrastructure for eVTOL aircraft.

We expect that the TriFan’s speed, range, and comfort, as well as its flexibility in takeoff and landing sites will offer a significant competitive advantage over eVTOL aircraft because eVTOL aircraft depend on the availability of battery or hydrogen charging infrastructure which is not commercially available yet.

We expect that the TriFan 600 will provide increased connectivity between communities as well as generate time savings for travelers.

As technology matures, we envision a transition to hybrid-electric propulsion for future TriFan configurations in our pursuit of taking aviation to a greener future.

We believe our phased, measured-risk approach is prudent given the lack of technology readiness of battery and hydrogen propulsion, limited and slow progress with respect to regulatory guidance regarding novel propulsion technologies, and expected long timelines to develop a widespread charging network.

With time, we also expect to benefit from the TriFan owners and operators use of the expected expansion of the landing pads, vertiports, and other VTOL aircraft infrastructure that will accommodate the eVTOL air taxis.

We anticipate owners and users of the TriFan will be able to access many of those facilities, which should allow XTI to participate to some extent in the upcoming and not yet established Advanced Air Mobility (“AAM”) market.

As of the date of this filing, the base price of the TriFan 600 aircraft is approximately $10 million.

The announced price for our only known direct competitor for a civilian fixed-wing VTOL aircraft is between $20 million and $30 million.

The TriFan 600’s $10 million base price falls within the price range ($6.5 million - $12 million) for many of the business airplanes with whom we expect the TriFan 600 to compete.

Unlike the TriFan 600, these airplanes require runways for takeoff and landing, which adds to total trip times.

The $10 million base price is above the initial purchase price range ($5.5 million to $8.2 million) for helicopters with whom the TriFan 600 expects to compete.

However, the TriFan 600 can complete missions at approximately twice the speed of competing helicopters.

Therefore, the mission time compared to helicopters is expected to be reduced by 40% - 50% and mission costs and emissions will also be reduced.

As a result, we expect the TriFan 600’s five-year cost of ownership (initial base purchase price plus annual direct operating costs) to be lower than much of the helicopter competition.

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Corporate Strategy

In December of 2021, our board of directors authorized a review of strategic alternatives, with the goal of maximizing shareholder value.

In furtherance of this objective, the Company pursued a number of strategic transactions which were consummated during 2023 and 2024.

In March 2023, we spun off and sold our enterprise apps business (see " Recent Events - Enterprise Apps Spin-off and Business Combination ” under Part II, Item 7 herein for more information).

Additionally, we consummated the XTI Merger on March 12, 2024 (see section " Recent Events - XTI Merger" under Part II, Item 7 herein .

" below for more details), and as required by the terms of the XTI Merger Agreement, we have also effected transactions for the divestiture of the businesses and assets that are not associated with our real time location services business, including our Shoom, SAVES and Game Your Game lines of business (see " Recent Events - Solutions Divestiture - Grafiti Holding Inc.

" " - Damon Business Combination " and " - Solutions Divestiture - Grafiti LLC ” under Part II, Item 7 herein for more information).

Products and Services

Our aviation business is focused on the development of our initial configuration of the TriFan 600 Vertical Lift Crossover Airplane, which is a six-seat aircraft is intended to provide point-to-point air travel over distances of up to 700 miles, fly at twice the speed of a helicopter and cruise at altitudes up to 25,000 feet.

We believe that the target TriFan 600 airplane will provide unique advantages over existing helicopters, turboprop and light jet aircraft.

Since the aircraft will take off and land vertically, we anticipate that the TriFan 600 will generate significant time savings on a typical 500-mile trip by traveling point-to-point or utilizing more convenient existing ground and airspace infrastructure (such as helipads) to avoid or reduce the time traveling on the ground to and from an airport.

The TriFan 600 also is expected to have the capability to take off and land conventionally, if a runway is available.

This added capability is expected to increase range and payload and expand utility.

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We plan to either assemble the TriFan 600 aircraft in-house with supplier-provided components or engage a third-party manufacturer to assemble the aircraft.

By combining existing and future state-of-the-art technologies and components (including turbine engines, composites, software, advanced propulsion and fuel systems) into our patented proprietary design, we believe the TriFan 600 will be a commercially successful aircraft for the business and other aviation markets.

Indoor Intelligence

Our Indoor Intelligence offerings consist of the following software and hardware products.

• Industrial RTLS SaaS Platform - Our full stack offering in the Industrial IoT space includes an enterprise class, multi-technology RTLS IoT platform for industrial automation.

Our RTLS IoT platform is a comprehensive real-time IoT solution for the implementation of industrial RTLS (track & trace) applications for indoor and outdoor areas, such as vehicle localization, production tracking, yard management, gate allocation, forklift location (MHE), real-time route optimization, and the automatic identification (AutoID) and booking of goods and material flows.

In addition to real-time data applications for the digital twin, it also provides smart real-time location analyses from a single platform suite, enabling companies to identify significant process optimizations and make data-based decisions.

Prebuilt modules offered within the platform include smart factory, smart warehouse, inventory manager, shipment manager, and yard manager.

The digital twin of a physical space facilitates use cases for facility management, security safety, customer or worker experiences, asset tracking and more.

• IoT Devices, Sensors and Tags - Our RTLS asset tracking hardware includes a full end-to-end portfolio of IoT sensors (also known as nodes or anchors) and tracking tags to track assets or personnel.

This portfolio leverages our own products for ultra-wideband (UWB) and chirp spread spectrum (CSS) and GPS while incorporating support for third party integrated BLE, RFID and LiDAR solutions.

In the security space, a version of our sensor enables detection of cellular, Wi-Fi and BLE signals that is combined with UWB to offer security and high value asset tracking solutions.

Chirp technology is effective for longer range communication while UWB is an important RF standard for pinpoint asset tracking.

Organizations across many different industries can leverage the accuracy, low-latency, and reliability of both technologies to track the real-time location and status of key assets and equipment, with precision.

Users can display and track the static location and movement of assets and asset attribute information within a space on indoor maps.

• Transceivers/Modules - Our nanoLOC transceiver is a low-power, highly integrated mixed-signal chip.

This 2.4 GHz long range CSS transceiver transmits and receives wireless data packets for robust wireless communications, ranging capabilities, and real-time location determination.

Our chirp leverages a patented, Company-owned technology and offers range comparable to Wi-Fi systems with accuracy of BLE or UWB in some scenarios.

Supporting a freely adjustable center frequency with three non-overlapping frequency channels, amongst others, our nanoLOC enables multiple physically independent networks and improved coexistence with existing 2.4 GHz wireless technologies.

This product is also available in a module form to allow easier integration for our partners and integrators.

• Video Integration – Our RF video solution uses IoT analytics data and allows direct integration with leading Video Management Systems (VMS) and CCTV to provide visual track and trace of assets or to quickly allow video to aid security personnel in an emergency situation.

This solution builds upon the accurate mapping solutions while adding analytics and precise RTLS data.

• Analytics and Insights - Our cloud-based analytics platform allows data from multiple sensors and data sources to be visualized for action by the customer.

Our platforms can engage with data from our IoT sensors, mobile apps, third-party sensors and data that is ingested via an application programming interface ("API") or data import.

Analytics enable, for instance, factory operators to visualize and analyze the flow of products through the facility to address bottlenecks and improve efficiency and productivity.

• Augmented Reality ("AR") and 3D - Our augmented reality solutions allow us to easily scan a space and subsequently attach AR content persistently to any position in the world.

The technology can also be used for visual asset tracking without beacons or markers as well as digital twin creation and manipulation.

Using SLAM (simultaneous localization and mapping) combined with innovative technologies offers tools to help enable augmented reality and metaverse capabilities for their business.

• Wireless Device Detection for Security – Our wireless detection and positioning solutions help cultivate situational awareness and identify security risks by leveraging sensors with proprietary technology that can detect and position active cellular, Wi-Fi, Bluetooth, and UWB signals throughout a venue.

are primarily an aircraft development company.

We also provide real-time location systems (“RTLS”) for the industrial sector,

which was Legacy Inpixon’s focus prior to the closing of the XTI Merger.

Headquartered in Englewood, Colorado, the Company is developing a vertical

takeoff and landing (“VTOL”) airplane that is designed to take off and land like a helicopter and cruise like a fixed-wing

business airplane.

We believe our initial configuration, the TriFan 600 airplane, will be one of the first civilian fixed-wing VTOL airplane

that offers the speed and comfort of a business airplane and the range and versatility of VTOL for a wide range of customer applications,

including private aviation for business and high net worth individuals, emergency medical services, and regional charter air travel.

2013, we have been engaged primarily in developing the aerodynamic performance and top-level engineering design of the TriFan 600, building

and testing a two-thirds scale unmanned version of the TriFan 600, generating pre-orders for the TriFan 600, and seeking funds from investors

to enable the Company to advance the detailed design and certification of the TriFan 600, and to eventually engage in commercial production

and sale of the TriFan 600.

We continue to work to optimize our airplane design for both manufacturing

and certification.

The development of a VTOL airplane that meets our business requirements demands significant design and development

efforts on all facets of the airplane.

We believe that by bringing together a mix of talent with VTOL and traditional commercial aerospace

backgrounds, we have built a team that enables us to move through the design, development, and certification of our VTOL airplane with

the FAA in an efficient manner, thus allowing us to achieve our end goal of bringing to market our airplane as efficiently as possible.

To date, we have not generated revenue from the sale of aircraft, as

we continue to design, develop, and seek the governmental approvals necessary for our VTOL airplane to enter into service.

to raise capital for the foreseeable future to continue to fund our efforts to bring our VTOL airplane to market.

The amount and timing

of any future capital requirements will depend on many factors, including the pace and results of the design and development of our airplane

and future manufacturing operations, as well as our progress in obtaining necessary FAA certifications and other government approvals.

For example, any significant delays in obtaining such FAA certifications and other government approvals will likely require us to raise

additional capital and delay our generation of revenues from aircraft sales.

RTLS solutions leverage cutting-edge technologies such as IoT, AI, and big data analytics to provide real-time tracking and monitoring

of assets, machines, and people within industrial environments.

With our RTLS solutions, businesses can achieve improved operational

efficiency, enhanced safety and reduced costs.

By having real-time visibility into operations, industrial organizations can make informed,

data-driven decisions, minimize downtime, and ensure compliance with industry regulations.

addition to advancing the design and certification of the TriFan 600 for commercial production and sale, and in order to continue to respond

to rapid changes and required technological advancements, increase our opportunities for revenue generation, and increase shareholder

value, we are exploring strategic transactions and opportunities that we believe will enhance shareholder value.

We are particularly focused

on delivering leading, business-focused solutions that seek to shape the future across powered-lift aircraft solutions.

Expanding into

autonomous, remotely operated drones is key to our strategic vision.

By combining drone technology with VTOL innovation, we believe we

are positioning XTI to accelerate the development of both unmanned aerial vehicles (UAV) and VTOL solutions, expand its market presence,

and create new opportunities across multiple industries.

We will also be opportunistic and may consider other strategic and/or attractive

transactions, which may include, but not be limited to other alternative investment opportunities, such as minority investments and joint

If we make any acquisitions in the future, we expect that we may pay for such acquisitions with cash, equity securities and/or

debt in combinations appropriate for each acquisition.

In this regard, in January of this year, we entered into a non-binding memorandum

of understanding to acquire a minority equity interest in an AI-powered, autonomous drone company.

We may enter into one or more additional

non-binding letters of intent in connection with our due diligence and strategic transaction evaluation process.

In addition to these

strategic initiatives, we also intend to invest in a variety of thought leadership marketing and branding initiatives to increase market

visibility and enhance our brand strength and credibility within the powered lift aircraft market.

Air Travel Market

In today’s regional air travel market, customers have two choices

– either a fixed-wing airplane, which requires a runway, or a helicopter, which is slower, comparatively expensive, and relatively

range limited.

What we intend to bring to market is a unique airplane combining the speed, range and comfort of a fixed-wing business

airplane with the point-to-point VTOL capability of a helicopter.

Our target customers for the TriFan 600 include corporate and individual

business aircraft and helicopter operators, charter operators, major and regional airlines, and air medical operators.

In terms of current

market size, the 2024 year-end General Aviation Aircraft Shipment Reports of the General Aviation Aircraft Manufacturers Association

(“GAMA”) reports total general (civilian, non-commercial) aircraft and helicopter shipments billings at approximately $31.2

billion for 2024, an approximate 12% increase from 2023.

We believe the anticipated differentiating performance capabilities

of the TriFan 600 – the unique versatility delivered by combining the best of a helicopter and a business airplane in one platform

which we expect will result in significant time and cost savings – will be attractive to customers and disruptive in existing markets.

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.

See “- Customers - TriFan 600” for more information.

In contrast to the eVTOL (electric vertical takeoff and landing) aircraft,

which are short-range air taxis for urban transport being developed by other companies (and not yet certified by the FAA), the TriFan

600 is expected to have significantly greater range of 700 miles in addition to the flexibility to take off and land vertically (VTOL),

conventionally (CTOL), or on short runways (STOL).

With our initial configuration of two turboshaft engines, we expect that our customers

will be able to use much of the existing infrastructure on the ground, including more than 5,000 existing helipads in the U.S.

as well as other landing areas where it is safe and legal to land and take off, including job sites, grassy areas, driveways, backyards,

other paved and improved surfaces, hospital helipads and regional airports, which may not contain the requisite charging infrastructure

for eVTOL aircraft.

We expect that the TriFan’s speed, range, and comfort, as well as its flexibility in takeoff and landing sites

will offer a significant competitive advantage over eVTOL aircraft because eVTOL aircraft depend on the availability of battery or hydrogen

charging infrastructure which is not commercially available yet.

We expect that the TriFan 600 will provide increased connectivity between

communities as well as generate time savings for travelers.

As technology matures, we envision a transition to hybrid-electric propulsion

for future TriFan configurations in our pursuit of taking aviation to a greener future.

We believe our phased, measured-risk approach

is prudent given the lack of technology readiness of battery and hydrogen propulsion, limited and slow progress with respect to regulatory

guidance regarding novel propulsion technologies, and expected long timelines to develop a widespread charging network.

With time, we

anticipate that owners and users of the TriFan will be able to access many of the landing pads, vertiports, and other VTOL aircraft infrastructure

that we expect will accommodate eVTOL air taxis, which should allow the Company to participate to some extent in the future Advanced Air

Mobility market.

As of the date of this filing, the base price of the TriFan 600 airplane

is approximately $10 to $12 million.

The announced price for our only known direct competitor for a civilian fixed-wing VTOL airplane

is between $20 million and $30 million.

The TriFan 600’s $10 to $12 million base price falls within the price range ($6.5 million

- $12 million) for many of the business airplanes with whom we expect the TriFan 600 to compete.

Unlike the TriFan 600, these airplanes

require runways for takeoff and landing, which adds to total trip times.

The $10 to $12 million base price is above the initial purchase

price range ($5.5 million to $8.2 million) for helicopters with whom the TriFan 600 expects to compete.

However, the TriFan 600 will be

capable of completing missions at approximately twice the speed of competing helicopters.

Therefore, the mission time compared to helicopters

is expected to be reduced by 40% - 50% and mission costs and emissions will also be reduced.

As a result, we expect the TriFan 600’s

five-year cost of ownership (initial base purchase price plus annual direct operating costs) to be lower than much of the helicopter competition.

Our aviation business

is focused on the development of our initial configuration of the TriFan 600, which is a seven-occupant airplane intended to provide

point-to-point air travel over distances of up to 985 miles, fly at twice the speed of a helicopter and cruise at altitudes up to 25,000

We believe that the target TriFan 600 airplane will provide unique advantages over existing helicopters, turboprop and light jet

Since the airplane will take off and land vertically, we anticipate that the TriFan 600 will generate significant time savings

on a typical 500-mile trip by traveling point-to-point or utilizing more convenient existing ground and airspace infrastructure (such

as helipads) to avoid or reduce the time traveling on the ground to and from an airport.

The TriFan 600 also is expected to have the

capability to take off and land conventionally, if a runway is available.

This added capability is expected to increase range and payload

and expand utility.

We plan to either assemble the TriFan 600 airplane in-house with supplier-provided

components or engage a third-party manufacturer to assemble the airplane.

By combining existing and future state-of-the-art technologies

and components (including turbine engines, composites, software, advanced propulsion and fuel systems) into our patented proprietary design,

we believe the TriFan 600 will be a commercially successful airplane for the business and other aviation markets.

Location Systems (RTLS) & IIoT Solutions

Our real-time location systems (RTLS) & IIoT solutions consist of the following software and hardware products.

During the quarter

ended December 31, 2024, the Company began exploring strategic options to wind down and/or sell the hardware portions of the Company’s

Industrial IoT business segment in order to shift its focus towards sales of software products.

RTLS SaaS Platform - Our full stack offering in the Industrial IoT space includes an

enterprise class, multi-technology RTLS IoT platform for industrial automation.

IoT platform is a comprehensive real-time IoT solution for the implementation of industrial

RTLS (track & trace) applications for indoor and outdoor areas, such as vehicle localization,

production tracking, yard management, gate allocation, forklift location (MHE), real-time

route optimization, and the automatic identification (AutoID) and booking of goods and material

In addition to real-time data applications for the digital twin, it also provides

smart real-time location analyses from a single platform suite, enabling companies to identify

significant process optimizations and make data-based decisions.

Prebuilt modules offered

within the platform include smart factory, smart warehouse, inventory manager, shipment manager,

and yard manager.

The digital twin of a physical space facilitates use cases for facility

management, security safety, customer or worker experiences, asset tracking and more.

Devices, Sensors and Tags - Our RTLS asset tracking hardware includes a full end-to-end

portfolio of IoT sensors (also known as nodes or anchors) and tracking tags to track assets

or personnel.

This portfolio leverages our own products for ultra-wideband (UWB) and chirp

spread spectrum (CSS) and GPS while incorporating support for third party integrated BLE,

RFID and LiDAR solutions.

In the security space, a version of our sensor enables detection

of cellular, Wi-Fi and BLE signals that is combined with UWB to offer security and high value

asset tracking solutions.

Chirp technology is effective for longer range communication while

UWB is an important RF standard for pinpoint asset tracking.

Organizations across many different

industries can leverage the accuracy, low-latency, and reliability of both technologies to

track the real-time location and status of key assets and equipment, with precision.

can display and track the static location and movement of assets and asset attribute information

within a space on indoor maps.

● Transceivers/Modules

- Our nanoLOC transceiver is a low-power, highly integrated mixed-signal chip.

GHz long range CSS transceiver transmits and receives wireless data packets for robust wireless

communications, ranging capabilities, and real-time location determination.

Our chirp leverages

a patented, Company-owned technology and offers range comparable to Wi-Fi systems with accuracy

of BLE or UWB in some scenarios.

Supporting a freely adjustable center frequency with three

non-overlapping frequency channels, amongst others, our nanoLOC enables multiple physically

independent networks and improved coexistence with existing 2.4 GHz wireless technologies.

This product is also available in a module form to allow easier integration for our partners

and integrators.

and Insights - Our cloud-based analytics platform allows data from multiple sensors and

data sources to be visualized for action by the customer.

Our platforms can engage with data

from our IoT sensors, mobile apps, third-party sensors and data that is ingested via an application

programming interface (“API”) or data import.

Analytics enable, for instance,

factory operators to visualize and analyze the flow of products through the facility to address

bottlenecks and improve efficiency and productivity.

Device Detection for Security – Our wireless detection and positioning solutions

help cultivate situational awareness and identify security risks by leveraging sensors with

proprietary technology that can detect and position active cellular, Wi-Fi, Bluetooth, and

UWB signals throughout a venue.

This solution allows for the positioning of people and assets

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homogeneously as they travel in a controlled space and empowers customers to make key decisions around security, risk mitigation and public safety, at scale.

Utilizing various radio signal technologies permits device positioning with accuracy ranging from several meters down to approximately thirty centimeters, depending on the product deployed and conditions in the indoor space.

The technology allows for detailed understanding of space and resource utilization, and in security applications it enables detection and identification of authorized and unauthorized devices, prevention of rogue devices through alerts based on rules when unknown devices are detected in restricted areas and asset tracking with centimeter level precision.

• Enterprise Apps - Our indoor intelligence segment historically also included the smart office app, events and mapping solution which comprised the enterprise apps line of products offering enhanced employee experiences with a holistic location aware customer branded employee app for a smart, innovative and connected workplace.

This suite of products and solutions was spun off in connection with the separation of our enterprise apps business effective as of March 14, 2023 and is presented as discontinued operations and, as such have been excluded from both continuing operations and segment results for all periods presented.

(See “ Recent Events - Enterprise Apps Spin-off and Business Combination ” under Part II, Item 7 herein for more information).

Shoom and SAVES Product Lines

Our Shoom and SAVES operating segments, which included our cloud-based applications and analytics for the advertising, media and publishing industries and the data analytics and statistical visualization software solutions for engineers and scientists have been disposed of or met the held for sale criteria and represent a strategic shift in our operations, and therefore are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented (see " Recent Events - Solutions Divestiture - Grafiti Holding Inc.

" " - Damon Business Combination " and " - Solutions Divestiture - Grafiti LLC ” under Part II, Item 7 herein for more information).

RTLS Product Enhancements

Our ability to adapt to the technological advancements within our industry is critical to our long-term success and growth.

As a result, our executive management must continuously work to ensure that they remain informed and prepared to quickly adapt and leverage new technologies within our product and service offering as such technologies become available.

In connection with that goal, our product roadmap development plans include expanding the use of both UWB and CSS technology for precise asset tracking, furthering our efforts towards 3D mapping, with a specific focus on light detection and ranging (LiDAR) and AR features, innovation in our machine learning algorithms for our positioning engines, and understanding worldwide 5G deployments to enhance our detection and positioning capabilities.

Positioning Innovation Powered by Machine Learning

In 2024, we intend to continue to explore the use of machine learning and artificial intelligence (“AI”) to improve positioning accuracy, reliability and range which would provide additional benefits to existing customers and unlock new opportunities for our RTLS technology.

homogeneously as they travel in a controlled space and empowers customers to make key decisions

around security, risk mitigation and public safety, at scale.

Utilizing various radio signal

technologies permits device positioning with accuracy ranging from several meters down to

approximately thirty centimeters, depending on the product deployed and conditions in the

indoor space.

The technology allows for detailed understanding of space and resource utilization,

and in security applications it enables detection and identification of authorized and unauthorized

devices, prevention of rogue devices through alerts based on rules when unknown devices are

detected in restricted areas and asset tracking with centimeter level precision.

Innovation Powered by Machine Learning

2025, we intend to continue to explore the use of machine learning and artificial intelligence (“AI”) to improve positioning

accuracy, reliability and range which would provide additional benefits to existing customers and unlock new opportunities for our RTLS

Here is an example of how we are utilizing AI to enhance our technology:

due to fluctuating frequency plotting in the beginning of a project, but after applying advanced AI filter methods and machine learning algorithms we can better understand the radio frequency (RF) behavior as to how the time difference of arrival (TDoA) sync path should be configured in the specific environment considering several attributes.

Following these enhancements, we believe our products will be able to assist in providing predictive, more accurate, bidirectional location information to secure and optimize our deployments using hardware that includes iOS and Android smartphones, IoT sensors, access points or BLE beacons.

Building on research and development (R&D) efforts in 2023, we intend to continue to study the worldwide 5G deployments, both public and private, to identify a robust hardware and software solution to detect and position new handsets based on this technology and explore software defined radio solutions, as well as enhancements in antenna technology to provide our customers with additional capabilities in the security field.

due to fluctuating frequency plotting in the beginning

of a project, but after applying advanced AI filter methods and machine learning algorithms we can better understand the radio frequency

(RF) behavior as to how the time difference of arrival (TDoA) sync path should be configured in the specific environment considering

several attributes.

Following these enhancements, we believe our products will be able to assist in providing predictive, more accurate,

bidirectional location information to secure and optimize our deployments using hardware that includes iOS and Android smartphones, IoT

sensors, access points or BLE beacons.

on research and development (R&D) efforts in 2024, we intend to continue to study the worldwide 5G deployments, both public and private,

to identify a robust hardware and software solution to detect and position new handsets based on this technology and explore software

defined radio solutions, as well as enhancements in antenna technology to provide our customers with additional capabilities in the security

This is a complex challenge and we are working with partners and customers to understand requirements, use cases and solutions.

Analytics and Insights

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Inpixon Analytics on-premises or in the cloud, along with specially-optimized algorithms and industry specific dashboards that are intended to provide better visibility, predictive maintenance, process optimization, security and safety, and data-driven decision-making.

Improved visibility gives real-time locations and status of assets, people, and equipment both indoors and outdoors.

By collecting and analyzing data from RTLS systems, organizations gain insights from asset movements and use this information to optimize their operations.

Predictive maintenance reduces downtime and maintenance costs, as well as improve the lifespan of equipment.

Process optimization helps improve productivity, reduce costs, and enhance customer satisfaction.

Security and safety helps prevent accidents, reduce the risk of theft, and enhance the overall safety of employees and customers.

Data-driven decision making by analyzing data from RTLS systems, organizations gains a better understanding of their operations, identify areas for improvement, and make data-driven decisions that drive business value.

Furthermore, we are continuing to enhance the integration of ChatGPT, a generative artificial intelligence (AI), into our RTLS solution.

This innovative integration expands the capabilities of our RTLS, enabling rapid, AI-assisted insights as well as interactive discussions in a conversational medium.

Operations managers in production and logistics, in particular, stand to benefit from this transformative development.

Augmented Reality and Digital Twin

Our AR and digital twin technologies multiply the capabilities of RTLS solutions by providing real-time visualization aided with meta data, remote monitoring, simulation and testing, predictive maintenance, collaboration, and training, all of which can help optimize operations and improve efficiency.

AR helps visualize the real-time location of assets, people, and equipment in the physical world, overlaid with digital information such as asset status, maintenance history, and other relevant data.

This can provide a more intuitive and efficient way for operators to understand and interact with the physical world.

In addition, digital twin features can enable remote monitoring of assets and equipment, providing a virtual representation of the physical world that can be accessed from anywhere to monitor assets and equipment in real-time and make informed decisions based on the data gathered.

Digital twin technology can also enable simulation and testing of scenarios in a virtual environment, allowing our customers to test different configurations and optimize their operations without the need for physical experimentation.

Finally, AR and digital twin technologies can facilitate collaboration and training by providing a shared virtual environment where operators can train and work together remotely.

Research and Development

We plan to seek FAA certification of the TriFan 600 as a fixed-wing, VTOL aircraft.

Initial concept and engineering analysis for the TriFan 600 was completed in July 2015.

Analytics on-premises or in the cloud, along with specially-optimized algorithms and industry specific dashboards that are intended to

provide better visibility, predictive maintenance, process optimization, security and safety, and data-driven decision-making.

visibility gives real-time locations and status of assets, people, and equipment both indoors and outdoors.

By collecting and analyzing

data from RTLS systems, organizations gain insights from asset movements and use this information to optimize their operations.

maintenance reduces downtime and maintenance costs, as well as improve the lifespan of equipment.

Process optimization helps improve

productivity, reduce costs, and enhance customer satisfaction.

Security and safety helps prevent accidents, reduce the risk of theft,

and enhance the overall safety of employees and customers.

Data-driven decision making by analyzing data from RTLS systems, organizations

gains a better understanding of their operations, identify areas for improvement, and make data-driven decisions that drive business

Furthermore, we are continuing to enhance the integration of ChatGPT, a generative artificial intelligence (AI), into our RTLS

This innovative integration expands the capabilities of our RTLS, enabling rapid, AI-assisted insights as well as interactive

discussions in a conversational medium.

Operations managers in production and logistics, in particular, stand to benefit from this transformative

and Development

We plan to seek FAA certification

of the TriFan 600 under the FAA’s new “Powered Lift” aircraft category.

Initial concept and engineering analysis

for the TriFan 600 was completed in July 2015.

Legacy XTI built a 65% scale prototype and in May 2019 began initial hover tests.

The prototype was successfully hover-tested multiple times.

Subsequent to raising private funding during 2021, Legacy XTI hired a number of engineers (employees and consultants) to establish its core engineering organization.

Additionally, Legacy XTI retained consulting firms to provide specialized engineering technical knowledge to complement XTI’s team.

Legacy XTI completed its preliminary design review (“PDR”) in 2022, which set the stage for the next step of design development.

Legacy XTI updated the exterior design of the TriFan 600, including the wing fans location and the location of the horizontal tail, all of which had a positive impact on the performance and efficiency of the aircraft.

Design and engineering for other systems, including the propulsion system, landing gear, cockpit visibility, cabin sizing and structural integrity were also advanced during 2022 and 2023.

The PDR phase included the identification of Legacy XTI’s supply chain.

The team, throughout the design phase, has identified and started negotiating with key suppliers globally to support each of the components or systems of the TriFan 600, requesting proposals from each.

Subsequent to raising private funding during 2021, Legacy XTI hired a

number of engineers (employees and consultants) to establish its core engineering organization.

Additionally, Legacy XTI retained

consulting firms to provide specialized engineering technical knowledge to complement XTI’s team.

In 2022, Legacy XTI updated the exterior design of the TriFan 600,

including the location of the wing fans and the horizontal tail, to improve the performance and efficiency of the airplane.

engineering for other systems, including the propulsion system, landing gear, cockpit visibility, cabin sizing and structural integrity

were also advanced during 2022 and 2023.

Legacy XTI identified the initial supply chain and began negotiating with key suppliers globally.

As a result of these efforts, Legacy XTI has established a baseline bill-of-materials.

The current development design review phase (“DDR”) of the program includes further interactions with suppliers to develop and mature major structures and systems of the aircraft.

With input from industry-respected suppliers, we believe all systems of the TriFan 600 can be incorporated into the airframe to deliver a fully-integrated solution.

The fulfillment of this phase is expected to pave the way for approving engineering designs used to build the aircraft.

The DDR phase also includes ongoing communication with the FAA to discuss and maintain awareness of our compliance with federal regulations.

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The next target milestones include critical design review (“CDR”) and building and preliminary testing of a full-scale flight test aircraft, along with building additional full-scale flight test aircraft, are fully dependent on raising additional financing.

Following the completion of the first full-scale flight test aircraft, certification from the Federal Aviation Administration ("FAA") is expected to take an additional eighteen months to achieve.

We anticipate FAA certification of the TriFan 600 in 2028.

Indoor Intelligence

Our management believes that we must continue to dedicate a significant amount of resources to research and development efforts to maintain a competitive position.

Our RTLS products intersect many emerging fields including metaverse, augmented reality, occupancy planning, industry 4.0, smart cities, and more, and we continue to innovate and patent new methods to solve problems for our customers.

Research and development expenses associated with our indoor intelligence business for the years ended December 31, 2023 and 2022 totaled approximately $4.4 million and $4.5 million, respectively.

Sales and Marketing

Our sales channels include direct sales as well as indirect sales channels which may include one or more regional sales agents or brokers.

Indirect sales partners may also provide a range of pre- and post-sales services to our customers including aftermarket support and maintenance, repair and overhaul ("MRO") services using XTI parts.

In 2023, we entered into a commercial agreement with a sales and distribution agent for prospective sales of TriFan aircraft and MRO services in certain markets, including 21 countries of the Middle East and North Africa.

We have been in discussions with other sales and distribution agents throughout the world and plan to expand our global territory reach via commercial agreements.

We intend to market our aircraft through customer-targeted marketing campaigns (e.g., EMS, land management, oil & gas) utilizing our digital presence, webinars, national and regional trade shows, conferences, traditional print advertising and other media.

To best identify target customers, we intend to utilize focus groups and "voice of the customers" panels to allow us to map customer requirements and use cases to our available features, functions and options.

Indoor Intelligence

Our sales channels include direct sales as well as indirect sales through channel partners including original equipment manufacturers (OEMs), integrators, 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.

a series of scaled model tests and Computational Fluid Dynamic (CFD) analysis, the engineering team further enhanced the aerodynamic

performance and stability of the TriFan 600 and released its latest configuration, C211.2, and included a larger vertical stabilizer,

enhanced duct and stator designs, new engine air inlets and exhaust, an updated drive train, and additional system design.

configuration is currently undergoing CFD analysis at Oak Ridge National Laboratory.

In addition, the engineering team continues to evolve

the Digital Mockup (DMU), mass properties (i.e., weight) and Global Finite Element Modeling (GFEM) analysis.

In 2024, the Company engaged

the FAA in a General Familiarization (Gen Fam) briefing for the TriFan 600.

Follow-up meetings with FAA Subject Matter Experts (SME) began

in early 2025 and will continue throughout the year to help assess safety, certification standards and potential certification challenges

and obstacles.

In March 2025, the Company submitted its TriFan 600 Type Certification application and G-1 “basis of certification”

to the FAA for review.

The G-1 addresses the latest draft Powered Lift Category guidelines and identifies areas unique to the TriFan 600

and intended means of safety and compliance.

Company is currently working through the TriFan 600’s Preliminary Design Review (“PDR”) update, which we expect to

complete in early 2026.

During this PDR update, the Company will be refreshing the TriFan 600 vendor / supplier list.

For critical suppliers,

we will begin signing phased contracts during the first half of 2025.

Once the PDR phase is completed, we expect that almost all suppliers

for the TriFan 600 will have been identified and most under contract.

Supplier systems and subsystems will be integrated into our PDR

configuration, C212.

We will engage a handful of outside experts to be part of our PDR participants to help assess our PDR “exit”

After PDR, we will launch our detailed design phase culminating in

a Critical Design Review (“CDR”).

This phase will include further interactions with suppliers to develop and mature major

structures and systems of the airplane.

With input from industry-respected suppliers, we believe all systems of the TriFan 600 can be

incorporated into the airframe to deliver a fully integrated solution.

The fulfillment of this phase is expected to pave the way for approving

engineering designs used to build the airplane.

The CDR phase will also include ongoing communication with the FAA to discuss and maintain

awareness of our compliance with federal regulations.

We expect this phase to take approximately 12 to 18 months.

Following the completion of the CDR phase, we will begin fabricating

and constructing our full-scale flight test airplane and working towards first flight.

After a successful first flight activities, the

certification from the FAA is expected to take an additional 18 to 24 months to achieve.

As such, we anticipate FAA type certification

of the TriFan 600 in 2030.

& IIoT Solutions

management believes that we must continue to dedicate a significant amount of resources to research and development efforts to maintain

a competitive position.

Our RTLS products intersect many emerging fields including metaverse, augmented reality, occupancy planning,

industry 4.0, smart cities, and more, and we continue to innovate and patent new methods to solve problems for our customers.

and Marketing

sales channels include direct sales as well as indirect sales channels which may include

one or more regional sales agents or brokers.

Indirect sales partners may also provide a

range of pre- and post-sales services to our customers including aftermarket support and

maintenance, repair and overhaul (“MRO”) services using XTI Aerospace parts.

In 2023, we entered into a commercial agreement with a sales and distribution

agent for prospective sales of the TriFan 600 airplane and MRO services in certain markets, including 21 countries of the Middle East

and North Africa.

We have been in discussions with other sales and distribution agents throughout the world and plan to expand our global

territory reach via commercial agreements.

We intend to market our airplane through customer-targeted marketing

campaigns (e.g., EMS, land management, oil & gas) utilizing our digital presence, webinars, podcasts, national and regional trade

shows, conferences, and other media.

To best identify target customers, we intend to utilize a Customer Advisory Board – a focus

group to solidify the “voice of the customers” and allow us to map customer requirements and use cases to our available features,

functions and options.

& IIoT Solutions

sales channels include direct sales as well as indirect sales through channel partners including original equipment manufacturers (OEMs),

integrators, 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.

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

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.

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.

Aircraft Purchase Agreement

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On February 2, 2022, we entered into a conditional aircraft purchase contract (the “Aircraft Purchase Agreement”) with a counterparty located in the southwest region of the United States (“Counterparty A”) relating to the purchase of 100 TriFan 600 aircraft.

The parties’ obligations under the Aircraft Purchase Agreement are subject to certain conditions, including certification of our aircraft by the FAA and obligations to amend the Aircraft Purchase Agreement to add certain material terms including, among others, delivery dates, aircraft specifications, warranties, remedies, milestones relating to the development of the TriFan 600, the type and extent of assistance to be provided by Counterparty A in obtaining certification of the TriFan 600, branding and marketing matters, optional equipment and other matters.

Counterparty A’s obligations to consummate the Aircraft Purchase Agreement arise only after all material terms are agreed upon, in the discretion of each party.

If the parties do not agree on such material terms, either party will have the right to terminate the agreement if such party determines in its discretion that it is not likely that the material terms will be agreed to in a manner consistent with such party’s business and operational interests (as those interests may change from time to time).

We will determine the base purchase price for each TriFan 600 aircraft under the Aircraft Purchase Agreement during the first month of the calendar quarter prior to the quarter in which the subject TriFan 600 aircraft are to be delivered, subject to adjustments.

The Aircraft Purchase Agreement contains customary representations and covenants for contracts of this type.

In connection with the Aircraft Purchase Agreement, we issued Counterparty A a warrant to purchase 6,357,474 shares of Legacy XTI common stock (as amended as of April 3, 2022 and March 11, 2024, the “Counterparty A Warrant”).

The shares underlying the Counterparty A Warrant adjusted to 567,467 shares of our common stock by application of the exchange ratio at the effective time of the XTI Merger (the “Effective Time”).

The Counterparty A Warrant contains conditional vesting criteria;

the purchase right for one-third of the shares represented by the Counterparty A Warrant vested upon the execution and delivery of the Aircraft Purchase Agreement, one-sixth of the shares vested on March 11, 2024, and one-third of the shares will vest upon the acceptance of delivery and final purchase of the first TriFan 600 aircraft by Counterparty A pursuant to the Aircraft Purchase Agreement.

The Counterparty A Warrant requires the parties to agree on an initial strategic public and industry announcement within 90 days of March 11, 2024 or such other time as the parties may mutually agree.

The Counterparty A Warrant will expire on the earlier of (i) a liquidation event as defined therein and (ii) 5:00 p.m.

Pacific time on February 2, 2029.

Indoor Intelligence

Our RTLS offerings which include real-time location tracking, collision avoidance and wireless device detections are used around the world in automotive factories, heavy equipment factories, logistics and distribution warehouses, mining operations, government and military buildings, and corporate offices.

During the year ended December 31, 2023, two customers accounted for over 10% of revenue with one customer with 17% of revenue and one customer that accounted for 10% of revenue.

During the year ended December 31, 2022, only one customer accounted for over 10% of revenue with 23% of revenue for the year.

From time to time, one or two customers can represent a significant portion of our revenue as a result of one-time projects.

The private jet and private business aircraft markets are highly competitive and we face a significant number of original equipment manufacturer competitors, most of which are larger, better known and have better financial resources than us.

When the TriFan 600 goes into production, we believe it will compete with other aircraft manufacturers by providing our customers with what we believe is a unique “crossover” aircraft with distinct and largely unique performance capabilities at a competitive purchase price.

We believe the TriFan 600 will be one of a small number of aircraft that offers the speed, range and comfort of a business aircraft with the versatility of VTOL.

As we expect that the TriFan 600 will be capable of flying greater distances and on average at twice the speed and three times the range of competing helicopters, we expect the TriFan 600 to offer lower direct operating costs (cost per flight hour) and be able to fly almost twice as many missions, thus generating additional cost savings and revenue for airlines and aircraft operators when compared with helicopters.

Indoor Intelligence

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In addition, our RTLS business is characterized by innovation and rapid change.

Our RTLS Indoor Intelligence products compete with companies such as Aruba, Cisco, Juniper Networks/Mist Systems, Ubisense, Sewio, Kinexon, Zebra Technologies and other mostly vertical focused RTLS companies.

Some competitors determine positioning primarily using BLE or Wi-Fi and, therefore, we believe they cannot achieve the same accuracy that we do and so cannot meet some customers' needs.

Many RTLS competitors are focused on one technology and/or vertical and, at this time, we believe none of them have as complete an offering of tags, anchors, positioning, engine, software, integrations and analytics.

We believe we offer a unique and differentiated approach to the market with our industrial RTLS which is:

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.

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 the development of the TriFan 600, the type and extent of

assistance to be provided by Mesa in obtaining certification of the TriFan 600, branding and marketing matters, and optional equipment

in the airplane.

If the parties do not agree on such material terms, either party has the right to terminate the agreement if such party

determines in its discretion that it is not likely that the material terms will be agreed to in a manner consistent with such party’s

business and operational interests (as those interests may change from time to time).

Additionally, we have entered into non-binding options to purchase

an aggregate of 40 airplanes with potential purchasers located in the United States and Europe.

We have entered into non-binding aircraft

reservation deposit agreements for an aggregate of 114 airplanes with potential purchasers located in the United Kingdom, Ireland, Australia,

Dubai, India, Japan, Brazil, and the United States.

Customers making reservation deposits are not obligated to purchase any airplanes

until they execute a definitive purchase agreement.

We have written letters of intent (without deposits) with customers for an additional

105 airplanes.

Customers may request a return of their refundable deposits any time up until the execution of a purchase agreement.

conditional orders and reservations represent the potential of more than $3.0 billion in future gross revenue upon delivery of those airplanes,

assuming the low end of our current list price range of $10 million per airplane assuming we can execute on the development program for

the TriFan 600, secure FAA certification, and deliver these airplanes.

& IIoT Solutions

RTLS offerings which include real-time location tracking, collision avoidance and wireless device detections are used around the world

in automotive factories, heavy equipment factories, logistics and distribution warehouses, mining operations, government and military

buildings, and corporate offices.

the year ended December 31, 2024, four customers accounted for over 10% of revenue (23%, 14%, 13%, and 11%, respectively).

had no revenue during the year ended December 31, 2023.

The private jet and private business aircraft markets are highly competitive,

and we face a significant number of original equipment manufacturer competitors, most of which are larger, better known and have better

financial resources than us.

When the TriFan 600 goes into production, we believe it will compete with other aircraft manufacturers by

providing our customers with what we believe is a unique airplane with distinct and largely unique performance capabilities at a competitive

purchase price.

We believe the TriFan 600 airplane will be one of a small number of aircraft that offers the speed, range and comfort

of a business airplane with the versatility of VTOL.

As we expect that the TriFan 600 will be capable of flying greater distances and

on average at twice the speed and three times the range of competing helicopters, we expect the TriFan 600 to offer lower direct operating

costs (cost per flight hour) and be able to fly almost twice as many missions, thus generating additional cost savings and revenue for

airlines and aircraft operators when compared with helicopters.

IIoT Solutions

RTLS business is characterized by innovation and rapid change.

Our RTLS Indoor Intelligence products compete with companies such as Aruba,

Cisco, Juniper Networks/Mist Systems, Ubisense, Sewio, Kinexon, Zebra Technologies and other mostly vertical focused RTLS companies.

Some competitors determine positioning primarily using BLE or Wi-Fi and, therefore, we believe they cannot achieve the same accuracy

that we do and so cannot meet some customers’ needs.

Many RTLS competitors are focused on one technology and/or vertical and, at

this time, we believe none of them have as complete an offering of tags, anchors, positioning, engine, software, integrations and analytics.

believe we offer a unique and differentiated approach to the market with our industrial RTLS which is:

● Comprehensive .

We offer full-stack RTLS solutions which seamlessly integrates tracking tags, anchors, sensors, positioning engine, software, and connections to third-party systems.

We integrate a myriad of indoor data inputs and outputs.

With a single platform we can support a multitude of use cases across numerous industries in both the private and public sector.

We offer full-stack RTLS solutions which seamlessly integrates tracking tags, anchors, sensors,

positioning engine, software, and connections to third-party systems.

We integrate a myriad

of indoor data inputs and outputs.

With a single platform we can support a multitude of use

cases across numerous industries in both the private and public sector.

Our solutions are built to support customers’ expanding needs and use cases.

Unlike many other competitive point-solutions, we can offer expansion paths and support for a wide variety of location-based use cases at large, multi-size, global enterprises.

Our multi-layered depiction of indoor data allows users to see the information most relevant to their role, in the optimal format for them (e.g., charts, tables, maps, etc.).

• Technology-agnostic and open .

We embrace an ecosystem of hardware, software, integration and distribution partners welcoming integration and synchronization with third party data and systems in combination with our platform.

Our open architecture is designed to enable the integration of disparate technologies, preserve investment and avoid obsolescence.

APIs and MQTT make it possible to move data in and out of our platform to enable a plethora of opportunities and benefits.

Intellectual Property

We have received a utility patent (US Patent 9,676,479) and a design patent (US Patent D741247) for a VTOL aircraft that includes a pair of ducted lift/thrust fans that are rotatably moveable between the lift and thrust positions.

many other competitive point-solutions, we can offer expansion paths and support for a wide

variety of location-based use cases at large, multi-size, global enterprises.

Our multi-layered

depiction of indoor data allows users to see the information most relevant to their role,

in the optimal format for them (e.g., charts, tables, maps, etc.).

● Technology-agnostic

We embrace an ecosystem of hardware, software, integration and distribution

partners welcoming integration and synchronization with third party data and systems in combination

with our platform.

Our open architecture is designed to enable the integration of disparate

technologies, preserve investment and avoid obsolescence.

APIs and MQTT make it possible

to move data in and out of our platform to enable a plethora of opportunities and benefits.

We have received a utility

patent (US Patent 9,676,479) and a design patent (US Patent D741247) for a VTOL airplane that includes a pair of ducted lift/thrust fans

that are rotatably moveable between the lift and thrust positions.

Based on those U.S.

patents, the Company has also applied for and has been issued multiple additional foreign utility patents, including from China, Japan, Europe and Canada.

We have sought to protect our intellectual property through the use of patents and trade secrets.

Employee and third-party consultants have signed non-disclosure agreements with Legacy XTI which include standard provisions related to assignment of work product and other requirements to further protect its proprietary rights.

patents, the Company has also applied for and has

been issued multiple additional foreign utility patents, including from China, Japan, Europe and Canada.

We have sought to protect our

intellectual property using patents and trade secrets.

Employee and third-party consultants have signed non-disclosure agreements with

Legacy XTI which include standard provisions related to assignment of work product and other requirements to further protect its proprietary

We are continuing to develop intellectual property, and we intend to aggressively protect our position in key technologies.

We own several trademarks protecting Legacy XTI's name and logo.

Our intellectual property also includes extensive data, engineering analyses and other know-how.

We have obtained broad patent protection in both respects through the above-referenced patents.

Under the European patent, we have applied for issuance of patents in the U.K., France, Germany, and Italy, where we expect the aircraft will be sold and used.

own several trademarks protecting Legacy XTI’s name and logo.

Our intellectual property also includes extensive data, engineering

analyses and other know-how.

We have obtained broad patent

protection in both respects through the above-referenced patents.

Under the European patent, we have applied for issuance of patents

in the U.K., France, Germany, and Italy, where we expect the airplane will be sold and used.

Patents are also pending in Brazil.

Indoor Intelligence

To establish and protect our proprietary rights, we rely on a combination of patents, trademarks, copyrights, trade secrets, including know-how, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention assignment agreements, and other contractual rights.

We do not believe that our proprietary technology is dependent on any single patent or copyright or groups of related patents or copyrights.

We believe the duration of our patents is adequate relative to the expected lives of our products.

In connection with the Enterprise Apps Spin-off and the terms of the KINS Separation Agreement (defined below in the Recent Events section of Item 7), each of the Company and CXApp have granted the other party a limited worldwide, non-exclusive, irrevocable, royalty free, fully paid up, perpetual license (the “Licensee”) to use, practice and otherwise exploit such intellectual property (with certain exceptions) that is owned, controlled or purported to be owned or controlled by the other party (the “Licensor”) to the extent used, practiced or otherwise exploited in the business of the Licensee during the twelve (12) months prior to the separation or is reasonably anticipated to be used after the separation for the conduct of any business of the

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Licensee as conducted on or prior to the separation and reasonably anticipated extension or evolutions thereof that are not substitutes for any product or service of the Licensor.

Government Regulation

In general, we are subject to numerous federal, state and foreign legal requirements on matters as diverse as data privacy and protection, employment and labor relations, immigration, taxation, anticorruption, import/export controls, trade restrictions, internal and disclosure control obligations, securities regulation and anti-competition.

Violations of one or more of these diverse legal requirements in the conduct of our business could result in significant fines and other damages, criminal sanctions against us or our officers, prohibitions on doing business and damage to our reputation.

Violations of these regulations or contractual obligations related to regulatory compliance in connection with the performance of customer contracts could also result in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage, restrictions on our ability to compete for certain work and allegations by our customers that we have not performed our contractual obligations.

establish and protect our proprietary rights, we rely on a combination of patents, trademarks, copyrights, trade secrets, including know-how,

license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention assignment

agreements, and other contractual rights.

We do not believe that our proprietary technology is dependent on any single patent or copyright

or groups of related patents or copyrights.

We believe the duration of our patents is adequate relative to the expected lives of our

In connection with the Company’s

disposition of its enterprise app business lines to CXApp, Inc.

in March 2023 (see Part III, Item 11 “Executive Compensation —

Completed Transaction Bonus Plan” for more information about this disposition), each of the Company and CXApp, Inc.

granted the other

party (each, a “Licensee”) a limited worldwide, non-exclusive, irrevocable, royalty free, fully paid up, perpetual license

to use, practice and otherwise exploit such intellectual property (with certain exceptions) that is owned, controlled or purported to

be owned or controlled by the other party (the “Licensor”) to the extent used, practiced or otherwise exploited in the business

of the Licensee during the twelve (12) months prior to the separation or is reasonably anticipated to be used after the separation for

the conduct of any business of the Licensee as conducted on or prior to the separation and reasonably anticipated extension or evolutions

thereof that are not substitutes for any product or service of the Licensor.

general, we are subject to numerous federal, state and foreign legal requirements on matters as diverse as data privacy and protection,

employment and labor relations, immigration, taxation, anticorruption, import/export controls, trade restrictions, internal and disclosure

control obligations, securities regulation and anti-competition.

of one or more of these diverse legal requirements in the conduct of our business could result in significant fines and other damages,

criminal sanctions against us or our officers, prohibitions on doing business and damage to our reputation.

Violations of these regulations

or contractual obligations related to regulatory compliance in connection with the performance of customer contracts could also result

in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage,

restrictions on our ability to compete for certain work and allegations by our customers that we have not performed our contractual obligations.

To date, compliance with these regulations has not been financially burdensome.

Aviation Regulations

In the U.S., civil aviation is regulated by the FAA, which controls virtually every aspect of flight from pilot licensing to aircraft design and construction, and use of the public air space within the boundaries and territorial waters of the United States.

The FAA requires that every civilian aircraft that flies in the U.S.

carry a valid “type certificate” and airworthiness certificate issued by the FAA or a foreign civil aviation authority.

We intend to seek approval for the design of the TriFan 600 by obtaining a standard Type Certificate under Federal Aviation Regulations, in particular the criteria set forth by the FAA (as defined in Part 23 of the Federal Aviation Regulations (14 CFR Part 23)), as a normal category piloted aircraft that can also take off and land vertically.

The Company submitted a preliminary certification plan to the FAA during the fourth quarter of 2023 and plans to submit a formal initial certification plan by 2025.

The FAA will oversee extensive testing and analysis of the TriFan 600 to confirm the aircraft’s safety, stability, reliability, performance, and compliance with the applicable airworthiness standards.

In addition, once the FAA issues a type certificate to the Company, we intend to apply for a production certificate, the FAA’s approval required for the manufacture of an FAA-approved type design, to enable the Company to manufacture the TriFan in commercial quantities.

TriFan 600 aircraft that are manufactured by XTI in accordance with the type certificate and the production certificate will be delivered to customers along with a certificate of airworthiness.

To obtain a production certificate from the FAA, we must demonstrate that our organization and our personnel, facilities, and quality system can produce the aircraft such that they conform to the approved design.

Since we are not permitted to deliver commercially produced aircraft to customers until any such aircraft has obtained FAA certification, no material aircraft sales revenue will be generated before receipt of FAA certification.

The process of obtaining a valid type certificate, production certificate and airworthiness certificate for the TriFan 600 will take several years.

In addition to the FAA, customers’ operation of the TriFan 600 will be regulated by various state, county, and municipal agencies.

Specifically, flight of the TriFan 600 will be regulated by the FAA, while the ability to take off and land will be governed by the FAA and various zoning restrictions imposed by non-federal agencies in each location where an owner of the TriFan 600 intends to operate.

the U.S., civil aviation is regulated by the FAA, which controls virtually every aspect of flight from pilot licensing to aircraft design

and construction, and use of the public air space within the boundaries and territorial waters of the United States.

The FAA requires

that every civilian aircraft that flies in the U.S.

carry a valid “type certificate” and airworthiness certificate issued

by the FAA or a foreign civil aviation authority.

We intend to seek approval for the design of the TriFan 600 by obtaining

a standard Type Certificate under Federal Aviation Regulations, in particular the criteria set forth under the “Powered Lift”

In March 2025, the Company submitted its Type Certification application to the FAA.

The FAA will oversee extensive testing

and analysis of the TriFan 600 to confirm the airplane’s safety, stability, reliability, performance, and compliance with the applicable

airworthiness standards.

In addition, once the FAA issues a type certificate to the Company,

we intend to apply for a production certificate, the FAA’s approval required for the manufacture of an FAA-approved type design,

to enable the Company to manufacture the TriFan in commercial quantities.

TriFan 600 airplane that are manufactured by XTI in accordance

with the type certificate and the production certificate will be delivered to customers along with a certificate of airworthiness.

obtain a production certificate from the FAA, we must demonstrate that our organization and our personnel, facilities, and quality system

can produce the airplane such that they conform to the approved design.

we are not permitted to deliver commercially produced aircraft to customers until any such aircraft has obtained FAA certification, no

material aircraft sales revenue will be generated before receipt of FAA certification.

The process of obtaining a valid type certificate,

production certificate and airworthiness certificate for the TriFan 600 will take several years.

addition to the FAA, customers’ operation of the TriFan 600 will be regulated by various state, county, and municipal agencies.

Specifically, flight of the TriFan 600 will be regulated by the FAA, while the ability to take off and land will be governed by the FAA

and various zoning restrictions imposed by non-federal agencies in each location where an owner of the TriFan 600 intends to operate.

These restrictions vary by location.

Some government and private locations in the U.S.

and around the world limit or prohibit the use of aircraft.

and around the world limit or prohibit the use

There are currently over 5,000 helipads in the U.S.

where helicopters are allowed to land.

Thus, we expect that customers will be able to legally land the TriFan 600 in these locations and at thousands of other paved areas or grassy areas, job sites, residential and commercial locations in the U.S.

and around the world where it’s safe and legal to land VTOL aircraft, as well as smaller general aviation airports unavailable to conventional business aircraft and jets.

As of March 15, 2024, we have 50 employees, including 4 part-time employees, which includes all employees of our subsidiaries.

This includes 4 officers, 6 sales personnel, 4 marketing personnel, 27 technical and engineering personnel and 9 finance, legal and administration personnel.

Table of Content s

Corporate Information

We currently have two direct, wholly-owned operating subsidiaries:

XTI Aircraft Company, based in Englewood, Colorado (at our corporate headquarters), and Inpixon GmbH (previously Nanotron Technologies GmbH), based in Berlin, Germany.

IntraNav GmbH, based in Eschborn, Germany (“IntraNav”), is an indirect subsidiary of the Company and the wholly-owned subsidiary of Inpixon GmbH.

Our principal executive offices are located at Centennial Airport at 8123 InterPort Blvd., Suite C, Englewood, Colorado 80112.

This facility houses our principal executive office, finance, and other administrative activities, although our employees and consultants mostly work remotely.

Thus, we expect that customers

will be able to legally land the TriFan 600 in these locations and at thousands of other paved areas or grassy areas, job sites, residential

and commercial locations in the U.S.

and around the world where it’s safe and legal to land VTOL aircraft, as well as smaller general

aviation airports unavailable to conventional business aircraft and jets.

As of April 11, 2025, we have 47 employees, including 4 part-time employees,

which includes all employees of our subsidiaries.

This includes 3 officers, 7 sales personnel, 4 marketing personnel, 20 technical and

engineering personnel and 9 finance, other executive, legal and administration personnel.

July 24, 2023, we entered into an Agreement and Plan of Merger (amended on December 30, 2023 and March 12, 2024, the “XTI Merger

Agreement”) by and among us, Superfly Merger Sub Inc., a Delaware corporation and our then wholly-owned subsidiary (“Merger

Sub”), and XTI Aircraft Company, a Delaware corporation (“Legacy XTI”).

Pursuant to the XTI Merger Agreement, on March

12, 2024 (the “Closing Date”), Merger Sub merged with and into Legacy XTI (the “XTI Merger”), with Legacy XTI

surviving the XTI Merger as our wholly-owned subsidiary.

Following the effective time of the XTI Merger (the “Effective Time”)

on the Closing Date, we amended our articles of incorporation to change our name from “Inpixon” to “XTI Aerospace,

Inc.” and the combined company opened for trading on the Nasdaq Capital Market on March 13, 2024 under the new ticker symbol “XTIA”.

Immediately prior to the Effective

Time, we effected a 1-for-100 reverse split of our outstanding shares of common stock.

currently have two direct, wholly-owned operating subsidiaries:

XTI Aircraft Company, based in Englewood, Colorado (at our corporate

headquarters), and Inpixon GmbH (previously Nanotron Technologies GmbH), based in Berlin, Germany.

IntraNav GmbH, based in Eschborn,

Germany (“IntraNav”), is an indirect subsidiary of the Company and the wholly-owned subsidiary of Inpixon GmbH.

principal executive offices are located at Centennial Airport at 8123 InterPort Blvd., Suite C, Englewood, Colorado 80112.

This facility

houses our principal executive office, finance, and other administrative activities, although our employees and consultants mostly work

Our engineers are working remotely throughout the U.S.

We believe that our facility in Colorado meets our needs for the immediate future.

However, we plan to begin a site selection process as early as the second quarter of 2024 to identify a facility located at an airport within the continental U.S.

that will allow us to consolidate engineers and other administrative employees, perform flight simulations, perform propulsion rig and prototype flight tests, and potentially expand to a full production site with a facility for pilot training.

It is not yet determined whether our corporate headquarters will change from the current location at Centennial Airport.

We expect to move into a new facility by 2025.

Our telephone number is (800) 680-7412.

believe that our facility in Colorado meets our needs for the immediate future.

During 2024, we commenced a site selection process to

identify a facility located at an airport within the continental U.S.

that will allow us to consolidate engineers and other administrative

employees, perform flight simulations, perform propulsion rig and prototype flight tests, and potentially expand to a full production

site with a facility for pilot training.

It is not yet determined whether our corporate headquarters will change from the current location

at Centennial Airport.

telephone number is (800) 680-7412.

We have also agreed to sublease office space in Palo Alto, California.

Two of our subsidiaries, Inpixon GmbH and IntraNav, maintain offices in Berlin Germany, and Eschborn, Germany, respectively.

Two of our subsidiaries, Inpixon

GmbH and IntraNav, maintain offices in Berlin Germany, and Eschborn, Germany, respectively.

Our Internet website is www.xtiaerospace.com.

The information on, or that can be accessed through, our website is not part of this report, and you should not rely on any such information in making any investment decision relating to our common stock.

The information on, or that can be accessed through, our website is not part of this report, and you should not rely on any such information

in making any investment decision relating to our common stock.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business