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1、 UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2024 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF
2、 1934 For the transition period from _ to _ Commission File Number 001-36404 XTI AEROSPACE,INC.(Exact name of registrant as specified in its charter)Nevada 88-0434915(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)8123 InterPort Blvd.,Suite CEnglewood,C
3、O 80112(Address of principal executive offices)(Zip Code)(303)503-5660(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each class Trading Symbol Name of each exchange onwhich each is registeredCommon Stock,par value$0.001 XTIA The N
4、asdaq Stock Market LLC Securities registered pursuant to Section 12(g)of the Act:None(Title of class)Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports p
5、ursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12months(or for such shorter period that the registrant was required to
6、 file such reports);and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(229.405 of this chapter)during the
7、 preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company or emerging growth company.See the definit
8、ions of“large accelerated filer,”“accelerated filer,”“smaller reporting company”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting company Emerging growth company If an emerging growth company,indicate by check
9、 mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managemen
10、ts assessment of the effectiveness of its internal control over financialreporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate
11、 by check mark whether the financial statements of the registrant included in the filing reflect thecorrection of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based com
12、pensation received by any of theregistrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the issuer is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the voting and non-voting common
13、 equity held by non-affiliates of the registrant as of June 28,2024,the last business day of the registrantsmost recently completed second fiscal quarter,was$10,996,269 based upon the closing price reported for such date on the Nasdaq Capital Market.As of April 11,2025,there were 5,537,540 shares of
14、 the registrants common stock outstanding.DOCUMENTS INCORPORATED BY REFERENCE None.XTI AEROSPACE,INC.TABLE OF CONTENTS SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION CONTAINED IN THIS REPORTii PART I1 ITEM 1:BUSINESS1ITEM 1A:RISK FACTORS10ITEM 1B:UNRESOLVED STAFF COMMENTS36I
15、TEM 1C:CYBERSECURITY37ITEM 2:PROPERTIES38ITEM 3:LEGAL PROCEEDINGS38ITEM 4:MINE SAFETY DISCLOSURES38 PART II39 ITEM 5:MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES39ITEM 6:RESERVED39ITEM 7:MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CON
16、DITION AND RESULTS OF OPERATIONS39ITEM 7A:QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK52ITEM 8:FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAF-1ITEM 9:CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE53ITEM 9A:CONTROLS AND PROCEDURES53ITEM 9B:OTHER INFOR
17、MATION53ITEM 9C:DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS53 PART III54 ITEM 10:DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE54ITEM 11:EXECUTIVE COMPENSATION60ITEM 12:SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS73ITEM
18、13:CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,AND DIRECTOR INDEPENDENCE74ITEM 14:PRINCIPAL ACCOUNTING FEES AND SERVICES81 PART IV82 ITEM 15:EXHIBITS,FINANCIAL STATEMENT SCHEDULES82ITEM 16:FORM 10-K SUMMARY82 SIGNATURE88 i SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER INFORMATIONCON
19、TAINED IN THIS REPORT This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of theSecurities Act of 1933,as amended(the“Securities Act”),and Section 21E of the Securities Exchange Act of 1934,as am
20、ended(the“Exchange Act”).Forward-lookingstatements give our current expectations or forecasts of future events.You can identify these statements by the fact that they do not relate strictly to historical or current facts.You can find many(but not all)of these statements by looking for words such as“
21、approximates,”“believes,”“hopes,”“expects,”“anticipates,”“estimates,”“projects,”“intends,”“plans,”“would,”“should,”“could,”“may,”or other similar expressions in this report.In particular,these include statements relating to future actions;prospectiveproducts,anticipated expenses,applications,custome
22、rs and technologies;future performance or results of anticipated products;and projected expenses and financial results.These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our presentex
23、pectations or projections.Factors that could cause actual results to differ from those discussed in the forward-looking statements include,but are not limited to:our history of losses;our ability to achieve profitability;the risk that we have a limited operating history,have not yet manufactured any
24、 non-prototype aircraft or delivered any aircraft to a customer,and we and ourcurrent and future collaborators may be unable to successfully develop and market our aircraft or solutions,or may experience significant delays in doing so;the ability to meet the development and commercialization schedul
25、e with respect to the TriFan 600;our ability to secure required certifications for the TriFan 600 and/or any other aircraft we develop;our ability to navigate the regulatory environment and complexities with compliance related to such environment;the risk that our conditional pre-orders(which includ
26、e conditional aircraft purchase agreements,non-binding reservations,and options)are canceled,modified,delayed or not placed and that we must return the refundable deposits;our ability to obtain adequate financing in the future as needed;emerging competition and rapidly advancing technologies in our
27、industries that may outpace our technology;the risk that other aircraft manufacturers develop competitive VTOL aircraft or other competitive aircraft that adversely affect our market position;customer demand for the products and services we develop;ii our ability to develop other new products and te
28、chnologies;our ability to attract customers and/or fulfill customer orders;our ability to enhance and maintain the reputation of our brand and expand our customer base;our ability to scale in a cost-effective manner and maintain and expand our manufacturing and supply chain relationships;our ability
29、 to attract,integrate,manage,and retain qualified personnel or key employees;our ability to maintain compliance with the continued listing requirements of the Nasdaq Capital Market;the risks relating to long development and sales cycles,our ability to satisfy the conditions and deliver on the orders
30、 and reservations,our ability to maintainquality control of our aircraft,and our dependence on third parties for supplying components and potentially manufacturing the aircraft;the risk that our ability to sell our aircraft may be limited by circumstances beyond our control,such as a shortage of pil
31、ots and mechanics who meet the trainingstandards,high maintenance frequencies and costs for the sold aircraft,and any accidents or incidents involving VTOL aircraft that may harm customerconfidence;general economic conditions and events and the impact they may have on us and our potential customers,
32、including,but not limited to escalating tariff and non-tariff trade measures imposed by the U.S.and other countries,increases in inflation rates and rates of interest,supply chain challenges,increased costs formaterials and labor,cybersecurity attacks,the ongoing conflicts between Russia and Ukraine
33、 and Hamas and Israel,and public health threats such as the COVID-19 pandemic;lawsuits and other claims by third parties or investigations by various regulatory agencies that we may be subjected to and are required to report,including but notlimited to,the U.S.Securities and Exchange Commission(the“
34、SEC”);the outcome of any known and unknown litigation and regulatory proceedings;the risk that our future patent applications may not be approved or may take longer than expected,and that we may incur substantial costs in enforcing andprotecting our intellectual property;our ability to respond to a
35、failure of our systems and technology to operate our business;impact of any changes in existing or future tax regimes;our success at managing the risks involved in the foregoing items;and other factors discussed in this report.The forward-looking statements are based upon managements beliefs and ass
36、umptions and are made as of the date of this report.We undertake no obligation topublicly update or revise any forward-looking statements included in this report.You should not place undue reliance on these forward-looking statements.This report also contains or may contain estimates,projections and
37、 other information concerning our industry and our business,including data regarding the estimatedsize of our markets and their projected growth rates.Information that is based on estimates,forecasts,projections or similar methodologies is inherently subject to uncertaintiesand actual events or circ
38、umstances may differ materially from events and circumstances reflected in this information.Unless otherwise expressly stated,we obtained theseindustry,business,market and other data from reports,studies and similar data prepared by third parties,industry and general publications,government data and
39、 similarsources.In some cases,we do not expressly refer to the sources from which these data are derived.iii EXPLANATORY NOTE On March 12,2024(the“Closing Date”),XTI Aerospace,Inc.(formerly known as Inpixon(“Legacy Inpixon”),Superfly Merger Sub Inc.,a Delaware corporationand a wholly owned subsidiar
40、y of XTI Aerospace(“Merger Sub”),and XTI Aircraft Company,a Delaware corporation(“Legacy XTI”),completed their previously announcedmerger transaction pursuant to that certain Agreement and Plan of Merger,dated as of July 24,2023 and amended on December 30,2023 and March 12,2024(the“XTI MergerAgreeme
41、nt”),pursuant to which Merger Sub merged with and into Legacy XTI with Legacy XTI surviving the merger as a wholly-owned subsidiary of XTI Aerospace(the“XTI Merger”).In connection with the closing of the XTI Merger,our corporate name changed to“XTI Aerospace,Inc.”In this report,unless otherwise note
42、d,or the context otherwise requires,the terms“XTI Aerospace,”the“Company,”“we,”“us,”and“our”refer to XTI Aerospace,Inc.(formerly known as Inpixon),Inpixon GmbH,IntraNav GmbH and,prior to the closing of the XTI Merger,Merger Sub,and after the XTI Merger,Legacy XTI.The Company determined the XTI Merge
43、r should be accounted for as a reverse acquisition with Legacy XTI being considered the accounting acquirer.Therefore,theconsolidated financial statements included in this report represent a continuation of the financial statements of Legacy XTI and the results of operations of the accountingacquire
44、d entity,Legacy Inpixon,are included in the consolidated financial statements as of the Closing Date and through the December 31,2024 reporting date.Note Regarding Reverse Stock Splits The Company effected a reverse stock split of its outstanding common stock,par value$0.001,at a ratio of 1-for-100,
45、effective as of March 12,2024,for the purposeof complying with Nasdaq Listing Rule 5550(a)(2)and satisfying the bid price requirements applicable for initial listing applications in connection with the closing of the XTIMerger.The Company also effected a reverse stock split of its outstanding common
46、 stock at a ratio of 1-for-250,effective as of January 10,2025,for the purpose of complyingwith Nasdaq Listing Rule 5550(a)(2).We have reflected the reverse stock splits herein,unless otherwise indicated.iv PART I ITEM 1:BUSINESS Overview We are primarily an aircraft development company.We also prov
47、ide real-time location systems(“RTLS”)for the industrial sector,which was Legacy Inpixons focusprior 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 ahelicopter an
48、d 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 VTOLairplane that offers the speed and comfort of a business airplane and the range and versatility of VTOL for a wide range of customer applications
49、,including private aviation forbusiness and high net worth individuals,emergency medical services,and regional charter air travel.Since 2013,we have been engaged primarily in developing theaerodynamic performance and top-level engineering design of the TriFan 600,building and testing a two-thirds sc
50、ale 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 engagein commercial production and sale of the TriFan 600.We continue to work to
51、 optimize our airplane design for both manufacturing and certification.The development of a VTOL airplane that meets our businessrequirements 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 traditiona
52、lcommercial 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 anefficient manner,thus allowing us to achieve our end goal of bringing to market our airplane as efficiently as possible.To date,we ha
53、ve not generated revenue from the sale of aircraft,as we continue to design,develop,and seek the governmental approvals necessary for our VTOLairplane to enter into service.We will need to raise capital for the foreseeable future to continue to fund our efforts to bring our VTOL airplane to market.T
54、he amount andtiming 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 manufacturingoperations,as well as our progress in obtaining necessary FAA certifications and other government approvals.For exam
55、ple,any significant delays in obtaining such FAAcertifications and other government approvals will likely require us to raise additional capital and delay our generation of revenues from aircraft sales.Our RTLS solutions leverage cutting-edge technologies such as IoT,AI,and big data analytics to pro
56、vide real-time tracking and monitoring of assets,machines,andpeople 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 informe
57、d,data-driven decisions,minimize downtime,and ensure compliance with industry regulations.Corporate Strategy In 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 andrequired technological advan
58、cements,increase our opportunities for revenue generation,and increase shareholder value,we are exploring strategic transactions andopportunities that we believe will enhance shareholder value.We are particularly focused on delivering leading,business-focused solutions that seek to shape the future
59、acrosspowered-lift aircraft solutions.Expanding into autonomous,remotely operated drones is key to our strategic vision.By combining drone technology with VTOL innovation,webelieve we are positioning XTI to accelerate the development of both unmanned aerial vehicles(UAV)and VTOL solutions,expand its
60、 market presence,and create newopportunities across multiple industries.We will also be opportunistic and may consider other strategic and/or attractive transactions,which may include,but not be limited toother alternative investment opportunities,such as minority investments and joint ventures.If w
61、e make any acquisitions in the future,we expect that we may pay for suchacquisitions 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-bindingmemorandum of understanding to acquire a minority equity i
62、nterest in an AI-powered,autonomous drone company.We may enter into one or more additional non-bindingletters 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 ofthought leaders
63、hip marketing and branding initiatives to increase market visibility and enhance our brand strength and credibility within the powered lift aircraft market.1 The Air Travel Market In todays regional air travel market,customers have two choices either a fixed-wing airplane,which requires a runway,or
64、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 businessairplane with the point-to-point VTOL capability of a helicopter.Our target customers for the TriFan
65、600 include corporate and individual business aircraft and helicopteroperators,charter operators,major and regional airlines,and air medical operators.In terms of current market size,the 2024 year-end General Aviation Aircraft ShipmentReports of the General Aviation Aircraft Manufacturers Associatio
66、n(“GAMA”)reports total general(civilian,non-commercial)aircraft and helicopter shipments billings atapproximately$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 combi
67、ning the best of a helicopter and abusiness 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 thedate of this filing,we have conditional pre-orders under a combination of aircraft purchas
68、e agreements,non-binding reservation deposit agreements and options for the deliveryof 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
69、 other companies(andnot 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,w
70、e expect that our customers will be able to use much of theexisting 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 pave
71、d and improved surfaces,hospital helipads and regional airports,which may not contain the requisitecharging infrastructure for eVTOL aircraft.We expect that the TriFans speed,range,and comfort,as well as its flexibility in takeoff and landing sites will offer a significantcompetitive advantage over
72、eVTOL aircraft because eVTOL aircraft depend on the availability of battery or hydrogen charging infrastructure which is not commerciallyavailable yet.We expect that the TriFan 600 will provide increased connectivity between communities as well as generate time savings for travelers.As technology ma
73、tures,weenvision 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-riskapproach is prudent given the lack of technology readiness of battery and hydrogen propulsion,limited and slow progres
74、s with respect to regulatory guidance regarding novelpropulsion 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 toaccess many of the landing pads,vertiports,and other VTOL aircraft infrastructu
75、re that we expect will accommodate eVTOL air taxis,which should allow the Company toparticipate 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 d
76、irect competitorfor a civilian fixed-wing VTOL airplane is between$20 million and$30 million.The TriFan 600s$10 to$12 million base price falls within the price range($6.5 million-$12million)for many of the business airplanes with whom we expect the TriFan 600 to compete.Unlike the TriFan 600,these a
77、irplanes 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 TriFan600 expects to compete.However,the TriFan 600 will be capable of completing missio
78、ns at approximately twice the speed of competing helicopters.Therefore,the missiontime 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 600s five-yearcost of ownership(initial base purchase price plus an
79、nual direct operating costs)to be lower than much of the helicopter competition.Products and Services TriFan 600 Our aviation business is focused on the development of our initialconfiguration of the TriFan 600,which is a seven-occupant airplane intended toprovide point-to-point air travel over dist
80、ances of up to 985 miles,fly at twice thespeed of a helicopter and cruise at altitudes up to 25,000 feet.We believe that thetarget TriFan 600 airplane will provide unique advantages over existing helicopters,turboprop and light jet airplane.Since the airplane will take off and land vertically,weanti
81、cipate 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 andairspace infrastructure(such as helipads)to avoid or reduce the time traveling on theground to and from an airport.The TriFan 600 a
82、lso is expected to have the capabilityto take off and land conventionally,if a runway is available.This added capability isexpected to increase range and payload and expand utility.2 We plan to either assemble the TriFan 600 airplane in-house with supplier-provided components or engage a third-party
83、 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 fuelsystems)into our patented proprietary design,we believe the TriFan 600 will be acommercially successful airpl
84、ane for the business and other aviation markets.Real-Time 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,theCompany began exploring strategic options to wind d
85、own and/or sell the hardware portions of the Companys Industrial IoT business segment in order to shift its focus towardssales of software products.Industrial RTLS SaaS Platform-Our full stack offering in the Industrial IoT space includes an enterprise class,multi-technology RTLS IoT platform for in
86、dustrialautomation.Our RTLS IoT platform is a comprehensive real-time IoT solution for the implementation of industrial RTLS(track&trace)applications for indoorand outdoor areas,such as vehicle localization,production tracking,yard management,gate allocation,forklift location(MHE),real-time route op
87、timization,andthe automatic identification(AutoID)and booking of goods and material flows.In addition to real-time data applications for the digital twin,it also provides smartreal-time location analyses from a single platform suite,enabling companies to identify significant process optimizations an
88、d make data-based decisions.Prebuiltmodules offered within the platform include smart factory,smart warehouse,inventory manager,shipment manager,and yard manager.The digital twin of aphysical space facilitates use cases for facility management,security safety,customer or worker experiences,asset tra
89、cking 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)andtracking tags to track assets or personnel.This portfolio leverages our own products for ultra-wideband(UWB)and chirp spread spectrum(CSS
90、)and GPS whileincorporating support for third party integrated BLE,RFID and LiDAR solutions.In the security space,a version of our sensor enables detection of cellular,Wi-Fiand BLE signals that is combined with UWB to offer security and high value asset tracking solutions.Chirp technology is effecti
91、ve for longer rangecommunication 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 pre
92、cision.Users can display and trackthe 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 andreceives wir
93、eless 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 adjustablecenter freq
94、uency with three non-overlapping frequency channels,amongst others,our nanoLOC enables multiple physically independent networks and improvedcoexistence with existing 2.4 GHz wireless technologies.This product is also available in a module form to allow easier integration for our partners andintegrat
95、ors.Analytics and Insights-Our cloud-based analytics platform allows data from multiple sensors and data sources to be visualized for action by the customer.Ourplatforms can engage with data from our IoT sensors,mobile apps,third-party sensors and data that is ingested via an application programming
96、 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 andimprove efficiency and productivity.Wireless Device Detection for Security Our wireless detection and positioning solutions hel
97、p cultivate situational awareness and identify security risks byleveraging sensors with proprietary technology that can detect and position active cellular,Wi-Fi,Bluetooth,and UWB signals throughout a venue.This solutionallows for the positioning of people and assets homogeneously as they travel in
98、a controlled space and empowers customers to make key decisions aroundsecurity,risk mitigation and public safety,at scale.Utilizing various radio signal technologies permits device positioning with accuracy ranging from severalmeters down to approximately thirty centimeters,depending on the product
99、deployed and conditions in the indoor space.The technology allows for detailedunderstanding 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 unk
100、nown devices are detected in restricted areas and asset tracking with centimeter level precision.3 Positioning Innovation Powered by Machine Learning In 2025,we intend to continue to explore the use of machine learning and artificial intelligence(“AI”)to improve positioning accuracy,reliability and
101、range whichwould provide additional benefits to existing customers and unlock new opportunities for our RTLS technology.Here is an example of how we are utilizing AI to enhance ourtechnology:due to fluctuating frequency plotting in the beginning of a project,but after applying advanced AI filter met
102、hods and machine learning algorithms we can betterunderstand the radio frequency(RF)behavior as to how the time difference of arrival(TDoA)sync path should be configured in the specific environment considering severalattributes.Following these enhancements,we believe our products will be able to ass
103、ist in providing predictive,more accurate,bidirectional location information to secure andoptimize our deployments using hardware that includes iOS and Android smartphones,IoT sensors,access points or BLE beacons.5G Building on research and development(R&D)efforts in 2024,we intend to continue to st
104、udy the worldwide 5G deployments,both public and private,to identify arobust hardware and software solution to detect and position new handsets based on this technology and explore software defined radio solutions,as well as enhancements inantenna technology to provide our customers with additional
105、capabilities in the security field.This is a complex challenge and we are working with partners and customers tounderstand requirements,use cases and solutions.Analytics and Insights Inpixon Analytics on-premises or in the cloud,along with specially-optimized algorithms and industry specific dashboa
106、rds 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 R
107、TLS systems,organizations gain insights from asset movements and use this information tooptimize their operations.Predictive maintenance reduces downtime and maintenance costs,as well as improve the lifespan of equipment.Process optimization helps improveproductivity,reduce costs,and enhance custome
108、r satisfaction.Security and safety helps prevent accidents,reduce the risk of theft,and enhance the overall safety of employeesand customers.Data-driven decision making by analyzing data from RTLS systems,organizations gains a better understanding of their operations,identify areas forimprovement,an
109、d make data-driven decisions that drive business value.Furthermore,we are continuing to enhance the integration of ChatGPT,a generative artificialintelligence(AI),into our RTLS solutions.This innovative integration expands the capabilities of our RTLS,enabling rapid,AI-assisted insights as well as i
110、nteractivediscussions in a conversational medium.Operations managers in production and logistics,in particular,stand to benefit from this transformative development.Research and Development TriFan 600 We plan to seek FAA certification of the TriFan 600 under the FAAs new“Powered Lift”aircraft catego
111、ry.Initial concept and engineering analysis for theTriFan 600 was completed in July 2015.Legacy XTI built a 65%scale prototype andin May 2019 began initial hover tests.The prototype was successfully hover-testedmultiple times.Subsequent to raising private funding during 2021,Legacy XTI hireda number
112、 of engineers(employees and consultants)to establish its core engineeringorganization.Additionally,Legacy XTI retained consulting firms to providespecialized engineering technical knowledge to complement XTIs team.4 In 2022,Legacy XTI updated the exterior design of the TriFan 600,including the locat
113、ion of the wing fans and the horizontal tail,to improve the performance andefficiency of the airplane.Design and engineering for other systems,including the propulsion system,landing gear,cockpit visibility,cabin sizing and structural integrity werealso advanced during 2022 and 2023.Legacy XTI ident
114、ified the initial supply chain and began negotiating with key suppliers globally.As a result of these efforts,Legacy XTIhas established a baseline bill-of-materials.Following a series of scaled model tests and Computational Fluid Dynamic(CFD)analysis,the engineering team further enhanced the aerodyn
115、amic performance andstability 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 andexhaust,an updated drive train,and additional system design.The C211.2 configuration is currently undergoin
116、g 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 6
117、00.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 March2025,the Company submitted its TriFan 600 Type Certification application and
118、G-1“basis of certification”to the FAA for review.The G-1 addresses the latest draft PoweredLift Category guidelines and identifies areas unique to the TriFan 600 and intended means of safety and compliance.The Company is currently working through the TriFan 600s Preliminary Design Review(“PDR”)updat
119、e,which we expect to complete in early 2026.During thisPDR 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
120、 TriFan 600 will have been identified and most under contract.Supplier systems and subsystemswill 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”readiness.After PDR,we will launch our detailed d
121、esign phase culminating in a Critical Design Review(“CDR”).This phase will include further interactions with suppliers todevelop 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 incorporatedinto the a
122、irframe 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 re
123、gulations.We expect this phase totake 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 asuccessful first flight activities,the certification from the FAA is ex
124、pected to take an additional 18 to 24 months to achieve.As such,we anticipate FAA type certification of theTriFan 600 in 2030.RTLS&IIoT Solutions Our management believes that we must continue to dedicate a significant amount of resources to research and development efforts to maintain a competitive
125、position.Our RTLS products intersect many emerging fields including metaverse,augmented reality,occupancy planning,industry 4.0,smart cities,and more,and we continue toinnovate and patent new methods to solve problems for our customers.5 Sales and Marketing TriFan 600 Our sales channels include dire
126、ct sales as well as indirect sales channelswhich may include one or more regional sales agents or brokers.Indirect salespartners may also provide a range of pre-and post-sales services to our customersincluding aftermarket support and maintenance,repair and overhaul(“MRO”)services using XTI Aerospac
127、e 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 certainmarkets,including 21 countries of the Middle East and North Africa.We have been in discussions with other sales and distribution agen
128、ts throughout the world and plan toexpand 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,conference
129、s,and other media.To best identify target customers,we intend to utilize a Customer Advisory Board a focus group tosolidify the“voice of the customers”and allow us to map customer requirements and use cases to our available features,functions and options.RTLS&IIoT Solutions Our sales channels includ
130、e direct sales as well as indirect sales through channel partners including original equipment manufacturers(OEMs),integrators,resellers anddistributors.Indirect sales partners may provide a range of pre-and post-sales services to our customers including system design,installation,commissioning and
131、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,conferenc
132、es,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 chargean annual maintenance fee.The LaaS model is typically for a 3-5 year contract and includes license to use,maintenanc
133、e and hardware upgrades.The LaaS model generates arecurring revenue stream.Customers TriFan 600 We previously had a pre-sales program that included refundable deposits for the TriFan 600 airplane that we intend to reopen later in 2025.Most pre-orders do notinclude deposits.Pre-sale agreements genera
134、lly provide customers a delivery slot for their airplanes.The deposits we have received do not create an obligation on the part of thecustomer 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 pur
135、chaseagreement 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 bepurchased and the timing for delivery of the airplanes.As of the date of this filing,we have conditional pre-orders under
136、 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 airp
137、lanes byMesa Airlines,Inc.(“Mesa”)pursuant to that certain conditional aircraft purchase agreement,dated February 2,2022,by and among Legacy XTI,Mesa Airlines and Mesa AirGroup,Inc.Mesas purchase obligations under such agreement are conditioned upon,among other things,certification of our airplane b
138、y the FAA and the agreement by theparties of all material terms of the transaction including,but not limited to,delivery dates,airplane specifications,warranties,remedies,milestones relating to the developmentof the TriFan 600,the type and extent of assistance to be provided by Mesa in obtaining cer
139、tification of the TriFan 600,branding and marketing matters,and optionalequipment 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 itis not likely that the material terms will be a
140、greed to in a manner consistent with such partys business and operational interests(as those interests may change from time totime).6 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.Wehav
141、e 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 airpla
142、nes until they execute a definitivepurchase agreement.We have written letters of intent(without deposits)with customers for an additional 105 airplanes.Customers may request a return of their refundabledeposits any time up until the execution of a purchase agreement.These conditional orders and rese
143、rvations represent the potential of more than$3.0 billion in future grossrevenue 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 programfor the TriFan 600,secure FAA certification,and deliver
144、these airplanes.RTLS&IIoT Solutions 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 milit
145、ary buildings,and corporate offices.During the year ended December 31,2024,four customers accounted for over 10%of revenue(23%,14%,13%,and 11%,respectively).The Company had norevenue during the year ended December 31,2023.Competition TriFan 600 The private jet and private business aircraft markets a
146、re highly competitive,and we face a significant number of original equipment manufacturer competitors,most ofwhich 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 aircraftmanufacturers by providing our
147、 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 versatil
148、ity of VTOL.As weexpect 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 TriFan600 to offer lower direct operating costs(cost per flight hour)and be able to fly almost twice as many miss
149、ions,thus generating additional cost savings and revenue for airlinesand aircraft operators when compared with helicopters.RTLS&IIoT Solutions Our RTLS business is characterized by innovation and rapid change.Our RTLS Indoor Intelligence products compete with companies such as Aruba,Cisco,JuniperNet
150、works/Mist Systems,Ubisense,Sewio,Kinexon,Zebra Technologies and other mostly vertical focused RTLS companies.Some competitors determine positioning primarilyusing 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
151、 competitors arefocused 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,integrationsand analytics.We believe we offer a unique and differentiated approach to the market with our industrial RTLS which
152、is:Comprehensive.We offer full-stack RTLS solutions which seamlessly integrates tracking tags,anchors,sensors,positioning engine,software,and connections tothird-party systems.We integrate a myriad of indoor data inputs and outputs.With a single platform we can support a multitude of use cases acros
153、s numerousindustries in both the private and public sector.Scalable.Our solutions are built to support customers expanding needs and use cases.Unlike many other competitive point-solutions,we can offer expansionpaths and support for a wide variety of location-based use cases at large,multi-size,glob
154、al enterprises.Our multi-layered depiction of indoor data allows users tosee 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 welcom
155、ing integration and synchronizationwith third party data and systems in combination with our platform.Our open architecture is designed to enable the integration of disparate technologies,preserveinvestment and avoid obsolescence.APIs and MQTT make it possible to move data in and out of our platform
156、 to enable a plethora of opportunities and benefits.7 Intellectual Property TriFan 600 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 fansthat are rotatably moveable between the lift and thrus
157、t positions.Based on those U.S.patents,the Company has also applied for and has been issued multiple additional foreignutility patents,including from China,Japan,Europe and Canada.We have sought to protect our intellectual property using patents and trade secrets.Employee and third-partyconsultants
158、have signed non-disclosure agreements with Legacy XTI which include standard provisions related to assignment of work product and other requirements to furtherprotect its proprietary rights.We are continuing to develop intellectual property,and we intend to aggressively protect our position in key t
159、echnologies.We own severaltrademarks protecting Legacy XTIs 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 ap
160、plied for issuance of patents inthe U.K.,France,Germany,and Italy,where we expect the airplane will be sold and used.Patents are also pending in Brazil.RTLS To establish and protect our proprietary rights,we rely on a combination of patents,trademarks,copyrights,trade secrets,including know-how,lice
161、nse agreements,confidentiality procedures,non-disclosure agreements with third parties,employee disclosure and invention assignment agreements,and other contractual rights.We do notbelieve that our proprietary technology is dependent on any single patent or copyright or groups of related patents or
162、copyrights.We believe the duration of our patents isadequate relative to the expected lives of our products.In connection with the Companys 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 mor
163、e information about this disposition),each of the Company and CXApp,Inc.granted the other party(each,a“Licensee”)a limitedworldwide,non-exclusive,irrevocable,royalty free,fully paid up,perpetual license to use,practice and otherwise exploit such intellectual property(with certain exceptions)that is
164、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 theLicensee during the twelve(12)months prior to the separation or is reasonably anticipated to be used after the separation for the conduct
165、 of any business of the Licensee asconducted 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 requir
166、ements on matters as diverse as data privacy and protection,employment and laborrelations,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 le
167、gal requirements in the conduct of our business could result in significant fines and other damages,criminal sanctionsagainst us or our officers,prohibitions on doing business and damage to our reputation.Violations of these regulations or contractual obligations related to regulatorycompliance in c
168、onnection 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
169、have not performed ourcontractual 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
170、,and use of thepublic 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“typecertificate”and airworthiness certificate issued by the FAA or a foreign civil aviation authority.We intend to seek
171、approval for the design of the TriFan 600 by obtaining a standard Type Certificate under Federal Aviation Regulations,in particular the criteria setforth under the“Powered Lift”regulations.In March 2025,the Company submitted its Type Certification application to the FAA.The FAA will oversee extensiv
172、e testing andanalysis of the TriFan 600 to confirm the airplanes safety,stability,reliability,performance,and compliance with the applicable airworthiness standards.8 In addition,once the FAA issues a type certificate to the Company,we intend to apply for a production certificate,the FAAs approval r
173、equired for the manufacture ofan FAA-approved type design,to enable the Company to manufacture the TriFan in commercial quantities.TriFan 600 airplane that are manufactured by XTI in accordancewith the type certificate and the production certificate will be delivered to customers along with a certif
174、icate 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 airplane such that they conform to the approved design.Since we are not permitted to deliver commercially produced aircraft
175、 to customers until any such aircraft has obtained FAA certification,no material aircraft salesrevenue will be generated before receipt of FAA certification.The process of obtaining a valid type certificate,production certificate and airworthiness certificate for the TriFan600 will take several year
176、s.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 600will be regulated by the FAA,while the ability to take off and land will be governed by the FAA and various zoning restrictions imposed
177、 by non-federal agencies in eachlocation 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 limitor prohibit the use of aircraft.There are currently over 5,000 helipads in the U.S.where helicop
178、ters are allowed to land.Thus,we expect that customers will be able to legallyland 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 worldwhere its safe and legal to land VTOL aircraft,as w
179、ell as smaller general aviation airports unavailable to conventional business aircraft and jets.Employees 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 salespersonnel,4 marketing personnel,20 techn
180、ical and engineering personnel and 9 finance,other executive,legal and administration personnel.Business Combination On 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 andamong us,Superfly Merger Sub Inc.,a Delaw
181、are 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”),withLegacy XTI surviving the XTI Merge
182、r as our wholly-owned subsidiary.Following the effective time of the XTI Merger(the“Effective Time”)on the Closing Date,weamended our articles of incorporation to change our name from“Inpixon”to“XTI Aerospace,Inc.”and the combined company opened for trading on the Nasdaq CapitalMarket on March 13,20
183、24 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.Corporate Information We currently have two direct,wholly-owned operating subsidiaries:XTI Aircraft Company,based in Englewood,Colorado(at our
184、corporate headquarters),andInpixon GmbH(previously Nanotron Technologies GmbH),based in Berlin,Germany.IntraNav GmbH,based in Eschborn,Germany(“IntraNav”),is an indirect subsidiary ofthe Company and the wholly-owned subsidiary of Inpixon GmbH.Our principal executive offices are located at Centennial
185、 Airport at 8123 InterPort Blvd.,Suite C,Englewood,Colorado 80112.This facility houses our principalexecutive office,finance,and other administrative activities,although our employees and consultants mostly work remotely.Our engineers are working remotely throughout theU.S.We believe that our facili
186、ty in Colorado meets our needs for the immediate future.During 2024,we commenced a site selection process to identify a facility located atan airport within the continental U.S.that will allow us to consolidate engineers and other administrative employees,perform flight simulations,perform propulsio
187、n rig andprototype 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 changefrom the current location at Centennial Airport.Our telephone number is(800)680-7412.We have also agreed to suble
188、ase office space in Palo Alto,California.Two of our subsidiaries,Inpixon GmbH and IntraNav,maintain offices in Berlin Germany,and Eschborn,Germany,respectively.Our Internet website is .The information on,or that can be accessed through,our website is not part of this report,and you should not rely o
189、n any such information in making any investment decision relating to our common stock.9 ITEM 1A:RISK FACTORS We are subject to various risks and uncertainties that may materially harm our business,prospects,financial condition and results of operations.An investment in ourcommon stock is speculative
190、 and involves a high degree of risk.In evaluating an investment in shares of our common stock,you should carefully consider the risks describedbelow,together with the other information included in this report.If any of the events described in the following risk factors actually occurs,or if addition
191、al risks and uncertainties later materialize,that are not presently known to usor that we currently deem immaterial,then our business,prospects,results of operations and financial condition could be materially adversely affected.In that event,thetrading price of our common stock could decline,and in
192、vestors in our common stock may lose all or part of their investment in our shares.The risks discussed below includeforward-looking statements,and our actual results may differ substantially from those discussed in these forward-looking statements.Summary Risk Factors The following summarizes the ri
193、sks and uncertainties that could materially adversely affect our business,financial condition,results of operation and stock price.Youshould read this summary together with the more detailed description of each risk factor contained below.Risks Related to Our Business and Industry We have a limited
194、operating history and have not yet manufactured any non-prototype aircraft,delivered any aircraft to customers or generated any revenues fromour aircraft business,and we may never develop or manufacture any VTOL aircraft according to our current development schedule,or at all.We will require FAA cer
195、tification,and a delay in receiving such certification could adversely affect our prospects,business,financial condition and results ofoperations.The pre-orders we have received for our TriFan 600 airplane are non-binding,conditional or written expressions of interest and may be terminated at any ti
196、meprior to execution of a definitive purchase agreement.If these pre-orders are cancelled,modified,delayed or not placed in accordance with the terms agreed witheach party,our business,results of operations,liquidity and cash flow will be materially adversely affected.We have a history of losses,and
197、 in order to successfully execute our business plan,we will need to raise additional capital through additional debt or equityfinancing,which may otherwise not be available on reasonable terms or at all.As a result of our failure to timely file a Current Report on Form 8-K,we are currently ineligibl
198、e to use Form S-3 until August 2025,which may impair our abilityto raise capital on terms favorable to us,in a timely manner or at all.Operating aircraft carries a degree of inherent risk.Accidents or incidents involving VTOL aircraft,us or our competitors could have a material adverse effect onour
199、business,financial condition and results of operations.The market for a civilian long-range fixed-wing VTOL aircraft is new and untested.If such market does not respond at the level we expect or if it fails to grow aslarge as we expect,our business,financial condition and results of operations could
200、 be harmed.If we do not adequately protect our intellectual property rights,we may experience a loss of revenue and our operations and growth prospects may be materiallyharmed.We have completed several strategic transactions including acquisitions and dispositions,which may make it difficult for pot
201、ential investors to evaluate our futurebusiness.Any future acquisitions or dispositions could disrupt our business and harm our business,financial condition or operating results.Furthermore,due tothe risks and uncertainties related to the acquisition of new businesses,any such acquisition does not g
202、uarantee that we will be able to attain profitability.10 We have been subject to government or regulatory investigations or inquiries under national,regional and local laws,as amended from time to time,and may berequired to comply with data requests,or requests for information by government authorit
203、ies and regulators in the United States or other jurisdictions in which weoperate and any resulting enforcement action could have a materially adverse effect on us.Digital threats such as cyber-attacks,data protection breaches,computer viruses or malware on our customers networks,or in cloud-based s
204、ervices provided byor enabled by us,could result in liability for us,damage our reputation or otherwise harm our business.Any failures or interruptions in our services or systems could disrupt our business and impair our ability to effectively provide our RTLS services and products toour customers,w
205、hich could damage our reputation and adversely affect our revenues and profitability.The growth of our RTLS business is dependent on increasing sales to our existing customers and obtaining new customers,which,if unsuccessful,could limit ourfinancial performance.Risks Related to Our Securities Our f
206、ailure to maintain compliance with the continued listing requirements of the Nasdaq Capital Market may result in our common stock being delisted from theNasdaq Capital Market,which could negatively impact the price of our common stock,liquidity,our ability to access the capital markets and our stock
207、holdersability to sell their shares.We are subject to certain contractual limitations that could materially adversely affect our ability to consummate future financings.Our stock price may be volatile,and your investment may suffer a decline in value as a result of the volatility of our stock.Sales
208、of our common stock or other securities,or the perception that future sales may occur,may cause the market price of our common stock to decline,even ifour business is doing well.There may be future sales or other dilution of our equity,which may adversely affect the market price of our common stock.
209、We may issue debt and equity securities or securities convertible into equity securities,any of which may be senior to our common stock as to distributions and inliquidation,which could negatively affect the value of our common stock.If our common stock becomes subject to the penny stock rules,it wo
210、uld become more difficult to trade our shares.11 We do not intend to pay cash dividends to our stockholders,so it is unlikely that stockholders will receive any return on their investment in our Company prior toselling our stock.Some provisions of Nevada law,our articles of incorporation and our byl
211、aws may deter takeover attempts,which may inhibit a takeover that stockholders considerfavorable and limit the opportunity of our stockholders to sell their shares at a favorable price.Risks Related to Our Business and Industry We have a limited operating history and have not yet manufactured any no
212、n-prototype aircraft,delivered any aircraft to customers or generated any revenues from ouraircraft business,and we may never develop or manufacture any VTOL aircraft according to our current development schedule,or at all.We have a limited operating history in the VTOL aircraft industry.Our primary
213、 VTOL aircraft product is the TriFan 600 airplane,which is currently in thedevelopmental stage.If we are successful in commercially producing the TriFan 600 according to our current development schedule,we do not expect to be able to obtainapproval from the FAA and regulatory bodies in other countri
214、es,and commence deliveries until 2030 at the earliest,if at all.We have no experience as an organization in highvolume manufacturing of the TriFan 600 or any other type of aircraft.We cannot assure you that we or our partners will be able to develop efficient,automated,cost-efficientmanufacturing ca
215、pabilities and processes and reliable sources of component supplies that will enable us to meet the quality,price,engineering,design and production standards,as well as the production volumes,required to successfully mass market our aircraft.You should consider our business and prospects in light of
216、 the risks and significantchallenges we face as a new entrant into our industry,including,among other things,with respect to our ability to:design and produce safe,reliable and quality aircraft on an ongoing basis;obtain the necessary regulatory approvals in a timely manner;build a well-recognized a
217、nd respected brand;establish and expand our customer base;successfully service our aircraft after sales and maintain a good flow of spare parts and customer goodwill;improve and maintain our operational efficiency;predict our future revenues and appropriately budget for our expenses;attract,retain a
218、nd motivate talented employees;anticipate trends that may emerge and affect our business;anticipate and adapt to changing market conditions,including technological developments and changes in our competitive landscape;and navigate an evolving and complex regulatory environment.If we fail to adequate
219、ly address any or all of these risks and challenges,our business,financial condition and results of operations may be materially and adverselyaffected.There is no assurance that we will ever be profitable or generate sufficient revenue to pay dividends to the holders of our common stock.We do not be
220、lieve we will beable to generate revenues from the sale of aircraft without successfully securing FAA certification of the TriFan 600 airplane,which involves substantial risk.As a result,we aredependent upon raising sufficient financing to fund the Company until the TriFan 600s first flight,includin
221、g building the first test airplane.If planned operating levels arechanged,higher operating costs encountered,lower sales revenue received,more time is needed to implement the plan,or less funding is received from customer deposits orsales,more investor funds than currently anticipated may be require
222、d.Additional difficulties may be encountered prior to FAA certification,such as unanticipated problemsrelating to development,testing,and initial and continuing regulatory compliance,vendor manufacturing costs,production and assembly,and the competitive and regulatoryenvironments in which we intend
223、to operate.If additional capital is not available when required,or is not available on acceptable terms,we may be forced to modify or abandonour business plan.12 We will require FAA certification,and a delay in receiving such certification could adversely affect our prospects,business,financial cond
224、ition and results of operations.The TriFan 600 is still in the development stage,and we are still working to obtain FAA type certification of the TriFan 600.Certification by the FAA will be requiredfor the sale of the TriFan 600 in the civil or commercial market in the United States.The process to o
225、btain such certification is expensive and time consuming and has inherentengineering risks.These include(but are not limited to)ground test risks such as structural strength and fatigue resistance,and structural flutter modes.Flight test risks include(but are not limited to)stability and handling ov
226、er the desired center-of-gravity range,performance extremes(stalls,balked-landing climb,single-engine climb),and fluttercontrol effectiveness(aircraft roll effectiveness,controllability,various control failure safety).Delays in FAA certification can be expected to result in us incurring increasedcos
227、ts in attempting to correct any issues causing such delays.Also,the impact of new or changed laws or regulations on the TriFan 600s certification or the costs of complyingwith such laws and regulations cannot be predicted.The pre-orders we have received for our TriFan 600 airplane are non-binding,co
228、nditional or written expressions of interest and may be terminated at any time prior toexecution of a definitive purchase agreement.If these pre-orders are cancelled,modified,delayed or not placed in accordance with the terms agreed with each party,ourbusiness,results of operations,liquidity and cas
229、h flow will be materially adversely affected.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 notinclude deposits.Pre-sale agreements generally provide customers a delivery slot for their air
230、planes.The deposits we have received do not create an obligation on the part of thecustomer 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 purchaseagreement between us and each party that conta
231、ins the final terms for the purchase of our TriFan 600 airplane,including,but not limited to,the final number of airplanes to bepurchased and the timing for delivery of the airplanes.Some or most customers might not transition to non-refundable purchase contracts until prior to aircraft delivery,if
232、at all.Aircraft customers might respond to weak economic conditions or competitive alternatives in the market by canceling orders,resulting in lower demand for our TriFan 600airplane and other materials,such as parts,services,and training,from which we expect to generate additional revenue.Customers
233、 request for a return of their refundabledeposits could have a material adverse effect on our financial results and/or liquidity,including,but not limited to,the possibility that we may be financially unable to returnsuch deposits.We have a history of losses,and in order to successfully execute our
234、business plan,we will need to raise additional capital through additional debt or equity financing,which may otherwise not be available on reasonable terms or at all.We incurred net losses of approximately$35.6 million and$25.1 million for the fiscal years ended December 31,2024 and 2023,respectivel
235、y,and we had anaccumulated deficit of approximately$93.6 million as of December 31,2024.These losses and prior-year losses have resulted in significant negative cash flows.Thecontinuation of our Company is dependent upon attaining and maintaining profitable operations in our RTLS business and execut
236、ing timely on our design,FAA certificationand eventual production of the TriFan 600 and raising additional capital as needed,but there can be no assurance that we will be able to raise any further financing.Our management is evaluating options and strategic transactions and continuing to market and
237、promote our new products and technologies,however,there is noguarantee that these efforts will be successful or that we will be able to achieve or sustain profitability.Even if we are able to successfully develop and sell our aircraft,therecan be no assurance that the aircraft will be commercially s
238、uccessful and achieve or sustain profitability.We expect the rate at which we will incur losses to be significantlyhigher in future periods as we,among other things,certify and assemble our aircraft,deploy our facilities,build up inventories of parts and components for our aircraft,increaseour sales
239、 and marketing activities,develop our manufacturing infrastructure and increase our general and administrative functions to support our growing operations.Theseefforts may not result in the Company reaching profitability,which would further increase our losses.We have funded our operations primarily
240、 with proceeds from public andprivate offerings of our common stock and secured and unsecured debt instruments.Our history of operating losses and cash uses,our projections of the level of cash that willbe required for our operations to reach profitability,may impair our ability to raise capital on
241、terms that we consider reasonable and at the levels that we will require over thecoming months.13 To the extent that we raise additional capital by issuing equity securities,such an issuance may cause significant dilution to our stockholders ownership and the termsof any new equity securities may ha
242、ve preferences over our common stock.Any debt financing that we enter into may involve covenants that restrict our operations.Theserestrictive covenants may include limitations on additional borrowing and specific restrictions on the use of our assets,as well as prohibitions on our ability to create
243、 liens,paydividends,redeem its stock or make investments.In addition,if we raise additional funds through licensing,partnering or other strategic arrangements,it may be necessary torelinquish rights to some of our technologies and proprietary rights,or grant licenses on terms that are not favorable
244、to us.We have issued,and may in the future issue,incentive awards under our equity incentive plans,which may have additional dilutive effects.We may also be required to recognize non-cash expenses in connection withcertain securities we may issue in the future such as convertible notes and warrants,
245、which would adversely impact our financial condition and results of operations.Our ability to obtain needed financing may be impaired by factors,including the condition of the economy and capital markets,both generally and specifically in ourindustry,and the fact that we are neither cash flow positi
246、ve nor profitable,which could affect the availability or cost of future financing.We cannot provide any assurances thatwe will be able to secure additional funding from public or private offerings or debt financings on terms acceptable to us,if at all.If the amount of capital we are able to raisefro
247、m financing activities,together with our limited revenues from operations,is not sufficient to satisfy our capital needs,we may need to reduce our operations by,forexample,selling certain assets or business segments.As a result of our failure to timely file a Current Report on Form 8-K,we are curren
248、tly ineligible to use Form S-3 until August 2025,which may impair our ability to raisecapital on terms favorable to us,in a timely manner or at all.Form S-3 permits eligible issuers to conduct registered offerings using a short form registration statement that allows the issuer to incorporate by ref
249、erence its past andfuture filings and reports made under the Exchange Act.In addition,Form S-3 enables eligible issuers to conduct primary offerings“off the shelf”under Rule 415 of theSecurities Act.The shelf registration process,combined with the ability to forward incorporate information,allows is
250、suers to avoid delays and interruptions in the offeringprocess and to access the capital markets in a more expeditious and efficient manner than raising capital in a standard registered offering pursuant to a registration statement onForm S-1.The ability to register securities for resale may also be
251、 limited as a result of the loss of Form S-3 eligibility.As a result of our failure to timely file a Current Report on Form 8-K,we are currently ineligible to use Form S-3 until August 2025.Our inability to use Form S-3may significantly impair our ability to raise necessary capital to fund our opera
252、tions and execute our strategy.If we seek to access the capital markets through a registeredoffering during the period of time that we are unable to use Form S-3,we may be required to publicly disclose the proposed offering and the material terms thereof before theoffering commences,we may experienc
253、e delays in the offering process due to SEC review of a Form S-1 registration statement and we may incur increased offering andtransaction costs and other considerations.Disclosing a public offering prior to the formal commencement of an offering may result in downward pressure on our stock price.If
254、we are unable to raise capital through a registered offering,we would be required to conduct our equity financing transactions on a private placement basis,which may besubject to pricing,size and other limitations imposed under the Nasdaq rules,or seek other sources of capital.The foregoing limitati
255、ons on our financing approaches couldprevent us from pursuing transactions or implementing business strategies that would be beneficial to our business.Operating aircraft carries a degree of inherent risk.Accidents or incidents involving VTOL aircraft,us or our competitors could have a material adve
256、rse effect on ourbusiness,financial condition and results of operations.Test flying a prototype aircraft is inherently risky,and accidents or incidents involving our aircraft are possible.Any such occurrence would negatively impact ourdevelopment,testing and certification efforts,and could result in
257、 re-design,certification delay and/or postponements or delays to the sales of our aircraft.14 The operation of an aircraft is subject to various risks,and we expect demand for our aircraft to be impacted by accidents or other safety issues regardless of whethersuch accidents or issues involve our ai
258、rcraft.Such accidents or incidents could also have a material impact on our ability to obtain certification from the FAA and/orinternational regulators for our aircraft,or to obtain such certification in a timely manner.Such events could impact confidence in a particular aircraft type or the airtran
259、sportation services industry as a whole,particularly if such accidents or disasters were due to a safety fault.We believe that regulators and the general public are stillforming opinions about the safety and utility of various new types of VTOL aircraft,particularly“air taxis”,which are also known a
260、s“eVTOLs.”An accident or incidentinvolving either our VTOL aircraft or an eVTOL aircraft during these early stages of opinion formation could have a disproportionate impact on the longer-term view of theadvanced VTOL aircraft market generally.There may be heightened public skepticism of new types of
261、 VTOL aircraft and its adopters.In particular,there could be negative public perception surrounding airtaxis,including the overall safety and the potential for injuries or death occurring as a result of accidents involving them,regardless of whether any such safety incidentsinvolve our aircraft.Any
262、of the foregoing risks and challenges could adversely affect the combined companys prospects,business,financial condition and results of operations.We are at risk of adverse publicity stemming from any public incident involving our company,our people,our brand or other companies in our industry.Such
263、 anincident could involve the actual or alleged behavior of any of our employees or third-party contractors.Further,if our personnel,our TriFan 600 airplane or other types ofaircraft are involved in a public incident,accident,catastrophe or regulatory enforcement action,we could be exposed to signif
264、icant reputational harm and potential legalliability.The insurance we carry may be inapplicable or inadequate to cover any such incident,accident,catastrophe or action.In the event that our insurance is inapplicable orinadequate,we may be forced to bear substantial losses from an incident or acciden
265、t.In addition,any such incident,accident,catastrophe or action involving our employees,our TriFan 600 airplane or other types of aircraft could create an adverse public perception,which could harm our reputation,result in passengers being reluctant to use ourservices and adversely impact our busines
266、s,results of operations and financial condition.We operate in highly competitive markets and we may be required to reduce the prices for some of our products and services to remain competitive,which could adverselyaffect our results of operations.The TriFan 600 potentially competes with a variety of
267、 aircraft manufacturers in the United States and abroad.Further,we could face competition from competitors ofwhom we are not aware that have developed or are developing technologies that will offer alternatives to the TriFan 600.Competitors could develop an aircraft that renders theTriFan 600 less c
268、ompetitive than we believe it will become.Many existing potential competitors are well-established,have or may have longer-standing relationships withcustomers and potential business partners,have or may have greater name recognition,and have or may have access to significantly greater financial,tec
269、hnical and marketingresources.Other manufacturers may be developing a light,fixed-wing,VTOL airplane with performance similar to that of the TriFan 600.Additionally,the RTLS industry is developing rapidly and related technology trends are constantly evolving.In this environment,we face,among other t
270、hings,significant price competition from our competitors.As a result,we may be forced to reduce the prices of the RTLS products and services we sell in response to offerings madeby our competitors and may not be able to maintain the level of bargaining power that we have enjoyed in the past when neg
271、otiating the prices of our products and services.Ifwe are not able to maintain favorable pricing for our RTLS products and services,our results of operations could be adversely affected.The market for a civilian long-range fixed-wing VTOL airplane is new and untested.If such market does not respond
272、at the level we expect or if it fails to grow as large aswe expect,our business,financial condition and results of operations could be harmed.The market for a civilian long-range fixed-wing VTOL airplane is completely new and untested.Our success in this market is dependent upon our ability to effec
273、tivelymarket and sell travel and other applications by the TriFan 600 as a substitute for conventional methods of air transportation(i.e.,helicopters and/or light and mid-size businessaircraft)and the effectiveness of our other marketing and growth efforts.We have projected the market for the TriFan
274、 600 based upon a variety of internal and external marketdata.The estimates involve assumptions,which may not be realized in fact.There can be no assurance that our estimates for the number of TriFan 600 airplane that may be soldin the market will be as anticipated.If the public does not respond as
275、expected as a result of concerns regarding safety,affordability or for other reasons,then the market for ourofferings may not develop,may develop more slowly than we expect or may not achieve the growth potential we expect,any of which could harm our business,financialcondition and results of operat
276、ions.Developing new products and technologies entails significant risks and uncertainties.Delays or cost overruns in the development or certification of the TriFan 600 and failure of the product to meet its performance estimates is likely to affect ourfinancial performance.Delays and increased costs
277、 may be caused by unanticipated technological hurdles,changes to design or failure on the part of our suppliers to delivercomponents as agreed.This may further delay the development and/or certification of the TriFan 600.Additionally,the TriFan 600 may not perform at the level we expect or may conta
278、in defects in design and manufacture that may cause them not to perform as expectedor that may require repair.It is not possible to fully replicate every operating condition and validate the long-term durability of every aspect of our aircraft in testing prior to itsuse in service.In some instances,
279、we may need to continue to rely upon projections and models to validate the projected performance of our aircraft over their lifetime.Therefore,similar to most aerospace products,there is a risk that our aircraft may suffer unforeseen faults,defect or other issues in service.Such faults,defects and
280、other issuesmay require significant additional research and development to rectify and could involve suspension of operation of our aircraft until any such defects can be cured.There canbe no assurance that such research and development efforts would result in viable products or cure any such defect
281、s.Obtaining the necessary data and results may take longerthan planned or may not be obtained at all.Any such delays or setbacks could have a material adverse effect on our reputation and our ability to achieve our projected timelinesand financial goals.15 If we are unable to obtain and maintain ade
282、quate facilities and infrastructure,we may be unable to develop and manufacture the aircraft as expected,and our aircraft mayrequire maintenance at frequencies or at costs that are greater than expected.In order to develop and manufacture our aircraft,we must be able to obtain and maintain adequate
283、facilities and infrastructure.We may be unsuccessful in obtaining,developing and/or maintaining these facilities in a commercially viable manner.Even if we are able to begin assembly operations in these facilities,maintenance of thesefacilities will require considerable capital expenditure as we exp
284、and operations.We cannot provide any assurance that we will be successful in obtaining and maintainingadequate facilities and infrastructure,and any failure to do so may result in our inability to develop and manufacture our aircraft as expected or on the timelines projected,which would adversely af
285、fect our business,financial condition and results of operations.Moreover,the TriFan 600,when produced,is anticipated to require regular maintenance and support.We are still developing our understanding of the long-termmaintenance profile of the airplane,and if useful lifetimes are shorter than expec
286、ted,this may lead to greater maintenance costs than previously anticipated.If the TriFan 600and related equipment require maintenance more frequently than we plan for or at costs that exceed our estimates,that would have an impact on the sales of our aircraft andhave a material adverse effect on our
287、 business,financial condition and results of operations.There may be a shortage of pilots and mechanics who meet the training standards required,which could reduce our ability to sell our aircraft at scale and on our expectedtimelines.There is a shortage of pilots that is expected to exacerbate over
288、 time as more pilots in the industry approach mandatory retirement age.Similarly,trained and qualifiedaircraft and aviation mechanics are also in short supply.If these shortages continue,the aviation industry as a whole and our business may face challenges.Operations could be adversely affected by i
289、nterruptions of production that are beyond our control.We intend to produce the TriFan 600 and its derivatives using systems,components and parts developed and manufactured by third-party suppliers.This supply chainexposes us to multiple potential sources of delivery failure or component shortages f
290、or our aircraft,most of which are out of our control,including shortages of,or disruptionsin the supply of,the raw materials used by our partners in the manufacture of components,disruptions to our partners workforce(such as strikes or labor shortfalls)anddisruptions to,or capacity constraints affec
291、ting,shipping and logistics.Such suppliers may be subject to additional risks such as financial problems that limit their ability toconduct their operations.If any of these third parties experience difficulties,it may have a direct negative impact on us.While we believe that we may be able to establ
292、ish alternate supply relationships and can obtain replacement components,we may be unable to do so in the short termor at all at prices that are acceptable to us or may need to recertify components.We may experience source disruptions in our or our partners supply chains,which may causedelays in our
293、 overall production process for both prototype and commercial production aircraft.If we needed to find alternative suppliers for any of the key components of our aircraft,then this could increase our costs and adversely affect our ability to receivesuch components on a timely basis,or at all,which c
294、ould cause significant delays in our overall projected timelines for the delivery of our aircraft and adversely affect ourrelationships with our customers.In addition,if we experience a significant increase in demand,or need to replace our existing suppliers,there can be no assurance that additional
295、 suppliers ofcomponent parts will be available when required on terms that are acceptable to us,or at all,or that any supplier would allocate sufficient supplies to us in order to meet ourrequirements or fill our orders in a timely manner.Further,if we are unable to manage successfully our relations
296、hips with all of our suppliers and partners,the quality andavailability of our aircraft may be harmed.Our suppliers or partners could,under some circumstances,decline to accept new purchase orders from,or otherwise reduce theirbusiness with,us.Any disruptions in the supply of components from our sup
297、pliers and partners could lead to delays in aircraft production,which would materially adverselyaffect our business,financial condition and operating results.Further,if any conflicts arise between our suppliers or partners and us,the other party may act in a manner adverse to us and could limit our
298、ability to implement ourbusiness strategies,which could impact our projected production timelines and number of aircraft produced.Our suppliers or partners may also develop,either alone or withothers,products in related fields that are competitive with our products as a result of any conflicts or di
299、sagreements.Any disagreements or conflicts with our suppliers orpartners could have an adverse effect on our reputation,which could also negatively impact our ability to source new suppliers or partners.16 Any changes in business conditions,wars,governmental changes,political intervention and other
300、factors beyond our control or which we do not presently anticipate,could also affect our partners and suppliers abilities to deliver components to us on a timely basis,which could have a material adverse effect on our overall timelines toproduce our aircraft.We do not control our suppliers or partne
301、rs or such parties labor and other legal compliance practices,including their environmental,health and safetypractices.If our current suppliers or partners,or any other suppliers or partners which we may use in the future,violates any specific laws or regulations,we may be subjectedto extra duties,s
302、ignificant monetary penalties,adverse publicity,the seizure and forfeiture of products that we are attempting to import or the loss of our import privileges.Theeffects of these factors could render the conduct of our business in a particular country undesirable or impractical and have a negative imp
303、act on our business,financialcondition and results of operations.If we do not adequately protect our intellectual property rights,we may experience a loss of revenue and our operations and growth prospects may be materially harmed.Although we have received certain patents for the TriFan 600 issued b
304、y the US Patent and Trademark Office(USPTO)and various foreign jurisdictions,there is noguarantee that we will receive one or more additional patents for which we will apply to the USPTO or for which we have applied or will apply in foreign jurisdictions.Theprocess of obtaining patent protection is
305、expensive and time-consuming,and we may not be able to prosecute all necessary or desirable patent applications at a reasonable costor in a timely manner.Even if issued,there can be no assurance that these patents will adequately protect our intellectual property,as the legal standards relating to t
306、he validity,enforceability and scope of protection of patent and other intellectual property rights are complex and often uncertain and are subject to change.There is no guarantee that anycourt will rule in our favor in the event of a dispute related to our intellectual property.In the absence of fu
307、rther patent protection,it may be more difficult for us to achievecommercial production of the TriFan 600.In addition,any patents issued in the future may not provide us with any competitive advantages because our competitors mayindependently develop similar or alternative technologies or products t
308、hat are equal to or superior to our TriFan 600 technology without infringing on any of our intellectualproperty rights or design around our proprietary technologies.Furthermore,our proprietary software is protected by common law copyright laws,as opposed to registration under copyright statutes.We h
309、ave not registeredcopyrights on any of the proprietary software we have developed.Our performance and ability to compete are dependent to a significant degree on our proprietary technology.Common law protection may be narrower than that which we could obtain under registered copyrights.As a result,w
310、e may experience difficulty in enforcing our copyrightsagainst certain third party infringements.As part of our confidentiality-protection procedures,we generally enter into agreements with our employees and consultants and limitaccess to,and distribution of,our software,documentation and other prop
311、rietary information.There can be no assurance that the steps we have taken will preventmisappropriation of our technology or that agreements entered into for that purpose will be enforceable.Moreover,the laws of other countries may afford us little or noprotection of our intellectual property.Our in
312、ability to protect our intellectual property rights could adversely affect our financial condition,operating results and growthprospects.We also rely on a variety of technology that we license from third parties.There can be no assurance that these third party technology licenses will continue to be
313、available to us on commercially reasonable terms,if at all.The loss of or inability to maintain or obtain upgrades to any of these technology licenses could result in delays incompleting software enhancements and new development until equivalent technology could be identified,licensed or developed a
314、nd integrated.Any such delays wouldmaterially and adversely affect our business.Our ability to use net operating loss carryforwards and certain other tax attributes may be limited.As of December 31,2024,we had federal net operating loss carryforwards(“NOLs”)of approximately$96.9 million,of which app
315、roximately$5.3 million will beginto expire in 2037 and the remainder do not expire.Under the Tax Cuts and Jobs Act,federal NOLs generated by us in tax years through December 31,2017 may be carriedforward for 20 years and may fully offset taxable income in the year utilized and federal NOLs generated
316、 by us in tax years beginning after December 31,2017 may be carriedforward indefinitely but may only be used to offset 80%of our taxable income annually.Under Sections 382 and 383 of the Code,if a corporation undergoes an“ownershipchange,”the corporations ability to use its pre-change federal NOLs a
317、nd other tax attributes(such as research and development tax credits)to offset its post-change income andtaxes may be limited.In general,an“ownership change”occurs if there is a greater than 50 percentage point change(by value)in a corporations equity ownership by certainstockholders over a rolling
318、three-year period.We may have experienced ownership changes in the past and may experience ownership changes in the future as a result ofsubsequent shifts in our stock ownership(some of which shifts are outside our control).As a result,our ability to our pre-change federal NOLs and other tax attribu
319、tes to offsetfuture taxable income and taxes could be subject to limitations.Similar provisions of state tax law may also apply.For these reasons,even if we achieve profitability,we maybe unable to use a material portion of our NOLs and other tax attributes which may have an adverse impact on our bu
320、siness,financial condition and results of operations.17 We may enter into joint venture,teaming and other arrangements,and these activities involve risks and uncertainties.A failure of any such relationship could havematerial adverse results on our business and results of operations.We may enter int
321、o joint venture,teaming and other arrangements.These activities involve risks and uncertainties,including the risk of the joint venture or applicableentity failing to satisfy its obligations,which may result in certain liabilities to us for guarantees and other commitments,the challenges in achievin
322、g strategic objectives andexpected benefits of the business arrangement,the risk of conflicts arising between us and our partners and the difficulty of managing and resolving such conflicts,and thedifficulty of managing or otherwise monitoring such business arrangements.In addition,we do not current
323、ly have arrangements in place that will allow us to fully execute ourbusiness plan,including,without limitation,final supply and manufacturing agreements.Moreover,existing or future arrangements may contain limitations on our ability toenter into arrangements with other partners.A failure of our bus
324、iness relationships could have a material adverse effect on our business and results of operations.We are subject to risks associated with climate change,including the potential increased impacts of severe weather events on our operations and infrastructure.The potential physical effects of climate
325、change,such as increased frequency and severity of high wind conditions,storms,floods,fires,fog,mist,freezing conditions,sea-level rise and other climate-related events,could affect our operations,infrastructure and financial results.Climate change risks could result in but are not limited tooperati
326、onal risk from the physical effect of climate events on our terminal facilities,production facilities and other assets,as well as transitional risks,including new or morestringent regulatory requirements,increased monitoring and disclosure requirements,and potential effects on our reputation and/or
327、changes in our business.We could incursignificant costs to improve the climate resiliency of our aircraft or infrastructure and otherwise prepare for,respond to,and mitigate such physical effects of climate change.We are not able to accurately predict the materiality of any potential losses or costs
328、 associated with the physical effects of climate change.Market and regulatory trends to reduce climate change may not evolve in the direction and within the timing expected,which could have a negative impact in our businessplan.A number of governments globally have introduced or are moving to introd
329、uce climate change legislation and treaties at the international,national,state/provincial andlocal levels.Regulation relating to emission levels and energy efficiency is becoming more stringent and is gaining more widespread market approval,as consumers expectcompanies to play a role in addressing
330、climate change.Our business plan is predicated in part on the idea that market and regulatory trends favoring such“clean”energy andaddressing climate change will continue to evolve in our favor.However,any change or reversal in such market and regulatory trends,such as less focus on climate-friendly
331、solutions or less stringent legislation with respect to emissions,could result in lower demand for our aircraft and have an adverse effect on our business.Investors expectations of our performance relating to environmental,social and governance(“ESG”)factors may impose additional costs and expose us
332、 to new risks.There is an increasing focus from investors,employees,customers and other stakeholders concerning corporate responsibility,specifically related to ESG matters.Some investors may use these non-financial performance factors to guide their investment strategies and,in some cases,may choos
333、e not to invest in us if they believe ourpolicies and actions relating to corporate responsibility are inadequate.The growing investor demand for measurement of non-financial performance is addressed by third-partyproviders of sustainability assessments and ratings with respect to public companies.The criteria by which our corporate responsibility practices are assessed may change dueto changes in
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