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Description of Business and Organization | 3 Months Ended
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Mar. 31, 2026
Description of Business and Organization [Abstract] |
Description of Business and Organization | Note 1 - Description of Business and Organization The following describes the Company’s business and organizational structure: Business XTI Aerospace, Inc. (the “Company”) is a U.S.-based aerospace company focused on unmanned aircraft systems (“UAS”) and related services. The Company provides UAS solutions through a combination of product distribution and service offerings, including the sale and support of UAS platforms, payloads, sensors, batteries, accessories and related equipment, as well as operator training, program enablement, repair and maintenance, and other fleet lifecycle support services for enterprise, public safety, government, and defense-related customers. In 2026, the Company started the design and development of unmanned platforms for defense and commercial applications. Effective in fiscal year 2026, as part of the Company’s strategic shift from the TriFan 600 development program towards the design and development of unmanned platforms, the Company revised its operating segments to remove the commercial aviation segment and replace it with the advanced defense systems (“ADS”) segment. The Company currently operates as two reportable segments: UAS and ADS, refer to Note 11 – Segments. Organization In November 2025, the Company completed the acquisition of Drone Nerds, LLC and Anzu Robotics, LLC (collectively, “Drone Nerds”) through XTI Drones Holdings, LLC, a Texas limited liability company (“XTI Drones Holdings”). The Company holds an 83.403% controlling equity interest in XTI Drones Holdings through its ownership of Class A Units, and the remaining 16.597% equity interest is held by other Class B unitholders. The results of Drone Nerds have been included in the Company’s consolidated financial statements from November 10, 2025, the acquisition date, and the ownership interest not held by the Company is reflected as noncontrolling interest. Drone Nerds represents the Company’s primary UAS solutions and services operations. During December 2025, the Company committed to a plan to dispose of its historical Industrial IoT / real-time location systems (“RTLS”) operations (the “Inpixon Business”) and retroactively classified the business as held for sale. The disposition of the Inpixon Business was completed on February 3, 2026. The Inpixon Business historically comprised the Company’s Industrial IoT operations, which previously represented the Company’s Industrial IoT reportable segment. The results of the Inpixon Business have been presented as discontinued operations in the accompanying condensed consolidated financial statements for all periods presented. Unless otherwise indicated, the information included in the accompanying notes relates to the Company’s continuing operations. See Note 16 for additional information regarding discontinued operations. Liquidity As of March 31, 2026, the Company had cash and cash equivalents of approximately $15.2 million, $4.6 million drawn and $8.1 million of remaining availability on the borrowing base under its credit facility, see Note 8—Debt for further detail on the Company’s credit facility. During the three months ended March 31, 2026, the Company incurred a net loss from continuing operations of approximately $31.7 million and used approximately $10.5 million of cash in operating activities. During the three months ended March 31, 2026, the Company received net proceeds of approximately $7.4 million from the exercise of warrants, which contributed to its liquidity during the period. The Company’s liquidity position has been supported by capital raising activities during 2025, including public offerings of equity securities and the issuance of convertible preferred stock, as well as proceeds received from warrant exercises during the three months ended March 31, 2026. In addition, the Company has access to financing arrangements, including an asset-based lending facility, which provides borrowing availability subject to a borrowing base. Management expects to fund operations through a combination of existing cash balances, proceeds from warrant exercises, borrowing availability under its credit facility, and its ability to manage discretionary expenditures. While the Company may pursue additional capital raising activities, such activities are not considered in management’s assessment of its ability to meet its obligations. Based on the Company’s current liquidity, including cash on hand, availability under its credit facility, and expected operating cash flows from its UAS platform, management believes that the Company will have sufficient liquidity to meet its obligations for at least twelve months from the date of issuance of these condensed consolidated financial statements. As of March 31, 2026, the Company’s net working capital was negative $40.6 million. However, after adjusting for the warrant liability, the Company’s net working capital was positive $24.3 million.

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