XTI Aerospace, Inc. — FY2023 Form 10-K
Reporting context: Fiscal year ended December 31, 2023. The audited statements are those of Inpixon, XTI Aerospace’s predecessor; the XTI Aircraft Company merger closed on March 12, 2024, after year-end. Accordingly, FY2023 results do not include Legacy XTI’s aircraft operations. Amounts below are in U.S. dollars unless stated otherwise.
Business context
After the merger, XTI Aerospace’s primary focus is developing the TriFan 600, a six-seat vertical-takeoff-and-landing aircraft. The company also retains its industrial real-time location systems (RTLS) business. The Enterprise Apps business was spun off in 2023; Shoom, SAVES and other businesses were classified as discontinued operations and substantially divested by February 2024.
Financial performance and liquidity
| Metric | FY2023 | FY2022 | Change |
|---|---|---|---|
| Revenue | $4.562 million | $6.109 million | Down 25% |
| Gross profit / margin | $3.104 million / 68% | $3.988 million / 65% | Margin up 3 percentage points |
| Operating expenses | $30.033 million | $23.232 million | Up $6.801 million |
| Operating loss | $(26.929) million | $(19.244) million | Loss widened |
| Net loss from continuing operations | $(34.350) million | $(19.682) million | Loss widened |
| Net loss attributable to XTI Aerospace stockholders | $(45.947) million | $(63.394) million | Loss narrowed, mainly on lower discontinued-operations losses |
| Adjusted EBITDA, non-GAAP | $(15.862) million | $(11.253) million | Loss widened |
| Net cash used in operating activities | $(29.213) million | $(33.963) million | Cash use decreased |
The gross-margin improvement reflected a higher-than-average-margin Aware product sale. Continuing-operations revenue fell amid longer sales cycles, customer purchasing delays and the shift toward recurring LaaS revenue. Acquisition and transaction costs, higher interest expense and a $3.361 million warrant-inducement expense contributed to the larger continuing-operations loss.
At December 31, 2023, cash was $6.254 million, working capital was reported as a $3.6 million surplus, total assets were $23.769 million and total liabilities were $17.040 million. Short-term debt was $8.738 million, primarily notes due in May 2024; the filing reports interest rates of 8%–10% on notes outstanding. The auditor highlighted substantial doubt about the company’s ability to continue as a going concern, citing losses and the need for additional funding. FY2023 operating cash use was $29.213 million.
Material changes, outlook and risks
- Merger and strategy shift: The March 2024 merger made aircraft development the company’s primary business. Legacy XTI holders received approximately 75% of the combined company on a fully diluted basis; pre-merger company security holders retained approximately 25%.
- TriFan 600 development: The aircraft remained in development. The company estimated it would need approximately $300 million of capital, net of anticipated deposits, to reach the first full-scale flight-test aircraft. Further milestones depend on financing. FAA certification is anticipated in 2028, with no material aircraft sales revenue expected before certification.
- Commercial interest is conditional: The company reported expressions of interest, options, reservations and agreements covering more than 700 aircraft, representing potential gross revenue above $7 billion at its stated $10 million base price. Most are non-binding or conditional; deposits may be refundable, and customers are not generally committed to buy absent definitive agreements and certification.
- RTLS outlook: Management expects Indoor Intelligence product revenue to grow in 2024 and anticipates improving sales cycles. This is qualitative commentary, not quantified financial guidance.
- Post-year-end financing terms: In March 2024, approximately $9.8 million of Streeterville debt was exchanged for Series 9 preferred stock. The preferred stock carries a 10% annual return, compounded annually, and includes restrictive covenants. A related entity controlled by former CEO Nadir Ali separately purchased $1.5 million of Series 9 preferred stock.
- Legal contingency: Xeriant alleges contract breaches and other claims relating to TriFan development and seeks damages exceeding $500 million, injunctive relief and royalties. The case was described as being in its early stages; the company said it could not estimate the likelihood or magnitude of an adverse outcome. Legacy XTI denies wrongdoing and is defending the case.
- Listing and dilution: The company regained Nasdaq minimum-bid-price compliance after a 1-for-100 reverse stock split in March 2024, but later received notice of noncompliance with board-independence and audit-committee requirements and has a cure period. The filing also identifies substantial potential dilution from equity-plan capacity, warrants and future capital needs.
Key facts for investors to verify
- Review the separate Legacy XTI audited financial statements and the merger pro forma information, which the filing said would be filed separately; FY2023 reported results are predecessor-only.
- Confirm current cash, debt maturities, financing raised since year-end and the company’s runway against the stated TriFan funding requirement.
- Assess the binding status, refundable deposits and conversion to definitive purchase agreements for the reported aircraft interest.
- Track FAA certification milestones, full-scale prototype funding and whether the 2028 certification target remains achievable.
- Monitor the Xeriant litigation, Nasdaq governance compliance and the terms, payments and covenants associated with Series 9 preferred stock.