{"success":true,"data":{"pressRelease":{"id":"174747","rtpr_id":"nPn3STWlfa-20261020","ticker":"XTIA","exchange":"NASDAQ","all_tickers":["XTIA"],"title":"XTI Aerospace Reports Second Quarter 2026 Results","author":"PR Newswire","published_at":"2026-10-20T21:15:00.042Z","article_body":"XTI Aerospace Reports Second Quarter 2026 Results\nPR Newswire\n\nMIAMI, Oct. 20, 2026\n\nMIAMI, Oct. 20, 2026 /PRNewswire/ -- XTI Aerospace, Inc. (Nasdaq: XTIA) (\"XTI\nAerospace,\" \"XTI,\" or the \"Company\"), an aerospace and advanced technology\nplatform and parent company of Drone Nerds, LLC, (\"Drone Nerds\"), a leading\ndrone solutions platform serving commercial, enterprise and government\ncustomers, today announced financial results for its second quarter ended June\n30, 2026, and provided an update on the Company's outlook for 2026.\n\n2026 Second Quarter Highlights (Inpixon results excluded and reflected in discontinued\noperations):\n\n * Revenue of $32.4 million\n * Gross profit of $5.6 million\n * Gross profit as a percentage of revenue of approximately 17%\n\"Demand for enterprise drone solutions continues to build across enterprise\nand government buyers and, as one of the nation's leading enterprise drone\nproviders, we believe we are well positioned to capitalize on that\nopportunity,\" said Jeremy Schneiderman, XTI Aerospace's Interim Chief\nExecutive Officer. \"My focus is on building a disciplined organization,\nspending carefully, and executing consistently. Importantly, the leadership\nteam, sales organization and technical experts who built this business remain\nin place and are committed to supporting our customers across public safety,\ngovernment, energy, infrastructure, agriculture and commercial markets.\"\n\n\"While we are navigating a dynamic regulatory environment, including Section\n232 tariffs that took effect on September 3 and other pending drone-related\nregulations, our team remains focused on accelerating growth by strengthening\nour product offerings, increasing our marketing investments, and maintaining\ndisciplined expense management. This is an exciting new chapter for the\nCompany and while we are taking a prudent view towards our full-year outlook,\nwe remain confident in our ability to drive improved performance and deliver\nsustainable growth.\"\n\nUpdated 2026 Financial Outlook and Guidance:\n\n * Full year 2026 revenue of $125 million to $130 million\n * Full year 2026 gross profit as a percentage of revenue of 17 percent to 19\npercent\nThe Company's outlook assumes, among other things, continued access to its\nasset-based credit facility and no material further changes in tariff policy,\nand is subject to the risks described below under \"Cautionary Statement\nRegarding Forward-Looking Statements.\n\n2026 Second Quarter and Recent Events:\n\n * Announced the addition of the XREAL xbx a01+, a lightweight pair of augmented\nreality (\"AR\") screen-casting glasses, to Drone Nerds' product lineup\n * Entered a partnership with DBOX to expand access to autonomous drone docking\nsolutions across the U.S. public safety and government markets through Drone\nNerds' enterprise solutions portfolio\n * Dr. Allan Evans appointed as Chairman of the Board of Directors, and Jeremy\nSchneiderman appointed as Interim CEO, further enhancing the Company's\nexpertise in the U.S. enterprise drone market\n * Completion of the internal review of matters relating to the Company's former\nChief Executive Officer and related corporate governance matters by a\ncommittee of independent directors, assisted by independent counsel,\nconcluding that no financial misstatements were identified.\nLiquidity and Reduction of Corporate Expenses\nAs of June 30, 2026, the Company had $7.2 million of unrestricted cash and\ncash equivalents and $9.1 million of remaining availability on the borrowing\nbase under its credit facility at Drone Nerds.\n\nDuring the second quarter the Company took significant action to reduce its\ncorporate and ADS headcount and related compensation, to consolidate its\noffice footprint, and to terminate non-core consulting, vendor and software\ncontracts. On a preliminary basis, average monthly operating cash outflows of\nthe Company's ADS and corporate operations (excluding Drone Nerds) during the\nthird quarter were approximately $1.1 million per month, down approximately\n42% from the second quarter, and 62% from the first quarter.\n\nAs of September 30, 2026 on a preliminary basis the Company had $5.1 million\nof unrestricted cash and cash equivalents. The Company continues to reduce its\nmonthly cash burn, resulting in an expected transition to positive net cash\nprovided by operating activities during the fourth quarter of 2026.\n\nUnaudited Supplemental Combined Financial Information\nFor purposes of this release, references to \"supplemental combined\" financial\ninformation refer to the unaudited supplemental combined financial information\ndescribed below.\n\nThe Company has provided unaudited supplemental financial information of the\ncombined company in this press release. The following financial information\ncombines XTI and Drone Nerds historical operating results as if the\nbusinesses had been operated together on a combined basis during prior\nperiods. This financial information is intended to illustrate the current\noperating footprint of the Company following the acquisition of Drone Nerds\nand divestiture of the Company's Industrial IoT / Real-Time Location Systems\nbusiness.\n\nThe unaudited supplemental combined financial information is not \"pro forma\"\nfinancial information as that term is used in Article 11 of Regulation S-X.\nThe unaudited supplemental combined financial information was not prepared in\naccordance with Article 11 of Regulation S-X and differs from the unaudited\npro forma condensed combined financial information included in the Current\nReport on Form 8-K/A filed with the SEC on February 9, 2026 (the \"Pro Forma\n8-K Filing\"), which was prepared in accordance with Article 11 of Regulation\nS-X and presented the year ended December 31, 2024 and the nine months ended\nSeptember 30, 2025, which includes the 2025 periods shown in this press\nrelease, but did not present those periods separately. The unaudited\nsupplemental combined financial information was not prepared in accordance\nwith Article 11 of Regulation S-X and is presented for illustrative purposes\nto assist investors in understanding the operational performance of the\ncombined business, timing and operational impact of the acquisition, and\nintegration of the combined business, and should not be considered a\nsubstitute for the pro forma financial information included in the Company's\nprior filings prepared in accordance with Article 11 of Regulation S-X.\n\nConsequently, the unaudited supplemental combined financial information is\nintentionally different from, but does not supersede, the pro forma financial\ninformation set forth in the Pro Forma 8-K Filing or the pro forma financial\ninformation set forth in the Company's most recent annual report on Form 10-K.\n\nIn addition, the unaudited supplemental combined financial information does\nnot purport to indicate the results that actually would have been obtained had\nthe companies been operated together during the periods presented, or which\nmay be realized in the future. The unaudited supplemental combined financial\ninformation has no impact on XTI's or Drone Nerds' previously reported\nconsolidated balance sheets or statements of operations, cash flows or equity.\n XTI Aerospace, Inc. and Subsidiaries\n Pro Forma((1)) Combined Financial Data\n (Unaudited)\n\nFor the Three Months Ended\n June 30,\n (in thousands, except percentages) 2026 2025 $ Change % Change\n (Actual) (Pro Forma)\n Amount Amount\n Revenues $ 32,449 $ 25,130 $ 7,319 29 %\n Gross profit 5,643 6,047 (404) (7) %\n Gross profit % 17.4 % 24.1 % (6.7) % (28) %\n Net loss from continuing operations (850) (13,267) 12,417 (94) %\n\n (1) For information on unaudited supplemental combined financial information\n presented, see the section titled \"Unaudited Supplemental Combined Financial\n Information\" in this press release.\n\nThe unaudited supplemental combined financial information excludes\nnon-recurring transaction-related costs associated with the Drone Nerds\nacquisition.\n\nConference Call\nThe Company will not host a conference call in conjunction with its second\nquarter results. It currently plans to resume conference calls with the\nissuance of its third quarter 2026 results.\n\nAbout XTI Aerospace, Inc.\n\nXTI Aerospace, Inc. (\"XTI\") (Nasdaq: XTIA) is focused on building a leading\nplatform for commercial and government drone adoption in the growing unmanned\naircraft systems (\"UAS\") industry. Through its subsidiary, Drone Nerds, LLC,\nXTI supports enterprise and government customers in sectors including public\nsafety, agriculture, construction, and energy across the drone program\nlifecycle, from hardware sourcing and deployment to training, service, repair,\nand the proprietary Always Flying™ program. Its established U.S. customer\nbase and reputation as a trusted solutions provider position the company as a\ngo-to-market partner for drone manufacturers and software developers seeking\nto scale in the domestic market.\n\nFor more information about XTI, please visit xtiaerospace.com\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=55440180&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D590182085%26u%3Dhttps%253A%252F%252Fxtiaerospace.com%252F%26a%3Dxtiaerospace.com&a=xtiaerospace.com)\n and follow XTI on LinkedIn\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=3194618082&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D1521617855%26u%3Dhttps%253A%252F%252Fwww.linkedin.com%252Fcompany%252Fxtiaerospace%26a%3DLinkedIn&a=LinkedIn)\n, Instagram\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=3235768443&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D331458684%26u%3Dhttps%253A%252F%252Fwww.instagram.com%252Fxtiaerospace%26a%3DInstagram&a=Instagram)\n, X\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=1555267003&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D573868182%26u%3Dhttps%253A%252F%252Fx.com%252FXTIAerospace%26a%3DX&a=X)\n, and YouTube\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=3866540580&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D2492076001%26u%3Dhttps%253A%252F%252Fwww.youtube.com%252F%2540XTIAerospace%26a%3DYouTube&a=YouTube)\n.\n\nCautionary Statement Regarding Forward-Looking Statements\nThis press release contains certain \"forward-looking statements\" within the\nmeaning of the United States Private Securities Litigation Reform Act of 1995,\nSection 27A of the Securities Act of 1933, as amended, and Section 21E of the\nSecurities Exchange Act of 1934, as amended. All statements other than\nstatements of historical fact contained in this press release are\nforward-looking statements.\n\nForward-looking statements may be identified by words such as \"believe,\"\n\"continue,\" \"could,\" \"would,\" \"will,\" \"expect,\" \"intend,\" \"plan,\" \"target,\"\n\"estimate,\" \"project,\" or similar expressions. These statements are subject to\nrisks, uncertainties, and other factors that could cause actual results to\ndiffer materially from those expressed or implied. Such risks include, but are\nnot limited to, the Company's ability to obtain a waiver of the existing\ncross-defaults under its asset-based credit facility and to restructure or\nrepay its acquisition-related promissory notes before the limited waiver\nperiod expires, which may occur on ten days' notice from the noteholders and\nin any event no later than December 31, 2026, the risk that its lender\ndeclines to make further advances or accelerates outstanding borrowings,\nsubstantial doubt about the Company's ability to continue as a going concern,\nthe Company's ability to maintain the listing of its common stock on Nasdaq,\nthe impact of Section 232 tariffs and other trade measures; pending regulatory\ninquiries and proceedings relating to its Anzu Robotics subsidiary; potential\nconflicts of interest arising from its Interim Chief Executive Officer's\neconomic interest in the holders of its acquisition-related notes, market\nadoption, regulatory requirements, supply chain conditions, technological\ndevelopment, integration of the acquired businesses, the Company's liquidity\nand ability to access additional capital on acceptable terms or at all, the\nCompany's negative stockholders' equity and the sufficiency of its capital\nresources, and changes in applicable laws or regulations, customer demand\nvariability and seasonal purchasing patterns, the Company's ability to achieve\nprojected gross margins and operating cost reductions, working capital timing\nand inventory management, the outcome of pending legal proceedings involving\nthe Company and its subsidiaries, the Company's ability to maintain\nrelationships with key suppliers, restrictions and covenants under the\nCompany's ABL credit facility, risks related to the wind-down of the\nCompany's ADS division and the development of its ATM division, which has not\ngenerated revenues, and the potential for significant non-cash charges related\nto changes in the fair value of warrant liabilities as well as the other\nrisks and uncertainties described in the Company's filings with the SEC. The\nCompany's financial outlook and other projections in this press release are\nbased on management's current expectations and assumptions and are\nparticularly subject to these risks. XTI undertakes no obligation to update\nany forward-looking statements to reflect subsequent events or circumstances,\nexcept as required by applicable law. Readers are encouraged to review the\nrisk factors described in XTI's filings with the SEC, including its most\nrecent Annual Report on Form 10-K and subsequent filings.\n\nContacts:\n\nGeneral inquiries:\nEmail: contact@xtiaerospace.com (mailto:contact@xtiaerospace.com)\nWeb: https://xtiaerospace.com/contact\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=3212952909&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D2224940040%26u%3Dhttps%253A%252F%252Fxtiaerospace.com%252Fcontact%26a%3Dhttps%253A%252F%252Fxtiaerospace.com%252Fcontact&a=https%3A%2F%2Fxtiaerospace.com%2Fcontact)\n\nInvestor Relations:\nIR@xtiaerospace.com (mailto:IR@xtiaerospace.com)\n XTI Aerospace, Inc. and Subsidiaries\n Consolidated Statements of Operations\n (In thousands, except share and per share data)\n (Unaudited)\n For the Three Months Ended For the Six Months Ended\n June 30, June 30,\n 2026 2025 2026 2025\n Revenues $ 32,449 $ — $ 60,145 $ —\n Cost of Revenues 26,806 — 49,356 —\n Gross Profit 5,643 — 10,789 —\n Operating Expenses\n Research and development 577 1,380 1,774 2,504\n Sales and marketing 1,975 934 4,338 1,209\n General and administrative 11,855 3,474 23,601 10,270\n Merger and acquisition transaction costs 90 — 90 —\n Amortization of intangible assets 228 8 458 16\n Total Operating Expenses 14,725 5,796 30,261 13,999\n Loss from Operations (9,082) (5,796) (19,472) (13,999)\n Other Income (Expense)\n Interest expense, net (148) (1) (302) (218)\n Loss on extinguishment of debt — — — (421)\n Warrant issuance expense — (3,779) — (5,795)\n Change in fair value of warrant liability 8,413 (5,934) (13,034) (5,431)\n Other (33) (5) 212 (349)\n Total Other Income (Expense) 8,232 (9,719) (13,124) (12,214)\n Loss from Continuing Operations Before Income (850) (15,515) (32,596) (26,213)\n Taxes\n Income tax (expense) benefit — (9) — 6\n Net Loss from Continuing Operations, net of tax (850) (15,524) (32,596) (26,207)\n Loss from operations of discontinued component, (1,600) (5,334) (4,852) (7,523)\n inclusive of tax\n Net loss (2,450) (20,858) (37,448) (33,730)\n Net income attributable to noncontrolling interest 304 — 576 —\n Net Loss Attributable to XTI Aerospace, Inc (2,754) (20,858) (38,024) (33,730)\n Less: Preferred stock dividends — — 42 29\n Net Loss Attributable to Common Stockholders $ (2,754) $ (20,858) $ (38,066) $ (33,759)\n Net Loss Per Share - Basic and Diluted:\n Continuing operations $ (0.03) $ (2.18) $ (0.90) $ (4.98)\n Discontinued operations $ (0.04) $ (0.75) $ (0.13) $ (1.43)\n Net loss per share $ (0.07) $ (2.93) $ (1.03) $ (6.41)\n Weighted Average Shares Outstanding, Basic and 38,476,439 7,121,837 36,857,677 5,263,609\n Diluted\n\n Net loss per share from continuing and discontinued operations is calculated\n based on net loss attributable to common stockholders. Preferred stock\n dividends and deemed dividends are allocated to continuing and discontinued\n operations on a proportional basis.\n\n \n XTI Aerospace, Inc. and Subsidiaries\n Consolidated Balance Sheets\n (In thousands)\n (Unaudited)\n As of June 30, As of December 31,\n 2026 2025\n Assets\n Current Assets\n Cash and cash equivalents $ 7,214 $ 16,696\n Accounts receivable, net 13,170 12,093\n Inventories 19,092 15,400\n Prepaid expenses and other current assets 5,864 3,989\n Current assets of discontinued operations — 3,645\n Total Current Assets 45,340 51,823\n Property and equipment, net 401 385\n Operating lease right-of-use asset, net 1,511 2,965\n Intangible assets, net 8,879 9,338\n Goodwill 11,544 11,544\n Note receivable 4,286 —\n Other assets 879 403\n Non-current assets of discontinued operations — 4,788\n Total Assets $ 72,840 $ 81,246\n Liabilities, Mezzanine Equity and Stockholders' Equity (Deficit)\n Current Liabilities\n Accounts payable $ 2,590 $ 5,212\n Accrued expenses and other current liabilities 7,738 6,556\n Customer deposits 1,916 3,071\n Warrant liability 56,482 22,561\n Operating lease obligation, current 630 550\n Note payable-related party 450 —\n Acquisition-related promissory note-related party 4,431 7,931\n Asset-based revolving line of credit 8,760 —\n Income tax payable 1,241 —\n Current liabilities of discontinued operations — 1,722\n Total Current Liabilities 84,238 47,603\n Note payable-related party — 450\n Operating lease obligation, noncurrent 909 2,427\n Non-current liabilities of discontinued operations — 322\n Total Liabilities 85,147 50,802\n Commitments and Contingencies\n Mezzanine Equity\n Representative and placement agent warrants, net of issuance costs 2,701 2,701\n Stockholders' Equity (Deficit)\n Preferred Stock — —\n Series 4 Convertible Preferred Stock — —\n Series 5 Convertible Preferred Stock — —\n Series 9 Convertible Preferred Stock — —\n Series 10 Convertible Preferred Stock — 21,793\n Common Stock 38 33\n Additional paid-in capital 174,720 157,354\n Accumulated other comprehensive income — 881\n Accumulated deficit (200,347) (162,323)\n Total Stockholders' Equity (Deficit) (25,589) 17,738\n Noncontrolling interest 10,581 10,005\n Total Equity (Deficit) (15,008) 27,743\n Total Liabilities, Mezzanine Equity and Equity (Deficit) $ 72,840 $ 81,246\n\n \n XTI Aerospace, Inc. and Subsidiaries\n Consolidated Statements of Cash Flows\n (In thousands)\n (Unaudited)\n For the Six Months Ended June 30,\n 2026 2025\n Cash Flows Used in Operating Activities\n Net loss $ (37,448) $ (33,730)\n Adjustments to reconcile net loss to net cash used in operating activities:\n Depreciation and amortization 110 68\n Amortization of intangible assets 458 152\n Amortization of right-of-use asset 390 76\n Non-cash interest (income) expense, net (206) 145\n Stock-based compensation 8,619 1,177\n Impairment of goodwill — 4,049\n Impairment of intangible assets — 631\n Loss on extinguishment of debt — 421\n Warrant issuance expense — 5,795\n Change in fair value of warrant liability 13,034 5,431\n Loss on sale of Inpixon Business 831 —\n Other income (250) —\n Other 257 (291)\n Changes in operating assets and liabilities:\n Accounts receivable and other receivables 203 401\n Inventories (3,673) (4)\n Prepaid expenses and other current assets (1,582) (264)\n Other assets (19) 362\n Accounts payable (2,648) (1,814)\n Related party payables — (51)\n Accrued expenses and other current liabilities 2,256 (4,838)\n Customer deposits (980) 376\n Operating lease obligation (360) (75)\n Net Cash Used in Operating Activities (21,008) (21,983)\n Cash Flows Used in Investing Activities\n Purchase of property and equipment (170) (103)\n Net cash paid on disposal of the Inpixon Business (694) —\n Net Cash Used in Investing Activities (864) (103)\n Cash Flows Provided by Financing Activities\n Proceeds from the exercise of liability classified warrants 7,927 3,771\n Payment of offering costs and commissions in connection with exercise of (488) —\n liability\n classified warrants\n Net proceeds from sale of common stock and pre-funded warrants via public — 36,396\n offerings\n Net proceeds from ATM stock offering — 1,667\n Redemption of Series 9 preferred stock — (1,427)\n Borrowings on asset-based revolving line of credit 45,008 —\n Repayment of borrowings on asset-based revolving line of credit (36,248) —\n Payment of debt issuance costs (565) —\n Repayments of promissory notes-related party (3,500) (2,719)\n Net Cash Provided by Financing Activities 12,134 37,688\n Effect of Foreign Exchange Rate on Changes on Cash 33 339\n Net (Decrease) Increase in Cash and Cash Equivalents (9,705) 15,941\n Cash and Cash Equivalents - Beginning of period 16,919 4,105\n Cash and Cash Equivalents - End of period $ 7,214 $ 20,046\n\n \n\nView original content to download\nmultimedia:https://www.prnewswire.com/news-releases/xti-aerospace-reports-second-quarter-2026-results-302914652.html\n(https://www.prnewswire.com/news-releases/xti-aerospace-reports-second-quarter-2026-results-302914652.html)\n\nSOURCE XTI Aerospace, Inc.\n\n\n\nPhoto: \nhttps://mmx.prnewswire.com/media/MS1663093/XTI-Aerospace-Vertical-Logo-Black.jpg?id=OA3029930\n\nCopyright (c) 2026 PR Newswire Association,LLC. All Rights Reserved.","article_body_html":"","raw_payload":{"data":{"id":"nPn3STWlfa-20261020","title":"XTI Aerospace Reports Second Quarter 2026 Results","author":"PR Newswire","ticker":"XTIA","created":"2026-10-20T21:15:00.042Z","tickers":["XTIA"],"exchange":"NASDAQ","article_body":"XTI Aerospace Reports Second Quarter 2026 Results\nPR Newswire\n\nMIAMI, Oct. 20, 2026\n\nMIAMI, Oct. 20, 2026 /PRNewswire/ -- XTI Aerospace, Inc. (Nasdaq: XTIA) (\"XTI\nAerospace,\" \"XTI,\" or the \"Company\"), an aerospace and advanced technology\nplatform and parent company of Drone Nerds, LLC, (\"Drone Nerds\"), a leading\ndrone solutions platform serving commercial, enterprise and government\ncustomers, today announced financial results for its second quarter ended June\n30, 2026, and provided an update on the Company's outlook for 2026.\n\n2026 Second Quarter Highlights (Inpixon results excluded and reflected in discontinued\noperations):\n\n * Revenue of $32.4 million\n * Gross profit of $5.6 million\n * Gross profit as a percentage of revenue of approximately 17%\n\"Demand for enterprise drone solutions continues to build across enterprise\nand government buyers and, as one of the nation's leading enterprise drone\nproviders, we believe we are well positioned to capitalize on that\nopportunity,\" said Jeremy Schneiderman, XTI Aerospace's Interim Chief\nExecutive Officer. \"My focus is on building a disciplined organization,\nspending carefully, and executing consistently. Importantly, the leadership\nteam, sales organization and technical experts who built this business remain\nin place and are committed to supporting our customers across public safety,\ngovernment, energy, infrastructure, agriculture and commercial markets.\"\n\n\"While we are navigating a dynamic regulatory environment, including Section\n232 tariffs that took effect on September 3 and other pending drone-related\nregulations, our team remains focused on accelerating growth by strengthening\nour product offerings, increasing our marketing investments, and maintaining\ndisciplined expense management. This is an exciting new chapter for the\nCompany and while we are taking a prudent view towards our full-year outlook,\nwe remain confident in our ability to drive improved performance and deliver\nsustainable growth.\"\n\nUpdated 2026 Financial Outlook and Guidance:\n\n * Full year 2026 revenue of $125 million to $130 million\n * Full year 2026 gross profit as a percentage of revenue of 17 percent to 19\npercent\nThe Company's outlook assumes, among other things, continued access to its\nasset-based credit facility and no material further changes in tariff policy,\nand is subject to the risks described below under \"Cautionary Statement\nRegarding Forward-Looking Statements.\n\n2026 Second Quarter and Recent Events:\n\n * Announced the addition of the XREAL xbx a01+, a lightweight pair of augmented\nreality (\"AR\") screen-casting glasses, to Drone Nerds' product lineup\n * Entered a partnership with DBOX to expand access to autonomous drone docking\nsolutions across the U.S. public safety and government markets through Drone\nNerds' enterprise solutions portfolio\n * Dr. Allan Evans appointed as Chairman of the Board of Directors, and Jeremy\nSchneiderman appointed as Interim CEO, further enhancing the Company's\nexpertise in the U.S. enterprise drone market\n * Completion of the internal review of matters relating to the Company's former\nChief Executive Officer and related corporate governance matters by a\ncommittee of independent directors, assisted by independent counsel,\nconcluding that no financial misstatements were identified.\nLiquidity and Reduction of Corporate Expenses\nAs of June 30, 2026, the Company had $7.2 million of unrestricted cash and\ncash equivalents and $9.1 million of remaining availability on the borrowing\nbase under its credit facility at Drone Nerds.\n\nDuring the second quarter the Company took significant action to reduce its\ncorporate and ADS headcount and related compensation, to consolidate its\noffice footprint, and to terminate non-core consulting, vendor and software\ncontracts. On a preliminary basis, average monthly operating cash outflows of\nthe Company's ADS and corporate operations (excluding Drone Nerds) during the\nthird quarter were approximately $1.1 million per month, down approximately\n42% from the second quarter, and 62% from the first quarter.\n\nAs of September 30, 2026 on a preliminary basis the Company had $5.1 million\nof unrestricted cash and cash equivalents. The Company continues to reduce its\nmonthly cash burn, resulting in an expected transition to positive net cash\nprovided by operating activities during the fourth quarter of 2026.\n\nUnaudited Supplemental Combined Financial Information\nFor purposes of this release, references to \"supplemental combined\" financial\ninformation refer to the unaudited supplemental combined financial information\ndescribed below.\n\nThe Company has provided unaudited supplemental financial information of the\ncombined company in this press release. The following financial information\ncombines XTI and Drone Nerds historical operating results as if the\nbusinesses had been operated together on a combined basis during prior\nperiods. This financial information is intended to illustrate the current\noperating footprint of the Company following the acquisition of Drone Nerds\nand divestiture of the Company's Industrial IoT / Real-Time Location Systems\nbusiness.\n\nThe unaudited supplemental combined financial information is not \"pro forma\"\nfinancial information as that term is used in Article 11 of Regulation S-X.\nThe unaudited supplemental combined financial information was not prepared in\naccordance with Article 11 of Regulation S-X and differs from the unaudited\npro forma condensed combined financial information included in the Current\nReport on Form 8-K/A filed with the SEC on February 9, 2026 (the \"Pro Forma\n8-K Filing\"), which was prepared in accordance with Article 11 of Regulation\nS-X and presented the year ended December 31, 2024 and the nine months ended\nSeptember 30, 2025, which includes the 2025 periods shown in this press\nrelease, but did not present those periods separately. The unaudited\nsupplemental combined financial information was not prepared in accordance\nwith Article 11 of Regulation S-X and is presented for illustrative purposes\nto assist investors in understanding the operational performance of the\ncombined business, timing and operational impact of the acquisition, and\nintegration of the combined business, and should not be considered a\nsubstitute for the pro forma financial information included in the Company's\nprior filings prepared in accordance with Article 11 of Regulation S-X.\n\nConsequently, the unaudited supplemental combined financial information is\nintentionally different from, but does not supersede, the pro forma financial\ninformation set forth in the Pro Forma 8-K Filing or the pro forma financial\ninformation set forth in the Company's most recent annual report on Form 10-K.\n\nIn addition, the unaudited supplemental combined financial information does\nnot purport to indicate the results that actually would have been obtained had\nthe companies been operated together during the periods presented, or which\nmay be realized in the future. The unaudited supplemental combined financial\ninformation has no impact on XTI's or Drone Nerds' previously reported\nconsolidated balance sheets or statements of operations, cash flows or equity.\n XTI Aerospace, Inc. and Subsidiaries\n Pro Forma((1)) Combined Financial Data\n (Unaudited)\n\nFor the Three Months Ended\n June 30,\n (in thousands, except percentages) 2026 2025 $ Change % Change\n (Actual) (Pro Forma)\n Amount Amount\n Revenues $ 32,449 $ 25,130 $ 7,319 29 %\n Gross profit 5,643 6,047 (404) (7) %\n Gross profit % 17.4 % 24.1 % (6.7) % (28) %\n Net loss from continuing operations (850) (13,267) 12,417 (94) %\n\n (1) For information on unaudited supplemental combined financial information\n presented, see the section titled \"Unaudited Supplemental Combined Financial\n Information\" in this press release.\n\nThe unaudited supplemental combined financial information excludes\nnon-recurring transaction-related costs associated with the Drone Nerds\nacquisition.\n\nConference Call\nThe Company will not host a conference call in conjunction with its second\nquarter results. It currently plans to resume conference calls with the\nissuance of its third quarter 2026 results.\n\nAbout XTI Aerospace, Inc.\n\nXTI Aerospace, Inc. (\"XTI\") (Nasdaq: XTIA) is focused on building a leading\nplatform for commercial and government drone adoption in the growing unmanned\naircraft systems (\"UAS\") industry. Through its subsidiary, Drone Nerds, LLC,\nXTI supports enterprise and government customers in sectors including public\nsafety, agriculture, construction, and energy across the drone program\nlifecycle, from hardware sourcing and deployment to training, service, repair,\nand the proprietary Always Flying™ program. Its established U.S. customer\nbase and reputation as a trusted solutions provider position the company as a\ngo-to-market partner for drone manufacturers and software developers seeking\nto scale in the domestic market.\n\nFor more information about XTI, please visit xtiaerospace.com\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=55440180&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D590182085%26u%3Dhttps%253A%252F%252Fxtiaerospace.com%252F%26a%3Dxtiaerospace.com&a=xtiaerospace.com)\n and follow XTI on LinkedIn\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=3194618082&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D1521617855%26u%3Dhttps%253A%252F%252Fwww.linkedin.com%252Fcompany%252Fxtiaerospace%26a%3DLinkedIn&a=LinkedIn)\n, Instagram\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=3235768443&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D331458684%26u%3Dhttps%253A%252F%252Fwww.instagram.com%252Fxtiaerospace%26a%3DInstagram&a=Instagram)\n, X\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=1555267003&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D573868182%26u%3Dhttps%253A%252F%252Fx.com%252FXTIAerospace%26a%3DX&a=X)\n, and YouTube\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=3866540580&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D2492076001%26u%3Dhttps%253A%252F%252Fwww.youtube.com%252F%2540XTIAerospace%26a%3DYouTube&a=YouTube)\n.\n\nCautionary Statement Regarding Forward-Looking Statements\nThis press release contains certain \"forward-looking statements\" within the\nmeaning of the United States Private Securities Litigation Reform Act of 1995,\nSection 27A of the Securities Act of 1933, as amended, and Section 21E of the\nSecurities Exchange Act of 1934, as amended. All statements other than\nstatements of historical fact contained in this press release are\nforward-looking statements.\n\nForward-looking statements may be identified by words such as \"believe,\"\n\"continue,\" \"could,\" \"would,\" \"will,\" \"expect,\" \"intend,\" \"plan,\" \"target,\"\n\"estimate,\" \"project,\" or similar expressions. These statements are subject to\nrisks, uncertainties, and other factors that could cause actual results to\ndiffer materially from those expressed or implied. Such risks include, but are\nnot limited to, the Company's ability to obtain a waiver of the existing\ncross-defaults under its asset-based credit facility and to restructure or\nrepay its acquisition-related promissory notes before the limited waiver\nperiod expires, which may occur on ten days' notice from the noteholders and\nin any event no later than December 31, 2026, the risk that its lender\ndeclines to make further advances or accelerates outstanding borrowings,\nsubstantial doubt about the Company's ability to continue as a going concern,\nthe Company's ability to maintain the listing of its common stock on Nasdaq,\nthe impact of Section 232 tariffs and other trade measures; pending regulatory\ninquiries and proceedings relating to its Anzu Robotics subsidiary; potential\nconflicts of interest arising from its Interim Chief Executive Officer's\neconomic interest in the holders of its acquisition-related notes, market\nadoption, regulatory requirements, supply chain conditions, technological\ndevelopment, integration of the acquired businesses, the Company's liquidity\nand ability to access additional capital on acceptable terms or at all, the\nCompany's negative stockholders' equity and the sufficiency of its capital\nresources, and changes in applicable laws or regulations, customer demand\nvariability and seasonal purchasing patterns, the Company's ability to achieve\nprojected gross margins and operating cost reductions, working capital timing\nand inventory management, the outcome of pending legal proceedings involving\nthe Company and its subsidiaries, the Company's ability to maintain\nrelationships with key suppliers, restrictions and covenants under the\nCompany's ABL credit facility, risks related to the wind-down of the\nCompany's ADS division and the development of its ATM division, which has not\ngenerated revenues, and the potential for significant non-cash charges related\nto changes in the fair value of warrant liabilities as well as the other\nrisks and uncertainties described in the Company's filings with the SEC. The\nCompany's financial outlook and other projections in this press release are\nbased on management's current expectations and assumptions and are\nparticularly subject to these risks. XTI undertakes no obligation to update\nany forward-looking statements to reflect subsequent events or circumstances,\nexcept as required by applicable law. Readers are encouraged to review the\nrisk factors described in XTI's filings with the SEC, including its most\nrecent Annual Report on Form 10-K and subsequent filings.\n\nContacts:\n\nGeneral inquiries:\nEmail: contact@xtiaerospace.com (mailto:contact@xtiaerospace.com)\nWeb: https://xtiaerospace.com/contact\n(https://edge.prnewswire.com/c/link/?t=0&l=en&o=4802455-1&h=3212952909&u=https%3A%2F%2Fedge.prnewswire.com%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4764440-1%26h%3D2224940040%26u%3Dhttps%253A%252F%252Fxtiaerospace.com%252Fcontact%26a%3Dhttps%253A%252F%252Fxtiaerospace.com%252Fcontact&a=https%3A%2F%2Fxtiaerospace.com%2Fcontact)\n\nInvestor Relations:\nIR@xtiaerospace.com (mailto:IR@xtiaerospace.com)\n XTI Aerospace, Inc. and Subsidiaries\n Consolidated Statements of Operations\n (In thousands, except share and per share data)\n (Unaudited)\n For the Three Months Ended For the Six Months Ended\n June 30, June 30,\n 2026 2025 2026 2025\n Revenues $ 32,449 $ — $ 60,145 $ —\n Cost of Revenues 26,806 — 49,356 —\n Gross Profit 5,643 — 10,789 —\n Operating Expenses\n Research and development 577 1,380 1,774 2,504\n Sales and marketing 1,975 934 4,338 1,209\n General and administrative 11,855 3,474 23,601 10,270\n Merger and acquisition transaction costs 90 — 90 —\n Amortization of intangible assets 228 8 458 16\n Total Operating Expenses 14,725 5,796 30,261 13,999\n Loss from Operations (9,082) (5,796) (19,472) (13,999)\n Other Income (Expense)\n Interest expense, net (148) (1) (302) (218)\n Loss on extinguishment of debt — — — (421)\n Warrant issuance expense — (3,779) — (5,795)\n Change in fair value of warrant liability 8,413 (5,934) (13,034) (5,431)\n Other (33) (5) 212 (349)\n Total Other Income (Expense) 8,232 (9,719) (13,124) (12,214)\n Loss from Continuing Operations Before Income (850) (15,515) (32,596) (26,213)\n Taxes\n Income tax (expense) benefit — (9) — 6\n Net Loss from Continuing Operations, net of tax (850) (15,524) (32,596) (26,207)\n Loss from operations of discontinued component, (1,600) (5,334) (4,852) (7,523)\n inclusive of tax\n Net loss (2,450) (20,858) (37,448) (33,730)\n Net income attributable to noncontrolling interest 304 — 576 —\n Net Loss Attributable to XTI Aerospace, Inc (2,754) (20,858) (38,024) (33,730)\n Less: Preferred stock dividends — — 42 29\n Net Loss Attributable to Common Stockholders $ (2,754) $ (20,858) $ (38,066) $ (33,759)\n Net Loss Per Share - Basic and Diluted:\n Continuing operations $ (0.03) $ (2.18) $ (0.90) $ (4.98)\n Discontinued operations $ (0.04) $ (0.75) $ (0.13) $ (1.43)\n Net loss per share $ (0.07) $ (2.93) $ (1.03) $ (6.41)\n Weighted Average Shares Outstanding, Basic and 38,476,439 7,121,837 36,857,677 5,263,609\n Diluted\n\n Net loss per share from continuing and discontinued operations is calculated\n based on net loss attributable to common stockholders. Preferred stock\n dividends and deemed dividends are allocated to continuing and discontinued\n operations on a proportional basis.\n\n \n XTI Aerospace, Inc. and Subsidiaries\n Consolidated Balance Sheets\n (In thousands)\n (Unaudited)\n As of June 30, As of December 31,\n 2026 2025\n Assets\n Current Assets\n Cash and cash equivalents $ 7,214 $ 16,696\n Accounts receivable, net 13,170 12,093\n Inventories 19,092 15,400\n Prepaid expenses and other current assets 5,864 3,989\n Current assets of discontinued operations — 3,645\n Total Current Assets 45,340 51,823\n Property and equipment, net 401 385\n Operating lease right-of-use asset, net 1,511 2,965\n Intangible assets, net 8,879 9,338\n Goodwill 11,544 11,544\n Note receivable 4,286 —\n Other assets 879 403\n Non-current assets of discontinued operations — 4,788\n Total Assets $ 72,840 $ 81,246\n Liabilities, Mezzanine Equity and Stockholders' Equity (Deficit)\n Current Liabilities\n Accounts payable $ 2,590 $ 5,212\n Accrued expenses and other current liabilities 7,738 6,556\n Customer deposits 1,916 3,071\n Warrant liability 56,482 22,561\n Operating lease obligation, current 630 550\n Note payable-related party 450 —\n Acquisition-related promissory note-related party 4,431 7,931\n Asset-based revolving line of credit 8,760 —\n Income tax payable 1,241 —\n Current liabilities of discontinued operations — 1,722\n Total Current Liabilities 84,238 47,603\n Note payable-related party — 450\n Operating lease obligation, noncurrent 909 2,427\n Non-current liabilities of discontinued operations — 322\n Total Liabilities 85,147 50,802\n Commitments and Contingencies\n Mezzanine Equity\n Representative and placement agent warrants, net of issuance costs 2,701 2,701\n Stockholders' Equity (Deficit)\n Preferred Stock — —\n Series 4 Convertible Preferred Stock — —\n Series 5 Convertible Preferred Stock — —\n Series 9 Convertible Preferred Stock — —\n Series 10 Convertible Preferred Stock — 21,793\n Common Stock 38 33\n Additional paid-in capital 174,720 157,354\n Accumulated other comprehensive income — 881\n Accumulated deficit (200,347) (162,323)\n Total Stockholders' Equity (Deficit) (25,589) 17,738\n Noncontrolling interest 10,581 10,005\n Total Equity (Deficit) (15,008) 27,743\n Total Liabilities, Mezzanine Equity and Equity (Deficit) $ 72,840 $ 81,246\n\n \n XTI Aerospace, Inc. and Subsidiaries\n Consolidated Statements of Cash Flows\n (In thousands)\n (Unaudited)\n For the Six Months Ended June 30,\n 2026 2025\n Cash Flows Used in Operating Activities\n Net loss $ (37,448) $ (33,730)\n Adjustments to reconcile net loss to net cash used in operating activities:\n Depreciation and amortization 110 68\n Amortization of intangible assets 458 152\n Amortization of right-of-use asset 390 76\n Non-cash interest (income) expense, net (206) 145\n Stock-based compensation 8,619 1,177\n Impairment of goodwill — 4,049\n Impairment of intangible assets — 631\n Loss on extinguishment of debt — 421\n Warrant issuance expense — 5,795\n Change in fair value of warrant liability 13,034 5,431\n Loss on sale of Inpixon Business 831 —\n Other income (250) —\n Other 257 (291)\n Changes in operating assets and liabilities:\n Accounts receivable and other receivables 203 401\n Inventories (3,673) (4)\n Prepaid expenses and other current assets (1,582) (264)\n Other assets (19) 362\n Accounts payable (2,648) (1,814)\n Related party payables — (51)\n Accrued expenses and other current liabilities 2,256 (4,838)\n Customer deposits (980) 376\n Operating lease obligation (360) (75)\n Net Cash Used in Operating Activities (21,008) (21,983)\n Cash Flows Used in Investing Activities\n Purchase of property and equipment (170) (103)\n Net cash paid on disposal of the Inpixon Business (694) —\n Net Cash Used in Investing Activities (864) (103)\n Cash Flows Provided by Financing Activities\n Proceeds from the exercise of liability classified warrants 7,927 3,771\n Payment of offering costs and commissions in connection with exercise of (488) —\n liability\n classified warrants\n Net proceeds from sale of common stock and pre-funded warrants via public — 36,396\n offerings\n Net proceeds from ATM stock offering — 1,667\n Redemption of Series 9 preferred stock — (1,427)\n Borrowings on asset-based revolving line of credit 45,008 —\n Repayment of borrowings on asset-based revolving line of credit (36,248) —\n Payment of debt issuance costs (565) —\n Repayments of promissory notes-related party (3,500) (2,719)\n Net Cash Provided by Financing Activities 12,134 37,688\n Effect of Foreign Exchange Rate on Changes on Cash 33 339\n Net (Decrease) Increase in Cash and Cash Equivalents (9,705) 15,941\n Cash and Cash Equivalents - Beginning of period 16,919 4,105\n Cash and Cash Equivalents - End of period $ 7,214 $ 20,046\n\n \n\nView original content to download\nmultimedia:https://www.prnewswire.com/news-releases/xti-aerospace-reports-second-quarter-2026-results-302914652.html\n(https://www.prnewswire.com/news-releases/xti-aerospace-reports-second-quarter-2026-results-302914652.html)\n\nSOURCE XTI Aerospace, Inc.\n\n\n\nPhoto: \nhttps://mmx.prnewswire.com/media/MS1663093/XTI-Aerospace-Vertical-Logo-Black.jpg?id=OA3029930\n\nCopyright (c) 2026 PR Newswire Association,LLC. All Rights Reserved."},"type":"article","timestamp":"2026-10-20T21:15:00.112817999Z","server_sent_at_ms":1792530900112},"received_at":"2026-10-20T21:15:00.270Z","source_url":"https://www.prnewswire.com/news-releases/xti-aerospace-reports-second-quarter-2026-results-302914652.html"},"analysis":{"id":"162801","press_release_id":"174747","analysis_json":{"industry":{"label":"Aerospace & Defense","sector":"Industrials"},"redFlags":["substantial doubt about the Company's ability to continue as a going concern","cross-default waiver on acquisition-related notes can expire on ten days' notice and no later than December 31, 2026","negative stockholders' equity of -$25.6M and negative total equity of -$15.0M","warrant liability of $56.5M vs $7.2M cash creates large non-cash fair-value swings and potential dilution","gross margin compressed ~670bps YoY (24.1% to 17.4%)","lender may decline further advances or accelerate borrowings","pending regulatory inquiries relating to Anzu Robotics subsidiary; Nasdaq listing maintenance risk","Interim CEO conflict of interest via economic interest in holders of acquisition-related notes"],"eventType":"earnings","narrative":"XTI Aerospace reported Q2 2026 revenue of $32.4 million, up 29% YoY on a pro forma combined basis, with gross profit of $5.6 million and a net loss from continuing operations of $0.85 million.\n\nGross margin compressed to 17.4% from 24.1% a year earlier, and the company guided full-year 2026 revenue to $125-130 million with 17-19% gross margin.\n\nLiquidity is the pressing issue: cash fell from $7.2 million at June 30 to a preliminary $5.1 million at September 30, stockholders' equity is negative at -$25.6 million, and the release discloses substantial doubt about going concern plus a cross-default on acquisition-related notes whose limited waiver can end on ten days' notice and no later than December 31, 2026.\n\nOffsetting positives include a 42% cut in corporate monthly cash burn, an expected transition to positive operating cash flow in Q4 2026, completion of the internal governance review finding no financial misstatements, and new leadership with Jeremy Schneiderman as Interim CEO.","sentiment":"bearish","agentHooks":{"shouldPost":true,"suggestedAngle":"Revenue growth masks a solvency story: going-concern doubt, negative equity, and a December cross-default deadline dwarf the 29% top-line gain."},"keyFigures":{"revenue":32449000,"guidance":"FY2026 revenue $125 million to $130 million; 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gross margin 17-19%","revenueYoy":"29%","customDimensions":{"gross_margin":"17.4%","gross_profit":5643000,"warrant_liability":56482000,"corporate_monthly_burn":"$1.1 million per month, down ~42% QoQ","prior_year_gross_margin":"24.1%","unrestricted_cash_jun30":7214000,"credit_facility_availability":9100000,"unrestricted_cash_sep30_prelim":5100000}},"named_entities":{"people":[{"name":"Jeremy Schneiderman","role":"Interim CEO"},{"name":"Dr. Allan Evans","role":"Chairman of the Board"}],"products":["XREAL xbx a01+","Always Flying"],"companies":[{"name":"XTI Aerospace, Inc.","ticker":"XTIA","relationship":"filer"},{"name":"Drone Nerds, LLC","relationship":"subsidiary"},{"name":"Anzu Robotics","relationship":"subsidiary (subject of pending regulatory inquiries)"},{"name":"DBOX","relationship":"partner"}],"dollarAmounts":[{"amount":"$32.4 million","context":"Q2 2026 revenue"},{"amount":"$5.6 million","context":"Q2 2026 gross profit"},{"amount":"$125 million to $130 million","context":"full year 2026 revenue guidance"},{"amount":"$7.2 million","context":"unrestricted cash as of June 30, 2026"},{"amount":"$5.1 million","context":"preliminary unrestricted cash as of September 30, 2026"},{"amount":"$9.1 million","context":"remaining borrowing-base availability under credit facility"},{"amount":"$1.1 million","context":"approximate monthly ADS/corporate operating cash outflow in Q3"}]},"model_name":"glm-5.3-flashx","prompt_hash":"sha256:5c812bd9e28b810d","schema_hash":"sha256:05005c02d9cffac9","created_at":"2026-10-20T21:15:08.589Z","global_importance":35,"audience_relevance":30,"importance_components":{"tickerTier":"micro-cap","eventGravity":"earnings-with-going-concern","goingConcern":true,"retailFavoriteBoost":"small — drone/UAS theme has some retail interest"}},"durationMs":8295,"modelName":"glm-5.3-flashx"}}