XTI Aerospace, Inc. Goodwill & Intangibles Disclosure
Note 7 - Goodwill and Intangible Assets
Goodwill
Goodwill represents the excess of the purchase price over the estimated fair value of identifiable net assets acquired in business combinations.
In connection with the XTI Merger in March 2024, the Company recognized goodwill of approximately $12.4 million related to its Inpixon Business (see Note 19).
The following table summarizes the changes in the carrying amount of Goodwill for the year ended December 31, 2025 (in thousands):
| Inpixon Business (Discontinued) | UAS – Drone Nerds (Continuing) | |||||||
| Beginning balance - January 1, 2024 | $ | $ | ||||||
| Goodwill recognized in connection with XTI Merger | 12,398 | |||||||
| Foreign currency translation adjustment | (326 | ) | ||||||
| Ending balance – December 31, 2024 | 12,072 | |||||||
| Goodwill recognized in connection with Drone Nerds acquisition | 11,544 | |||||||
| Foreign currency translation adjustment | 1,132 | |||||||
| Impairment | (9,895 | ) | ||||||
| Ending balance – December 31, 2025 | $ | 3,309 | $ | 11,544 | ||||
Impairment – Inpixon Business (Discontinued Operations)
During 2025, the Company recognized goodwill impairment charges related to the Inpixon Business, which is presented as discontinued operations. These charges are reflected in the goodwill rollforward above. See Note 19 – Discontinued Operations for additional information regarding the impairment and classification of the Inpixon Business.
UAS Reporting Unit (Drone Nerds)
Goodwill of approximately $11.5 million was recognized in connection with the Drone Nerds acquisition on November 10, 2025. The goodwill is attributable to expected synergies, expanded distribution capabilities, and growth opportunities in the enterprise drone market.
As of December 31, 2025, no impairment indicators were identified for the UAS reporting unit. The Company performs its annual goodwill impairment test during the fourth quarter.
Intangible Assets
Intangible assets consist primarily of patents, and trade names and trademarks acquired in the Drone Nerds acquisition. The following table presents intangible assets associated with continuing operations.
| December 31, 2025 | ||||||||||||||||||||
| Gross Amount | Accumulated Amortization | Impairment | Net Carrying Amount | Remaining Weighted Average Useful Life as of December 31, 2025 | ||||||||||||||||
| Patents | $ | 468 | $ | (207 | ) | $ | $ | 261 | 8.8 | |||||||||||
| Trade Names / Trademarks | 4,000 | (43 | ) | 3,957 | 12.9 | |||||||||||||||
| Customer Relationships | 5,200 | (80 | ) | 5,120 | 8.9 | |||||||||||||||
| Total | $ | 9,668 | $ | (330 | ) | $ | $ | 9,338 | ||||||||||||
| December 31, 2024 | ||||||||||||||||||||
| Gross Amount | Accumulated Amortization | Impairment | Net Carrying Amount | Remaining Weighted Average Useful Life as of December 31, 2024 | ||||||||||||||||
| Patents | $ | 468 | $ | (184 | ) | $ | $ | 284 | 9.8 | |||||||||||
| Total | $ | 468 | $ | (184 | ) | $ | $ | 284 | 9.8 | |||||||||||
Amortization Expense
Amortization expense for continuing operations for the years ended December 31, 2025 and 2024 was approximately $0.2 million and $0.03 million, respectively.
Future amortization expense related to intangible assets associated with continuing operations is estimated as follows (in thousands):
| For the Years Ending December 31, | Amount | |||
| 2026 | $ | 916 | ||
| 2027 | 916 | |||
| 2028 | 916 | |||
| 2029 | 916 | |||
| 2030 and thereafter | 5,674 | |||
| Total | $ | 9,338 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 15, 2026 | Showing above |
| 2024 | Apr 15, 2025 | |
| 2023 | Apr 16, 2024 | |
| 2022 | Apr 17, 2023 | |
| 2021 | Mar 16, 2022 | |
| 2020 | Mar 31, 2021 | |
| 2019 | Mar 3, 2020 | |
| 2018 | Mar 28, 2019 | |
| 2017 | Mar 27, 2018 | |
| 2016 | Apr 17, 2017 | |
| 2015 | Mar 30, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.