XTI Aerospace CEO Letter to Shareholders

Rhea-AI Summary

XTI Aerospace (Nasdaq: XTIA) announced its acquisition of Drone Nerds for approximately $40 million, shifting XTI's primary focus to enterprise, government and defense UAS solutions. Drone Nerds reported >$100 million revenue for 2024 and the purchase price represents <0.4x 2025 annualized revenue. The company reported proforma results showing a year‑over‑year revenue decline but a meaningful improvement in gross profit for the nine months ended Sept 30, 2025. XTI's market cap rose to nearly $65 million (share price $1.88 on Jan 16, 2026) and fully diluted shares total 99,000,270. XTI will reduce aircraft program spending while prioritizing Drone Nerds integration, NDAA‑compliant supply, and disciplined capital allocation.

Positive

• Acquisition of Drone Nerds for $40 million
• Drone Nerds reported $100M+ revenue in 2024
• Purchase price <0.4x 2025 annualized revenue
• Market cap increased from <$10M to nearly $65M
• Proforma showed improved gross profit for 9 months ended Sept 30, 2025

Negative

• Proforma revenue was lower year‑over‑year for the nine months ended Sept 30, 2025
• Total fully diluted shares outstanding of 99,000,270 (potential dilution)
• Aircraft program spending reduced to the lowest practical level, slowing development

News Market Reaction

+0.53%

4 alerts

+0.53% News Effect

+$364K Valuation Impact

$69M Market Cap

0.3x Rel. Volume

On the day this news was published, XTIA gained 0.53%, reflecting a mild positive market reaction. Our momentum scanner triggered 4 alerts that day, indicating moderate trading interest and price volatility. This price movement added approximately $364K to the company's valuation, bringing the market cap to $69M at that time.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Drone Nerds purchase price: approximately $40 million Drone Nerds 2024 revenue: in excess of $100 million Revenue multiple: less than 0.4x +5 more

8 metrics

Drone Nerds purchase price approximately $40 million Acquisition consideration disclosed in CEO shareholder letter

Drone Nerds 2024 revenue in excess of $100 million Historical revenue used to frame acquisition scale

Revenue multiple less than 0.4x Purchase price vs. 2025 annualized revenue

XTIA market cap Apr 2025 less than $10.0 million CEO reference point from prior April 1, 2025 letter

XTIA market cap Jan 16, 2026 nearly $65.0 million Market value referenced in latest shareholder letter

Share price Jan 16, 2026 $1.88 per share Closing price cited in shareholder letter

Common shares outstanding 34,508,796 Total common shares outstanding as of 12/31/2025 after UMAC conversion

Fully diluted shares 99,000,270 Total fully diluted shares outstanding from capitalization table

Market Reality Check

Price: $1.79 Vol: Volume 4,616,307 is 1.9x ...

high vol

$1.79 Last Close

Volume Volume 4,616,307 is 1.9x the 20-day average of 2,435,835, indicating elevated interest ahead of this update. high

Technical Price at $1.88 is trading above the 200-day MA of $1.71, reflecting an improving trend pre-letter.

Peers on Argus

XTIA was up 11.24% while momentum peers like GPUS, KITT and MNTS showed median d...

3 Down

XTIA was up 11.24% while momentum peers like GPUS, KITT and MNTS showed median declines around -6.7%. With 3 peers in the scanner all moving down, XTIA’s upside move appeared stock-specific rather than part of a sector-wide rally.

Historical Context

5 past events · Latest: Dec 23 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Dec 23	Regulatory positioning	Positive	-3.5%	Company framed FCC foreign-UAS restrictions as a market opportunity with Drone Nerds.
Dec 02	Investor outreach	Positive	-5.2%	Rescheduled town hall to January 2026 to give broader business and program updates.
Nov 19	Quarterly results	Positive	-9.2%	Q3 2025 10-Q with cash of <b>$32.2M</b>, revenue growth, and major financing disclosed.
Nov 19	Investor event	Positive	-9.2%	High-profile Mar-a-Lago investor dinner highlighting TriFan 600, Drone Nerds deal and investment.
Nov 14	Town hall update	Neutral	-5.0%	Announcement of rescheduled town hall to cover aircraft program and Drone Nerds acquisition.

Pattern Detected

Over the last five news events, XTIA’s shares moved lower after each announcement, including multiple seemingly positive strategic and financing updates, indicating a pattern of negative price reactions to news.

Recent Company History

In the past six months, XTIA announced the acquisitions of Drone Nerds and Anzu Robotics, a $25 million strategic investment, and progress on the TriFan 600 VTOL program. Town hall reschedulings and FCC-related positioning highlighted efforts to communicate strategy and leverage regulatory shifts. Despite these milestones, the last five news events (from Nov 14, 2025 to Dec 23, 2025) all saw negative 24-hour price reactions, making today’s positive move against a detailed shareholder letter a departure from recent trading behavior.

Regulatory & Risk Context

Active S-3 Shelf

Shelf Active

Active S-3 Shelf Registration 2026-01-15

On Jan 15, 2026, XTIA filed an S-3 shelf registration covering the resale of up to 18,031,466 existing-stockholder shares. XTIA would not receive proceeds from these resales, and the filing itself notes potential stock price pressure from such selling and ongoing Nasdaq listing compliance risks.

Market Pulse Summary

This announcement detailed XTIA’s strategic pivot toward Drone Nerds, a UAS platform with in-excess-...

Analysis

This announcement detailed XTIA’s strategic pivot toward Drone Nerds, a UAS platform with in-excess-of $100 million 2024 revenue acquired at less than 0.4x 2025 annualized revenue. The CEO outlined a focus on cash flow from Drone Nerds, reduced spend on the historic aircraft program, and a fully diluted share count of 99,000,270. Investors may watch execution on integration, the impact of FCC limits on foreign-made drones, and the potential supply from up to 18,031,466 registered resale shares under the recent S-3.

Key Terms

unmanned aircraft system ("uas"), original equipment manufacturer ("oem"), vertical take-off and landing (vtol), federal communications commission ("fcc"), +4 more

8 terms

unmanned aircraft system ("uas") technical

"its comprehensive unmanned aircraft system ("UAS") platform for enterprise"

An unmanned aircraft system ("UAS") is a complete drone setup: the aircraft itself plus its controller, communication links and supporting software or ground equipment—like a remote‑controlled airplane bundled with its pilot station and tools. Investors care because UAS enable new services (surveillance, delivery, inspection) and create revenue opportunities while also carrying regulatory, safety, and liability risks that can affect a company’s growth, costs and valuation.

original equipment manufacturer ("oem") technical

"Through a broad network of original equipment manufacturer ("OEM") relationships"

An original equipment manufacturer ("OEM") is a company that produces parts or complete products that other firms sell under their own brand name. For investors, OEM relationships matter because they shape revenue stability, profit margins and supply-chain risk—think of an OEM like a bakery that supplies bread to many restaurants: if the bakery has steady orders and reliable delivery, the restaurants (brands) stay stocked, but disruptions or contract changes can quickly affect everyone’s sales and costs.

vertical take-off and landing (vtol) technical

"development stage aircraft in the vertical take-off and landing (VTOL) sector"

A vertical take-off and landing (VTOL) aircraft can lift off and land straight up and down like a helicopter but can also fly forward like an airplane, combining two ways of moving into one vehicle. For investors, VTOL matters because it targets new markets such as urban air mobility and fast regional travel, and its commercial success depends on manufacturing costs, safety and regulatory approval—factors that directly affect a company’s revenue potential and risk.

federal communications commission ("fcc") regulatory

"Effective December 22, 2025, the Federal Communications Commission ("FCC") added"

The Federal Communications Commission (FCC) is the U.S. government agency that regulates interstate and international communications by radio, television, wire, satellite and cable. Investors care because the FCC issues licenses, sets technical rules and approves or blocks mergers and new services; its decisions can be like traffic signals for companies, determining who can operate, how fast they can grow and what revenues they can earn.

national defense authorization act ("ndaa") regulatory

"trusted National Defense Authorization Act ("NDAA")-compliant UAS component manufacturer"

Annual U.S. federal law that sets funding levels, policies, and procurement priorities for the military and related programs — like a yearly blueprint and shopping list for defense spending and rules. Investors pay attention because it determines which contractors and suppliers receive government contracts, can change regulatory or export restrictions affecting business lines, and often reshapes revenue forecasts and stock valuations across the defense and industrial sectors.

form 8-k regulatory

"On January 14, 2026, XTI filed a Form 8-K that included unaudited"

A Form 8-K is a report that companies file with the government to share important news quickly, such as changes in leadership, major business deals, or financial updates. It matters because it helps investors stay informed about significant events that could affect the company's value or stock price.

series 10 convertible preferred stock financial

"upon the conversion of the Series 10 Convertible Preferred Stock that we issued"

A Series 10 convertible preferred stock is a specific class of corporate shares that pays priority dividends and has a higher claim on assets than common stock, while carrying a built-in option to convert into common shares at a predetermined rate. Think of it as a hybrid between a bond and ordinary stock: it offers more steady payout and downside protection but can be turned into common shares, which matters to investors because conversion affects potential income, ownership percentage and dilution of common shareholders.

covered list regulatory

"added foreign-made drones and components to its Covered List identifying them"

A covered list is the set of stocks or securities that a brokerage, research team, or analyst actively monitors and writes reports about. Like a gardener’s list of plants they tend, it shows where the firm spends time and expertise; for investors this matters because inclusion means more public research, trading coverage, and quicker reaction to news, while exclusion can mean less information and liquidity.

AI-generated analysis. Not financial advice.

ENGLEWOOD, Colo., Jan. 20, 2026 /PRNewswire/ -- XTI Aerospace, Inc. (Nasdaq: XTIA) ("XTI Aerospace," "XTI," "we," "our," "us," or the "Company"), an aerospace technology company focused on building and scaling its newly acquired subsidiary, Drone Nerds, LLC ("Drone Nerds") and its comprehensive unmanned aircraft system ("UAS") platform for enterprise and government customers, today released the following letter from the Company Chairman and CEO Scott Pomeroy to shareholders.

Dear Shareholders,

As we enter 2026 and I reflect on the past year, 2025 will most certainly be remembered as a pivotal year of transformation for XTI Aerospace. In November, we announced the execution of a strategically transformative acquisition—one that fundamentally reshapes our focus, strengthens our financial stability, and recalibrates our strategy. Our acquisition of Drone Nerds for approximately $40 million catapulted us into the rapidly evolving U.S. domestic enterprise, government and defense drone markets. We gained proven capabilities, deep customer relationships, and a platform aligned with national priorities. With revenues in excess of $100 million for 2024, the purchase price represents multiples of less than 0.4 times 2025 annualized revenue.

THE DRONE NERDS ACQUISITION

The acquisition of Drone Nerds has immediately transformed who we are and our near-term focus.

Who is Drone Nerds and what do they do? 

Founded in 2014 by Jeremy Schneiderman and his business partner Alex Nafissy, Drone Nerds is one of the premier providers of enterprise drone solutions, services and hardware in the United States. Built with a deep understanding of the complex and rapidly evolving drone ecosystem, Drone Nerds' UAS programs help thousands of businesses throughout the United States integrate drone technology solutions into their operations in the areas of: public safety, construction, energy and utilities, real estate, manufacturing, media, logistics, agriculture, mining, inspection services and government, to name a few.

Through a broad network of original equipment manufacturer ("OEM") relationships, authorized dealerships, and direct customer engagements, Drone Nerds continuously evaluates industry platforms, new market entrants, capabilities and mission suitability. This enables the team to objectively match the right combination of products from manufacturers such as DJI, Quantum Systems, Parrot, Inspired Flight, EagleNXT, and many other equipment and software providers with each customer's specific operational requirements.

Equally critical to driving growth and maintaining long-term relationships is Drone Nerds' expanding aftermarket support, which includes certified repair services for virtually every OEM, routine repair, maintenance and fleet sustainment. This end-to-end approach ensures customer drone fleets remain operational, compliant and mission-ready.

Why did this transaction make so much sense?

Most importantly for XTI, the acquisition of Drone Nerds is immediately transformative. We have strategically repositioned from an aerospace company focused primarily on our development stage aircraft in the vertical take-off and landing (VTOL) sector to an industry leader in arguably one of the fastest-growing, most disruptive and most strategically important segments of modern aerospace - drones. Drone Nerds, an XTI Company, is positioned at the most important nexus between numerous and varied drone solutions and customers' commercial or missional needs. In fact, Drone Nerds may be one of the best positioned drone companies in the U.S. today to navigate the fast evolving market dynamic seemingly influenced on a daily basis by advancements in technology, new entrants and ever-changing regulations.

By moving immediately into a situation where we expect to generate in excess of $100 million in revenue annually with positive earnings and positive cash flow from Drone Nerds' operations, based on historical performance, we have completely transformed how we are thinking about the business. Given Drone Nerds' current leadership position in the industry and its tremendous future growth opportunities, we will be focusing most of our near-term energy and resources into the expansion of this incredible platform.

Our rationale for this transaction was further validated by the recent private placement investment into XTI by Unusual Machines Inc. ("UMAC"). Adding the trusted National Defense Authorization Act ("NDAA")-compliant UAS component manufacturer as one of our strategic investors brings additional value and potential to the Drone Nerds purchase.

Finally, and critical to the transaction, was our agreement with Jeremy and Alex to transition to XTI and continue to lead Drone Nerds' day-to-day operations. Combining the industry-recognized deep sector experience that the Drone Nerds' team has demonstrated with the wide-reaching strategic relationships and experience of XTI positions us to capitalize on numerous opportunities. We will intentionally extend our focus in commercial enterprise solutions, expand our current government footprint and reach into defense and national security applications, as we create durable value for customers and stakeholders.

LIMITS ON FOREIGN-MADE DRONES AND IMPLICATIONS FOR XTI AEROSPACE/DRONE NERDS

Effective December 22, 2025, the Federal Communications Commission ("FCC") added foreign-made drones and components to its Covered List identifying them as equipment that poses "unacceptable risks to the national security of the United States and to the safety and security of U.S. persons." Equipment on the Covered List is prohibited from receiving new FCC equipment authorization. Without authorization, manufacturers cannot legally market or sell new drone models or affected components in the United States. The FCC emphasized that the action applies primarily to future hardware. (A January 7, 2026, update to this notice removed some specific drones and components from the Covered List.)

The impacts of the FCC actions are significant and far-reaching. The majority of new drone models and critical components are currently manufactured in foreign countries, including those from DJI and Inspired Flight, are now prohibited from receiving new FCC equipment authorizations. This effectively prevents these manufacturers from launching future products into the U.S. market.

Drone Nerds has been preparing for this eventuality and has actively established sources for U.S.-made alternatives. The FCC's ban also covers foreign made "critical components" including data transmission devices, flight controllers, batteries, and motors. The company's relationship with UMAC, with its NDAA-compliant manufacturing capabilities, serves as a strong mitigant to address this potential threat.

These recent FCC actions and other regulations were promulgated to protect national security and ensure data privacy and are intended to accelerate a shift away from foreign-sourced drone solutions paving the way for U.S.-made solutions. This transition will likely bring with it significant uncertainty and compliance risk. Because Drone Nerds serves as a trusted advisor to its customers, our solutions-driven business model is designed to navigate such complexity and objectively evaluate evolving domestic platforms, capabilities, and regulatory requirements so that customers can continue to confidently meet their mission objectives. With its certified credentials, OEM-agnostic approach, and deep operational experience, Drone Nerds will further entrench itself as one of the primary "go-to" resources in the United States for enterprise, government and defense or defense-adjacent customers.

CAPITALIZATION

XTI's market cap was less than $10.0 million when I last wrote to you on April 1, 2025. Last Friday, January 16, 2026, our share price closed at $1.88 per share and our market cap was nearly $65.0 million. While we have made progress, I would suggest there is much work to be done as we look to further unlock the substantial shareholder value that is yet to be realized.

As a result of the recent shareholder approval at our annual meeting held on December 30, 2025, of the issuances of common stock upon the conversion of the Series 10 Convertible Preferred Stock that we issued to UMAC in a private placement. As of January 16, 2026, our capitalization table reflects the following:

Shares Outstanding 12/31/2025		32,786,816
UMAC Conversion (4.99%)		1,721,980
Total Common Shares Outstanding		34,508,796
UMAC Pre-Funded Warrants		15,307,735
Class B Units (Common – Drone Nerds)		6,524,576
Total Restricted Shares		21,832,311
Warrants - $2.00 cash exercise		23,572,300
All Other Warrants		1,641,117
Stock Options (1)		17,445,746
Total Fully Diluted Shares Outstanding		99,000,270

(1)	6.8 million of these options are vested. Of the 6.8 million vested options, 2.8 million of the options are in the money.

FINANCIAL IMPACT IN 2026

In 2026, we will drive value from our strengthened financial foundation while selectively pursuing nearer-term revenue opportunities.

On January 14, 2026, XTI filed a Form 8-K that included unaudited financial statements for Drone Nerds for the nine-months ended September 30, 2025 and 2024 and unaudited proforma condensed combined financial information giving effect to the Drone Nerds acquisition as of and for the nine months ended September 30, 2025. The proforma results reflect Drone Nerds' historical operations and demonstrate a relatively lower revenue year-over-year alongside a meaningful improvement in gross profit. The revenue decrease primarily reflects lower sales volume from the intentional reduction in big-box retail activity, with a growth in sales to the enterprise channel. The improvement in gross margin was driven primarily by successful price increases across several channels, supported by broader market acceptance of this higher pricing amid disruptions in global import flows in the period. These factors combined to improve gross profit during the period. The majority of the financial impact from these actions has been realized.

As we enter 2026, our focus is on maintaining financial flexibility and appropriate liquidity while supporting initiatives consistent with our operating strategy. Our current cash position provides flexibility to execute on our near-term strategy, as we continue to align the operating cost structure with our gross profit profile to support cash flow stability. Incremental near-term liquidity needs may be addressed through potential warrant exercise. We recognize the importance of disciplined capital allocation and strive to minimize shareholder dilution while driving growth.

Our historic aircraft program is a core asset for XTI Aerospace. However, given the capital-intensive nature of advanced aircraft development and our commitment to financial discipline, we are reducing the program's spending profile to the lowest practical level while preserving its underlying intellectual property, engineering progress, and certification capabilities. In 2026, our focus is on strengthening XTI's financial foundation with Drone Nerds, while evaluating non-dilutive funding and strategic opportunities that can best unlock the value of the aircraft program for shareholders.

CONCLUSION

Following the Drone Nerds acquisition, XTI Aerospace is on a new trajectory with greater resilience, clarity and capacity for sustainable growth. Drone Nerds is a recognized domestic leader in the high growth and evolving UAS market, and we anticipate the new FCC limits on foreign-made drones and components will be a driver for continued growth. As we turn XTI's focused attention to Drone Nerds, we expect to benefit significantly from an established, high-quality near-term revenue source, an expanded team with deep UAS knowledge that leverages our existing aerospace and strategic expertise, our realigned cost structure and our focus on disciplined capital allocation.

We believe 2026 will demonstrate the strategic value of the steps we have taken, as we integrate Drone Nerds into our business and maintain strong financial guardrails.

We look forward to sharing our progress going forward and especially encourage your participation in our upcoming town hall.

Sincerely,

Scott Pomeroy
CEO
XTI Aerospace

About XTI Aerospace, Inc. 

XTI Aerospace, Inc. (Nasdaq: XTIA) is a U.S.-based aerospace company focused on building and scaling market-leading capabilities in the unmanned aircraft systems (UAS) sector. Through its wholly owned subsidiary Drone Nerds, XTI operates one of the largest enterprise drone platforms in the United States, delivering end-to-end solutions that include aircraft selection, fleet deployment, training, maintenance, and lifecycle support for commercial, public safety, government, and defense customers.

Founded in 2014, Drone Nerds has established a national footprint and a reputation as a trusted solutions provider across industries such as public safety, government, agriculture, construction, insurance, energy, and infrastructure. Its proprietary Always Flying™ program supports enterprise customers with reliability, uptime, and operational assurance as they deploy drones in mission-critical environments.

In addition to its UAS business, XTI Aerospace maintains a portfolio of advanced aviation and technology initiatives. This includes XTI Aircraft Company, which is developing the TriFan 600, a next-generation fixed-wing aircraft designed to combine the vertical takeoff and landing capability of a helicopter with the speed and range of a conventional airplane. XTI also owns Inpixon, a provider of real-time location systems (RTLS) technology used by industrial customers worldwide to optimize operations, improve productivity, and enhance safety.

Together, XTI Aerospace's operating companies position the firm at the intersection of unmanned systems, advanced aviation, and intelligent infrastructure, with a growing focus on scalable, compliant, and revenue-generating solutions for customers across the aerospace ecosystem.

For more information about XTI, please visit xtiaerospace.com and follow XTI on LinkedIn, Instagram, X, and YouTube.

Cautionary Statement Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. All statements other than statements of historical fact contained in this press release, including without limitation, statements about the products under development by XTI Aerospace, the advantages of XTI Aerospace's technology, and XTI Aerospace's customers, plans and strategies are forward-looking statements.

Forward-looking statements may be identified by words such as "believe," "continue," "could," "would," "will," "expect," "intend," "plan," "target," "estimate," "project" or similar expressions. These statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied. Such risks include, but are not limited to, risks associated with XTI Aerospace's ability to integrate Drone Nerds successfully, market adoption, regulatory requirements, supply chain conditions, technological development and changes in applicable laws or regulations. XTI Aerospace undertakes no obligation to update any forward-looking statements to reflect subsequent events or circumstances. Readers are encouraged to review the risk factors described in XTI Aerospace's filings with the U.S. Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent filings.

Contacts

General inquiries:
Email: contact@xtiaerospace.com
Web: https://xtiaerospace.com/contact

Investor Relations:
Dave Gentry, CEO
RedChip Companies, Inc.
Phone: 1-407-644-4256
Email: XTIA@redchip.com

 

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SOURCE XTI Aerospace, Inc.

FAQ

What did XTI Aerospace (XTIA) announce about the Drone Nerds acquisition on Jan 20, 2026?

XTI announced it acquired Drone Nerds for approximately $40 million, repositioning XTI toward enterprise, government and defense UAS markets.

How large was Drone Nerds' revenue and how did that affect the XTIA purchase valuation?

Drone Nerds reported over $100 million revenue in 2024 and the purchase price represented less than 0.4x 2025 annualized revenue.

What were the proforma financial results for Drone Nerds included in XTI's Jan 14, 2026 8‑K?

Proforma results for the nine months ended Sept 30, 2025 showed a decline in revenue YoY but a meaningful improvement in gross profit.

How did XTI's market capitalization and share price change by Jan 16, 2026?

XTI's share price closed at $1.88 on Jan 16, 2026, and market cap was nearly $65 million, up from under $10 million earlier in 2025.

What is XTI's plan for its historic aircraft program after the Drone Nerds deal?

XTI will reduce aircraft program spending to the lowest practical level while preserving IP and certification progress.

How many fully diluted shares does XTI report after the transaction?

The company reports 99,000,270 total fully diluted shares outstanding as of Jan 16, 2026.