Debt |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | Debt
Interest expense on outstanding debt totaled approximately $0.3 million and $0.5 million for the three and six months ended June 30, 2026, respectively, and $0.0 million and $0.2 million for the three and six months ended June 30, 2025, respectively. Acquisition-Related Promissory Notes In connection with the November 2025 acquisition of Drone Nerds (the “Acquisition”), XTI Drones Holdings, LLC issued promissory notes to The Origin Group DN, Inc. and The Origin Group AZ, Inc. (collectively the “Sellers”) with an aggregate original principal amount of approximately $11.9 million (the “Notes”). The Sellers also own 6,524,576 Class B Units, representing 16.597% ownership, of XTI Drones Holdings, LLC. The terms of the Notes and the issuance of the Class B Units were negotiated together in connection with the Acquisition. See Note 9 — Capital Structure for further discussion of the Class B Units. The Notes bear interest at a rate of 7.25% per annum, calculated on a 365-day year. Accrued interest is payable in accordance with the terms of the Notes, and unpaid interest is added to principal if not paid when due. During the three and six months ended June 30, 2026, the Company made aggregated principal payments of $1.5 million and $3.5 million, respectively. The Notes require remaining scheduled principal repayments as follows: •$1.5 million in the aggregate due no later than September 30, 2026; and •The remaining outstanding principal and accrued interest due on or before the one-year anniversary of the Notes. The Notes may be prepaid at any time without premium or penalty, provided that accrued and unpaid interest is paid through the prepayment date. The outstanding principal balance of the Notes is subject to reduction in connection with indemnification obligations under the applicable purchase agreements. The Notes contain customary events of default, including bankruptcy-related events, upon which the outstanding principal and accrued interest may become immediately due and payable. As of June 30, 2026 and December 31, 2025, the aggregate outstanding principal balance of the Notes was approximately $4.4 million and $7.9 million, respectively. See Note 18, Subsequent Events for an update on the September 30, 2026 payment and the status of the Notes. Asset-Based Revolving Line of Credit (Drone Nerds) On February 11, 2026, Drone Nerds, LLC and Anzu Robotics, LLC (collectively, the “Borrowers”) entered into a Credit Agreement with JPMorgan Chase Bank, N.A. (the “Lender”), (the “Credit Agreement”), providing for a secured revolving credit facility with aggregate commitments of up to $20.0 million, subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory (the “ABL Facility”). The ABL Facility matures on February 11, 2029. As of June 30, 2026, the borrowing base was calculated to be approximately $18.7 million, and the Company had $8.8 million outstanding in addition to letters of credit in the amount of $0.8 million, with $9.1 million of remaining availability. Borrowings under the ABL Facility bear interest at Secured Overnight Financing Rate or a base rate, plus a margin of 2.0%, subject to adjustment in certain circumstances. The average unused commitment under the ABL Facility is subject to an unused commitment fee of 0.25% to 0.375%. Borrowings under the ABL Facility as of June 30, 2026 incurred interest at a weighted average of 5.7%. The Credit Agreement is subject to a cash dominion arrangement, whereby funds deposited into any depository account of the borrower are swept into a blocked account with the Lender and shall be used to reduce amounts owed under the Credit Facility. Because of the nature of the cash dominion arrangement, borrowings under the Credit Agreement are classified as current liabilities despite a maturity date that is more than twelve months from the balance sheet date. The Credit Agreement is secured by substantially all of the assets of the Borrowers and certain affiliated guarantors. The Credit Agreement contains customary affirmative and negative covenants, including limitations on additional indebtedness, liens, asset sales, investments and restricted payments. The Borrowers are required to maintain a minimum Fixed Charge Coverage Ratio as of the end of any calendar month of no less than 1.0 to 1.0, subject to certain cure rights. Proceeds of the ABL Facility may be used for general corporate purposes, refinancing certain existing indebtedness and permitted investments. During the six months ended June 30, 2026, gross borrowings and repayments under the ABL facility are presented within cash flows from financing activities. During the three months ended March 31, 2026 these amounts were incorrectly netted within cash flows from financing and have been corrected within the six-month ended June 30, 2026 as an immaterial correction. See Note 18, Subsequent Events for an update on the Credit Facility.
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