Summary

  • Inpixon (INPX) formed in Nevada in April 1999 is a world leader in indoor intelligence.
  • The company’s indoor location data platform ingests diverse data from IoT, third-party and proprietary sensors designed to detect and position active cellular, Wi-Fi and Bluetooth devices.
  • In  2018, the Company completed a spin-off of its then wholly owned subsidiary Sysorex, Inc.
  • On January 7, 2020, the company effected a 1-for-45 reverse split of its outstanding common stock.

Overview

Inpixon (INPX) formed in Nevada in April 1999 is a world leader in indoor intelligence. The company's indoor location and data platforms and patented technologies empower users to harness the power of indoor data to create actionable intelligence. The company specialize in capturing, interpreting and visualizing indoor data to make indoor spaces smarter, safer and more secure.1

The company's solutions are leveraged by a multitude of industries and disciplines to do good with indoor data. This multidisciplinary depiction of indoor data enables users to increase revenue, decrease costs, and enhance safety. Inpixon customers can take advantage of mapping, positioning, analytics, sensor fusion and the Internet of Things (IoT) to uncover the untold stories of the indoors.

The company’s indoor location data platform ingests diverse data from IoT, third-party and proprietary sensors designed to detect and position active cellular, Wi-Fi and Bluetooth devices. Paired with a high-performance data analytics engine, patented algorithms, and advanced mapping technology, Inpixon’s solutions are leveraged by a multitude of industries to do good with indoor data.2

The company has Nine registered patents and seven pending applications in various countries and regions, including the U.S., Mexico, Australia and the European Patent Organization region.

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Corporate Structure

Inpixon has two operating subsidiaries: (1) Inpixon Canada, Inc. (100% ownership) based in Coquitlam, British Columbia (“Inpixon Canada”); and (2) Inpixon India Limited (82.5% ownership) based in Hyderabad, India.

Product and Technology

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Indoor Intelligence Platform

Indoor Mapping

Create smart indoor experiences with industry-leading maps. Incorporate geospatially accurate maps into your applications and create tailored experiences for different types of users. Dynamic, layer-based maps allow you to power a multitude of location-based use cases and integrate your indoor and third-party data for enhanced data visualization and business rule automation.

Indoor Positioning

Make indoor spaces discoverable using Inpixon’s award-winning sensor technology or by leveraging your existing infrastructure. Leverage indoor positioning to create smart indoor spaces with location awareness and accurately pinpoint the location of people or assets inside a building using smartphones, mobile devices, tracking tags or other devices.

Indoor Security

Security that sees the unseen within your facilities. Cultivate situational awareness to detect rogue devices and wireless access points in your buildings with Inpixon’s wireless device detection technology. Integrate with leading Mobile Device Management (MDM) systems to enforce no-phone zones, keeping your data, organization, and employees safe while reducing risk.

Indoor Analytics

Reveal the untold stories of your indoor spaces. Leverage advanced indoor analytics to gain invaluable insights into how visitors and employees interact with your buildings. Uncover trends and optimize your operations, find efficiencies, and drive additional revenue. Inpixon’s robust predictive analytics empower you to forecast more accurately and maximize space utilization.

Sensors For Detection and Positioning

Start harnessing your indoor data with Inpixon’s best-in-class IoT sensors that detect and position wireless devices to power your location-based solutions. From wireless device detection and positioning to visitor analytics, asset tracking, and more, its versatile family of sensors and modular approach gives you flexibility to choose the sensor that best fits and scales to your unique indoor location needs.

Inpixon Pod

The Inpixon Pod is a specialized Wi-Fi sensor that can expand coverage areas, increase the number of devices detected, and improve positional accuracy compared to using solely your existing Wi-Fi.

Inpixon Sensor 4000

The multi-channel Inpxion Sensor 4000 locates Wi-Fi, Bluetooth and cellular signals to develop a complete and accurate picture of your building’s occupants and devices.

Inpixon Sensor Ultra

The Inpixon Sensor Ultra identifies and locates Wi-Fi and Bluetooth/BLE in addition to UWB tags and devices with centimeters-level positional accuracy.

Hardware Solutions

The company's collection of proprietary and third-party tags, sensors, and specialty hardware give you flexible, best-in class hardware options to power your location-aware use cases.

Tags

The company's tags leverage different technologies, such as Wi-Fi, BLE, GPS, or UWB and come in different form factors, like watches and badges, so you can choose the tag best suited for your location-aware application.

.

Third-Party Sensors

These third-party sensors seamlessly integrate into Inpixon’s location-aware solutions.

  • Bluetooth Long-Range Sensor
  • Footfall Counter XVS

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Business Overview

Effective August 31, 2018, the Company completed a spin-off of its then wholly owned subsidiary Sysorex, Inc. and the associated infrastructure business and it is no longer a part of its reporting in the current year. For prior years’ the consolidated financial data, revenue and expense of Sysorex’s infrastructure business are shown as discontinued operations. The company's Indoor Intelligence products secure, digitize and optimize the interior of any premises with indoor positioning and data analytics that provide rich positional information, similar to a global positioning system, and browserlike intelligence for the indoors.3

Revenues increased in the year ended December 31, 2020 over the same period in 2019 by approximately 48% due to revenue earned of approximately $1.2 million from the Systat licensing agreement, approximately $0.9 million from the Nanotron acquisition and approximately $0.9 million from existing product lines over the prior comparable period. The company expect to continue to grow its Indoor Intelligence product line in 2021. The Indoor Intelligence product line does have long sales cycles, which result from customer-related issues such as budget and procurement processes but also because of the early stages of indoor-positioning technology and the learning curve required for customers to implement such solutions. Customers also often engage in a pilot program first which prolongs sales cycles and is typical of most emerging technology adoption curves. The company anticipate sales cycles to improve in 2021 as its customer base moves from early adopters to mainstream customers. The sales cycle is also improving with the increased presence and awareness of beacon and Wi-Fi locationing technologies in the market. Indoor Intelligence sales can be licensed-based with government customers but commercial customers typically prefer a SaaS or subscription model. The company's other digital solutions are also delivered on a SaaS model and allow it to generate industry analytics that complement its indoor-positioning solutions.

The company experienced a net loss of approximately $29.2 million and $34.0 million for the years ended December 31, 2020 and 2019, respectively. The company cannot assure that the company will ever earn revenues sufficient to support its operations, or that the company will ever be profitable. In order to continue its operations, Inpixon has supplemented the revenues the company earned with proceeds from the sale of its equity and debt securities and proceeds from loans and bank credit lines.

Reverse Stock Split

On January 7, 2020, the company effected a 1-for-45 reverse split of its outstanding common stock.

January 2019 Capital Raise

On January 15, 2019, in a rights offering, the company issued and sold an aggregate of 12,000 units consisting of an aggregate of 12,000 shares of Series 5 Convertible Preferred Stock and 80,000 warrants to purchase common stock exercisable for one share of common stock at an exercise price of $149.85 per share in accordance with the terms and conditions of a warrant agency agreement, resulting in gross proceeds to the Company of approximately $12 million, and net proceeds of approximately $10.77 million after deducting expenses relating to dealer-manager fees and expenses, and excluding any proceeds received upon exercise of any warrants.

Following the rights offering, the conversion price of the Series 4 Convertible Preferred Stock was reduced to the floor price of $223.20, the exercise price of the warrants issued in the April 2018 public offering were also reduced to the floor price of $223.20 and the number of shares issuable upon exercise of such warrants was increased to 61,562 shares of common stock. The maximum deemed dividend under the Series 4 Convertible Preferred Stock has been recognized so there is no accounting effect from the conversion price reduction of the Series 4 Convertible Preferred Stock. However, the Company recorded a $1.3 million deemed dividend for the reduction to the exercise price of the April 2018 warrants. As of December 31, 2019, there were 126 shares of Series 5 Convertible Preferred Stock outstanding.

GTX Acquisition

On June 27, 2019, Inpixon completed its acquisition of certain assets of GTX, consisting of a portfolio of GPS technologies and intellectual property (the “Assets”). The Assets were acquired for aggregate consideration consisting of information $250,000 in cash delivered at the closing and (ii) 22,223 shares of Inpixon’s restricted common stock. The total recorded purchase price for the transaction was $900,000, which consisted of the cash paid of $250,000 and $650,000 representing the value of the stock issued upon closing.

Jibestream Acquisition

On August 15, 2019, Inpixon, through its wholly owned subsidiary, Inpixon Canada as purchaser (the “Purchaser”), completed its acquisition of Jibestream for consideration consisting of: information CAD $5,000,000, plus an amount equal to all cash and cash equivalents held by Jibestream at the closing, minus, if a negative number, the absolute value of the Estimated Working Capital Adjustment (as defined in the acquisition agreement), minus any amounts loaned by the Purchaser to Jibestream to settle any Indebtedness (as defined in the Purchase Agreement) or other fees, minus any cash payments to the holders of outstanding options to settle any in-the-money options, minus the deferred revenue costs of CAD $150,000, and minus the costs associated with the audit and review of the financial statements of Jibestream required by the Purchase Agreement (collectively, the “Estimated Cash Closing Amount”); plus (ii) 176,289 shares of the Company’s common stock which was equal to CAD $3,000,000 converted to U.S. dollars based on the exchange rate at the time of the closing, divided by $12.4875 which was the price per share at which shares of the Company’s common stock were issued in the Company’s public offering on August 12, 2019 (“Inpixon Shares”).

Nanotron Acquisition

On October 6, 2020, the company acquired, through its wholly-owned subsidiary Inpixon GmbH, a limited liability company incorporated under the laws of Germany (the “Purchaser), all of the outstanding capital stock (the “Nanotron Shares”) of Nanotron Technologies GmbH, a limited liability company incorporated under the laws of Germany (“Nanotron”), pursuant to the terms and conditions of that certain Share Sale and Purchase Agreement, dated as of October 5, 2020 (the “Purchase Agreement”), among the Purchaser, Nanotron and Sensera Limited, a stock corporation incorporated under the laws of Australia and the sole shareholder of Nanotron (the “Seller”).

As a result of the acquisition, the company now own 100% of Nanotron. Nanotron’s business consists of developing and manufacturing location-aware IoT systems and solutions.

At the closing, the Purchaser paid to the Seller an aggregate purchase price of $8,700,000 (less the Holdback Funds (as defined below) and certain other closing adjustments) for the Nanotron Shares (“Purchase Price”). The Purchase Price may be subject to certain post-Closing adjustments based on actual working capital as of the closing as described in the Purchase Agreement. The Purchaser retained $750,000 (the “Holdback Funds”) from the Purchase Price to secure the Seller’s obligations under the Purchase Agreement, with any unused portion of the Holdback Funds to be released to the Seller on the date that is 18 months after the closing date. The Purchaser paid the Purchase Price from funds received in connection with a capital contribution from it, and a portion of the Purchase Price was used by the Seller to satisfy outstanding loans payable by the Seller to obtain the release of certain existing security interests on Nanotron’s assets. On February 24, 2021, the company agreed to the early release of the Holdback Funds, in exchange for a reduction in the total amount payable to the Seller by $225,000. In addition, the amount payable was further reduced by $59,156.74 in connection with a post closing working capital adjustment and the satisfaction of a claim related to a customer dispute. A balance of $465,843.26 was paid to the Seller in full satisfaction of the Holdback Funds payable by the Purchaser to the Seller pursuant to the Purchase Agreement.

Systat License Acquisition

On June 19, 2020, the company entered into an exclusive license to market, distribute, and develop the SYSTAT and SigmaPlot software suite of products (the “License Grant”) pursuant to the terms and conditions of that certain Exclusive Software License and Distribution Agreement, as amended on June 30, 2020 (as amended, the “License Agreement”), with Cranes Software International Ltd. (“Cranes”) and Systat Software, Inc. (“Systat,” and together with Cranes, the “Systat Parties”). In accordance with the terms of the License Agreement, on June 30, 2020 (the “License Closing Date”), the company acquired the License Grant, effective as of June 1, 2020, and the company partitioned a portion of the outstanding balance under that certain secured promissory note (the “Sysorex Note”) issued to it by Sysorex, Inc. (“Sysorex”), into a new note in an amount equal to $3 million in principal plus accrued interest (the “Closing Note”) and assigned the Closing Note and all rights and obligations thereunder to Systat in accordance with the terms and conditions of that certain Promissory Note Assignment and Assumption Agreement. An aggregate of an additional $3.3 million of the principal balance underlying the Sysorex Note was partitioned and assigned to Systat as consideration payable for the rights granted under the license, including $1.3 million on the three month anniversary of the License Closing Date, $1.0 million on the six month anniversary of the License Closing Date and $1.0 million on March 19, 2021. Each assignment under the Sysorex Note was represented by a new secured promissory note and its right to any repayment under the Sysorex Note is subordinate and junior to Sysorex’s obligation to make any payment to Systat unless Inpixon has exercised its right to offset any losses against such assigned notes as permitted in the License Agreement. In addition, the company paid the remaining cash consideration of $2.2 million for the License Grant on July 8, 2020.

Financial Highlights

Revenues for the year ended December 31, 2020 were $9.3 million compared to $6.3 million for the comparable period in the prior year for an increase of approximately $3.0 million, or approximately 48%. Revenues increased approximately $1.2 million from the Systat License Agreement, approximately $0.9 million from the Nanotron acquisition and approximately $0.9 million from existing product lines over the prior comparable period.

Cost of revenues for the year ended December 31, 2020 were $2.6 million compared to $1.6 million for the comparable period in the prior year. This increase in cost of revenues of approximately $1.0 million, or approximately 62%, was primarily attributable to the increase in revenues from the Systat License Agreement, Nantoron acquisition and the existing product lines.

The gross profit margin for the year ended December 31, 2020 was 72% compared to 74% for the year ended December 31, 2019. This decrease in margin is primarily due to to lower gross profit margins from the Nanotron acquisition.

Operating expenses for the year ended December 31, 2020 were $30.5 million and $25.5 million for the comparable period ended December 31, 2019. This increase of $5.0 million is primarily attributable to increased operating expenses of the Systat licensing product line, Nanotron acquisition, increased operating expense of the Jibestream division as it was included for a full twelve months during 2020, increased professional fees and marketing expenses offset by a decrease in travel expenses, stock based compensation and amortization of intangibles.

Loss from operations for the year ended December 31, 2020 was $23.8 million as compared to $20.8 million for the comparable period in the prior year. This increase in loss of approximately $3.0 million was primarily attributable to higher operating expenses offset by the increase in gross profit for the year ended December 31, 2020.

Other income/expense for the year ended December 31, 2020 was a loss of $5.5 million compared to a loss of $13.8 million for the comparable period in the prior year. This decrease in loss of approximately $8.3 million is primarily attributable to a decrease in the valuation allowance adjustment in connection with a Note Receivable from Sysorex.

There was an income tax benefit of $56,000 for the year ended December 31, 2020 related to the acquisition of intangibles and net operating losses of Locality and Jibestream. There was no provision for income taxes for the year ended December 31, 2019 as the Company was in a net taxable loss position. Deferred tax assets resulting from such losses are fully reserved as of December 31, 2020 and 2019 for Inpixon and Inpixon Canada since, at present, the Company has no history of taxable income and it is more likely than not that such assets will not be realized.

Net loss attributable to stockholders for the year ended December 31, 2020 was $29.2 million compared to $34.0 million for the comparable period in the prior year. This decrease in loss of approximately $4.8 million was primarily attributable to the increase in operating expenses offset by the increase in gross margin and the decrease in the valuation allowance adjustment.

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Recent developments

Inpixon Reports First Quarter 2021 Financial Results

May 13, 2021; Inpixon provided a business update and reported financial results for the first quarter of 2021.4

Nadir Ali, CEO of Inpixon, stated, "I'm pleased to announce that we have continued our revenue growth trend in the first quarter of 2021, with a 64% increase as compared to the same period of last year. Over the last year and in particular during the last few weeks, we have completed key strategic transactions that we believe will significantly increase our revenue growth velocity. With the acquisition of The CXApp, a leading smart workplace app and hybrid events solution provider, we have achieved a significant milestone in our strategic plan. Inpixon is focused on using its Indoor Intelligence technologies to arm organizations with actionable intelligence for people, places and things, and with the ability to now offer a custom-branded, location-aware app as part of our Indoor Intelligence platform, we have direct access to the end user in order to deliver a truly unique, best-in-class experience. In addition to the ability to deliver what we believe will be an unparalleled experience with our full stack of Indoor Intelligence technologies with RTLS, blue dot positioning, mapping and analytics, we are confident that The CXApp acquisition will result in an increase in our average selling price, annual recurring revenue and customer stickiness. With multiple joint enterprise engagements in progress prior to the closing of the transaction, we already have a head start on delivering a combined solution and are witnessing an increase in interest and demand for our products.

"The CXApp also brings an established customer base that includes some of the most well-known, top-tier organizations in the world. The CXApp has historically leveraged a strong ecosystem of partners that share in the vision to offer the best experiences in order to deliver an app platform that works seamlessly with over 75 other systems and applications. We value these relationships and partnerships, and by combining our networks, we intend to continue this strategy and aggressively penetrate the global digital workplace and event management software markets, which are experiencing significant growth.

"In addition to the growth acceleration anticipated as a result of The CXApp acquisition, we also remain committed to being an innovator in Indoor Intelligence, and we are excited to have also added a suite of augmented reality (AR), computer vision, localization, navigation, mapping, and 3D reconstruction technologies from Visualix to our Indoor Intelligence platform. This technology wonderfully complements our existing portfolio as it leverages a smartphone's camera to create 3D models of indoor spaces, contributing to enhanced navigation, asset tracking, smart-office applications, customer service, marketing, and more. By merging the virtual and physical worlds, we are transforming the way we interact with our environment, tell stories, and utilize information. The demand for AR applications is rapidly increasing, and we believe we provide a unique and powerful tool for organizations who are looking to create smarter buildings and improve end user experiences.

"Finally, as further good news, we recently settled a note receivable with a face value including principal and interest of approximately $9.1 million, which was initially derived in connection with the spin-off of our legacy business in 2018, for approximately 16 million shares of common stock of Sysorex, Inc. (OTCQB: SYSX) (including the shares underlying a rights agreement). These shares have a current market value of over $100 million (determined based on the closing price of Sysorex's common stock, $6.70 per share as of May 12, 2021) and were acquired from Sysorex in connection with the closing of a reverse merger with TTM Digital Assets & Technologies, Inc., a data center owner and operator primarily engaged in the business of mining Ethereum and additional cryptocurrencies. As a second quarter 2021 event, the impact of this transaction on our financial statements will not be reflected until we report the upcoming second quarter 2021 results, however, I believe this is an extremely positive outcome for our shareholders."

Financial Results

Revenues for the three months ended March 31, 2021 were $3.0 million compared to $1.8 million for the comparable period in the prior year for an increase of approximately $1.2 million, or approximately 64%. This increase is primarily attributed to product sales related to  the Systat and the RTLS product lines. Gross profit for the three months ended March 31, 2021 was $2.1 million compared to $1.3 million for the comparable period in the prior year, an increase of 60%. The gross profit margin for the three months ended March 31, 2021 was 70% compared to 72% for the three months ended March 31, 2020. This decrease in margin is primarily due to lower gross profit margins from the RTLS product line. Net loss attributable to stockholders for the three months ended March 31, 2021 was $12.6 million compared to $6.2 million for the comparable period in the prior year. This increase in loss of approximately $6.4 million was primarily attributable to increased operating expenses including approximately $2.0 million  from the Systat licensing agreement and Nanotron acquisition and approximately $4.7 million of stock-based compensation expense offset by higher gross profit. Non-GAAP Adjusted EBITDA for the three months ended March 31, 2021 was a loss of $5.6 million compared to a loss of $3.9 million for the prior year period. EBITDA is defined as net income (loss) before interest, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is used by Inpixon management as a metric by which it manages the business. It is defined as EBITDA plus adjustments for other income or expense items, non-recurring items and other non-cash items including stock-based compensation.

Proforma non-GAAP net loss per basic and diluted common share for the three months ended March 31, 2021 was a loss of $0.08 compared to a loss of $0.92 per share for the prior year period. Proforma non-GAAP net income (loss) per share is used by Inpixon management as an evaluation tool as it manages the business and is defined as net income (loss) per basic and diluted share adjusted for non-cash items including stock-based compensation, amortization of intangibles and one-time charges and other adjustments including loss on the exchange of debt for equity, provision for valuation allowance on notes and acquisition costs.

Inpixon Wins Multi-Year Contract for Smart Office App for International Banking Organization

June 8, 2021; The company, today announced that its smart office app, acquired in the recent The CXApp acquisition, has been selected by a major European-based commercial and retail banking firm with more than 50,000 employees for implementation across more than 75 locations. The seven-figure contract includes both up-front professional services fees and annual subscription licenses covering a two-year period.5

The location-aware app will be custom-branded and configured to fit the customer's requirements for a smart, innovative and connected workplace with safety, productivity and engagement goals at its core. The app will deliver an enhanced work experience for employees regardless of their location, be it working from the office or remote, and will offer desk booking for more than 30,000 desks plus conference room booking, hoteling, indoor navigation, news and event feeds, and employee notifications. The app will integrate Microsoft Active Directory, single sign-on (SSO), surveys, polls and more for a frictionless workplace experience.

"Companies are looking for innovative solutions that promote productivity and deliver superior user experiences while ensuring safety as they support employees returning to work," commented Nadir Ali, CEO of Inpixon. "We are pleased that our award winning mobile app solution, which integrates a wide array of work functions into a single app, was selected by this major retail and commercial bank. We are seeing strong demand for our workplace experience platform and look forward to announcing additional contract awards."

References

  1. ^ https://www.inpixon.com/company?_ga=2.108997764.74207554.1610048132-1003211712.1610048132
  2. ^ https://ir.inpixon.com/?_ga=2.47710369.74207554.1610048132-1003211712.1610048132
  3. ^ https://ir.inpixon.com/sec-filings/all-sec-filings/content/0001628280-21-006279/0001628280-21-006279.pdf
  4. ^ https://ir.inpixon.com/news-events/press-releases/detail/197/inpixon-reports-first-quarter-2021-financial-results-and
  5. ^ https://ir.inpixon.com/news-events/press-releases/detail/198/inpixon-wins-multi-year-contract-for-smart-office-app-for
Tags: US:INPX
Created by Asif Farooqui on 2019/11/12 15:36
     

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