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... ... @@ -2,60 +2,31 @@ 2 2 {{toc/}} 3 3 {{/box}} 4 4 5 -= Business Overview=5 += Paragraph 1 = 6 6 7 - Inpixon (INPX) providea numberofdifferent technology productsandservicestoprivateand public sectorcustomers. EffectiveJanuary1, 2017 the Company hashangedthewayitanalyzesandassessesdivisionalperformanceoftheCompany. The Company has thereforere-alignedsoperatingsegments alongthose division businesslinesand now operatesintwosegments, namelyIndoorPositioningAnalyticsand Infrastructure.Thecompany's premierproprietary productsecures, digitizesand optimizes theinteriorofanypremises with indoorpositioningand dataanalyticsthatproviderich positional information, similartoa globalpositioningsystem, and browser-likeintelligenceforheindoors.Other productsand servicesthat thecompany provideincludeenterprise computingandstorage,virtualization, businesscontinuity,datamigration,custom application development, networkingandinformationtechnology,andbusinessconsultingservices.{{footnote}}https://fintel.io/doc/sec-inpx-inpixon-10k-2018-march-27-17950{{/footnote}}7 +Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. 8 8 9 -== IndoorPositioningAnalyticsSegment==9 +== Sub-paragraph == 10 10 11 - Revenues from itsIndoorPositioningAnalytics (“IPA”) segmentwere $848,000for the first quarter of 2018. Thecompany'sIPA segment doeshave longsales cycles whicharearesult fromcustomerrelatedissues such as budget andprocurementprocesses butalso becauseof the early stagesof indoor-positioning technologyandthe learning curve requiredfor customersto implement such solutions. Customersalsoengageina pilot programfirst which prolongs salescycles andistypicalof most emergingtechnologyadoptioncurves. Thecompanyanticipate sales cycles toimprovein 2018 as itscustomerbasemovesfrominnovatorstomainstream customeradoption.The sales cycleis also improving with the increasedpresenceandawareness of beaconandWi-Fi locationingtechnologies inthe market. IPA segmentsales can belicensed basedwithgovernmentcustomersbut areprimarilyon a SaaS modelwithcommercialcustomers.Thecompany's other SaaSproducts includecloud-based applicationsfor mediacustomers, whichallowit to generateindustryanalytics that complementits indoor-positioningsolutions.11 +Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. 12 12 13 - Approximately95% of its IPA segment purchase orders are recurringSaaS contracts and 4% are license based. The company find that its public sector customersprefer the licensing modelapproach while private sector companies are opting for theSaaS model. However, the sales mix can fluctuate significantly from quarter to quarter.13 +== Sub-paragraph == 14 14 15 - ==InfrastructureSegment==15 +Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. 16 16 17 - Thecompany's professional services group providesconsultingservices ranging from enterprisearchitecture design to customapplication development to data modeling. The company offerfull scope of information technologydevelopment and implementation services with expertise in a broad range of IT practices including project design and management, systems integration, outsourcing, independent validation and verification, cyber security and more.17 +=== Sub-sub paragraph === 18 18 19 - Inpixonhasanykey vendor, technology,wholesale distributionandstrategicpartnerrelationships. These relationshipsarecriticalforittodeliver solutionstoits customers.Inpixonhasavarietyof vendorsandalso products thatthecompanyprovidetoitscustomers,and mostof theseproductsarepurchasedthrough the distributionpartners.The company alsohavepartnerships andteamingagreements with various technologyandserviceoviders for thissegmentaswell asitsother business segments.These relationshipsrangefromjoint-sellingactivitiestoproductintegration efforts.Inpixon has beenfacingseriouscreditchallengeswiththesevendorsgivenitsfinancialcircumstancesbut are workingon solvingtheseissues asthecompany moveforward andimproveits liquidity.19 +Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. 20 20 21 -In addition its business is required to meet certain regulatory requirements. The company's federal government customers in particular have a range of regulatory requirements including ITAR certifications, DCAA compliancy in its government contracts and other technical or security clearance requirements as may be required from time to time. 22 22 23 - Thecompany experienced a net loss of approximately $6.2 million for the three months ended March 31, 2018. 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. The Company has raised an aggregate of gross proceeds of $31.3 million in equity capital so far in 2018 and also has availability on itsPayplant facility. However, the company cannot assure that the company will be able to raise money in the future if and when the company need it to continue its operations. If the company cannot raise funds as and when the company need them, the company may be required to scale back its business operations by reducingexpenditures for employees, consultants, business development and marketing efforts, selling assets or one or more segments of its business, or otherwiseseverelycurtailing its operations.22 += Paragraph 2 = 24 24 25 - Inorder to streamlineitsbusiness the companycurrently plan to spin-off itsInfrastructure segmentor value-added reseller (“VAR”) business,which is conducted primarily by InpixonUSA anditswholly-ownedsubsidiaryInpixonFederal,Inc. The spin-offofthisbusinesssegmentwouldsignificantlyreduceitsrevenuessincethey account for approximately91% ofitstotalrevenues,however, suchaspin-offwould also significantly reduceoperating expensesand eliminatesubstantiallyall ofitstradedebt.The spin-off of this segment wouldallowInpixontosolely focus ontheIndoor PositioningAnalyticsbusinessforwhich Inpixonhas historicallyrecognizedlowerrevenues,butwhichthecompany believehasgreatergrowth potentialand substantiallybetter gross margins thanthe infrastructuresegment. The spin-offwould bebeneficialtoInpixon USA andInpixonFederal,Inc. aswell becausetheycouldfocus theirresourceson theircore business withoutthe burdenof Inpixonandcouldreach profitability sooner.24 +Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. 26 26 27 - OnApril 23, 2018, the Company issued a press release announcing the filing of a Form 10 registration statement with theSEC in connection with the planned spin-off of its wholly-owned subsidiary, Inpixon USA (including its subsidiary, Inpixon Federal, Inc.), which is expected to be renamed “Sysorex, Inc.” (“Sysorex”) followingthe consummation of the spin-off transaction. Following the spin-off therewill be two distinct, publicly traded companies, Inpixon and Sysorex.26 +== Sub-paragraph == 28 28 29 - Inorderto effect theproposedtransaction, Inpixonintendsto distributesharesof Sysorex’scommontockas adividendtoholders ofInpixon’scommon stock andcertain other holdersof Inpixonwarrantsthatmaybe entitledtoparticipateinthe distributionasof a record dateto be determined.Thespin-offissubject to certainconditions, including,without limitation,the effectivenessofaForm 10 registrationstatement withSEC,theapprovalforquotationof Sysorex’scommon stockontheOTCQB Venture Marketoperatedby OTC MarketsGroup, Inc., finalapproval fromInpixon’sBoard of Directors andothercustomaryconditions.Noassurancecan be provided astothetimingof the completionof thespin-off or thatallconditionsto the spin-off will be met.Furthermore,until thedistributionhas occurred,Inpixonwill havethe righttoterminatethedistribution,even if alloftheconditionsareatisfied.28 +Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. 30 30 31 -= RecentEvents=30 +== Sub-paragraph == 32 32 33 -**January 2018 Capital Raise** 34 - 35 -On January 5, 2018, the Company entered into a Securities Purchase Agreement (the “January 2018 SPA”) with certain investors pursuant to which the Company agreed to sell, in a registered direct offering, an aggregate of 599,812 shares (the “January 2018 Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”), at a purchase price of $5.31 per share for aggregate gross proceeds of approximately $3,185,000. Concurrently with the sale of the January 2018 Shares, pursuant to the January 2018 SPA the Company also sold warrants to purchase up to 599,812 shares of Common Stock (the “January 2018 Warrants”). The aggregate gross proceeds for the sale of the January 2018 Shares and January 2018 Warrants was approximately $3.2 million. This offering closed on January 8, 2018. 36 - 37 -The January 2018 Warrants became exercisable on February 2, 2018 (the “January 2018 Warrant Initial Exercise Date”), at an exercise price per share equal to $6.60, subject to certain adjustments pursuant to the terms of the January 2018 Warrants (the “January 2018 Warrant Exercise Price”), and will expire on the fifth anniversary of the January 2018 Warrant Initial Exercise Date. As a result of a Dilutive Issuance (as defined in the January 2018 Warrants) as of February 20, 2018, the January 2018 Warrant Exercise Price was adjusted to the floor price of $3.00 per share pursuant to the January 2018 Warrants. 38 - 39 -**Reverse Stock Split** 40 - 41 -At a meeting of its stockholders held on February 2, 2018, its stockholders holding a majority of its outstanding voting power approved an amendment to its Articles of Incorporation to effect a reverse stock split of its Common Stock at an exchange ratio between 1-for -5 and 1-for-60 with its Board of Directors retaining the discretion as to whether to implement the reverse stock split and the exact exchange ratio to implement. The Board of Directors approved the implementation of a reverse stock split at a ratio of 1 for 30 effective as of February 6, 2018. 42 - 43 -**February 2018 Public Offering** 44 - 45 -On February 20, 2018, the Company completed a public offering for approximately $18 million in securities, consisting of (i) an aggregate of 3,325,968 Class A Units, at a price to the public of $2.35 per Class A Unit, each consisting of one share of Common Stock, and a five-year warrant to purchase one share of Common Stock, and (ii) 10,184.9752 Class B Units, at a price to the public of $1,000 per Class B Unit, each consisting of one share of the Company’s newly designated Series 3 Convertible Preferred Stock, par value $0.001 per share (“Series 3 Preferred”), with a stated value of $1,000 and initially convertible into approximately 426 shares of Common Stock at a conversion price of $2.35 per share for up to an aggregate of 4,334,032 shares of Common Stock and warrants exercisable for the number of shares of Common Stock into which the shares of Series 3 Preferred is initially convertible. The warrants (“February 2018 Warrant”) were immediately exercisable at an exercise price of $3.50 per share (subject to adjustment). 46 - 47 -The Company received approximately $18 million in gross proceeds from this offering, including the satisfaction of approximately $1 million in amounts payable to service providers. After satisfying the amounts due to service providers and deducting placement agent fees, the net cash proceeds from this offering was approximately $15.4 million. The Company used the net proceeds from the transactions for working capital and general corporate purposes, including research and development and sales and marketing. 48 - 49 -The shares of Series 3 Preferred issued in this offering have all been converted into Common Stock. As a result of the April 2018 offering described below as of April 24, 2018, the exercise price of the February 2018 Warrants was adjusted to the floor price of $0.634 per share and the number of shares of common stock underlying the February 2018 Warrants was increased to an aggregate of 42,287,102 shares of common stock. 50 - 51 -**April 2018 Public Offering** 52 - 53 -On April 24, 2018, the Company completed a public offering consisting of 10,115 units at a price to the public of $1,000 per unit, each consisting of (i) one share of its newly designated Series 4 convertible preferred stock, par value $0.001 per share (the “Series 4 Preferred”), with a stated value of $1,000 and initially convertible into approximately 2,174 shares of Common Stock, at a conversion price of $0.46 per share (subject to adjustment) and (ii) one warrant to purchase such number of shares of Common Stock as each share of Series 4 Preferred is convertible into. The warrants are immediately exercisable at an exercise price of $0.67 per share (subject to adjustment). 54 - 55 -The Series 4 Preferred contain an anti-dilution protection feature, to adjust the conversion price if shares of Common Stock are sold or issued for a consideration per share less than the conversion price then in effect (subject to certain exemptions), provided, that the conversion price will not be less than $0.124. In addition, on the 60th day following the original issuance date of the Series 4 Preferred, the conversion price will be reduced, and only reduced, to the lesser of (x) the then conversion price, as may be adjusted, and (y) 80% of the VWAP (as defined in the certificate of designation filed for the Series 4 Preferred) on the trading day immediately prior to the 60th day, provided that the conversion price will not be less than $0.124. 56 - 57 -The Company received approximately $10.1 million in gross proceeds from this offering, before deducting placement agent fees and offering expenses payable by the Company. After deducting placement agent fees and expenses, the net proceeds from this offering were approximately $9.2 million. The Company intends to use the net proceeds from this offering for working capital, general corporate purposes (including research and development, sales and marketing and the satisfaction of outstanding amounts payable to its vendors in connection with trade payables). Additionally, the Company may use a portion of the net proceeds of this offering to finance acquisitions of, or investments in, competitive and complementary businesses, products or services as a part of its growth strategy. However, the Company does not have any current commitments with respect to any such acquisitions or investments. 58 - 59 -= References = 60 - 61 -{{putFootnotes/}} 32 +Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.