PALO ALTO, Calif. and TORONTO, Aug. 13, 2020 /PRNewswire/ -- Inpixon (Nasdaq: INPX), a leading indoor data company that delivers Indoor Intelligence™ solutions, today provided a business update and reported financial results for the second quarter of 2020.

(PRNewsfoto/Inpixon)

Nadir Ali, CEO of Inpixon, commented, "Despite the impact of a global pandemic, the second quarter of 2020 has been pivotal for Inpixon. We ended the quarter by making significant strides towards strengthening our balance sheet and improving our overall financial condition. Like many other businesses, we have had to navigate certain obstacles, including supply chain constraints for certain products, and delays in anticipated orders as our customers were required to evaluate the impact of the on-going pandemic on their own businesses and ability to make expenditures. As a result, we focused on our remote and subscription-based offerings and seized upon the opportunity presented by the temporary slowdown to enhance our product offering, as well as accelerate our sales and marketing activities to address the new global realities. Specifically, we expanded our product offering to assist organizations seeking to manage the impacts of the pandemic by developing our Workplace Readiness solutions. These solutions provide live analytics and key insights related to people flow and occupancy density for building and zone health, in order to monitor areas that need increased cleaning efforts, crowd management or contact tracing.  We have secured certain key collaboration and reseller relationships, such as our relationship with Lenovo, allowing our solutions to be offered as part of their ThinkIoT Back to Work Solutions. We believe Lenovo's global footprint and established relationships with large enterprise customers will complement our internal sales activities and assist in rapidly expanding awareness and accelerating adoption of our solutions. Earlier this week we announced the receipt of our FCC certification for our UWB module which we believe will be significant in our future offerings along with the work we are doing in 5G cellular detection, next generation BLE and Wi-Fi 6. Our sensor fusion capabilities have long been a differentiator for us and we expect to continue to show our leadership and innovation in this space.

"To further the awareness of our Workplace Readiness and other solutions, we invested in our sales and marketing efforts by embarking on a nationwide advertising campaign, including a series of print and digital ads, online videos, radio spots and podcast sponsorships, and launched an enhanced website which highlights the full strength of our capabilities which has proven effective in increasing web traffic and lead generation. To facilitate our growth plans, we are also increasing our hiring activities throughout our organization. In this regard, we hired Tyler Hoffman, a senior industry executive, as our Chief Revenue Officer, to assist in accelerating our growth opportunities.

"In addition, during the second quarter of 2020, we were able to continue to execute on our strategic acquisition strategy, by acquiring an exclusive global marketing, distribution and development license for a suite of statistical, data analytics and visualization software tools, greatly expanding our customer base worldwide to include many top-tier organizations and educational institutions. We anticipate this transaction will be accretive to earnings, increase our overall revenue annually, as well as increase our cross-selling opportunities.

"Overall, we remain encouraged by the outlook, and we believe we are well positioned for continued growth, with over $39 million of cash as of June 30, 2020, which provides us with flexibility to execute on our organic growth strategy, and an ability to explore potential accretive, synergistic and other strategic transactions aimed at increasing long-term shareholder value."

Recent milestones:

  • Received FCC certification for our UWB module, a radio technology that can enable precise measure of radio frequency signals, allowing for centimeter-level accuracy and location measurements for use in a broad range of applications to facilitate contextual decision making, operating cost reductions, increased safety, and greater security for data communication and assets.
  • Launched new website, with a clean, modern, and easy-to-navigate design, highlighting Inpixon's comprehensive Indoor Intelligence Platform with mapping, positioning, security and analytics.
  • Announced Lenovo as an authorized reseller of Inpixon's Workplace Readiness solutions, allowing our solutions to be offered as part of Lenovo's ThinkIoT Back to Work Solutions, an ecosystem of IoT solutions that simplifies workplace preparation for bringing employees back to the office after closures due to COVID-19.
  • Acquired an exclusive global license to market, distribute, and develop a suite of statistical, data analytics and visualization software anticipated to increase our revenues annually and increase our cross-selling opportunities.
  • Launched "Reclaim Your Workplace" ad campaign nationwide, designed to raise awareness of Inpixon's Workplace Readiness solutions which include tools to support social distancing and contact tracing.
  • Released additional enterprise-class mapping features, Jibestream 4.13. The latest release simplifies integrations with third-party data and apps, improves the quality of data our customers input into the content management system, and enhances the aesthetics and readability of the wording on maps, ideal to support large enterprises.  
  • Appointed senior industry executive Tyler Hoffman as Chief Revenue Officer to further accelerate growth, bringing deep experience in enterprise software and Software-as-a-Service, spanning fintech, e-commerce, security, data, media and retail sectors.

Financial Results

Revenues for the second quarter ended June 30, 2020 were $1.1 million compared to $1.5 million for the comparable period in the prior year for a decrease of $415,000, or approximately 28%. Revenues decreased in the second quarter of 2020 over the prior period in 2019 primarily due to a delay in anticipated customer orders for our sensors from a significant customer that was received subsequent to the quarter end. Gross margin for three months ended June 30, 2020 was 72% compared to 74% for the second quarter ended June 30, 2019. This decrease in margin is primarily due to lower margins associated with Inpixon's mapping services during the second quarter ended June 30, 2020. Net loss attributable to stockholders of Inpixon for the three months ended June 30, 2020 was $7.3 million compared to $5.2 million for the comparable period in the prior year. The higher loss of approximately $2.1 million was primarily attributable to the lower revenues, additional interest expense and debt discount on promissory notes, and $1.4 million in valuation allowance adjustments. Non-GAAP Adjusted EBITDA for the three months ended June 30, 2020 was a loss of $3.9 million compared to a loss of $1.9 million for the prior period in 2019. 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 June 30, 2020 was a loss of ($0.21) per share compared to a loss of ($13.33) per share for the prior period in 2019. Proforma non-GAAP net income (loss) per share is used by the Company's management as an evaluation tool as it manages the business and is defined as net income (loss) per basic and diluted share adjusted for stock based compensation, amortization of intangibles, provision for doubtful accounts, severance costs, acquisition costs, costs associated with public offerings  and one time charges including loss on the exchange of debt for equity and provision for valuation allowances.

Conference Call

Management will host a conference call at 4:30 p.m. Eastern Time on Thursday, August 13, 2020 to discuss the Company's financial results, as well as the Company's corporate progress and other developments.

The conference call will be available via telephone by dialing toll free 877-407-9205 for U.S. callers or +1 201-689-8054 for international callers, or on the Company's Investor Relations section of the website: ir.inpixon.com.

A webcast replay will be available on the Company's Investor Relations section of the website (ir.inpixon.com) through August 13, 2021. A telephone replay of the call will be available approximately one hour following the call, through August 20, 2020 and can be accessed by dialing 877-481-4010 for U.S. callers or +1 919-882-2331 for international callers and entering conference ID: 36468.

About Inpixon

Inpixon® (Nasdaq: INPX) is the Indoor Intelligence™ company that specializes in capturing, interpreting and giving context to indoor data so it can be translated into actionable intelligence. The company's Indoor Intelligence platform ingests diverse data from IoT, third-party and proprietary sensors designed to detect and position active cellular, Wi-Fi, UWB 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. This multidisciplinary depiction of indoor data enables users to increase revenue, decrease costs, and enhance safety. Inpixon customers can boldly take advantage of location awareness, analytics, sensor fusion and the Internet of Things (IoT) to uncover the untold stories of the indoors. For the latest insights, follow Inpixon on LinkedIn, Twitter, and visit inpixon.com.

Safe Harbor Statement

All statements in this release that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of the control of Inpixon and its subsidiaries, which could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not limited to, the fluctuation of economic conditions, the impact of COVID-19 on Inpixon's results of operations, the performance of management and employees, the regulatory landscape as it relates to privacy regulations and their applicability to Inpixon's technology, Inpixon's ability to maintain compliance with Nasdaq's minimum bid price requirement and other continued listing requirements, including during a panel monitoring period ending on February 5, 2021, the ability to obtain financing, competition, general economic conditions and other factors that are detailed in Inpixon's periodic and current reports available for review at sec.gov. Furthermore, Inpixon operates in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. Inpixon disclaims any intention to, and undertakes no obligation to, update or revise forward-looking statements.

Non-GAAP Financial Measures

Management believes that certain financial measures not in accordance with generally accepted accounting principles in the United States ("GAAP") are useful measures of operations. EBIDTA, Adjusted EBITDA and pro forma net loss per share are non-GAAP measures. Inpixon defines "EBITDA" as net income (loss) before interest, provision for (benefit from) income taxes, and depreciation and amortization. Management uses Adjusted EBITDA as the matrix in which it manages the business and Inpixon defines "Adjusted EBITDA" as EBITDA plus adjustments for deemed dividends, other income or expense items, non-recurring items and non-cash items. Inpixon defines "pro forma net loss per share" as GAAP net loss per share adjusted for deemed dividends, stock based compensation, amortization of intangibles, provision for doubtful accounts, severance costs, acquisition costs, costs associated with public offerings  and one time charges including loss on the exchange of debt for equity and provision for valuation allowances.

Management provides Adjusted EBITDA and pro forma net loss per share measures so that investors will have the same financial information that management uses, which may assist investors in assessing Inpixon's performance on a period-over-period basis. Adjusted EBITDA or pro forma net loss per share is not a measure of financial performance under GAAP, and should not be considered an alternative to net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA and pro forma net loss per share have limitations as analytical tools and should not be considered either in isolation or as a substitute for analysis of Inpixon's results as reported under GAAP.

For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the "Reconciliation of Non-GAAP Financial Measures" table in this press release.

INPIXON AND SUBSIDIARIES

 CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except number of shares and par value data)








As of 


June 30,


December 31,

2020


2019








(Unaudited)


(Audited)

ASSETS




Current Assets






Cash and cash equivalents

$

39,458


$

4,777

Accounts receivable, net


1,155



1,108

Notes and other receivables


160



74

Inventory


378



400

Prepaid assets and other current assets


1,306



406

Total Current Assets


42,457



6,765







Property and equipment, net


122



145

Operating lease right-of-use asset, net


1,191



1,585

Software development costs, net


1,632



1,544

Intangible assets, net


8,987



8,400

Goodwill


2,318



2,070

Receivable from related party


--



616

Other assets


105



94

Total Assets

$

56,812


$

21,219







LIABILITIES AND STOCKHOLDERS' EQUITY






Current Liabilities






Accounts payable

$

630


$

2,383

Accrued liabilities


1,254



1,863

Operating lease obligation


589



776

Deferred revenue


1,509



912

Short-term debt


5,523



7,304

Acquisition liability


2,950



502

Total Current Liabilities


12,455



13,740







Long Term Liabilities






Operating lease obligations, noncurrent


623



837

Other liabilities


7



7

Deferred tax liability, noncurrent


--



87

Acquisition liability, noncurrent


--



500

Total Liabilities


13,085



15,171







Commitments and Contingencies












Stockholders' Equity






Preferred Stock - $0.001 par value; 5,000,000 shares authorized, consisting of Series 4 ConvertiblePreferred Stock - 10,415 shares authorized; 1 and 1 issued, and 1 and 1 outstanding as of June 30, 2020 and December 31, 2019, respectively, Series 5 Convertible Preferred Stock - 12,000 shares authorized; 126 and 126 issued, and 126 and 126 outstanding as of June 30, 2020 and December 31, 2019, respectively.


--



--

Common Stock - $0.001 par value; 250,000,000 shares authorized; 40,175,002 and 4,234,923 issued and 40,175,001 and  4,234,922 outstanding as of June 30, 2020 and December 31, 2019, respectively.


40



4

Additional paid-in capital


209,789



158,382

Treasury stock, at cost, 1 share


(695)



(695)

Accumulated other comprehensive income


(199)



94

Accumulated deficit (excluding $2,442 reclassified to additional paid in capital in quasi-reorganization)


(165,242)



(151,763)

Stockholders' Equity Attributable to Inpixon


43,693



6,022







Non-controlling interest


34



26







Total Stockholders' Equity


43,727



6,048







Total Liabilities and Stockholders' Equity

$

56,812


$

21,219

 

INPIXON AND SUBSIDIARIES

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data)














For the Three Months Ended


For the Six Months Ended


June 30,


June 30,


2020


2019


2020


2019












(Unaudited)


(Unaudited)

Revenues

$

1,076


$

1,491


$

2,880


$

2,854

Cost of Revenues


305



391



814



727













Gross Profit


771



1,100



2,066



2,127













Operating Expenses












Research and development


1,278



796



2,612



1,752

Sales and marketing


1,468



681



2,159



1,314

General and administrative


2,476



3,018



6,268



6,368

Acquisition related costs


169



510



196



647

Amortization of intangibles


508



820



1,524



1,633

Total Operating Expenses


5,899



5,825



12,759



11,714













Loss from Operations


(5,128)



(4,725)



(10,693)



(9,587)













Other Income (Expense)












Interest expense, net


(777)



(509)



(1,397)



(865)

Provision for valuation allowance on held for sale loan


(835)



--



(835)



--

Loss on exchange of debt for equity


(47)



(160)



(132)



(160)

Other income (expense)


(517)



163



(499)



232

Total Other Income (Expense)


(2,176)



(506)



(2,863)



(793)













Net Loss from Operations, before tax


(7,304)



(5,231)



(13,556)



(10,380)

Income tax benefit


--



--



87



--

Net Loss


(7,304)



(5,231)



(13,469)



(10,380)













Net Income Attributable to Non-controlling Interest


19



9



9



4













Net Loss Attributable to Stockholders of Inpixon

$

(7,323)


$

(5,240)


$

(13,478)


$

(10,384)













Deemed dividend for triggering of warrant down round feature


--



--



--



(1,250)

Net Loss Attributable to Common Stockholders

$

(7,323)


$

(5,240)


$

(13,478)


$

(11,634)













Net Loss Per Share - Basic and Diluted

$

(0.32)


$

(25.47)


$

(0.97)


$

(75.99)













Weighted Average Shares Outstanding












Basic and Diluted


22,823,976



205,730



13,931,245



153,108

























Comprehensive Loss












Net Loss

$

(7,304)


$

(5,231)


$

(13,469)


$

(10,380)

Unrealized foreign exchange gain/(loss) from cumulative translation adjustments


318



39



(295)



31

Comprehensive Loss

$

(6,986)


$

(5,192)


$

(13,764)


$

(10,349)

 

INPIXON AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)








For the Six Months Ended


June 30, 


2020


2019

(Unaudited)


Cash Flows Used In Operating Activities






  Net loss

$

(13,469)


$

(10,380)

Adjustments to reconcile net loss to net cash used in operating activities:






Depreciation and amortization


384



527

Amortization of intangible assets


1,524



1,633

Amortization of right of use asset


356



164

Stock based compensation


685



1,748

Amortization of technology


--



33

Loss on exchange of debt for equity


132



160

Amortization of debt discount


1,909



798

Accrued interest income, related party


(32)



--

Provision for doubtful accounts


--



105

Provision for the valuation allowance held for sale loan


835



--

Provision for the valuation allowance related party receivable


648



--

Income tax benefit


(87)



--

Other


21



26







Changes in operating assets and liabilities:






Accounts receivable and other receivables


(107)



(1,198)

Inventory


22



(109)

Other current assets


(905)



55

Other assets


(13)



(182)

Accounts payable


(1,539)



132

Accrued liabilities


(593)



53

Deferred revenue


105



(67)

Operating lease liabilities


(362)



--

Other liabilities


117



(66)

Total Adjustments


3,100



3,812

Net Cash Used in Operating Activities


(10,369)



(6,568)







Cash Flows Used in Investing Activities






   Purchase of property and equipment


(39)



(44)

Investment in capitalized software


(433)



(465)

Investment in GTX


--



(250)

Investment in Locality


--



(204)

Net Cash Flows Used in Investing Activities


(472)



(963)







Cash Flows From Financing Activities






Net repayments to bank facility


(150)



(23)

Net proceeds from issuance of common stock, preferred stock and warrants


--



10,859

Net proceeds from issuance of common stock


41,771



--

Net proceeds from notes payable


1



--

Repayment of notes payable


--



(1)

Loans to related party


(1,035)



(8,945)

Repayments from related party


200



1,683

Net proceeds from promissory notes


5,000



4,500

Repayment of acquisition liability to Locality shareholders


(250)



--

Net Cash Provided By Financing Activities


45,537



8,073







Effect of Foreign Exchange Rate on Changes on Cash


(15)



31







Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash


34,681



573







Cash, Cash Equivalents and Restricted Cash - Beginning of period


4,849



1,218







Cash, Cash Equivalents and Restricted Cash - End of period

$

39,530


$

1,791

 

Reconciliation of Non-GAAP Financial Measures:



























(In thousands)


Three Months Ended


Six Months Ended

June 30,


June 30,



2020


2019


2020


2019

Net loss attributable to common stockholders


$

(7,323)


$

(5,240)


$

(13,478)


$

(11,634)

Adjustments:













Non-recurring one-time charges:













Loss on exchange of debt for equity



47



160



132



160

Provision for valuation allowance on held for sale loan



835



--



835



--

Provision for the valuation allowance related party receivable



648



--



648



--

Settlement of litigation



--



--



--



6

Acquisition transaction/financing costs



169



510



196



647

Costs associated with public offering



--



50



--



50

Severance



--



100



--



100

Provision for doubtful accounts



--



--



--



105

Deemed dividend for triggering of warrant down round feature



--



--



--



1,250

Stock-based compensation – compensation and related benefits



286



858



685



1,748

Interest expense, net



777



508



 

1,397



864

Depreciation and amortization



682



1,117



1,908



2,160

Income tax benefit



--



(2)



(87)



(2)














Adjusted EBITDA


$

(3,879)


$

(1,939)


$

(7,764)


$

(4,546)








































(In thousands, except share data)


Three Months Ended


Six Months Ended

June 30,


June 30,



2020


2019


2020


2019

Net loss attributable to common stockholders


$

(7,323)


$

(5,240)


$

(13,478)


$

(11,634)

Adjustments:













Non-recurring one-time charges:













Loss on exchange of debt for equity



47



160



132



160

Provision for valuation allowance on held for sale loan



835



--



835



--

Provision for the valuation allowance related party receivable



648



--



648



--

Settlement of litigation



--



--



--



6

Acquisition transaction/financing costs



169



510



196



647

Costs associated with public offering



--



50



--



50

Severance



--



100



--



100

Provision for doubtful accounts



--



--



--



105

Deemed dividend for triggering of warrant down round feature



--



--



--



1,250

Stock-based compensation – compensation and related benefits



286



858



685



1,748

Amortization of intangibles



508



820



1,524



1,633

Proforma non-GAAP net loss



$    (4,830)



$(2,742)



$    (9,458)



$(5,935)

Proforma non-GAAP net loss per basic and diluted common share



$      (0.21)


$

(13.33)



$      (0.68)


$

(38.76)

Weighted average basic and diluted common shares outstanding



22,823,976



205,730



13,931,245



153,108

 

 

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