Compliance with Nasdaq Continued Listing
Requirement
As
previously reported, on May 19, 2017, Inpixon (the “Company”) received written notice from the Listing
Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it no longer complied
with Nasdaq Listing Rule 5550(b)(1) due to our failure to maintain a minimum of $2,500,000 in stockholders’ equity (the
“Minimum Stockholders’ Equity Requirement”) or to demonstrate compliance with any alternative to such
requirement. On October 24, 2017, the Company received notification (the “Staff Delisting Determination”) from
Nasdaq that the Company had not regained compliance with the Minimum Stockholders’ Equity Requirement. The Company
appealed the Staff Delisting Determination and requested a hearing that was held on December 7, 2017. As a result, the
suspension and delisting was stayed pending the issuance of a written decision by the Nasdaq Hearings Panel (the
“Panel”). By decision dated December 14, 2017, the Panel granted the Company’s request for a further
extension, through April 23, 2018, to evidence compliance with the $2,500,000 stockholders’ equity requirement.
On
April 20, 2018, the Company announced the pricing of a registered best-efforts public offering of units consisting of Series
4 preferred stock and warrants to purchase common stock, which is scheduled to close on or about April 24, 2018
(“Offering”). Upon the closing of this Offering, the Company’s stockholders’ equity will exceed the
continued listing requirement of $2.5 million in stockholders’ equity as set forth in Nasdaq Listing Rule
5550(b)(1).
Press Release
On April 23, 2018, the Company issued a press release announcing the filing of a Form 10 Registration Statement
with the U.S. Securities and Exchange Commission 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”)
following the consummation of the spin-off transaction. Following the spin-off there be two distinct, publicly traded companies,
Inpixon and Sysorex.
The
strategic goal of the spin-off is to create two public companies, each of which will be better positioned to capitalize on growth
opportunities and have a greater focus on their own individual strengths and operational plans.
In order to effect
the proposed transaction, Inpixon intends to distribute shares of Sysorex’s common stock as a dividend to holders of Inpixon’
s common stock and certain other holders of Inpixon warrants that may be entitled to participate in the distribution as of a record
date to be determined. The spin-off is subject to certain conditions, including, without limitation, the effectiveness of a Form
10 registration statement with the Securities and Exchange Commission, the approval for quotation of Sysorex’ s common stock
on the OTCQB Venture Market operated by OTC Markets Group, Inc., final approval from Inpixon’s Board of Directors and other
customary conditions. No assurance can be provided as to the timing of the completion of the spin-off or that all conditions to
the spin-off will be met. Furthermore, until the distribution has occurred, Inpixon will have the right to terminate the distribution,
even if all of the conditions are satisfied.
Upon
the completion of the proposed transaction, the Company plans to continue to focus its operations related to the development of
its indoor positioning analytics technology.
Cautionary Note Regarding Forward-Looking
Statements
This current report contains “forward-looking”
statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements
related to the planned spin-off. The words “intend,” “may,” “should,” “would,”
“expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,”
“potential” or “continue” or the negative of these terms or other comparable terminology are intended to
identify forward-looking statements, although not all forward-looking statements contain these identifying words. While the Company
believes its plans, intentions and expectations reflected in those forward-looking statements are reasonable, these plans, intentions
or expectations may not be achieved. The Company’s actual results, performance or achievements could differ materially from
those contemplated, expressed or implied by the forward-looking statements. For information about the factors that could cause
such differences, please refer to the Company’s filings with the U.S. Securities Exchange Commission. Given these uncertainties,
you should not place undue reliance on these forward-looking statements. The Company assumes no obligation to update any forward-looking
statement.