UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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INPIXON
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange
Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction
applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials:
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Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the date of its filing.
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(1)
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Amount previously paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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Preliminary Proxy Statement—Subject
to Completion
Inpixon
2479 E. Bayshore Road, Suite 195
Palo Alto, CA 94303
NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS
To be Held on November 16, 2021
Dear Inpixon Stockholders:
NOTICE IS HEREBY GIVEN that the
2021 Annual Meeting of Stockholders of Inpixon (the “Company”) will be held on November 16, 2021 (the “Annual Meeting”)
at 10:00 a.m., Pacific Time. Due to the COVID-19 pandemic and related governmental orders, the Annual Meeting will be a completely virtual
meeting of stockholders conducted via live audio webcast to enable our stockholders to participate from any location around the world
that is safe and convenient to them. You will be able to attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/INPX2021.
The agenda of the Annual Meeting
will be the following items of business, which are more fully described in the accompanying proxy statement (the “Proxy Statement”):
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the election of five directors to serve until
our next annual meeting of stockholders or until the election and qualification of their
successors;
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the ratification of the appointment of Marcum
LLP as our independent registered public accounting firm for the fiscal year ending December
31, 2021;
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3)
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the approval of an amendment to our Articles of Incorporation, as amended
(the “Articles of Incorporation”), to increase the number of authorized shares of the Company’s common stock (the “Common
Stock”) from 250,000,000 to 2,000,000,000;
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4)
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the approval, pursuant to Nasdaq Listing
Rule 5635(c), of the issuance of up to 11,061,939 shares of Common Stock (the “Earnout
Shares”) to selected sellers of the outstanding capital stock of Design Reactor, Inc.
(a.k.a., “The CXApp”) pursuant to the terms of that certain Stock Purchase Agreement,
dated April 30, 2021;
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the approval of an amendment to our Articles
of Incorporation, adding the provision entitling the Board to prescribe a record date of
the stockholders’ meeting not more than 120 days before the date of such stockholders’
meeting;
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the approval of an amendment to our 2018
Employee Stock Incentive Plan, as amended (the “2018 Plan”), as more fully described in the
accompanying Proxy Statement;
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7)
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the approval of the adjournment of the Annual
Meeting, if necessary or advisable, to solicit additional proxies in favor of the foregoing
proposals if there are not sufficient votes to approve the foregoing proposals; and
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the transaction of any other business properly
brought before the Annual Meeting or any adjournment or postponement thereof.
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All stockholders as of close of
business on September 17, 2021 (the “Record Date”) are cordially invited to attend the Annual Meeting virtually.
If you are a stockholder of record,
you may vote in one of the following ways:
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Vote over the Internet, by going
to www.proxyvote.com (have your proxy card in hand when you access the website);
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Vote by Telephone, by calling
the toll-free number 1-800-690-6903 (have your proxy card in hand when you call);
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Vote by Mail, by completing,
signing and dating the proxy card provided to you and returning it in the prepaid envelope
provided to you; or
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Vote virtually at the Annual Meeting.
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If your shares are held in “street
name,” that is, held for your account by a bank, broker or other nominee, you will receive instructions from the holder of record
that you must follow for your shares to be voted.
We hope that you attend the
Annual Meeting. Whether or not you plan to participate in the Annual Meeting, we urge you to take the time to vote your shares.
BY ORDER OF THE BOARD OF DIRECTORS
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Nadir Ali
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Wendy Loundermon
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Chief Executive Officer
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Secretary
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Palo Alto, California
[●], 2021
IMPORTANT NOTICE REGARDING
THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON NOVEMBER 16, 2021: THIS PROXY STATEMENT AND THE ANNUAL
REPORT ARE AVAILABLE AT
www.proxyvote.com.
TABLE OF CONTENTS
Preliminary Proxy Statement—Subject
to Completion
Inpixon
2479 E. Bayshore Road, Suite 195
Palo Alto, CA 94303
2021 Annual Meeting of Stockholders
to be held November 16, 2021
The 2021 Annual Meeting of Stockholders
(the “Annual Meeting”) of Inpixon (which may be referred to in this Proxy Statement as the “Company,” “Inpixon,”
“we,” “us” or “our”) will be held on November 16, 2021 at 10:00 a.m., Pacific Time. Due to the COVID-19
pandemic and related governmental orders, the Annual Meeting will be a completely virtual meeting of stockholders conducted via live
audio webcast to enable our stockholders to participate from any location around the world that is safe and convenient to them. You will
be able to attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/INPX2021.
The Notice of 2021 Annual Meeting
of Stockholders (the “Notice”), this proxy statement (the “Proxy Statement”), and our Annual Report on Form 10-K
for the year ended December 31, 2020 (the “Annual Report”) are also available at proxyvote.com. This proxy procedure permits
all stockholders of record, many of whom are unable to virtually attend the Annual Meeting, to vote their shares of common stock of the
Company (“Common Stock”) and their shares of Series 7 Convertible Preferred Stock of the Company (“Series 7 Preferred
Stock”) at the Annual Meeting.
Our board of directors (the “Board”)
has fixed the close of business on September 17, 2021 as the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournment or postponements thereof.
IMPORTANT NOTICE
WHETHER OR NOT YOU PLAN TO
VIRTUALLY ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO VOTE OVER THE INTERNET, BY TELEPHONE, OR MARK, DATE, AND SIGN THE ENCLOSED
PROXY CARD AND RETURN IT AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE. VOTING BY USING THE ABOVE METHODS WILL NOT PREVENT YOU FROM
VOTING VIRTUALLY AT THE ANNUAL MEETING.
THANK YOU FOR ACTING PROMPTLY
QUESTIONS
AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
What are proxy materials?
The accompanying proxy is delivered
and solicited on behalf of our Board in connection with the Annual Meeting to be held on November 16, 2021 at 10:00 a.m., Pacific Time.
As a stockholder, you are invited to virtually attend the Annual Meeting and are requested to vote on the items of business described
in this Proxy Statement. This Proxy Statement includes information that we are required to provide to you under Securities and Exchange
Commission (the “SEC”) rules and is designed to assist you in voting your shares. The proxy materials include this Proxy
Statement for the Annual Meeting, our Annual Report, and the proxy card or a voting instruction form for the Annual Meeting (the “Proxy
Materials”).
Why did I receive a notice in the mail regarding
the Internet availability of proxy materials instead of a full set of proxy materials?
In accordance with the SEC
rules, we may furnish Proxy Materials, including this Proxy Statement and our Annual Report, to our stockholders by providing access to
such documents on the Internet instead of mailing printed copies. Accordingly, we are sending the Notice to our stockholders of record
and beneficial stockholders as of September 17, 2021, which is the record date for the Annual Meeting.
How can I access the proxy materials over the
Internet?
The Notice and proxy card or voting
instruction form included with the Proxy Materials will contain instructions on how to view the proxy materials on the Internet. Electronic
copies of this Proxy Statement and the Annual Report are available at www.proxyvote.com.
How can I sign up for the electronic proxy delivery
service?
The Notice and proxy card or voting
instruction form included with the Proxy Materials will contain instructions on how to request electronic delivery of future proxy materials.
Choosing to receive your future proxy materials by e-mail will eliminate the cost of printing and mailing documents and will reduce the
associated environmental impact. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with
instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by e-mail
will remain in effect until you terminate it.
What am I voting on?
The items of business scheduled
to be voted on at the Annual Meeting are:
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Proposal One: the election of
five directors to serve on our Board until our next annual meeting of stockholders or until
the election and qualification of their successors;
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Proposal Two: the ratification
of the appointment of Marcum LLP as our independent registered public accounting firm for
the fiscal year ending December 31, 2021;
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Proposal Three: the approval
of an amendment to our Articles of Incorporation, to increase the number of authorized shares
of our Common Stock from 250,000,000 to 2,000,000,000;
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Proposal Four: the approval,
pursuant to Nasdaq Listing Rule 5635(c), of the issuance of up to 11,061,939 shares of our
Common Stock (the “Earnout Shares”) to selected sellers of the outstanding capital
stock of Design Reactor, Inc. (a.k.a., “The CXApp”) pursuant to the terms of
that certain Stock Purchase Agreement, dated April 30, 2021;
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Proposal Five: the approval of
an amendment to our Articles of Incorporation, adding the provision entitling the Board to
fix a record date not exceeding 120 days before
the date of any stockholders’ meeting;
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Proposal Six: the approval of
an amendment to our 2018 Employee Stock Incentive Plan, as amended (the “2018 Plan”), as more
fully described herein;
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Proposal Seven: the approval
of the adjournment of the Annual Meeting, if necessary or advisable, to solicit additional
proxies in favor of the foregoing proposals if there are not sufficient votes to approve
the foregoing proposals; and
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Proposal Eight: the transaction
of any other business properly brought before the Annual Meeting or any adjournment or postponement
thereof.
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Who is entitled to vote at the Annual Meeting,
and how many votes do they have?
Stockholders of record at the
close of business on September 17, 2021 (the “Record Date”) may vote at the Annual Meeting. Pursuant to the rights of our
stockholders contained in our charter documents, the holders of our Common Stock and the holders of our Series 7 Preferred Stock shall
vote together as a single class on all actions to be taken by the stockholders at this Annual Meeting.
Each share of our Common Stock
has one vote. There were 116,993,719 shares of Common Stock outstanding as of the Record Date.
Each holder of Series 7 Preferred Stock
is entitled to the number of votes equal to the number of shares of our Common Stock into which such shares then held by such holder could
be converted on the record date for the vote. Each share of our Series 7 Preferred Stock has 800 votes as of the
Record Date, which is determined
by dividing $1,000, the stated value of one share of Series 7 Preferred Stock, by $1.25, the conversion price. There were 58,750 shares
of Series 7 Preferred Stock outstanding as of the Record Date, which are convertible into 47,000,000 shares of Common Stock.
The allocation of the voting power
of the Company is illustrated in the table below.
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Number of Shares
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Number of Votes per share
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Aggregate Number of Votes
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Percentage of Total Voting Power
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Common Stock
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116,993,719
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1
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116,993,719
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71.34
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Series 7 Preferred Stock
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58,750
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800
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47,000,000
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28.66
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What constitutes a quorum?
The holders of thirty three
and one-third (33 1/3) of the eligible votes as of the Record Date, either present virtually or represented by proxy, constitute a quorum.
A quorum is necessary in order to conduct the Annual Meeting. If you choose to have your shares represented by proxy at the Annual Meeting,
you will be considered part of the quorum. Both abstentions and broker non-votes are counted as present for the purpose of determining
the presence of a quorum. If a quorum is not present at the Annual Meeting, the stockholders holding a majority of the eligible votes
present virtually or by proxy may adjourn the meeting to a later date. If an adjournment is for more than 60 days or a new record date
is fixed for the adjourned meeting, we will provide notice of the adjourned meeting to each stockholder of record entitled to vote at
the meeting.
How do I vote?
If you hold Common Stock or Series
7 Preferred Stock as a stockholder of record as of the Record Date, you may direct how your stock is voted without virtually attending
the Annual Meeting, by the following means:
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Vote by Internet: You can vote
via the Internet at www.proxyvote.com or you may scan the QR code with your smartphone
and, once you are at the website, follow the online instructions. You will need information
from your proxy card to vote via the Internet. Internet voting is available 24 hours a day.
Proxies submitted by the Internet must be received by 11:59 p.m. Eastern Time on the day
before the Annual Meeting.
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Vote by Telephone: You can vote
by telephone by calling the toll-free telephone number 1-800-690-6903. You will need your
proxy card to vote by telephone. Telephone voting is available 24 hours a day. Proxies submitted
by telephone must be received by 11:59 p.m. Eastern Time on the day before the Annual Meeting.
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Vote by Mail: You can vote by
marking, dating and signing your name exactly as it appears on the proxy card you received,
and returning it in the postage-paid envelope provided. Please promptly mail your proxy card
to ensure that it is received prior to the closing of the polls at the Annual Meeting.
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If you hold Common Stock or Series
7 Preferred Stock in the name of a bank, broker, or other nominee, you should have received this Proxy Statement and voting instructions,
which include the following, from your bank, broker or other nominee:
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Vote by Internet. You can vote
via the Internet by following the instructions on the voting instruction form provided to
you. Once there, follow the online instructions. Internet voting is available 24 hours a
day.
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Vote by Telephone. You can vote
by telephone by calling the number provided on your voting instruction form. Telephone voting
is available 24 hours a day.
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Vote by Mail. You can vote by
marking, dating, and signing your name exactly as it appears on the voting instruction form,
and returning it in the postage-paid envelope provided. Please promptly mail your voting
instruction form to ensure that it is received prior to the closing of the polls at the Annual
Meeting.
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What is a proxy?
A proxy is a person you appoint
to vote on your behalf. By using the methods discussed above, except voting virtually at the meeting, you will be appointing Nadir Ali,
our Chief Executive Officer, and Wendy Loundermon, our Chief Financial Officer and Secretary, as your proxies (together, the “Management
Proxyholders”). The Management Proxyholders may act together or individually to vote on your behalf, and will have the authority
to appoint a substitute to act as proxy. If you are unable to virtually attend the Annual Meeting, please vote by proxy so that your
shares may be voted.
You also have the right to
appoint a person other than the Management Proxyholders to represent you at the Annual Meeting by striking out the names of the Management
Proxyholders in the accompanying form of proxy and by inserting the desired proxyholder’s name in the blank space provided. A proxyholder
need not be a stockholder.
How will my proxy vote my shares?
If you are a stockholder of
record, your proxy will vote according to your instructions. If you choose to vote by mail and complete and return the enclosed proxy
card but do not indicate your vote, your proxy will vote “FOR” any proposal for which you do not indicate your vote. We do
not intend to bring any other matter for a vote at the Annual Meeting, and we do not know of anyone else who intends to do so. Your proxies
are authorized to vote on your behalf, however, using their best judgment, on any other business that properly comes before the Annual
Meeting, including, among other things, consideration of a motion to adjourn the Annual Meeting to another time or place.
How do I change my vote?
If you are a stockholder of record,
you may revoke your proxy at any time before your shares are voted at the Annual Meeting by:
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notifying our Chief Financial Officer
and Secretary, Wendy Loundermon, in writing at 2479 E. Bayshore Road, Suite 195, Palo Alto,
CA 94303, that you are revoking your proxy;
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submitting a proxy at a later date via
the Internet or telephone, or by signing and delivering a proxy card relating to the same
shares and bearing a later date than the date of the previous proxy prior to the vote at
the Annual Meeting, in which case your later-submitted proxy will be recorded and your earlier
proxy revoked; or
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virtually attending and voting at the
Annual Meeting.
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If your shares are held in the
name of a nominee, you should check with your nominee and follow the voting instructions your nominee provides.
Who will count the votes?
A representative from Broadridge
Financial Solutions, Inc. will act as the inspector of election and count the votes.
What vote is required to approve each proposal?
For Proposal One, the election
of directors, the nominees will be elected by a majority of the votes cast by the holders of shares of Common Stock and Series 7 Preferred
Stock present virtually or represented by proxy and entitled to vote in the election. You may choose to vote FOR, AGAINST, or ABSTAIN
separately for each nominee. A properly executed proxy or voting instructions marked ABSTAIN with respect to the election of one or more
directors will not be voted with respect to the director or directors indicated, although it will be counted for the purposes of determining
whether there is a quorum. Stockholders may not cumulate votes in the election of directors, which means that each stockholder may vote
no more than the number of votes such stockholder is entitled to cast for a single director candidate.
For Proposals Two, Four, Six,
and Seven the affirmative vote of the holders of shares of Common Stock and Series 7 Preferred Stock voting together as a single class
representing a majority of the votes cast by the holders of all of the shares present or represented and entitled to vote at the Annual
Meeting will be required for approval.
For Proposals Three, and Five,
the affirmative vote of the holders of shares of Common Stock and Series 7 Preferred Stock representing a majority of the voting power
as of the Record Date will be required for approval.
What are the effects of abstentions and broker
non-votes?
An abstention represents a stockholder’s
affirmative choice to decline to vote on a proposal. Under Nevada law, abstentions are considered present and entitled to vote at the
Annual Meeting. As a result, abstentions will be counted for purposes of determining the presence or absence of a quorum and will also
count as votes against a proposal in cases where approval of the proposal requires the affirmative vote of the majority of the voting
power (Proposals Three and Five).
If you are a beneficial owner
of shares held in “street name” and do not provide the organization that holds your shares with specific voting instructions,
under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on
routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from
you on how to vote your shares on a non-routine matter, the organization that holds your shares does not have the authority to vote on
the matter with respect to those shares. This is generally referred to as a “broker non-vote.”
Proposals Two, Three and Five
involve matters that we believe will be considered routine under the relevant securities exchange rules and will not be subject to broker
non-vote. Any proposal that is considered to be routine under the relevant securities exchange rules, will also not be subject to broker
non-vote. The “routine” treatment of these proposals does not affect the seriousness with which we treat these proposals. All other proposals
involve matters that we believe will be considered non-routine and brokers and other intermediaries will not have the discretion to vote
on them without voting instructions. We encourage you to provide voting instructions to the organization that holds your shares by carefully
following the instructions provided by such organization.
What percentage of each class of voting securities
do our director-nominees and current executive officers own?
As of September 17, 2021, our
director-nominees and executive officers beneficially owned approximately 4.0% of the total voting power, including shares of Common Stock
issuable within sixty days, as more particularly illustrated in the table below. For more information, See the discussion under
the heading “Security Ownership of Certain Beneficial Owners and Management” for more details.
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Common Stock
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Series 7 Preferred Stock
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Total Voting Power
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Number of shares beneficially owned by our director-nominees and executive officers as of the Record Date
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4,913,893
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0
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4,913,893
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Voting Power of shares beneficially owned by our director-nominees and executive officers as of the Record Date
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4.0
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%
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0
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4.0
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Who is soliciting proxies, how are they being
solicited, and who pays the cost?
We have engaged D.F. King & Co., Inc. (“King”) to assist
in the distribution of the Proxy Materials and the solicitation of proxies. We expect to pay King a fee for these services estimated at
$11,500 plus out-of-pocket expenses. Proxies will be solicited on behalf of our Board by mail, in person, by telephone, and via the Internet.
We will bear the cost of soliciting proxies. Further, proxies may also be solicited through our directors, officers, and employees, are
soliciting proxies primarily by mail and the Internet without additional payments to them other than the reimbursement of out-of-pocket
expenses in connection with such solicitation. We will also reimburse stockbrokers and other custodians, nominees, and fiduciaries for
their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to the owners of our voting stock.
Can I attend the Annual Meeting?
This year, in light of the ongoing
COVID-19 pandemic, the Board chose a virtual meeting format for the Annual Meeting in response to public health and travel concerns and
in an effort to facilitate stockholder attendance and participation by enabling stockholders to participate fully, and equally, from
any location around the world, at no cost. The virtual meeting format will allow our stockholders to engage with us at the Annual Meeting
from any geographic location, using any convenient Internet connected devices, including smart phones and tablets, laptop or desktop
computers. The virtual format allows stockholders to submit questions during the meeting.
To ensure they can participate,
stockholders and proxyholders should visit virtualshareholdermeeting.com/INPX2021 and enter the 16-digit control number included on their
Notice of Internet Availability of Proxy Materials or proxy card. If you wish to participate in the meeting and your shares are held
in street name, you must obtain, from the broker, bank or other organization that holds your shares, the information required, including
a 16-digit control number, in order for you to be able to participate in, and vote at the Annual Meeting.
Stockholders can vote their shares
and submit questions via the Internet during the Annual Meeting by accessing the annual meeting website at virtualshareholdermeeting.com/INPX2021.
We will answer any timely submitted and relevant questions on a matter to be voted on at the Annual Meeting before voting is closed on
the matter. Following adjournment of the formal business of the Annual Meeting, we will address appropriate general questions from stockholders
regarding Inpixon as time allows. Questions relating to us may be submitted in the field provided in the web portal at or before the
time the questions are to be discussed. If we receive substantially similar questions, we may group those questions together and provide
a single response to avoid repetition.
Online check-in to the Annual
Meeting webcast will begin at 9:45 a.m., Pacific Time, and you should allow ample time to log in to the meeting webcast and test your
computer audio system. During online check-in and continuing through the length of the Annual Meeting, we will have technicians standing
by to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing
the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual
Shareholder Meeting log in page.
Who is our Independent Registered Public Accounting
Firm, and will they be represented at the Annual Meeting?
Marcum LLP served as the independent
registered public accounting firm auditing and reporting on our financial statements for the fiscal year ended December 31, 2020 and
has been appointed to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2021. We expect
that representatives of Marcum LLP will be available at the Annual Meeting. They will have an opportunity to make a statement, if they
desire, and will be available to answer appropriate questions at the Annual Meeting.
What are the recommendations of our Board?
The recommendations of our Board
are set forth together with the description of each proposal in this Proxy Statement. In summary, the Board recommends a vote FOR all
of the proposals. With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended
by the Board or, if no recommendation is given, in their own discretion.
If you sign and return your proxy
card but do not specify how you want to vote your shares, the persons named as proxy holders on the proxy card will vote in accordance
with the recommendations of the Board.
EXECUTIVE
OFFICERS, DIRECTORS, AND CORPORATE GOVERNANCE
The following table sets forth
the names and ages of all of our directors and executive officers as of the date of this Proxy Statement. Our officers are appointed
by, and serve at the pleasure of, our Board.
Name
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Age
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Position
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Nadir Ali
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53
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Chief Executive Officer and Director
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Soumya Das
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48
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Chief Operating Officer and Chief Marketing Officer
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Wendy Loundermon
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50
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Chief Financial Officer and Secretary of Inpixon and Secretary of Inpixon
Canada, Inc. and Director
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Leonard Oppenheim
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75
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Director
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Kareem Irfan
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61
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Director
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Tanveer Khader
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53
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|
Director
|
Nadir Ali
Mr. Ali has served as our Chief
Executive Officer and as a member of our Board since September 2011. As the Chief Executive Officer of Inpixon, Mr. Ali is responsible
for establishing the vision, strategy and the operational aspects of Inpixon. Mr. Ali works with the Inpixon executive team to deliver
both operational and strategic leadership and has over 20 years of experience in the consulting and high-tech industries. From November
2015 until the completion of the Spin-off in August 2018, Mr. Ali served as the Chief Executive Officer of Sysorex Inc. (OTCQB: SYSX)
and he served as a member of its board of directors until May 14, 2021.
From 1998 to 2001, Mr. Ali was
the co-founder and Managing Director of Tira Capital, an early stage technology fund. Immediately prior thereto, Mr. Ali served as Vice
President of Strategic Planning for Isadra, Inc., an e-commerce software start-up, which was acquired by VerticalNet. From 1995 through
1998, Mr. Ali was Vice President of Strategic Programs at Sysorex Information Systems, a computer systems integrator, which was acquired
by Vanstar Government Systems in 1997. Mr. Ali received a Bachelor of Arts degree in Economics from the University of California at Berkeley
in 1989. Mr. Ali’s valuable entrepreneurial, management, mergers and acquisitions and technology experience together with his in-depth
knowledge of the business of Inpixon provide him with the qualifications and skills to serve as a director
of our Company.
Soumya Das
Mr. Das has served as our Chief
Operating Officer since February 2018 and served as our Chief Marketing Officer from November 2016 until March 2021. Prior to joining
Inpixon, from November 2013 until January 2016, Mr. Das was the Chief Marketing Officer of Identiv, a security technology company. From
January 2012 until October 2013, Mr. Das was the Chief Marketing Officer of SecureAuth, a provider of multi-factor authentication, single
sign-on, adaptive authentication and self-services tools for different applications. Prior to joining SecureAuth, Mr. Das was the Vice
President, Marketing and Strategy of CrownPeak, a provider of web content management solutions, from April 2010 until January 2012. Mr.
Das earned an MBA from Richmond College, London, United Kingdom, and Bachelor of Business Management from Andhra University in India.
Wendy Loundermon
Ms. Loundermon, who was appointed
our Principal Financial and Accounting Officer on July 19, 2017, has overseen all of Inpixon’s finance, accounting and HR activities
from 2002 until October 2014 at which time she became the Vice President of Finance until December 2014. From January 2015 and October
2015, she was appointed Interim CFO of the Company. Thereafter, she continued with the Company as Vice President of Finance and was re-
appointed as CFO on September 16, 2019. She was also appointed as a member of our Board on May 14, 2019. Ms. Loundermon has over 20 years
of finance and accounting experience. She is currently responsible for the preparation and filing of financial statements and reports
for all companies, tax return filings, and managing the accounting staff. Ms. Loundermon received a Bachelor of Science degree in Accounting
and a Master of Science degree in Taxation from George Mason University. Ms. Loundermon’s extensive knowledge about the Company
and strong financial experience provides her with the qualifications and skills to serve as a director of our Company.
Leonard A. Oppenheim
Mr. Oppenheim has served as a
member of our Board since July 2011. Mr. Oppenheim retired from business in 2001 and has since been active as a private investor. From
1999 to 2001, he was a partner in Faxon Research, a company offering independent research to professional investors. From 1983 to 1999,
Mr. Oppenheim was a principal in the Investment Banking and Institutional Sales division of Montgomery Securities. Prior to that, he
was a practicing attorney. Mr. Oppenheim is a graduate of New York University Law School. Mr. Oppenheim served on the Board of Apricus
Biosciences, Inc. (Nasdaq: APRI), a publicly held bioscience company, from June 2005 to May 2014. Mr. Oppenheim’s public company
board experience is essential to the Company. Mr. Oppenheim also meets the Audit Committee Member requirements as a financial expert.
Mr. Oppenheim’s public company board experience and financial knowledge provide him with the qualifications and skills to serve
as a director of our Company.
Kareem M. Irfan
Mr. Irfan has served as a member
of our Board since July 2014. Since 2014, Mr. Irfan has been the CEO (Global Businesses) of Cranes Software International (Cranes), a
business group offering business intelligence, data analytics and engineering software solutions and services. Previously, Mr. Irfan
was Chief Strategy Officer at Cranes starting in 2011. From 2005 until 2011, he was General Counsel at Schneider Electric, a Paris-based
global company that specializes in electricity distribution, automation and energy management solutions. Mr. Irfan served earlier as
Chief IP & IT Counsel at Square D Co., a US-based electrical distribution and automation business, and also practiced law at two
international IP law firms in Chicago. Mr. Irfan is a graduate of DePaul University College of Law, holds a MS in Computer Engineering
from the University of Illinois, and a BS in Electronics Engineering from Bangalore University. Mr. Irfan’s extensive experience
in advising information technology companies, managing corporate governance and regulatory management policies, and over fifteen years
of executive management leadership give him strong qualifications and skills to serve as a director of our Company.
Tanveer A. Khader
Mr. Khader has served as a member
of our Board since July 2014. Since 2010, Mr. Khader has been the Executive Vice President of Systat Software Inc., a company offering
scientific software products for statisticians and researchers. Prior thereto he was Senior Vice President from 2008-2010, Vice President
from 2004-2008, and General Manager from 2002-2004. Mr. Khader holds a BE in Engineering from Bangalore University and a degree in Business
Administration from St. Joseph’s Commerce College. Mr. Khader’s extensive experience with software development, data analytics
and strategic planning give him the qualifications and skills to serve as director of our Company.
Our Board
Our Board may establish the authorized
number of directors from time to time by resolution. The current authorized number of directors is five. Our current directors, if elected,
will continue to serve as directors until the next annual meeting of stockholders and until his or her successor has been elected and
qualified, or until his or her earlier death, resignation, or removal.
We continue to review our corporate
governance policies and practices by comparing our policies and practices with those suggested by various groups or authorities active
in evaluating or setting best practices for corporate governance of public companies. Based on this review, we have adopted, and will
continue to adopt, changes that the Board believes are the appropriate corporate governance policies and practices for our Company.
Our Board held 9 meetings during
2020 and acted through 8 written consents. No member of our Board attended fewer than 75% of the aggregate of (i) the total number of
meetings of the Board (held during the period for which he or she was a director) and (ii) the total number of meetings held by all committees
of the Board on which such director served (held during the period that such director served). Members of our Board are invited and encouraged
to attend our annual meeting of stockholders.
Independence of Directors
In determining the independence
of our directors, we apply the definition of “independent director” provided under the listing rules of Nasdaq. Pursuant
to these rules, the Board has determined that all of the directors currently serving on the Board, are independent within the meaning
of Nasdaq Listing Rule 5605 with the exception of Nadir Ali and Wendy Loundermon, who are executive officers.
Committees of our Board
The Board has three standing committees:
the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee.
Audit Committee
The Audit Committee consists of
three directors – Leonard Oppenheim, Tanveer Khader, and Kareem Irfan, all of whom are “independent” as defined under
section 5605(a)(2) of the Nasdaq Listing Rules. In addition, the Board has determined that Leonard Oppenheim qualifies as an “audit
committee financial expert” as defined in the rules of the SEC. The Audit Committee met 4 times during 2020. All members attended
more than 75% of such committee meetings. The role of the Audit Committee is to:
|
●
|
oversee management’s preparation
of our financial statements and management’s conduct of the accounting and financial
reporting processes;
|
|
●
|
oversee management’s maintenance
of internal controls and procedures for financial reporting;
|
|
●
|
oversee our compliance with applicable
legal and regulatory requirements, including without limitation, those requirements relating
to financial controls and reporting;
|
|
●
|
oversee the independent auditor’s
qualifications and independence;
|
|
●
|
oversee the performance of the independent
auditors, including the annual independent audit of our financial statements;
|
|
●
|
prepare the report required by the rules
of the SEC to be included in our Proxy Statement; and
|
|
●
|
discharge such duties and responsibilities
as may be required of the Committee by the provisions of applicable law, rule or regulation.
|
A copy of the charter of the Audit
Committee is available on our website at http://www.inpixon.com (under “Investors”).
Compensation Committee
The Compensation Committee consists
of Kareem Irfan, Leonard Oppenheim, and Tanveer Khader, all of whom are “independent” as defined in section 5605(a)(2) of
the Nasdaq Listing Rules. Mr. Irfan is the Chairman of the Compensation Committee. The Compensation Committee met 2 times during 2020.
All members attended 75% or more of such committee meetings. The role of the Compensation Committee is to:
|
●
|
develop and recommend to the independent
directors of the Board the annual compensation (base salary, bonus, stock options and other
benefits) for our President/Chief Executive Officer;
|
|
●
|
review, approve and recommend to the
independent directors of the Board the annual compensation (base salary, bonus and other
benefits) for all of our Executive Officers (as used in Section 16 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and defined in Rule 16a-1 thereunder);
|
|
●
|
review, approve and recommend to the
Board the aggregate number of equity grants to be granted to all other employees; and
|
|
●
|
ensure that a significant portion of
executive compensation is reasonably related to the long-term interest of our stockholders.
|
A copy of the charter of the Compensation
Committee is available on our website at http://www.inpixon.com (under “Investors”).
The Compensation Committee may
form and delegate a subcommittee consisting of one or more members to perform the functions of the Compensation Committee. The Compensation
Committee may engage outside advisers, including outside auditors, attorneys and consultants, as it deems necessary to discharge its
responsibilities. The Compensation Committee has sole authority to retain and terminate any compensation expert or consultant to be used
to provide advice on compensation levels or assist in the evaluation of director, President/Chief Executive Officer or senior executive
compensation, including sole authority to approve the fees of any expert or consultant and other retention terms. In addition, the Compensation
Committee considers, but is not bound by, the recommendations of our Chief Executive Officer with respect to the compensation packages
of our other executive officers.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance
Committee, or the “Governance Committee,” consists of Tanveer Khader, Leonard Oppenheim, and Kareem Irfan, all of whom are
“independent” as defined in section 5605(a)(2) of the Nasdaq Listing Rules. Mr. Khader is the Chairman of the Governance
Committee. The Nominating and Corporate Governance Committee did not meet in person during 2020 and acted by written consent one time
during 2020. The role of the Governance Committee is to:
|
●
|
evaluate from time to time the appropriate
size (number of members) of the Board and recommend any increase or decrease;
|
|
●
|
determine the desired skills and attributes
of members of the Board, taking into account the needs of the business and listing standards;
|
|
●
|
establish criteria for prospective members,
conduct candidate searches, interview prospective candidates, and oversee programs to introduce
the candidate to us, our management, and operations;
|
|
●
|
annually recommend to the Board persons
to be nominated for election as directors;
|
|
●
|
recommend to the Board the members of
all standing Committees;
|
|
●
|
periodically review the “independence”
of each director;
|
|
●
|
adopt or develop for Board consideration
corporate governance principles and policies; and
|
|
●
|
provide oversight to the strategic planning
process conducted annually by our management.
|
A copy of the charter of the Governance
Committee is available on our website at http://www.inpixon.com (under “Investors”).
Stockholder Communications
Stockholders may communicate
with the members of the Board, either individually or collectively, by writing to the Board at 2479 E. Bayshore Road, Suite 195, Palo
Alto, CA 94303. These communications will be reviewed by the Secretary as agent for the non-employee directors in facilitating direct
communication to the Board. The Secretary will treat communications containing complaints relating to accounting, internal accounting
controls, or auditing matters as reports under our Whistleblower Policy. Further, the Secretary will disregard communications that are
bulk mail, solicitations to purchase products or services not directly related either to us or the non-employee directors’ roles
as members of the Board, sent other than by stockholders in their capacities as such or from particular authors or regarding particular
subjects that the non-employee directors may specify from time to time, and all other communications which do not meet the applicable
requirements or criteria described below, consistent with the instructions of the non-employee directors.
General Communications. The
Secretary will summarize all stockholder communications directly relating to our business operations, the Board, our officers, our activities
or other matters and opportunities closely related to us. This summary and copies of the actual stockholder communications will then
be circulated to the Chairman of the Governance Committee.
Stockholder Proposals and
Director Nominations and Recommendations. Stockholder proposals are reviewed by the Secretary for compliance with the requirements for
such proposals set forth in our Bylaws and in Regulation 14a-8 promulgated under the Exchange Act. Stockholder proposals that meet these
requirements will be summarized by the Secretary. Summaries and copies of the stockholder proposals are circulated to the Chairman of
the Governance Committee.
Stockholder nominations for
directors are reviewed and summarized by the Secretary and are then circulated to the Chairman of the Governance Committee.
The Governance Committee will
consider director candidates recommended by stockholders. If a director candidate is recommended by a stockholder, the Governance Committee
expects to evaluate such candidate in the same manner it evaluates director candidates it identifies. Stockholders desiring to make a
recommendation to the Governance Committee should follow the procedures set forth above regarding stockholder nominations for directors.
Retention of Stockholder Communications.
Any stockholder communications which are not circulated to the Chairman of the Governance Committee because they do not meet the applicable
requirements or criteria described above will be retained by the Secretary for at least ninety calendar days from the date on which they
are received, so that these communications may be reviewed by the directors generally if such information relates to the Board as a whole,
or by any individual to whom the communication was addressed, should any director elect to do so.
Distribution of Stockholder
Communications. Except as otherwise required by law or upon the request of a non-employee director, the Chairman of the Governance Committee
will determine when and whether a stockholder communication should be circulated among one or more members of the Board and/or Company
management.
Director Qualifications and Diversity
The Board seeks independent
directors who represent a diversity of backgrounds and experiences that will enhance the quality of the Board’s deliberations and
decisions. Candidates should have substantial experience with one or more publicly traded companies or should have achieved a high level
of distinction in their chosen fields. The Board is particularly interested in maintaining a mix that includes individuals who are active
or retired executive officers and senior executives, particularly those with experience in technology; research and development; finance,
accounting and banking; or marketing and sales.
There is no difference in
the manner in which the Governance Committee evaluates nominees for directors based on whether the nominee is recommended by a stockholder.
In evaluating nominations to the Board, the Governance Committee also looks for depth and breadth of experience within the Company’s
industry and otherwise, outside time commitments, special areas of expertise, accounting and finance knowledge, business judgment, leadership
ability, experience in developing and assessing business strategies, corporate governance expertise, and for incumbent members of the
Board, the past performance of the incumbent director. Each of the candidates nominated for election to our Board was recommended by
the Governance Committee.
Code of Business Conduct and Ethics
The Board has adopted a code
of business conduct and ethics (the “Code of Ethics”) designed, in part, to deter wrongdoing and to promote honest and ethical
conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships,
full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with or submits to the SEC
and in the Company’s other public communications, compliance with applicable governmental laws, rules and regulations, the prompt
internal reporting of violations of the Code of Ethics to an appropriate person or persons, as identified in the Code of Ethics and accountability
for adherence to the Code of Ethics. The Code of Ethics applies to all directors, executive officers and employees of the Company. The
Code of Ethics is periodically reviewed by the Board. In the event we determine to amend or waive certain provisions of the Code of Ethics,
we intend to disclose such amendments or waivers on our website at http://www.inpixon.com under the subheading “Investor
Relations” under the heading “Company” and in within four business days following such amendment or waiver or as otherwise
required by the Nasdaq Listing Rules.
Are there any family relationships among the directors and the
executive officers?
There are no family relationships
among any of our directors and executive officers.
Policy against Hedging Stock
Our insider trading policy
(which was adopted by the Board in November 2015 and updated as of August 2020) prohibits our directors, officers and other employees,
and their designees, from engaging in short sales or from hedging transactions of any nature that are designed to hedge or offset a decrease
in market value of such person’s ownership of the Company’s equity securities.
Risk Oversight
Our Board provides risk oversight
for our entire company by receiving management presentations, including risk assessments, and discussing these assessments with management.
The Board’s overall risk oversight, which focuses primarily on risks and exposures associated with current matters that may present
material risk to our operations, plans, prospects or reputation, is supplemented by the various committees. The Audit Committee discusses
with management and our independent registered public accounting firm our risk management guidelines and policies, our major financial
risk exposures and the steps taken to monitor and control such exposures. Our Compensation Committee oversees risks related to our compensation
programs and discusses with management its annual assessment of our employee compensation policies and programs. Our Governance Committee
oversees risks related to corporate governance and management and director succession planning.
Board Leadership Structure
The Chairman of the Board
presides at all meetings of the Board, unless such position is vacant, in which case, the Chief Executive Officer of the Company presides.
The office of Chairman of the Board has been vacant since the resignation of Abdus Salam Qureishi in September 2016.
The Company has no fixed policy
with respect to the separation of the offices of the Chairman of the Board and Chief Executive Officer. The Board believes that the separation
of the offices of the Chairman of the Board and Chief Executive Officer is in the best interests of the Company and will review this
determination from time to time.
Director Compensation
The following table provides
certain summary information concerning compensation awarded to, earned by or paid to our directors in the year ended December 31, 2020,
except Nadir Ali and Wendy Loundermon, whose aggregate compensation information has been disclosed under “Executive Compensation”
below.
Name
|
|
Fees
Earned or paid
in cash
($)
|
|
|
Stock
awards
($)
|
|
|
Option awards
($)
|
|
|
Non-equity
Incentive
plan
compensation
($)
|
|
|
Nonqualified
deferred
compensation
earnings
($)
|
|
|
All
other
compensation
($)
|
|
|
Total
($)
|
|
Leonard Oppenheim
|
|
$
|
56,000
|
|
|
|
-
|
|
|
$
|
6,720
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
62,720
|
|
Kareem Irfan
|
|
$
|
53,000
|
|
|
|
-
|
|
|
$
|
6,720
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
59,720
|
|
Tanveer Khader
|
|
$
|
47,000
|
|
|
|
-
|
|
|
$
|
6,720
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
53,720
|
|
Directors are entitled to
reimbursement of ordinary and reasonable expenses incurred in exercising their responsibilities and duties as a director.
Effective July 1, 2015, the
Board approved the following compensation plan for the independent directors payable in accordance with each independent director’s
services agreement: $30,000 per year for their services rendered on the Board, $15,000 per year for service as the audit committee chair,
$10,000 per year for service as the compensation committee chair, $6,000 per year for service on the audit committee, $4,000 per year
for service on the compensation committee, $2,500 per year for service on the nominating committee, a one-time non-qualified stock option
grant to purchase 20,000 shares (on a pre-Reverse Splits basis) of the Common Stock under applicable equity incentive plan, which are
granted in four equal installments on a quarterly basis and are each 100% vested upon grant.
On January 25, 2019, each
independent director entered into an amendment to his respective director services agreement pursuant to which the Company agreed to
grant each independent director, so long as such director continues to fulfill her or his duties and provide services pursuant to their
services agreement, an annual non-qualified stock option to purchase up to 20,000 shares of Common Stock in lieu of the above-mentioned
equity awards. Each stock option grant will be subject to the approval of the Board, which shall determine the appropriate vesting schedule,
if any, and the exercise price.
During the year ended December
31, 2020, the independent directors received 20,000 non-qualified stock options and did not receive any restricted stock awards.
EXECUTIVE
COMPENSATION
The table below sets forth,
for the last two fiscal years, the compensation earned by (i) each individual who served as our principal executive officer and (ii)
our two other most highly compensated executive officers, other than our principal executive officer, who were serving as an executive
officer at the end of the last fiscal year. Together, these individuals are sometimes referred to as the “Named Executive Officers.”
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Option
Awards
($)(1)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
Nadir Ali,
|
|
2020
|
|
$
|
280,000
|
|
|
$
|
175,000
|
|
|
$
|
336,000
|
(1)
|
|
$
|
239,999
|
(2)
|
|
$
|
1,030,999
|
|
Chief Executive Officer
|
|
2019
|
|
$
|
280,000
|
|
|
$
|
150,000
|
|
|
$
|
804,000
|
(1)
|
|
$
|
323,926
|
(3)
|
|
$
|
1,557,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Soumya Das
|
|
2020
|
|
$
|
290,625
|
|
|
$
|
48,950
|
|
|
$
|
168,000
|
(1)
|
|
$
|
136,728
|
(4)
|
|
$
|
644,303
|
|
Chief Operating Officer; Chief Marketing Officer
|
|
2019
|
|
$
|
275,000
|
|
|
$
|
50,000
|
|
|
$
|
482,400
|
(1)
|
|
$
|
92,501
|
(4)
|
|
$
|
899,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wendy Loundermon
|
|
2020
|
|
$
|
250,000
|
|
|
$
|
80,000
|
|
|
|
168,000
|
(1)
|
|
$
|
8,413
|
(5)
|
|
$
|
506,413
|
|
Chief Financial Officer
|
|
2019
|
|
$
|
250,000
|
|
|
$
|
60,000
|
|
|
$
|
562,800
|
(1)
|
|
$
|
17,021
|
(5)
|
|
$
|
889,821
|
|
|
(1)
|
The fair value of employee
option grants are estimated on the date of grant using the Black-Scholes option pricing model
with key weighted average assumptions, expected stock volatility and risk free interest rates
based on US Treasury rates from the applicable periods.
|
|
(2)
|
Automobile allowance and
housing allowance.
|
|
(3)
|
Accrued vacation paid as
compensation, automobile allowance and housing allowance.
|
|
(4)
|
Commission and automobile
allowance.
|
|
(5)
|
Accrued vacation paid as
compensation.
|
Outstanding Equity Awards at Fiscal Year-End
Other than as set forth below,
there were no outstanding unexercised options, unvested stock, and/or equity incentive plan awards issued to our Named Executive Officers
as of December 31, 2020.
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
Grant Date
|
|
Number of securities underlying unexercised
options (#) exercisable
|
|
|
Number of securities underlying unexercised
options (#) unexercisable
|
|
|
Equity incentive plan awards: number
of securities underlying unexercised unearned options (#)
|
|
|
Option
exercise price ($)
|
|
|
Option expiration date
|
|
Number of shares or units of stock
that have not vested #
|
|
|
Market value of shares of units of
stock that have not vested ($)
|
|
|
Equity incentive plan awards: number
of unearned shares, units or other rights that have not vested (#)
|
|
|
Equity incentive plan awards: market
or payout value of unearned shares, units or other rights that have not vested ($)
|
|
Nadir Ali
|
|
12/21/2012
|
|
|
1
|
(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
225,643.05
|
|
|
12/21/2022
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
08/14/2013
|
|
|
1
|
(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
1,952,678.70
|
|
|
08/14/2023
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
04/17/2015
|
|
|
1
|
(2)
|
|
|
0
|
|
|
|
0
|
|
|
|
1,677,857.40
|
|
|
04/17/2025
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
05/17/2018
|
|
|
312
|
(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
570.60
|
|
|
05/17/2028
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
01/25/2019
|
|
|
10186
|
(3)
|
|
|
926
|
(3)
|
|
|
0
|
|
|
|
101.70
|
|
|
01/25/2029
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
05/10/2019
|
|
|
7408
|
(3)
|
|
|
3704
|
(3)
|
|
|
0
|
|
|
|
33.75
|
|
|
05/10/2029
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5/08/20202
|
|
|
333,333
|
(4)
|
|
|
666,667
|
(4)
|
|
|
0
|
|
|
|
1.10
|
|
|
05/08/2030
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Soumya Das
|
|
02/03/2017
|
|
|
0
|
|
|
|
1
|
(2)
|
|
|
0
|
|
|
|
188,035.74
|
|
|
02/03/2027
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
05/17/2018
|
|
|
187
|
(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
570.60
|
|
|
05/17/2028
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
01/25/2019
|
|
|
6112
|
(3)
|
|
|
555
|
(3)
|
|
|
0
|
|
|
|
101.70
|
|
|
01/25/2029
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
05/10/2019
|
|
|
4445
|
(3)
|
|
|
2222
|
(3)
|
|
|
0
|
|
|
|
33.75
|
|
|
05/10/2029
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5/08/20202
|
|
|
166,666
|
(4)
|
|
|
333,334
|
(4)
|
|
|
0
|
|
|
|
1.10
|
|
|
05/08/2030
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wendy Loundermon
|
|
12/05/2011
|
|
|
1
|
(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
1,012,500.00
|
|
|
12/05/2021
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
12/21/2012
|
|
|
1
|
(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
225,643.05
|
|
|
12/21/2022
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
11/18/2013
|
|
|
1
|
(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
1,851,428.70
|
|
|
11/18/2023
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
05/09/2014
|
|
|
1
|
(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
3,507,589.35
|
|
|
05/09/2024
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
08/05/2015
|
|
|
1
|
(2)
|
|
|
0
|
|
|
|
0
|
|
|
|
1,265,625.00
|
|
|
08/05/2025
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
02/25/2016
|
|
|
0
|
|
|
|
1
|
(2)
|
|
|
0
|
|
|
|
376,071.30
|
|
|
02/25/2026
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
07/20/2016
|
|
|
0
|
|
|
|
1
|
(2)
|
|
|
0
|
|
|
|
339,910.65
|
|
|
07/20/2026
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
05/17/2018
|
|
|
218
|
(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
570.60
|
|
|
05/17/2028
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
01/25/2019
|
|
|
7130
|
(3)
|
|
|
648
|
(3)
|
|
|
0
|
|
|
|
101.70
|
|
|
01/25/2029
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
05/10/2019
|
|
|
5186
|
(3)
|
|
|
2592
|
(3)
|
|
|
0
|
|
|
|
33.75
|
|
|
05/10/2029
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5/08/20202
|
|
|
166,666
|
(4)
|
|
|
333,334
|
(4)
|
|
|
0
|
|
|
|
1.10
|
|
|
05/08/2030
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
(1)
|
This option is 100% vested.
|
|
|
|
(2)
|
This option vests 1/48th
per month at the end of each month starting on the grant date.
|
|
(3)
|
This option vests 1/12th
per month at the end of each month starting on the grant date.
|
|
(4)
|
This option vests 1/24th
per month at the end of each month starting on the grant date.
|
Employment Agreements and Arrangements
Nadir Ali
On July 1, 2010, Nadir Ali
entered into an at-will Employment and Non-Compete Agreement, as subsequently amended, with Inpixon Federal, Inc., Inpixon Government
Services and Inpixon Consulting prior to their acquisition by the Company. Under the terms of the Employment Agreement Mr. Ali serves
as President. The employment agreement was assumed by the Company and Mr. Ali became CEO in September 2011. Mr. Ali’s salary under
the agreement was initially $240,000 per annum plus other benefits including a bonus plan, a housing allowance, health insurance, life
insurance and other standard Inpixon employee benefits. If Mr. Ali’s employment is terminated without Cause (as defined), he will
receive his base salary for 12 months from the date of termination. Mr. Ali’s employment agreement provides that he will not compete
with the Company and will be subject to non-solicitation provisions relating to employees, consultants and customers, distributors, partners,
joint ventures or suppliers of the Company during the term of his employment or consulting relationship with the Company. On April 17,
2015, the compensation committee approved the increase of Mr. Ali’s annual salary to $252,400, effective January 1, 2015. Effective
May 16, 2018 the compensation committee approved an increase in Mr. Ali’s annual salary to $280,000 and an auto allowance of $1,000
a month.
Soumya Das
On November 4, 2016, and effective
as of November 7, 2016, Mr. Das entered into an employment agreement to serve as Chief Marketing Officer of the Company. On February
2, 2018, he was promoted to Chief Operating Officer. In accordance with the terms of the agreement, Mr. Das will receive a base salary
of $250,000 per annum. In addition, Mr. Das will receive a bonus up to $75,000 annually, provided that he completes the required tasks
before their deadlines, and the tasks, their deadlines and the amount of corresponding bonuses shall be determined by the Company and
the CEO. The agreement was effective for an initial term of twenty-four (24) months and was automatically renewed for one additional
twelve (12) month period. The Company may terminate the services of Mr. Das with or without “just cause” (as defined). If
the Company terminates Mr. Das’ employment without just cause, or if Mr. Das resigns within twenty-four (24) months following a
change of control (as defined) and as a result of a material diminution of his position or compensation, Mr. Das will receive (1) his
base salary at the then current rate and levels for one (1) month if Mr. Das has been employed by the Company for at least six (6) months
but not more than twelve (12) months as of the date of termination or resignation, for three (3) months if Mr. Das has been employed
by the Company more than twelve (12) but not more than twenty-four (24) months as of the date of termination or resignation, or for six
(6) months if Mr. Das has been employed by the Company for more than twenty-four (24) months as of the date of resignation or termination;
(2) 50% of the value of any accrued but unpaid bonus that Mr. Das otherwise would have received; (3) the value of any accrued but unpaid
vacation time; and (4) any unreimbursed business expenses and travel expenses that are reimbursable under the agreement. If the Company
terminates Mr. Das’ employment with just cause, Mr. Das will receive only the portion of his base salary and accrued but unused
vacation pay that has been earned through the date of termination. On August 31, 2018, the Company amended Mr. Das’ employment
agreement to make the following changes to his compensation effective May 14, 2018: (1) increase in base salary to $275,000 per year,
(2) have up to $50,000 in MBO’s annually, (3) commissions equal to 2% of recognized revenue associated with the IPA product line
paid quarterly and subject to the Company policies in connection with commissions payable and (4) provide a transportation allowance
of $1,000 per month. On May 10, 2019, the Company amended Mr. Das’ commission plan to include a 1% commission on recognized revenue
associated with the Shoom product line paid quarterly and subject to Company commission plan policies. Effective as of March 2021, Mr.
Das resigned from his position as Chief Marketing Officer.
Wendy Loundermon
On October 21, 2014, and effective
as of October 1, 2014, the Company entered into an at-will employment agreement with Wendy Loundermon. Ms. Loundermon currently serves
as CFO, Director and Secretary of the Company and Secretary of Inpixon Canada, Inc. Pursuant to the agreement, Ms. Loundermon was compensated
at an annual rate of $200,000 and is entitled to benefits customarily provided to senior management including equity awards and cash
bonuses subject to the satisfaction of certain performance goals determined by the Company. The standards and goals and the bonus targets
is set by the compensation committee, in its sole discretion. The Company may terminate the services of Ms. Loundermon with or without
“cause” (as defined). If the Company terminates Ms. Loundermon’s employment without cause or in connection with a change
of control (as defined), Ms. Loundermon will receive (1) severance consisting of her base salary at the then current rate for twelve
(12) months from the date of termination, and (2) her accrued but unpaid salary. If Ms. Loundermon’s employment is terminated under
any circumstances other than the above, Ms. Loundermon will receive her accrued but unpaid salary. Ms. Loundermon’s salary was
increased to $228,500 effective April 1, 2017, $250,000 effective March 1, 2018, and $280,000 effective January 2021.
Inpixon Employee Stock Incentive Plans
2018 Employee Stock Incentive Plan
The following is a summary
of the material terms of our 2018 Employee Stock Incentive Plan, as amended to date, excluding the amendment being voted upon at the Annual Meeting (the “2018 Plan”). This description is
not complete. For more information, we refer you to the full text of the 2018 Plan.
The 2018 Plan is an important
part of our compensation program. It promotes financial saving for the future by our employees, fosters good employee relations, and
encourages employees to acquire shares of our common stock, thereby better aligning their interests with those of the other stockholders.
Therefore, the Board believes it is essential to our ability to attract, retain, and motivate highly qualified employees in an extremely
competitive environment both in the United States and internationally.
Amount of Shares of Common
Stock. The number of shares of our common stock initially reserved for issuance under the 2018 Plan was 2,000,000, which number is
automatically increased on the first day of each quarter, beginning on April 1, 2018 and for each quarter thereafter through October 1,
2028, by a number of shares of common stock equal to the least of (i) 1,500,000 shares, (ii) twenty percent (20%) of the outstanding shares
of common stock on the last day of the immediately preceding calendar quarter, or (iii) such number of shares that may be determined by
the Board. The amount of shares available for issuance is not adjusted in connection with a change in the outstanding shares of common
stock by reason of stock dividends, stock splits, reverse stock splits, recapitalizations, mergers, consolidations, combinations or exchanges
of shares, separations, reorganizations or liquidations; provided; however, that in no event will the Company issue more than 63,000,000
shares of common stock under the 2018 Plan, including the maximum amount of shares of common stock that may be added to the 2018 Plan
in accordance with the automatic quarterly increases. As of the Record Date, there were 18,730,073 shares of Common Stock authorized for
issuance under the 2018 Plan.
Types of Awards. The
2018 Plan provides for the granting of incentive stock options, non-qualified stock options (“NQSOs”), stock grants and other
stock-based awards, including Restricted Stock and Restricted Stock Units (as defined in the 2018 Plan).
|
●
|
Incentive and Nonqualified
Stock Options. The plan administrator determines the exercise price of each stock option.
The exercise price of an NQSO may not be less than the fair market value of our common stock
on the date of grant. The exercise price of an incentive stock option may not be less than
the fair market value of our common stock on the date of grant if the recipient holds 10%
or less of the combined voting power of our securities, or 110% of the fair market value
of a share of our common stock on the date of grant otherwise.
|
|
●
|
Stock Grants. The
plan administrator may grant or sell stock, including restricted stock, to any participant,
which purchase price, if any, may not be less than the par value of shares of our common
stock. The stock grant will be subject to the conditions and restrictions determined by the
administrator. The recipient of a stock grant shall have the rights of a stockholder with
respect to the shares of stock issued to the holder under the 2018 Plan.
|
|
●
|
Stock-Based Awards.
The plan administrator of the 2018 Plan may grant other stock-based awards, including stock
appreciation rights, restricted stock and restricted stock units, with terms approved by
the administrator, including restrictions related to the awards. The holder of a stock-based
award shall not have the rights of a stockholder except to the extent permitted in the applicable
agreement.
|
Plan Administration.
Our Board is the administrator of the 2018 Plan, except to the extent it delegates its authority to a committee, in which case the committee
shall be the administrator. Our Board has delegated this authority to our compensation committee. The administrator has the authority
to determine the terms of awards, including exercise and purchase price, the number of shares subject to awards, the value of our common
stock, the vesting schedule applicable to awards, the form of consideration, if any, payable upon exercise or settlement of an award
and the terms of award agreements for use under the 2018 Plan.
Eligibility. The plan
administrator will determine the participants in the 2018 Plan from among our employees, directors and consultants. A grant may be approved
in advance with the effectiveness of the grant contingent and effective upon such person’s commencement of service within a specified
period.
Termination of Service.
Unless otherwise provided by the administrator or in an award agreement, upon a termination of a participant’s service, all unvested
options then held by the participant will terminate and all other unvested awards will be forfeited.
Transferability. Awards
under the 2018 Plan may not be transferred except by will or by the laws of descent and distribution, unless otherwise provided by the
plan administrator in its discretion and set forth in the applicable agreement, provided that no award may be transferred for value.
Adjustment. In the
event of a stock dividend, stock split, recapitalization or reorganization or other change in change in capital structure, the plan administrator
will make appropriate adjustments to the number and kind of shares of stock or securities subject to awards.
Corporate Transaction.
If we are acquired, the plan administrator will: (i) arrange for the surviving entity or acquiring entity (or the surviving or acquiring
entity’s parent company) to assume or continue the award or to substitute a similar award for the award; (ii) cancel or arrange
for cancellation of the award, to the extent not vested or not exercised prior to the effective time of the transaction, in exchange
for such cash consideration, if any, as the plan administrator in its sole discretion, may consider appropriate; or (iii) make a payment,
in such form as may be determined by the plan administrator equal to the excess, if any, of (A) the value of the property the holder
would have received upon the exercise of the award immediately prior to the effective time of the transaction, over (B) any exercise
price payable by such holder in connection with such exercise. In addition in connection with such transaction, the plan administrator
may accelerate the vesting, in whole or in part, of the award (and, if applicable, the time at which the award may be exercised) to a
date prior to the effective time of such transaction and may arrange for the lapse, in whole or in part, of any reacquisition or repurchase
rights held by us with respect to an award.
Amendment and Termination.
The 2018 Plan will terminate on January 4, 2028 or at an earlier date by vote of our Board; provided, however, that any such earlier
termination shall not affect any awards granted under the 2018 Plan prior to the date of such termination. The 2018 Plan may be amended
by our Board, except that our Board may not alter the terms of the 2018 Plan if it would adversely affect a participant’s rights
under an outstanding stock right without the participant’s consent.
The Board may at any time
amend or terminate the 2018 Plan; provided that no amendment may be made without the approval of the stockholder if such amendment would
increase either the maximum number of shares which may be granted under the 2018 Plan or any specified limit on any particular type or
types of award, or change the class of employees to whom an award may be granted, or withdraw the authority to administer the 2018 Plan
from a committee whose members satisfy the independence and other requirements of Section 162(m) and applicable SEC and Nasdaq requirements.
Pursuant to the listing standards of the Nasdaq Stock Market, certain other material revisions to the 2018 Plan may also require stockholder
approval.
Federal Income Tax Consequences
of the 2018 Plan. The federal income tax consequences of grants under the 2018 Plan will depend on the type of grant. The following
is a general summary of the principal United States federal income taxation consequences to participants and us under current law with
respect to participation in the 2018 Plan. This summary is not intended to be exhaustive and does not discuss the income tax laws of
any city, state or foreign jurisdiction in which a participant may reside or the rules applicable to deferred compensation under Section
409A of the Code. Our ability to realize the benefit of any tax deductions described below depends on our generation of taxable income
as well as the requirement of reasonableness, the provisions of Section 162(m) of the Code and the satisfaction of our tax reporting
obligations.
From the grantees’ standpoint,
as a general rule, ordinary income will be recognized at the time of delivery of shares of our common stock or payment of cash under
the 2018 Plan. Future appreciation on shares of our common stock held beyond the ordinary income recognition event will be taxable as
capital gain when the shares of our common stock are sold. The tax rate applicable to capital gain will depend upon how long the grantee
holds the shares. We, as a general rule, will be entitled to a tax deduction that corresponds in time and amount to the ordinary income
recognized by the grantee, and we will not be entitled to any tax deduction with respect to capital gain income recognized by the grantee.
Exceptions to these general
rules arise under the following circumstances:
|
●
|
If shares of our
common stock, when delivered, are subject to a substantial risk of forfeiture by reason of
any employment or performance-related condition, ordinary income taxation and our tax deduction
will be delayed until the risk of forfeiture lapses, unless the grantee makes a special election
to accelerate taxation under section 83(b) of the Code.
|
|
●
|
If an employee exercises
a stock option that qualifies as an ISO, no ordinary income will be recognized, and we will
not be entitled to any tax deduction, if shares of our common stock acquired upon exercise
of the stock option are held until the later of (A) one year from the date of exercise and
(B) two years from the date of grant. However, if the employee disposes of the shares acquired
upon exercise of an ISO before satisfying both holding period requirements, the employee
will recognize ordinary income at the time of the disposition equal to the difference between
the fair market value of the shares on the date of exercise (or the amount realized on the
disposition, if less) and the exercise price, and we will be entitled to a tax deduction
in that amount. The gain, if any, in excess of the amount recognized as ordinary income will
be long-term or short-term capital gain, depending upon the length of time the employee held
the shares before the disposition.
|
|
●
|
A grant may be subject
to a 20% tax, in addition to ordinary income tax, at the time the grant becomes vested, plus
interest, if the grant constitutes deferred compensation under section 409A of the Code and
the requirements of section 409A of the Code are not satisfied.
|
Section 162(m) of the Code generally
disallows a publicly held corporation’s tax deduction for compensation paid to its chief executive officer or certain other officers
in excess of $1 million in any year. Qualified performance-based compensation is excluded from the $1 million deductibility limit, and
therefore remains fully deductible by the corporation that pays it. Stock units, stock awards, dividend equivalents, and other stock-based
awards granted under the 2018 Plan may be designated as qualified performance-based compensation if the Committee conditions such grants
on the achievement of specific performance goals in accordance with the requirements of section 162(m) of the Code.
We have the right to require
that grantees pay to us an amount necessary for us to satisfy our federal, state or local tax withholding obligations with respect to
grants. We may withhold from other amounts payable to a grantee an amount necessary to satisfy these obligations. The Committee may permit
a grantee to satisfy our withholding obligation with respect to grants paid in shares of our common stock by having shares withheld,
at the time the grants become taxable, provided that the number of shares withheld does not exceed the individual’s minimum applicable
withholding tax rate for federal, state and local tax liabilities.
2011 Employee Stock Incentive Plan
Except as set forth below,
the material terms of our 2011 Employee Stock Incentive Plan, as amended to date (the “2011 Plan”) are substantially similar
to the material terms of the 2018 Plan. However, this description is not complete. For more information, we refer you to the full text
of the 2011 Plan.
The 2011 Plan was intended
to encourage ownership of common stock by our employees and directors and certain of our consultants in order to attract and retain such
people, to induce them to work for the benefit of us and to provide additional incentive for them to promote our success. The 2011 Plan
(but not awards granted under the 2011 Plan) terminated on August 31, 2021.
Securities Authorized for Issuance under Equity Compensation
Plans
The following table provides
information as of December 31, 2020 regarding the shares of our common stock to be issued upon exercise of outstanding options or available
for issuance under equity compensation plans and other compensation arrangements that were (i) adopted by our security holders and (ii)
were not approved by our security holders.
Plan Category
|
|
Number of
securities
to be issued
upon
exercise of
outstanding
options
(a)
|
|
|
Weighted-average
exercise
price of
outstanding
(b)
|
|
|
Number of
securities
remaining
available for
future issuance
under equity
compensation
plans
(excluding
securities
reflected in
column a)
(c)
|
|
Equity compensation plans approved by security holders
|
|
|
5,450,056
|
(1)
|
|
$
|
23.41
|
|
|
|
9,197,287
|
(2)
|
Equity compensation plans not approved by security holders
|
|
|
1
|
(3)
|
|
$
|
1,952,678.70
|
|
|
|
-
|
|
Total
|
|
|
5,450,057
|
|
|
$
|
23.76
|
|
|
|
9,197,287
|
|
|
(1)
|
Represents 89 shares of
common stock that may be issued pursuant to outstanding stock options granted under the 2011
Plan and 5,449,967 shares of common stock that may be issued pursuant to outstanding stock
options granted under the 2018 Plan.
|
|
(2)
|
Represents 417,181 shares
of common stock available for future issuance in connection with equity award grants under
the 2011 Plan (provided, that 2011 Plan is terminated as of August 31, 2021) and 8,780,106
shares of common stock available for future issuance in connection with equity award grants
under the 2018 Plan.
|
|
(3)
|
Represents shares of common
stock issuable upon the exercise of stock options granted to Nadir Ali on August 14, 2013
outside of the 2011 Plan and the 2018 Plan.
|
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth
certain information as of September 17, 2021, regarding the beneficial ownership of our common stock by the following persons:
|
●
|
our Named Executive
Officers;
|
|
●
|
all of our executive
officers and directors as a group; and
|
|
●
|
each person or entity
who, to our knowledge, owns more than 5% of our common stock.
|
Except as indicated in the
footnotes to the following table, subject to applicable community property laws, each stockholder named in the table has sole voting
and investment power. Unless otherwise indicated, the address for each stockholder listed is c/o Inpixon, 2479 E. Bayshore Road, Suite
195, Palo Alto, California 94303. Shares of common stock subject to options, warrants, or other rights currently exercisable or exercisable
within 60 days of September 17, 2021, are deemed to be beneficially owned and outstanding for computing the share ownership and percentage
of the stockholder holding the options, warrants or other rights, but are not deemed outstanding for computing the percentage of any
other stockholder. The information provided in the following table is based on our records, information filed with the SEC, and information
furnished by our stockholders.
Name of Beneficial Owner
|
|
Amount
and
nature of
beneficial
ownership
|
|
|
Percent of
Class(1)
|
|
Named Executive Officers and Directors
|
|
|
|
|
|
|
Nadir Ali
|
|
|
2,274,027
|
(2)
|
|
|
1.9
|
%
|
Leonard Oppenheim
|
|
|
160,450
|
(3)
|
|
|
*
|
|
Kareem Irfan
|
|
|
160,449
|
(4)
|
|
|
*
|
|
Tanveer Khader
|
|
|
160,452
|
(5)
|
|
|
*
|
|
Soumya Das
|
|
|
1,026,526
|
(6)
|
|
|
*
|
|
Wendy Loundermon
|
|
|
1,131,989
|
(7)
|
|
|
*
|
|
All executive officers and directors as a group (6 persons)
|
|
|
4,913,893
|
(8)
|
|
|
4.0
|
%
|
|
*
|
Represents beneficial ownership
of less than 1%.
|
|
(1)
|
Based
on 116,993,719 shares outstanding as of September 17, 2021.
|
|
(2)
|
Includes
(i) 1,293,152 shares of common stock held of record by Mr. Ali, including 750,000 restricted shares subject to forfeiture, (ii) 980,873
shares of common stock issuable upon exercise of options exercisable within 60 days of September 17, 2021, (iii) 1 shares of common stock
held of record by Lubna Qureishi, Mr. Ali’s wife, and (iv) 1 share of common stock held of record by the Qureishi Ali Grandchildren
Trust, of which Mr. Ali is the joint-trustee (with his wife Lubna Qureishi) of the Qureishi Ali Grandchildren Trust and has shared voting
and investment control over the shares held. Excludes 1,541,667 shares issuable pursuant to options that are not currently exercisable
or become exercisable within 60 days of September 17, 2021.
|
|
(3)
|
Includes
(i) 2 shares of common stock held of record by Mr. Oppenheim, and (ii) 160,448 shares of common stock issuable upon exercise of options
exercisable within 60 days of September 17, 2021.
|
|
(4)
|
Includes
(i) 1 share of common stock held of record by Mr. Irfan and (ii) 160,448 shares of common stock issuable upon exercise of options exercisable
within 60 days of September 17, 2021.
|
|
(5)
|
Includes
(i) 3 shares of common stock owned directly by SyHolding Corp., (ii) 1 shares of common stock held of record by Mr. Khader and (iii)
160,448 shares of common stock issuable upon exercise of options exercisable within 60 days of September 17, 2021. Tanveer Khader holds
the power to vote and dispose of the SyHolding Corp. shares.
|
|
(6)
|
Includes
(i) 550,494 shares of common stock held of record by Mr. Das, including 375,000 restricted shares subject to forfeiture and (ii) 476,032
shares of common stock issuable upon exercise of options exercisable within 60 days of September 17, 2021. Excludes 637,493 shares issuable
pursuant to options that are not currently exercisable or become exercisable within 60 days of September 17, 2021.
|
|
(7)
|
Includes
(i) 637,040 shares of common stock held of record by Mrs. Loundermon, including 375,000 restricted shares subject to forfeiture
and (ii) 494,949 shares of common stock issuable upon exercise of options exercisable within 60 days of September 17, 2021. Excludes
770,835 shares issuable pursuant to options that are not currently exercisable or become exercisable within 60 days of September 17,
2021.
|
|
(8)
|
Includes
(i) 2,480,690 shares of common stock held of record by the beneficial owner, including 1,500,000 restricted shares subject to forfeiture,
(ii) 1 share of common stock held of record by spouse, (iii) 4 shares of common stock held of record by entities, and (iv) 2,433,198
shares of common stock issuable upon exercise of options exercisable within 60 days of September 17, 2021. Excludes 2,949,995 shares
issuable pursuant to options that are not currently exercisable or become exercisable within 60 days of September 17, 2021.
|
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Review, Approval, or Ratification of Transactions
with Related Persons.
The Board reviews issues involving
potential conflicts of interest, and reviews and approves all related party transactions, including those required to be disclosed as
a “related party” transaction under applicable federal securities laws. The Board has not adopted any specific procedures
for conducting reviews of potential conflicts of interest and considers each transaction in light of the specific facts and circumstances
presented. However, to the extent a potential related party transaction is presented to the Board, the Company expects that the Board
would become fully informed regarding the potential transaction and the interests of the related party, and would have the opportunity
to deliberate outside of the presence of the related party. The Company expects that the Board would only approve a related party transaction
that was in the best interests of the Company, and further would seek to ensure that any completed related party transaction was on terms
no less favorable to the Company than could be obtained in a transaction with an unaffiliated third party. Other than as described below,
no transaction requiring disclosure under applicable federal securities laws occurred since fiscal year 2019 that was submitted to the
Board for approval as a “related party” transaction.
Related Party Transactions
SEC regulations define the
related person transactions that require disclosure to include any transaction, arrangement or relationship in which the amount involved
exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years
in which we were or are to be a participant and in which a related person had or will have a direct or indirect material interest. A
related person is: (i) an executive officer, director or director nominee, (ii) a beneficial owner of more than 5% of our common stock,
(iii) an immediate family member of an executive officer, director or director nominee or beneficial owner of more than 5% of our common
stock, or (iv) any entity that is owned or controlled by any of the foregoing persons or in which any of the foregoing persons has a
substantial ownership interest or control.
For the period from January
1, 2020, through the date of this Proxy Statement (the “Reporting Period”), described below are certain transactions or series
of transactions between us and certain related persons.
Sysorex Transactions
Nadir Ali, Chief Executive
Officer and member of the Board, was a member of the board of directors of Sysorex, Inc., a Nevada corporation (“Sysorex”),
at the time of the reported transactions. Mr. Ali resigned as a member of the board of directors of Sysorex on May 14, 2021.
Sysorex Securities Settlement Agreement
On April 14, 2021, the Company
entered into a Securities Settlement Agreement (the “SSA”) and a Rights Letter Agreement (the “RLA”), each with
Sysorex, whereby Sysorex agreed to satisfy in full its outstanding debt, in the aggregate amount of $9,088,176 as of March 31, 2021,
owed to the Company under that certain secured promissory note, originally dated December 31, 2018, as amended from time to time (the
“Sysorex Note”), and in connection with that certain settlement agreement, dated February 20, 2019, by and among the Company,
Sysorex and Atlas Technology Group, LLC (the “Debt Settlement”). To effect the Debt Settlement, Sysorex agreed to issue to
the Company (i) pursuant to the terms of the SSA, 12,972,189 shares of its common stock, $0.00001 par value per share, and (ii) rights
to acquire 3,000,000 additional shares of its common stock pursuant to the terms of the RLA. The Debt Settlement was entered into in
connection with Sysorex’s closing of a reverse triangular merger with TTM Digital Assets & Technologies, Inc.
The Company recorded $7.5
million for the release of the previously recorded valuation allowance, $1.6 million of interest income, and a gain on settlement of
$49.8 million equal to the difference in the carry value of the promissory note, including interest and value of the common stock and
rights to acquire additional shares received in the settlement.
In connection with the Debt Settlement,
the Company also entered into a Registration Rights Agreement, dated as of April 14, 2021 (the “RRA”), with Sysorex and certain
other stockholders of Sysorex (the “Holders”). Pursuant to the terms of the RRA, Sysorex must, subject to certain limitations,
register the resale of the shares of common stock held by the Company and the Holders, with the U.S. Securities and Exchange Commission
(the “SEC”),.
Also, under the RRA, if Sysorex
determines to prepare and file with the SEC a registration statement relating to an offering of any of its equity securities, for its
own account or the account of others, then the Company and the Holders will have the right, subject to certain limitations, to require
Sysorex to include in such registration statement all or any part of the shares of common stock held by them.
Systat License Acquisition
On June 30, 2020 (the “Closing
Date”), pursuant to the terms and conditions of that certain Exclusive Software License and Distribution Agreement, dated as of
June 19, 2020, with an effective date of June 1, 2020 (as amended, the “License Agreement”), with Cranes Software
International Ltd., a company organized under the laws of India (“Cranes”), and Systat Software, Inc., a Delaware corporation
(“Systat,” and together with Cranes, the “Systat Parties”), the Company acquired (a) an exclusive, worldwide
license to use, modify, develop, market and distribute certain software, software source, user documentation and related Systat intellectual
property and (b) an exclusive, worldwide sub-license to use, modify, develop, market and distribute software, software source,
user documentation and related intellectual property licensed to Systat by Cranes (collectively, the “Licenses”). In exchange
for the Licenses the Company paid $2.2 million in cash and the Company partitioned a portion of the Sysorex Note 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. Pursuant to the License Agreement, the Company partitioned and assigned to Systat an additional $3.3 million
of the principal balance underlying the Sysorex Note as follows: (i) $1.3 million on the three month anniversary of the Closing Date;
(ii) $1.0 million on the six month anniversary of the Closing Date; and (iii) $1.0 million on March 19, 2021.
In addition, during the first
quarter of 2021, in connection with an amendment to License Agreement, dated February 22, 2021, the Company exercised its option under
the License Agreement to purchase a portion of the underlying assets of the Sysorex Note, including certain software, trademarks, solutions,
domain names and websites from Systat, in exchange for $900,000 in cash consideration.
Nadir Ali, the Company’s
Chief Executive Officer and a member of the Board, is a related party in connection with the acquisition of the Licenses as a result
of his service as a director of Sysorex, the issuer of the Sysorex Note that was assigned in accordance with the terms and conditions
of the License Agreement. In addition, Tanveer Khader and Kareem Irfan, members of the Board, are also related parties in connection
with the acquisition of the Licenses as a result of their respective employment relationships with the Systat Parties.
Subscription of Units of Cardinal Venture Holdings
On September 30, 2020,
the Company entered into a Subscription Agreement (the “Subscription Agreement”) with Cardinal Venture Holdings LLC, a Delaware
limited liability company (“CVH”), pursuant to which the Company agreed to (i) contribute up to $1,800,000 (the “Contribution”)
to CVH and (ii) purchase up to 599,999 Class A Units of CVH (the “Class A Units”) and up to 1,800,000 Class B
Units of CVH (the “Class B Units,” and, together with the Class A Units, the “Units”). The aggregate
purchase price of $1,800,000 for the Units is deemed to be satisfied in part through the Contribution.
CVH owns certain interests
in the sponsor entity (the “Sponsor”) to a special purpose acquisition company formed for the purpose of pursuing an initial
public offering of its securities followed by effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses (the “SPAC”). It is anticipated that the Contribution will be
used by CVH to fund the Sponsor’s purchase of securities in the SPAC.
Nadir Ali, the Company’s
Chief Executive Officer and a director, beneficially owns membership interests in CVH through 3AM LLC, a Delaware limited liability company
and a founding member of CVH (“3AM”).
Concurrently with the Company’s
entry into the Subscription Agreement, the Company entered into the Amended and Restated Limited Liability Company Agreement of CVH (the
“LLC Agreement”), dated as of September 30, 2020. Under the terms of the LLC Agreement, in the event the managing member
can no longer manage CVH’s affairs due to his death, disability or incapacity, 3AM will serve as CVH’s replacement managing
member. Except as may be required by law, the Company, as a non-managing member under the LLC Agreement, does not have any voting
rights and generally cannot take part in the management or control of CVH’s business and affairs.
On December 16, 2020, the
Company entered into a second Subscription Agreement with CVH, pursuant to which the Company agreed to (i) contribute $700,000 (the “Additional
Contribution”) to CVH and (ii) purchase 700,000 Class B Units. The aggregate purchase price of $700,000 for the Class B Units is
deemed to be satisfied through the Additional Contribution. Following the closing of the Additional Contribution, the Company owns an
aggregate of 599,999 Class A Units and 2,500,000 Class B Units.
Inpixon Canada Promissory Note
On August 12, 2019, prior
to the acquisition of Jibestream, the Company loaned Jibestream $140,600 for operating expenses. The note accrues interest at a rate
of 5% per annum and has a maturity date of December 31, 2020. However, upon the acquisition of Jibestream by Inpixon Canada, Inpixon
Canada assumed the loan through consolidation. As of June 30, 2021, the principal and interest of the Jibestream note and the other amounts
advanced to Inpixon Canada by the Company totaled $14,290,529.
Proposal
ONE:
Election Of Directors
Nominees for Election
Our business affairs are managed
under the direction of our Board, which is currently composed of five members. Three of our directors are independent according to the
independent director requirements of Nasdaq. Our directors serve for one-year terms.
At the Annual Meeting, stockholders
will be asked to elect the following five directors to serve until the 2022 annual meeting of stockholders or until their successors
are duly elected and qualified:
If a quorum is present at
the Annual Meeting, then nominees will be elected by a majority of the votes cast by the holders of shares present virtually or represented
by proxy and entitled to vote at the meeting. There is no cumulative voting in the election of directors.
In the event that any nominee
for any reason is unable to serve, or for good cause will not serve, the proxies will be voted for such substitute nominee as our Board
may determine. We are not aware of any nominee who will be unable to serve, or for good cause will not serve, as a director.
Unless otherwise provided
by law, any vacancy on the Board, except for a vacancy created by the removal of a director, may be filled by the stockholders, by a
majority of the directors then in office, even if less than a quorum, or by a sole remaining director. A vacancy in the Board created
by the removal of a director may only be filled by the vote of a majority of the shares entitled to vote represented at a duly held meeting
at which a quorum is present, or by the written consent of the holders of a majority of the outstanding shares.
The relevant experiences,
qualifications, attributes or skills of each nominee that led our Board to recommend the above persons as a nominee for director are
described in the section entitled “Executive Officers, Directors, and Corporate Governance.”
Vote Required
The nominees will be elected
by a majority of the votes cast by the holders of shares entitled to vote at the Annual Meeting present virtually or represented by proxy
and entitled to vote in the election. You may choose to vote FOR, AGAINST, or ABSTAIN separately for each nominee. If your shares are
held by a broker and you do not give the broker specific instructions on how to vote your shares, your broker may not vote your shares
at its discretion. Abstentions and broker non-votes will have no effect on the outcome of the vote on this proposal.
***THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE “FOR”
EACH OF THE NOMINEES LISTED ABOVE***
PROPOSAL TWO:
Ratification of THE Appointment of OUR Independent
Registered Public Accounting Firm
The Audit Committee of the
Board has appointed Marcum LLP (“Marcum”) as our independent registered public accounting firm to audit our financial statements
for the fiscal year ending December 31, 2021. Marcum has served as our independent registered public accounting firm since 2012.
Stockholder ratification of
the selection of Marcum as our independent registered public accounting firm is not required by our Bylaws or the Nevada Revised Statutes
(“NRS”). The Board seeks such ratification as a matter of good corporate practice. Should the stockholders fail to ratify
the selection of Marcum as our independent registered public accounting firm, the Board will reconsider whether to retain that firm for
fiscal year 2021. In making its recommendation to the Board that stockholders ratify the appointment of Marcum as our independent registered
public accounting firm for the fiscal year ending December 31, 2021, the Audit Committee considered whether Marcum’s provision
of non-audit services is compatible with maintaining the independence of our independent registered public accounting firm. The Audit
Committee pre-approved the audit fees, audit-related fees, tax fees and all other fees described below in accordance with our pre-approval
policy and believes such fees are compatible with the independence of Marcum. Set forth below are approximate fees for services rendered
by Marcum LLP, our independent registered public accounting firm, for the fiscal years ended December 31, 2020 and 2019.
|
|
2020
|
|
|
2019
|
|
Audit Fees
|
|
$
|
355,024
|
|
|
$
|
399,382
|
|
Audit Related Fees
|
|
$
|
-
|
|
|
$
|
-
|
|
Tax Fees
|
|
$
|
-
|
|
|
$
|
-
|
|
All Other Fees
|
|
$
|
-
|
|
|
$
|
-
|
|
Audit Fees. The “Audit
Fees” are the aggregate fees of Marcum attributable to professional services rendered in 2020 and 2019 for the audit of our annual
financial statements, for review of financial statements included in our quarterly reports on Form 10-Q or for services that are normally
provided by Marcum in connection with statutory and regulatory filings or engagements for that fiscal year. These fees include fees billed
for professional services rendered by Marcum for the review of registration statements or services that are normally provided in connection
with statutory and regulatory filings or engagements for those fiscal years.
Audit-Related Fees.
Marcum billed us for professional services that were reasonably related to the performance of the audit or review of financial statements
in 2020 and 2019, which are not included under Audit Fees above including the filing of our registration statements, including our Registration
Statement on Form S-3. This amount also includes audit fees related to acquisitions.
Tax Fees. Marcum did
not perform any tax advice or planning services in 2020 or 2019.
All Other Fees. Marcum
did not perform any services for us or charge any fees other than the services described above in 2020 and 2019.
Pre-approval Policies and Procedures
The Audit Committee is required
to review and approve in advance the retention of the independent auditors for the performance of all audit and lawfully permitted non-audit
services and the fees for such services. The Audit Committee may delegate to one or more of its members the authority to grant pre-approvals
for the performance of non-audit services, and any such Audit Committee member who pre-approves a non-audit service must report the pre-approval
to the full Audit Committee at its next scheduled meeting. The Audit Committee is required to periodically notify the Board of their
approvals. The required pre-approval policies and procedures were complied with during 2019 and 2020.
Marcum LLP Representatives at Annual Meeting
We expect that representatives
of Marcum will be present at the Annual Meeting. They will be given the opportunity to make a statement
if they desire to do so, and they will be available to respond to appropriate questions after the meeting.
Vote Required
The affirmative vote of
the holders of shares entitled to vote at the Annual Meeting representing a majority of the votes cast on such matter will be
required for the ratification of the appointment of Marcum LLP as our independent registered public accounting firm for the fiscal
year ending December 31, 2021. Abstentions will have no effect on the outcome of the vote on this proposal. Brokers generally have
discretionary authority to vote on the ratification of our independent registered public accounting firm, thus
broker non-votes are not expected to result from the vote on this Proposal.
***THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE “FOR”
THE RATIFICATION OF THE APPOINTMENT OF MARCUM LLP***
Report
of the Audit Committee
The Audit Committee of the
Board has:
|
●
|
reviewed and discussed
the Company’s audited consolidated financial statements for the year ended December
31, 2020 with management;
|
|
●
|
discussed with the
Company’s independent auditors the matters required to be discussed under Public Company
Accounting Oversight Board Auditing Standard No. 1301; and
|
|
●
|
received the written
disclosures and letter from the independent auditors required by the applicable requirements
of the Public Accounting Oversight Board regarding the independent auditors communications
with the Audit Committee concerning independence, and has discussed with Marcum LLP matters
relating to its independence.
|
In reliance on the review
and discussions referred to above, the Audit Committee recommended to the Board that the consolidated financial statements audited by
Marcum LLP for the fiscal year ended December 31, 2020 be included in its Annual Report on Form 10-K for such fiscal year.
Audit Committee of the Board
Leonard Oppenheim
Tanveer Khader
Kareem Irfan
PROPOSAL THREE:
APPROVAL OF THE AUTHORIZED SHARE INCREASE
Background
Our Board has determined that it
is advisable and in our and our stockholders’ best interests to increase the number of authorized shares of Common Stock from 250,000,000
to 2,000,000,000 shares (the “Share Increase Proposal”). Accordingly, stockholders are asked to approve an amendment to our
Articles of Incorporation to effectuate such increase.
The Board strongly believes
that the increase in the number of authorized shares of Common Stock is necessary to provide us with resources and flexibility with respect
to our capital sufficient to execute our business plans and strategy. Accordingly, the Board has unanimously approved a resolution proposing
such amendment to our Articles of Incorporation and directed that it be submitted for approval at the Annual Meeting.
The text of the form of the
proposed Certificate of Amendment to our Articles of Incorporation, which assumes the approval of this proposal, is attached hereto as
Annex A.
Of the 250,000,000 shares
of Common Stock currently authorized, 116,993,719 shares of Common Stock were outstanding as of the Record Date, in addition to the
following:
|
●
|
81 shares of Common
Stock issuable upon the exercise of outstanding stock options under our 2011 Employee Stock
Incentive Plan, having a weighted average exercise price of $1,263,375.06 per share;
|
|
●
|
12,120,119 shares
of Common Stock issuable upon the exercise of outstanding stock options under the Company’s
2018 Employee Stock Incentive Plan, having a weighted average exercise price of $1.79 per
share;
|
|
●
|
1 share of Common
Stock issuable upon the exercise of outstanding stock options not under our 2011 or 2018
Employee Stock Incentive Plan, having a weighted average exercise price of $1,952,678.70
per share;
|
|
●
|
2,274,466 shares of Common Stock available
for future issuance under our 2018 Employee Stock Incentive Plan and any other additional
shares of our common stock that may become available under our 2018 Employee Stock Incentive
Plan;
|
|
●
|
4 shares of Common Stock issuable upon
the exercise of warrants at an exercise price of $16,200 per share;
|
|
●
|
24 shares of Common Stock issuable upon
the exercise of warrants at an exercise price of $29,700 per share;
|
|
●
|
340 shares of Common
Stock issuable upon the exercise of warrants at an exercise price of $5,400 per share;
|
|
●
|
24,055 shares of Common
Stock issuable upon the exercise of warrants at an exercise price of $1,141.20 per share;
|
|
●
|
61,562 shares of Common
Stock issuable upon the exercise of warrants at an exercise price of $223.20 per share;
|
|
●
|
2,507 shares of Common
Stock issuable upon the exercise of warrants at an exercise price of $149.85 per share;
|
|
●
|
4,758 shares of Common
Stock issuable upon the exercise of Series A warrants at an exercise price of $12.4875 per
share;
|
|
●
|
5,000,000 shares of
Common Stock issuable upon the exercise of warrants at an exercise price of $1.25 per share;
|
|
●
|
19,354,838 shares
of Common Stock issuable upon the exercise of warrants at an exercise price of $1.55 per
share;
|
|
●
|
15,000,000 shares
of Common Stock issuable upon the exercise of warrants at an exercise price of $2.00 per
share;
|
|
●
|
9,950,250 shares of
Common Stock issuable upon the exercise of warrants at an exercise price of $2.01 per share;
|
|
●
|
5 shares of Common
Stock issuable upon the conversion of 1 outstanding share of Series 4 Convertible Preferred
Stock, at a conversion price of $223.20 per share;
|
|
●
|
841 shares of Common
Stock issuable upon conversion of 126 outstanding shares of Series 5 Convertible Preferred
Stock, at a conversion price of $149.85 per share;
|
|
●
|
up to 11,061,939 shares
of Common Stock issuable to selected CXApp sellers as earnout shares, subject to the terms
and conditions of the CXApp Stock Purchase Agreement;
|
|
●
|
47,000,000 shares of Common Stock issuable upon conversion of Series 7 Preferred Stock; and
|
|
●
|
47,000,000 shares of Common Stock issuable
upon the exercise of the Warrants issued in the registered offering on September 15, 2021,
provided that such Warrants are not exercisable as of the date of this Proxy Statement.
|
Reasons for the Proposed Increase in Number
of Authorized Shares of Common Stock
To provide us with resources
and flexibility with respect to our capital sufficient to execute our business plans and strategy. The increase in authorized shares
of Common Stock will provide us greater flexibility with respect to our capital structure for various purposes as the need may arise
from time to time. These purposes may include: raising capital, establishing strategic relationships with other companies, expanding
our business through the acquisition of other businesses or products and providing equity incentives to employees, officers or directors.
Approval of this proposal would enable us to respond promptly to, and take advantage of, market conditions and other favorable opportunities
without incurring the delay and expense associated with calling a special stockholders’ meeting to approve a contemplated stock
issuance. Our management and Board believe it is in the best interests of the Company and our stockholders to have the flexibility provided
by an increase in the number of shares of authorized Common Stock.
In addition, we do not
currently have sufficient shares of authorized unreserved shares of Common Stock to permit the exercise in full of all of the
47,000,000 shares of Common Stock underlying outstanding warrants issued on September 15, 2021 (the “Warrants”) pursuant
to the terms and conditions of a securities purchase agreement (“Purchase Agreement”). As a result, the Warrants are not
exercisable prior to the occurrence of an event which would result in a sufficient number of authorized shares of Common Stock to
permit the exercise of the Warrants in full (“Capital Event”). The terms of the Purchase Agreement also prohibit the
Company from issuing any additional shares of Common Stock or Common Stock equivalents or filing any registration statements until
30 days following a Capital Event (the “Standstill Period”). Accordingly, the approval of this Proposal 3 will permit the Company to increase its available
authorized shares of Common Stock, which will constitute a Capital Event allowing the holders to exercise their Warrants, which, if
exercised for cash, will result in additional cash proceeds to the Company and will also commence the Standstill Period.
Principal Effects of Increase in Number of
Authorized Shares of Common Stock
If stockholders approve this
Proposal Three, the additional authorized shares of Common Stock will have rights identical to the currently outstanding shares of our
Common Stock. The proposed amendment will not affect the par value of the Common Stock, which will remain at $0.001 per share. Approval
of this Proposal Three and issuance of the additional authorized shares of Common Stock would not affect the rights of the holders of
currently outstanding shares of our Common Stock, except for effects incidental to increasing the number of shares of our Common Stock
outstanding, such as dilution of any earnings per share and voting rights of current holders of Common Stock.
The additional authorized
shares of Common Stock, by the approval of this Proposal Three, could be issued by our Board without further vote of our stockholders
except as may be required in particular cases by our Articles of Incorporation, the NRS or other applicable law, regulatory agencies
or Nasdaq Listing Rules. Stockholders do not have preemptive rights to subscribe to additional securities that we may issue, which means
that current stockholders do not have a prior right thereunder to purchase any new issue of Common Stock, or securities that are convertible
into Common Stock, in order to maintain their proportionate ownership interests in the Company.
Our stockholders are not entitled
to dissenters’ or appraisal rights under the NRS with respect to the proposed amendment to our Articles of Incorporation to increase
the number of authorized shares of Common Stock and we will not independently provide the stockholders with any such right if the increase
is implemented.
The proposed amendment to
our Articles of Incorporation to increase the number of authorized shares of our Common Stock could, under certain circumstances, have
an anti-takeover effect. The additional shares of Common Stock that would become available for issuance, if this Proposal Three is approved,
could also be used by us to oppose a hostile takeover attempt or to delay or prevent changes in control or our management. For example,
without further stockholder approval, the Board could adopt a “poison pill” which would, under certain circumstances related
to an acquisition of our securities not approved by the Board, give certain holders the right to acquire additional shares of Common
Stock at a low price, or the Board could strategically sell shares of Common Stock in a private transaction to purchasers who would oppose
a takeover or favor the current Board.
Although this proposal to
increase the authorized Common Stock has been prompted by business and financial considerations and not by the threat of any hostile
takeover attempt (nor is the Board currently aware of any such attempts directed at us), nevertheless, stockholders should be aware that
approval of this Proposal Three could facilitate future efforts by us to deter or prevent changes in control, including transactions
in which the stockholders might otherwise receive a premium for their shares over then current market prices.
This proposal will be effective
upon its approval by our stockholders at the Annual Meeting and is not conditioned upon the approval by our stockholders of any other
proposal. As each proposal will be presented to our stockholders at the Annual Meeting in the order presented herein, if this proposal
is approved by our stockholders, it will become effective.
No Appraisal Rights
Under the NRS, stockholders
are not entitled to rights of appraisal with respect to Proposal Three, and we will not independently provide our stockholders with any
such right.
Vote Required
The affirmative vote of the
holders of shares entitled to vote at the Annual Meeting representing a majority of the voting power will be required for approval of
this proposal. Accordingly, abstentions and broker non-votes, if any, will have the same legal effect as a vote “AGAINST”
this proposal.
***THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE
AMENDMENT TO OUR ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK TO 2,000,000,000***
PROPOSAL
FOUR:
approval of issuance of EARNOUT shares pursuant to Nasdaq Listing Rule 5635(c)
Overview
On April 30, 2021 (the “Closing
Date”), pursuant to the terms of a stock purchase agreement (the “Purchase Agreement”), we completed the acquisition
of over 99.9% of the outstanding capital stock of Design Reactor, Inc., a California corporation (“The CXApp”), with a leading
SaaS app platform that enables corporate enterprise organizations to provide a custom-branded, location-aware employee app focused on
enhancing the workplace experience and hosting virtual and hybrid events (the “Acquisition”).
The aggregate consideration
payable by us to the sellers of the outstanding capital stock of The CXApp (the “Sellers”) consisted of a combination
of cash and shares of our Common Stock and included, inter alia, $12,500,000 in contingent earnout payments subject to meeting
the certain Earnout Target (defined infra) payable in shares of Common Stock based on a per share price of $1.13, which was the
closing price of our Common Stock immediately prior to executing the Purchase Agreement (such shares, the “Earnout Shares”),
to certain Sellers (the “Selected Sellers”) within 90 days following the 12 month anniversary of the Closing Date (the “Earnout
Payment Date”), subject to certain adjustments (the “Earnout Payment).
The Earnout Payment, if any, will
be payable only to the Selected Sellers if the Company (including its subsidiaries) records revenue from the sale of The CXApp’s
cloud based mobile app platform (“Revenue”) of at least $8,270,000 (the “Earnout Target”) from the Closing Date
through the 12-month anniversary of the Closing Date (the “Earnout Period”). The Earnout Payment will be subject to a proportional
reduction if actual Revenue as of the end of the Earnout Period fails to meet the Earnout Target. For example, if actual Revenue during
the applicable Earnout Period is 90% of the Earnout Target, the Earnout Payment will be proportionally reduced by 10%. In addition, if
actual Revenue recorded during the Earnout Period is equal to or less than 75% of the Earnout Target, no Earnout Payment will be payable.
Why We Need Stockholder Approval
Our Common Stock is listed
on the Nasdaq Capital Market. As a result, we are subject to Nasdaq’s rules and regulations. Because the Earnout Shares may constitute
equity compensation and are not being granted pursuant to any stockholder approved equity plan, we are required to obtain stockholder
approval for the issuance of the Earnout Shares under Nasdaq Listing Rule 5635(c).
Consequences of Not Approving this Proposal
If this Proposal Four is not approved
by stockholders, we will not be able to issue the Earnout Shares. In such event, we would need to pay the Earnout Payment in cash in an
amount up to $12,500,000, in order to maintain compliance with applicable Nasdaq listing requirements.
Vote Required
The affirmative vote of the
holders of shares entitled to vote at the Annual Meeting representing a majority of the votes cast on such matter will be required for
the approval of this proposal. Abstentions and broker non-votes will not be treated as votes cast
for or against the proposal, and therefore will have no effect on the outcome of the proposal.
***THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE ISSUANCE OF EARNOUT
shares PURSUANT TO NASDAQ LISTING RULE 5635(C)***
PROPOSAL
FIVE:
APPROVAL OF THE AMENDMENT OF THE ARTICLES OF INCORPORATION TO EXTEND THE PERMITTED
PERIOD OF TIME BETWEEN A RECORD DATE and A STOCKHOLDER MEETING
Background
Our Board has unanimously
adopted resolutions approving a proposal to amend our Articles of Incorporation to effect an amendment entitling the Board to fix a
record date not exceeding 120 days before the date of any stockholders’ meeting.
Currently, the Board may fix
a record date not more than 60 or less than 10 days before the date of any stockholders’ meeting as the date as of which stockholders
are entitled to notice of and to vote at such meetings must be determined pursuant to NRS 78.350. It is permitted, however, pursuant
to NRS 78.350 to prescribe a period of more than 60 days in the Company’s Articles of Incorporation. The Board deems it in the
best interest of the Company to increase such period to 120 days.
The text of the proposed Certificate
of Amendment to our Articles of Incorporation to effect the aforementioned amendment is included as Annex B to this Proxy Statement.
Purpose of the Amendment
The Company’s resources are
limited and have to be used sparingly. When it comes to the stockholders’ meetings, the Company dutifully attempts to approach its
stockholders and to make sure that they are aware of the upcoming meeting and instruct their respective brokers as per their choice. At
times, it is not achievable within 60 days timeframe, especially with regard to the shares of Common Stock held through a brokerage firm.
In the event of adjournment of the stockholders’ meeting and subsequent change of the record date, the Company may have to appeal
to different stockholders and incur additional expenses it may not be able to afford. Furthermore, the Company may not have an option
to postpone a meeting in order to reach more of its stockholders electronically and solicit proxy voting. Consequently, a potential increase
of the period of time between the record date and the stockholders meeting may significantly impact the outcome of the voting allowing
the Company or any other parties soliciting proxies to have ample of time to appeal to the stockholders without the amendment of the stockholder’s
base or fixing a new record date.
Furthermore, the Board’s
flexibility in the solicitation of stockholders’ votes may entail additional benefits to the Company and its stockholders in the
form of equity financing with larger institutional investors that would necessitate stockholders’ approval under Nasdaq Listing
Rules or potential friendly acquirors that would be willing proceed with the transaction with the Company if the outcome of the transaction
is easier to achieve in comparison with analogous publicly trading targets. Overall, the amendment would allow the Board additional flexibility
to implement the course of business that the Board deems to be in the best interests of the Company and its stockholders.
Procedure for Effecting the Amendment
Subject to receiving the
stockholder approval, the Company will effect the amendment entitling the Board to fix a record date not exceeding 120 days before
the date of any stockholders’ meeting by filing a Certificate of Amendment to the Articles of Incorporation, substantially in
the form attached to this Proxy Statement as Annex B, with the Secretary of State of the State of Nevada. Our Board will subsequently approve an amendment to our Bylaws to reflect the amendment of the Articles of Incorporation.
The authority of the Board
to fix the record date on the amended terms would become effective at such time as the Certificate of Amendment is filed with the Secretary
of State of the State of Nevada or at such later time as is specified therein. No further action on the part of the Company’s stockholders
would be required.
Effect of Amendment
If this proposal is approved
by the Company’s stockholders, the Board will have the authority without any further action necessary by the stockholders, to
effect the amendment entitling the Board to fix a record date not exceeding 120 days before the date of any stockholders’
meeting. The Board may, in its sole determination, choose any date that is not more than 120 or less than 10 days before the
respective meeting as the record date of such meeting. It is the Board’s position that granting this discretionary authority
provides the Board with maximum flexibility to solicit necessary stockholders’ votes and to ensure that the adjournment of the
stockholders’ meeting for further solicitation is not necessary and thereby obviating undue economic or administrative burden
of the Company.
The principal effect of the amendment
will be the probability that the date of future stockholders’ meetings of the Company will be more than 60 days after the record
date, if the Board determines that fixing such longer date is practicable under the circumstances. Consequently, the probability that
the dichotomy of the voting rights of the shares of voting stock and their ownership will likely increase: the change of title to the
shares subsequently to the record date will not automatically transfer the voting rights to the new owners as it relates to the meeting
for such record date. However, the Company believes that the benefits of the amendment outweigh the possible inconvenience of certain
stockholders in the context of the amendment.
Effective Date
The amendment would become
effective upon the filing of a Certificate of Amendment to our Articles of Incorporation with the office of the Secretary of State of
the State of Nevada or at such later date as is specified in such filing.
Vote Required
The affirmative vote of the
holders of shares entitled to vote at the Annual Meeting representing a majority of the voting power will be required for approval of
this proposal. Accordingly, abstentions and broker non-votes, if any, will have the same legal effect as a vote “AGAINST”
this proposal.
***THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE “FOR” THE APPROVAL OF AN AMENDMENT TO EXTEND THE PERMITTED PERIOD OF TIME BETWEEN
A RECORD DATE AND A STOCKHOLDER’S MEETING***
PROPOSAL
SIX:
APPROVAL OF THE AMENDMENT of 2018 Employee Stock Incentive Plan
Background
The Company’s Board
of Directors adopted Inpixon 2018 Employee Stock Incentive Plan (the “2018 Plan”) on January 4, 2018. The 2018 Plan was approved
by our stockholders at the Company’s Annual Meeting on February 2, 2018. The 2018 Plan was subsequently amended on May 17, 2018,
on October 31, 2018, on October 31, 2019 and August 10, 2020.
As of December 31, 2020, only [●]
shares remained available for grant under the 2018 Plan and the Company’s 2011 Plan was terminated on August 31, 2021.
In order to continue to have
an appropriate number of shares available for grant under the 2018 Plan, on September [●], 2021, the Board adopted, subject to
stockholder approval, an amendment to the 2018 Plan that would (i) increase the total number of shares of Common Stock currently
reserved and available for grant by [●] shares resulting in the increase of the number of shares of Common Stock reserved and
available for grant under 2018 Plan to 40,000,000 and (ii) increase the maximum number of shares of Common Stock that may be issued in connection with quarterly
evergreen increases from 1,500,000 shares of Common Stock to 3,000,000.
The amendment would thus increase
the maximum number of shares of Common Stock that can be issued under the 2018 Plan, taking into account the maximum number of shares
of Common Stock that may be added to the 2018 Plan in accordance with the proposed automatic quarterly increase.
If stockholder approval is
obtained, such amendments will be effective as of the date of the Annual Meeting. Following such approval, the Board may, for administrative
purposes, amend and restate the 2018 Plan to solely restate and integrate all prior amendments to the 2018 Plan, approved to date,
The Company believes that equity-based
compensation is a critical part of its compensation program. Shareholder approval of the amended Plan would allow us to continue to attract
and retain talented employees, consultants and directors with equity incentives.
Material Terms of the Plan
The summary of the material
features of the 2018 Plan and its operation is contained in this Proxy Statement (See “Executive Compensation” under “2018
Employee Stock Incentive Plan”). The summary is qualified in its entirety by reference to the 2018 Plan which is incorporated by
reference to (i) 10.1 to our Annual Report on Form 10-K filed on March 31, 2021 and (ii) the amendment, which is attached hereto as Annex
C.
Purpose of the Amendment
The Board believes that the increase
is necessary to ensure an adequate pool of equity remains available to incentivize its employees for retention and recruitment purposes
and to remain aligned with our shareholders. We believe that it is important that all full-time employees have a stake in the Company
in form of equity grants that will incentivize them to create shareholder value. If the amendment to the 2018 Plan is not approved by
the stockholders, awards will continue to be made under the 2018 Plan as currently in effect to the extent shares are available.
If this Proposal Six is
approved by the stockholders, we anticipate filing a Form S-8 registration statement with the SEC shortly after the Annual Meeting to
register the shares authorized for issuance under the amendment to 2018 Plan.
Interests of Directors and Executive Officers
Our current directors and
executive officers have substantial interests in the matters set forth in this proposal since equity awards may be granted to them under
the 2018 Plan.
Vote Required
The affirmative vote of the
holders of shares entitled to vote at the Annual Meeting representing a majority of the votes cast on such matter will be required for
the approval of this proposal. Abstentions and broker non-votes will not be treated as votes cast for or against the proposal, and therefore
will have no effect on the outcome of the proposal.
***THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE “FOR”
THE APPROVAL OF THE AMENDMENT OF 2018 EMPLOYEE STOCK INCENTIVE PLAN***
PROPOSAL SEVEN:
AUTHORIZATION TO ADJOURN THE ANNUAL MEETING
If the Annual Meeting is convened
and a quorum is present, but there are not sufficient votes to approve the foregoing proposals described in this Proxy Statement, the
Company may move to adjourn the Annual Meeting at that time in order to enable our Board of Directors to solicit additional proxies.
In this Proposal Seven, we are
asking our stockholders to authorize the Company to adjourn the Annual Meeting to another time and place, if necessary or advisable, to
solicit additional proxies in the event that there are not sufficient votes to approve the forgoing proposals, each as described in this
Proxy Statement. If our stockholders approve this Proposal Seven, we could adjourn the Annual Meeting and any adjourned session of the
Annual Meeting and use the additional time to solicit additional proxies, including the solicitation of proxies from our stockholders
that have previously voted. Among other things, approval of this proposal could mean that, even if we had received proxies representing
a sufficient number of votes to defeat the forgoing proposals, we could adjourn the Annual Meeting without a vote on such proposals and
seek to convince our stockholders to change their votes in favor of such proposals.
If it is necessary or advisable
to adjourn the Annual Meeting, no notice of the adjourned meeting is required to be given to our stockholders, other than an announcement
at the Annual Meeting of the time and place to which the Annual Meeting is adjourned, so long as the meeting is adjourned for 60 days
or less and no new record date is fixed for the adjourned meeting. At the adjourned meeting, we may transact any business which might
have been transacted at the original meeting.
Vote Required
The affirmative vote of the holders
of shares entitled to vote at the Annual Meeting representing a majority of the votes cast on such matter will be required for the approval
of this proposal. Abstentions and broker non-votes will not be treated as votes cast
for or against the proposal, and therefore will have no effect on the outcome of the proposal.
***OUR BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A “FOR” VOTE
FOR THIS PROPOSAL TO AUTHORIZE THE ADJOURNMENT OF THE ANNUAL MEETING***
DELIVERY OF DOCUMENTS
TO STOCKHOLDERS SHARING AN ADDRESS
We and some brokers have adopted
“householding,” a procedure under which stockholders who have the same address will receive a single Notice of Internet Availability
or set of proxy materials, unless one or more of these stockholders provides notice that they wish to continue receiving individual copies.
Stockholders who participate in householding will continue to receive separate proxy cards. This procedure can result in significant
savings to the Company by reducing printing and postage costs. If you participate in householding and wish to receive a separate Notice
of Internet Availability or set of proxy materials, or if you wish to receive separate copies of future Notices, annual reports and proxy
statements, please call or write to: Broadridge Financial Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, New York
11717, telephone number 1-800-579-1639, or Wendy Loundermon, Chief Financial Officer and Secretary of Inpixon, 2479 E. Bayshore Road,
Suite 195, Palo Alto, CA 94303, telephone number (703) 665-0585. We will deliver the requested documents to you promptly upon your request.
Stockholders who share an address and receive multiple copies of the Notice of Internet Availability or proxy materials can also request
to receive a single copy by following the instructions above.
Requirements
For Advance Notification of Nominations
and Stockholder Proposals
Stockholder proposals submitted
to us pursuant to Rule 14a-8 promulgated under the Exchange Act for inclusion in our Proxy Statement and form of proxy for our 2022 Annual
Meeting of stockholders must be received by us no later than July 19, 2022, which is 120 calendar days before the one-year anniversary
of the date on which the Company first mailed this Proxy Statement, and must comply with the requirements of the proxy rules promulgated
by the Securities and Exchange Commission. Stockholder proposals should be addressed to our Secretary at 2479 E. Bayshore Road, Suite
195, Palo Alto, CA 94303. However, in the event that the Company holds its 2022 Annual Meeting of Stockholders more than 30 days before
or 30 days after the one-year anniversary date of the 2021 Annual Meeting, the Company will disclose the new deadline by which stockholder
proposals must be received.
Recommendations from stockholders
which are received after the deadline likely will not be considered timely for consideration by the Company for next year’s annual
meeting.
MANAGEMENT
CONTRACTS
Management functions of the
Company are substantially performed by directors or executive officers of the Company and not, to any substantial degree, by any other
person with whom the Company has contracted.
Other
Matters
The Board does not intend
to bring any other matters before the Annual Meeting and has no reason to believe any other matters will be presented. If other matters
properly do come before the Annual Meeting, however, it is the intention of the persons named as proxy agents in the enclosed proxy card
to vote on such matters as recommended by the Board or, if no recommendation is given, in their own discretion.
It is important that your
shares be represented at the Annual Meeting, regardless of the number of shares that you hold. You are, therefore, urged to vote by telephone
or by using the Internet as instructed on the proxy card or, if so requested, by executing and returning, at your earliest convenience,
the requested proxy card in the envelope that will have been provided.
THE BOARD OF DIRECTORS
Palo Alto, CA
[●], 2021
ANNEX A
Certificate of Amendment to Articles of
Incorporation
For Nevada Profit Corporations
(Pursuant to NRS 78.385 and 78.390 — After Issuance of Stock)
1. Name of corporation:
Inpixon
2. The articles have been amended as follows:
(provide article numbers, if available)
The Restated Articles of Incorporation are hereby
amended as follows:
(a) The first paragraph of “ARTICLE IV.
CAPITAL STOCK” is hereby amended and restated as follows:
The Corporation is authorized to issue up to 2,005,000,000
shares of capital stock of which 2,000,000,000 shall be designated as “Common Stock,” each of which shall have a par value
of $0.001, and 5,000,000 which shall be designated as “Preferred Stock,” each of which shall have a par value of $0.001.
3. The vote by which the stockholders holding
shares in the corporation entitling them to exercise a least a majority of the voting power, or such greater proportion of the voting
power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation*
have voted in favor of the amendment is: Shares representing [ ]% of the outstanding voting power were voted in favor of the amendment.
4. Effective date of filing: (optional)
(must not be later than 90 days after the certificate is filed)
5. Signature: (required)
Signature of Officer Nadir Ali, Chief Executive
Officer
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*
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If any proposed amendment
would alter or change any preference or any relative or other right given to any class or
series of outstanding shares, then the amendment must be approved by the vote, in addition
to the affirmative vote otherwise required, of the holders of shares representing a majority
of the voting power of each class or series affected by the amendment regardless to limitations
or restrictions on the voting power thereof.
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ANNEX B
Certificate of Amendment
to Articles of Incorporation
For Nevada Profit Corporations
(Pursuant to NRS 78.385 and 78.390 — After Issuance of Stock)
1. Name of corporation:
Inpixon
2. The articles have been amended as follows:
(provide article numbers, if available)
The Restated Articles of Incorporation are hereby
amended by adding the following paragraph to Article VIII “Stockholder Meetings:”
“The Board may prescribe a record date
not more than 120 or less than 10 days before the date of any such meeting as the date as of which stockholders entitled to notice of
and to vote at such meetings must be determined. Only stockholders of record on that date are entitled to notice or to vote at such a
meeting. The Board of Directors must fix a new record date if the meeting is adjourned to a date more than 60 days later than the date
set for the original meeting.”
3. The vote by which the stockholders holding
shares in the corporation entitling them to exercise a least a majority of the voting power, or such greater proportion of the voting
power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation*
have voted in favor of the amendment is: Shares representing [ ]% of the outstanding voting power (or [ ]% of the shares
voted) were voted in favor of the amendment.
4. Effective date of filing: (optional)
(must not be later than 90 days after the certificate is filed)
5. Signature: (required)
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Signature of Officer
Nadir Ali, Chief Executive Officer
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*
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If any proposed amendment
would alter or change any preference or any relative or other right given to any class or
series of outstanding shares, then the amendment must be approved by the vote, in addition
to the affirmative vote otherwise required, of the holders of shares representing a majority
of the voting power of each class or series affected by the amendment regardless to limitations
or restrictions on the voting power thereof.
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ANNEX C
AMENDMENT TO THE INPIXON
2018 EMPLOYEE STOCK INCENTIVE PLAN
This Amendment (the “Amendment”)
to the Inpixon 2018 Employee Stock Incentive Plan, as amended (the “Plan”) is made pursuant to Section 12 of the Plan. Capitalized
terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Plan.
WHEREAS, the Plan was approved and adopted
by the board of directors (the “Board”) of Inpixon (the “Company”) on January 4, 2018 and approved by the stockholders
of the Company on February 2, 2018;
WHEREAS, Section 12.2 of the Plan provides
that the Board may modify or amend the Plan in whole or in part and from time to time in such respects as it deems advisable;
WHEREAS, the Board has determined that
it is in the best interest of the Company and its stockholders to amend the Plan as set forth below; and
WHEREAS, the stockholders of the Company
approved this Amendment on November 16, 2021.
NOW THEREFORE, the Plan is amended as
follows:
1. Section 1. Section 1 is hereby amended and
restated with the following:
“Shares Subject to the Plan.
Subject to an adjustment in accordance with Section
8, the maximum number of shares which may be issued under the Plan shall be forty million (40,000,000) shares of Common Stock, par value
$0.001 per share (the “Initial Limit”), of the Company (the “Shares”), which shall automatically increase on the
first day of each calendar quarter, beginning on April 1, 2021 and for each quarter thereafter through October 1, 2028, by a number of
shares of Common Stock equal to the least of (i) 3,000,000 Shares, (ii) twenty percent (20%) of the outstanding Shares on the last day
of the immediately preceding calendar quarter, or (iii) such number of Shares determined by the Committee (the “Quarterly Increase”).
The Company shall at all times while the Plan is in effect reserve such number of shares of Common Stock as will be sufficient to satisfy
the requirements of outstanding Awards granted under the Plan. The Shares subject to the Plan shall be either authorized and unissued
shares or treasury shares of Common Stock. If any Award is forfeited, or if any Stock Option (and related Stock Appreciation Right, if
any) terminates, expires or lapses for any reason without having been exercised in full or shall cease for any reason to be exercisable
in whole or in part, or if any Stock Appreciation Right is exercised for cash, the unpurchased Shares subject to such Awards shall again
be available for distribution under the Plan. Subject to such overall limitations, the maximum aggregate number of Shares that may be
issued in the form of Incentive Stock Options shall not exceed the Initial Limit cumulatively increased on April 1, 2018 and on the first
day of each quarter thereafter by the Quarterly Increase.”
2. In all other respects, the terms and conditions of the Plan shall
remain the same.
[Signature page follows.]
IN WITNESS WHEREOF, the Company has adopted this Amendment, effective
as of the ______________ , 2021.
INPIXON
By:
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Name:
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Nadir Ali
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Title:
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Chief Executive Officer
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Preliminary Proxy Card
— Subject to Completion
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