Item
1.01 Entry into a Material Definitive Agreement.
Registered
Direct Offering
On March 22, 2022 (the “Effective Date”), Inpixon (the
“Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional
investors named therein (the “Purchasers”), pursuant to which the Company agreed to issue and sell in a registered direct
offering (the “Registered Offering”) (i) up to 53,197.7234 shares of the Company’s newly designated Series 8 Convertible
Preferred Stock, par value $0.001 per share the (the “Shares”), each Share with a stated
value of $1,000 (the “Stated Value”) and convertible into approximately 2,120 shares of the Company’s common stock,
par value $0.001 per share (the “Common Stock”), which is equal to the Stated Value divided by the conversion price of $0.4717
per share, and (ii) related warrants to purchase up to an aggregate of 112,778,723 shares of Common Stock (the “Warrants”).
The Warrants have an exercise price of $0.4717 per share, will be immediately exercisable and will
expire five years from the issuance date. Each Share and related Warrants will be sold together at a subscription amount of $940.00,
representing an original issue discount of 6% of the Stated Value for an aggregate subscription amount of $50,005,860.00. The net proceeds
to the Company from the Registered Offering are expected to be $47,005,508.40 million after placement agent commissions.
The
Shares, the Warrants and the shares of Common Stock issuable upon conversion of the Shares and the Warrants (collectively, the “Securities”)
are being offered by the Company pursuant to an effective shelf registration statement on Form S-3 (File No. 333-256827), which was declared
effective on June 17, 2021 (the “Registration Statement”).
Pursuant to the Purchase Agreement,
subject to certain exceptions (“Exempt Issuances”), the Company has agreed not to (i) issue, enter into any agreement to issue
or announce the issuance or proposed issuance of any shares of Common Stock or securities convertible into Common Stock or (ii) file any
registration statement or any amendment or supplement thereto, or a registration statement on Form S-8, until the forty-fifth (45th)
day after the Closing Date (as defined below) (such period, the “Standstill Period”). Pursuant to the Purchase Agreement,
the Company has also agreed not to enter into any “variable rate transactions” until the earlier of (i) such time as no Purchaser
holds any of the Warrants or (ii) December 31, 2023, other than the issuance of Common Stock in an “at-the-market” offering;
provided, that any such issuance shall not occur until the expiration of the Standstill Period.
The closing of the Registered
Offering is expected to occur on or about March 24, 2022 (“Closing Date”), subject to the satisfaction of customary closing
conditions.
Placement
Agency Agreement
Maxim
Group LLC acted as the sole placement agent (the “Placement Agent”) on a “reasonable best efforts” basis, in
connection with the Registered Offering pursuant to a placement agency agreement (the “Placement Agency Agreement”), dated
and entered as of March 22, 2022, by and between the Company and the Placement Agent. In accordance with the Placement Agency Agreement,
the Placement Agent will be entitled to a cash fee of 6% of the gross proceeds raised in the Registered Offering and reimbursement of
certain out-of-pocket expenses including attorney’s fees.
Preferred
Stock
The
rights, preferences, designations, privileges, and limitations of the Shares are set forth in a Certificate of Designation of Preferences,
Rights, and Limitations of Series 8 Convertible Preferred Stock (the “Certificate of Designation”). The board of directors
of the Company (the “Board”) approved the Certificate of Designation on March 21, 2022, and the Certificate of Designation
will be filed with the Secretary of State of the State of Nevada on or before the Closing Date. Each share of Preferred Stock shall have
an initial Stated Value of $1,000 per share.
Each Share is convertible at any time at the option of the holder into
shares of Common Stock, subject to certain beneficial ownership limitations (to the extent that the holder, together with its affiliates
and any other person or entity acting as a group, would own more than 4.99% (or, upon election by a holder prior to issuance, 9.99%) of
the outstanding shares of Common Stock after conversion (the “Beneficial Ownership Limitation”)) as provided in the Certificate
of Designation. The initial conversion price is $0.4717 per share of Common Stock, subject to appropriate adjustment in the event of certain
stock dividends and distributions, stock splits, stock combinations and reclassifications, and other similar events affecting the Common
Stock. In the event the Shares are not converted timely pursuant to the Certificate of Designation, the Company will be obligated to remit
certain cash payments to the converting holder of Shares as liquidated damages. Additionally, if after the Closing Date (i) the volume
weighted average price for each of any 10 consecutive trading day period following such event, exceeds $1.00 per share (subject to adjustments
for splits, dividends, and the like); (ii) the volume for each trading day during any such period exceeds $2,000,000 of shares of Common
Stock per trading day; and (iii) the Company satisfies certain Equity Conditions (as defined in the Certificate of Designation), the Company
may elect to mandatorily convert all or a portion of the outstanding Shares (any such portion to be pro-rated across all holders thereof)
at the then prevailing conversion price.
At
any time beginning on October 1, 2022 (the “Redemption Triggering Date”) and ending ninety (90) days thereafter, each holder
of Shares may require the Company to redeem all or part of the Shares then held by such holder in cash for a redemption price per share
equal to the Stated Value plus all accrued but unpaid dividends thereon and all liquidated damages and other costs, expenses, or amounts
due in respect of such shares (the “Redemption Amount”), provided that in certain instances of the Company’s default
more particularly described in the Certificate of Designation, the Redemption Amount is increased to 110% of the Stated Value plus all
accrued but unpaid dividends thereon and all liquidated damages and other costs, expenses, or amounts due in respect of such shares.
If the Company fails to pay the full redemption amount timely, it will be obligated to pay interest thereon at a rate equal to the lesser
of 18% per annum or the maximum rate permitted by applicable law, accruing daily from the due date until the redemption amount and all
interest thereon are paid in full. Correspondingly, beginning on the Redemption Triggering Date for so long as the Shares remain outstanding
the Company has the right to redeem all or part of the Shares then held by a holder for the Redemption Amount, subject to Equity Conditions.
In the event, the Company elects to exercise its redemption right, the holder will have an option to convert the Shares subject to redemption
into the Common Stock in accordance with the Certificate of Designation within thirty (30) days following a written notice sent to the
holder. Upon the receipt of the pertinent Redemption Amount, the holder of the Shares will forfeit 50% of the Warrants issued.
Until the earlier of the conversion
or redemption of all Shares and January 1, 2023, the Company shall maintain a cash balance (in the form of cash and cash equivalents equal
to the sum of (i) the Stated Value of all of the Shares then outstanding, (ii) the stated value of the Company’s Series 7 Convertible
Preferred Stock then outstanding as set forth in the Series 7 Convertible Preferred Stock Certificate of Designation (provided, however,
this will not apply following June 14, 2022), (iii) the aggregate amount of any debt (including trade payables), (iv) the aggregate stated
value of any other equity securities that are issued that are senior to, or pari passu with, the Shares and (v) the aggregate amount of
monetary judgments with respect to the Company, any subsidiary or any of their respective property or assets.
The
holders of Shares have full voting rights and powers, except as otherwise required by the Articles of Incorporation or applicable law.
The holders of Shares shall vote together with all other classes and series of stock of the Company as a single class on all actions
to be taken by the stockholders of the Company. Each holder of the Shares shall be entitled to the number of votes equal to the number
of shares of Common Stock into which the Shares then held by such holder could be converted on the record date for the vote which is
being taken, provided, however, that the voting power of a holder together with its Attribution Parties (as defined in the Certificate
of Designation), may not exceed 19.99% (or such greater percentage allowed by the Nasdaq Listing Rules without any shareholder approval
requirements). Fractional votes are not permitted and, with respect to each holder of Shares, any fractional voting rights resulting
from the above (after aggregating all shares of Common Stock into which the Shares held by a holder could be converted) shall be rounded
down to the nearest whole number. Any amendment to the Articles of Incorporation, bylaws, or the Certificate of Designation that adversely
alters the powers, preferences, and rights of the holders of the Shares requires the approval of the holders of 51% in Stated Value of
the then outstanding Shares.
In
the event of the occurrence of a Fundamental Transaction (as defined in the Certificate of Designation, including but not limited to
the disposition of substantially all assets, certain reclassifications or recapitalizations of Common Stock, and certain dispositions
of assets of the Company), the holders of Shares will be entitled to receive, upon any subsequent conversion of Shares, the kind and
amount of securities, cash, or other property that the holders would have received had they converted the Shares to Common Stock immediately
prior to such event.
The
Shares will rank junior to the Company’s Series 7 Convertible Preferred Stock until June 14, 2022 and senior to the Junior Securities
as to dividends, redemption or distribution of assets upon liquidation, dissolution, or winding up of the Company. Accordingly, in the
event of liquidation, dissolution, or winding up of the Company, the Holders are entitled to receive out of the assets of the Company
an amount equal to the Stated Value, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due
and owing thereon, prior to distribution to holders of securities ranking junior to the Shares (unless such distribution is made prior
to June 14, 2022, in which case the distribution to the Shares will be subsequent to the Series 7 Convertible Preferred Stock). If the
assets of the Company are insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Shares
shall be ratably distributed among them in accordance with the respective amounts that would be payable on the Shares if all amounts
payable thereon were paid in full.
Warrants
Each Warrant has an exercise price of $0.4717 per share and is immediately
exercisable, subject to the Beneficial Ownership Limitation. Additionally, the Warrants may be exercised by cashless exercise at the election
of the holder.
The
exercise price and the number of underlying shares of Common Stock are subject to appropriate adjustment in the event of certain stock
dividends and distributions, stock splits, stock combinations and reclassifications, and other similar events affecting the Common Stock.
The Warrants include fundamental transaction and dividend protection provisions. Except as otherwise provided in the Warrants or by virtue
of such holder’s ownership of shares of the Company’s Common Stock, the holder of a Warrant does not have the rights or privileges
of a holder of Common Stock, including any voting rights, until the holder exercises the Warrant.
Lock-up Agreement
Each of the Company’s executive
officers and directors have entered into a lock-up agreement (a “Lock-up Agreement”), pursuant to which such executive officers
and directors have agreed, until the twentieth (20th) day after the Closing Date to not offer, sell, contract to sell, hypothecate, pledge
or otherwise dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect
to, any shares of Common Stock or securities convertible, exchangeable or exercisable into, shares of Common Stock, subject to certain
customary exceptions, including, but not limited to, exceptions for bona fide gifts, estate planning transactions, exercises of stock
options pursuant to the Company’s employee benefits plans.
The foregoing description of the
Placement Agency Agreement, the Purchase Agreement, the form of Certificate of Designation, the form of Warrant, and the form of Lock-up
Agreement, does not purport to be complete. The foregoing description is qualified in its entirety by reference to the Placement Agency
Agreement, the Purchase Agreement, the form of Certificate of Designation, the form of Warrant and the form of Lock-up Agreement, which
are filed as Exhibits 1.1, 10.1, 3.1, 4.1 and 10.2 respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Series 7 Convertible Preferred Stock Redemptions
On March 22, 2022, the Company
received cash redemption notices from the remaining holders of the Series 7 Convertible Preferred Stock issued on September 15, 2021,
totaling 16,250 shares of Series 7 Convertible Preferred Stock for aggregate cash required to be paid of approximately $16.25 million.
In addition, in accordance with the related purchase agreement, upon redemption of the Series 7 Convertible Preferred Stock, each holder
will forfeit 75% of the related warrants that were issued. Therefore, as of the date of this report, 16,250 shares of Series 7 Convertible
Preferred Stock will be redeemed and 9,750,000 related warrants will be forfeited. Following such redemption, there will be
no shares of Series 7 Convertible Preferred Stock outstanding.