Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-256827
PROSPECTUS
SUPPLEMENT
(To
Prospectus Dated June 17, 2021)
Up
to $25,000,000
Common
Stock
We
have entered into an Equity Distribution Agreement with Maxim Group LLC, or Maxim, relating to the sale of our common stock, par value
$0.001 per share, offered by this prospectus supplement. In accordance with the terms of the Equity Distribution Agreement, we may offer
and sell shares of our common stock having an aggregate offering price of up to $25,000,000 from time to time through Maxim acting as
agent.
Sales
of our common stock, if any, under this prospectus supplement and the accompanying base prospectus will be made in sales deemed to be
“at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, or the Securities Act, including
sales made directly on or through the Nasdaq Capital Market, the existing trading market for our common stock, sales made to or through
a market maker other than on an exchange or otherwise, in negotiated transactions at market prices prevailing at the time of sale or
at prices related to such prevailing market prices and/or any other method permitted by law, including in privately negotiated transactions.
Maxim will use its commercially reasonable efforts to sell on our behalf all the shares of common stock requested to be sold by us, consistent
with its normal trading and sales practices, on mutually agreed terms between Maxim and us. There is no arrangement for funds to be received
in any escrow, trust or similar arrangement. We provide more information about how the shares of common stock will be sold in the section
entitled “Plan of Distribution.”
Maxim
will be entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds of each sale of shares of our common stock.
In connection with the sale of shares of our common stock on our behalf, Maxim will be deemed to be an “underwriter” within
the meaning of the Securities Act and the compensation of Maxim will be deemed to be underwriting commissions or discounts. We have also
agreed to provide indemnification and contribution to Maxim with respect to certain liabilities, including liabilities under the Securities
Act.
Our
common stock is traded on the Nasdaq Capital Market under the symbol “INPX.” On July 20, 2022, the last reported sale price
of our common stock was $0.1557 per share.
Investing
in our common stock involves a high degree of risk. See “Risk Factors” beginning on page PS-5 of this prospectus supplement,
page 5 of the accompanying base prospectus and under similar headings in the documents incorporated by reference into this prospectus
supplement and the accompanying base prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus supplement or the accompanying base prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
Maxim
Group LLC
The
date of this prospectus supplement is July 22, 2022
TABLE
OF CONTENTS
Prospectus
Supplement
Prospectus
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
prospectus supplement and the accompanying base prospectus form a part of a registration statement on Form S-3 (File No. 333-256827),
which was declared effective on June 17, 2021, that we filed with the Securities Exchange Commission (“SEC”) utilizing a
“shelf” registration process. This document is in two parts. The first part is the prospectus supplement, which describes
the specific terms of this offering. The second part, the accompanying base prospectus, provides more general information about the securities
we may offer from time to time, some of which may not apply to the securities offered by this prospectus supplement. Generally, when
we refer to this prospectus, we are referring to both parts of this document combined. Before you invest, you should carefully read this
prospectus supplement, the accompanying base prospectus, all information incorporated by reference herein and therein, and the additional
information described under “Where You Can Find More Information” in this prospectus supplement. These documents contain
information you should consider when making your investment decision. This prospectus supplement may add, update or change information
contained in the accompanying base prospectus. To the extent that any statement that we make in this prospectus supplement is inconsistent
with statements made in the accompanying base prospectus or any documents incorporated by reference therein, the statements made in this
prospectus supplement will be deemed to modify or supersede those made in the accompanying base prospectus and such documents incorporated
by reference therein.
You
should rely only on the information contained or incorporated herein by reference in this prospectus supplement and contained or incorporated
therein by reference in the accompanying base prospectus. We have not authorized any other person to provide you with any information
that is different. If anyone provides you with different, additional or inconsistent information, you should not rely on it.
We
are offering to sell our securities only in jurisdictions where offers and sales are permitted. The distribution of this prospectus supplement
and the accompanying base prospectus and the offering of the securities in certain jurisdictions may be restricted by law. This prospectus
supplement and the accompanying base prospectus do not constitute, and may not be used in connection with, an offer to sell, or a solicitation
of an offer to buy, any securities offered by this prospectus supplement and the accompanying base prospectus by any person in any jurisdiction
in which it is unlawful for such person to make such an offer or solicitation.
We
further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document
that is incorporated by reference in the prospectus supplement and the accompanying base prospectus were made solely for the benefit
of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements,
and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants
were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately
representing the current state of our affairs.
Unless
the context otherwise requires, references in this prospectus supplement to the “Company,” “we,” “us”
and “our” refer to Inpixon and its subsidiaries.
We
have authorized only the information contained or incorporated by reference in this prospectus supplement, the accompanying base prospectus,
and any free writing prospectus prepared by or on behalf of us or to which we have referred you. We have not, and Maxim and any other
underwriters have not, authorized anyone to provide you with information that is different. We and Maxim take no responsibility for,
and can provide no assurance as to the reliability of, any information that others may give you. We are offering to sell, and seeking
offers to buy, our common stock only in jurisdictions where offers and sales are permitted. The information contained in or incorporated
by reference in this document is accurate only as of the date such information was issued, regardless of the time of delivery of this
prospectus supplement or the date of any sale of our common stock.
CAUTIONARY
NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This
prospectus supplement, the accompanying base prospectus and the documents incorporated herein by reference contain forward-looking statements
that involve risks and uncertainties. You should not place undue reliance on these forward-looking statements. Our actual results could
differ materially from those anticipated in the forward-looking statements. In some cases, you can identify these forward-looking statements
by terms such as “anticipate,” “believe,” “continue,” “could,” “depends,”
“estimates,” “expects,” “intends,” “may,” “ongoing,” “plan,”
“potential,” “predict,” “project,” “should,” “will,” “would”
or the negative of those terms or other similar expressions, although not all forward-looking statements contain those words.
We
have based these forward looking statements largely on our current expectations and projections about future events and financial trends
that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward looking
statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section
titled “Risk Factors” and elsewhere in this prospectus, regarding, among other things:
| ● | our
ability to achieve profitability; |
| ● | our
limited operating history with recent acquisitions; |
| ● | risks
related to our recent acquisitions; |
| ● | our
ability to successfully integrate companies or technologies we acquire; |
| ● | emerging
competition and rapidly advancing technology in our industry that may outpace our technology; |
| ● | customer
demand for the products and services we develop; |
| ● | the
impact of competitive or alternative products, technologies and pricing; |
| ● | our
ability to manufacture any products we develop; |
| ● | general
economic conditions and events and the impact they may have on us and our potential customers,
including, but not limited to supply chain challenges and other impacts resulting from COVID-19
and the Russia/Ukraine conflict; |
| ● | our
ability to obtain adequate financing in the future as needed; |
| ● | our
ability to use the proceeds from this offering as discussed in the section entitled “Use
of Proceeds”; |
| ● | our
consummation of strategic transactions which may include acquisitions, mergers, dispositions
involving us and any of our business units or other strategic investments; |
| ● | our
ability to maintain compliance with the continued listing requirements of the Nasdaq Capital
Market; |
| ● | lawsuits
and other claims by third parties or investigations by various regulatory agencies that we
are required to report to including, but not limited to, the U.S. Securities and Exchange
Commission; |
| ● | our
success at managing the risks involved in the foregoing items; and |
| ● | other
factors discussed in this prospectus supplement and the accompanying base prospectus. |
These
risks are not exhaustive. Other sections of this prospectus supplement, the accompanying base prospectus and the documents incorporated
herein by reference may include additional factors that could adversely impact our business and financial performance. Moreover, we operate
in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management
to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from those contained in, or implied by, any forward looking statements. You
should read this prospectus supplement, the accompanying base prospectus and the documents incorporated herein by reference with the
understanding that our actual future results, levels of activity, performance and achievements may be materially different from what
we expect. Except as required by law, we undertake no obligation to update publicly any forward looking statements for any reason after
the date of this prospectus supplement or to conform these statements to actual results or to changes in our expectations.
We
qualify all of our forward looking statements by these cautionary statements.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights selected information contained elsewhere in this prospectus supplement, the accompanying base prospectus and in the
documents we incorporate by reference. This summary does not contain all of the information you should consider before investing in our
common stock. You should read this entire prospectus supplement and the accompanying base prospectus carefully, especially the risks
of investing in our common stock discussed under “Risk Factors” beginning on page PS-5 of this prospectus supplement and
under similar sections of the accompanying base prospectus and other periodic reports incorporated herein and therein by reference, along
with our consolidated financial statements and notes to those consolidated financial statements, before making an investment decision.
The
Company
Inpixon
is the Indoor Intelligence™ company. Our solutions and technologies help organizations create and redefine exceptional experiences
that enable smarter, safer and more secure environments. We leverage our positioning, mapping, augmented reality, analytics and app technologies
to achieve higher levels of productivity and performance, increase safety and security, improve worker and employee satisfaction rates
and drive a more connected workplace. We have focused our corporate strategy on being the primary provider of the full range of foundational
technologies needed in order to offer a comprehensive suite of solutions that make indoor data available and meaningful to organizations,
employees and visitors. Together, our technologies are foundational for allowing organizations to create and launch the digital twin
of a physical location necessary for driving enhanced experiences in the metaverse.
Our
Indoor Intelligence solutions are used by our customers for a variety of use cases including, but not limited to, employee and visitor
experience enhancement through a customer branded app with features such as desk booking, wayfinding and navigation, and the delivery
of content to tens of thousands of attendees in hybrid events. Our real time location (RTLS) and asset tracking products offer manufacturing
and warehouse logistics optimization and automation, increase workforce productivity, and enhance worker safety and security.
In
addition to our Indoor Intelligence technologies and solutions, we also offer:
| ● | Digital
solutions (eTearsheets; eInvoice, adDelivery) or cloudbased applications and analytics for
the advertising, media and publishing industries advertising management platform referred
to as Shoom by Inpixon; and |
| ● | A
comprehensive set of data analytics and statistical visualization solutions for engineers
and scientists referred to as SAVES by Inpixon. |
We
report financial results for three segments: Indoor Intelligence, Shoom and SAVES. For Indoor Intelligence, we generate revenue from
sales of hardware, software licenses and professional services. For Shoom and SAVES we generate revenue from the sale of software licenses.
Corporate
Strategy
Since
2019, management has pursued a corporate strategic acquisition strategy focused on building and developing its business as the Indoor
IntelligenceTM provider with the ability to provide end to end solutions ranging from the collection of data to delivering insights from
that data to our customers with a focus on securing, digitizing and optimizing premises with our indoor positioning, mapping and analytics
solutions for businesses and governments. In furtherance of this strategy, we have completed a series of strategic transactions to enhance
our products and solution offerings, including, the acquisition of (1) technologies allowing for wireless device positioning and radio
frequency augmentation of video surveillance systems; (2) GPS tracking products, software, technologies, and related intellectual property
to provide ground positioning, asset tracking, and situational awareness monitoring for those whose intelligence needs expand outdoors;
(3) our indoor mapping solution, Inpixon Mapping, to provide users with the tools to add intelligence to complex indoor spaces by integrating
business data with geospatially accurate indoor maps to create relevant views of indoor environments; (4) a suite of on-device “blue
dot” indoor location and motion technologies, including patents, trademarks, software and related intellectual property; (5) IoT
solutions for real-time location systems (RTLS) and indoor and outdoor positioning solutions utilizing both industry-standard technologies,
such as ultra-wideband (UWB), and patented proprietary wireless communication technologies, such as Chirp Spread Spectrum (CSS); (6)
a suite of augmented reality, computer vision, localization, navigation, mapping, and 3D reconstruction technologies, including patents,
trademarks, software and related intellectual property; (7) 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 and (8) an industrial IoT, RTLS, and sensor data services provider.
We believe these transactions
have positioned us as a market leader with a comprehensive suite of products and solutions allowing us to provide organizations with actionable
indoor intelligence to make their indoor spaces smarter, safer and more secure. We also operate and compete in an industry that is characterized
by rapid technological innovation, changing customer needs, evolving industry standards and frequent introductions of new products, product
enhancements, services and distribution methods. Our success will depend on our ability to develop expertise with these new products,
product enhancements, services and distribution methods and to implement solutions that anticipate and respond to rapid changes in technology,
the industry, and customer needs. In order to continue to respond to rapid changes and required technological advancements, as well as
increase shareholder value, we intend to continue to evaluate various strategic transactions and opportunities that we believe will enhance
shareholder value and support our commitment to delivering exceptional experiences and continued innovation with technologies that combine
the physical and digital worlds with augmented reality and location based technologies. We are primarily focused on identifying potential
targets or other opportunities that we believe will increase shareholder value, which may include, but not be limited to other alternative
investment opportunities, such as minority investments, joint ventures or special purpose acquisition companies. In addition, at the end
of last year, our board of directors authorized a review of strategic alternatives, including a possible asset sale, merger with another
company or spin-off of one or more of our business units. In this regard, we have received preliminary indications of interest which we
are currently evaluating. We may also retain an investment bank as our financial advisor in order to evaluate strategic options that may
be available to us. If we make any acquisitions in the future, we expect that we may pay for such acquisitions with cash, equity securities
and/or debt in combinations appropriate for each acquisition.
Recent
Events
Warrant
and Note Exchanges
On
January 28, 2022, we entered into an exchange agreement with the holder (the “Warrant Holder”) of certain existing warrants
to purchase up to an aggregate of 49,305,088 shares of our common stock (the “Existing Warrants”), pursuant to which we agreed
to issue an aggregate of 13,811,407 shares of common stock (collectively, the “Exchange Common Shares”) and rights (the “Rights”)
to receive an aggregate of 3,938,424 shares of common stock (collectively, the “Reserved Shares” and together with the Exchange
Common Shares, the “Exchange Shares”) to such warrant holder in exchange for the cancellation of the Existing Warrants (the
“Warrant Exchange”). Subject to the terms of the Exchange Agreement, the Rights may be exercised by the Warrant Holder for
the Reserved Shares, in whole or in part, at any time or times on or after the date of the Exchange Agreement, subject to certain beneficial
ownership limitations. On any Trading Day (as defined in the Existing Warrants) during the period commencing on the date of the exchange
agreement and ending on March 29, 2022 (such period, the “Restricted Period”), the warrant holder will not sell on such Trading
Day, in the aggregate, any Exchange Shares in an aggregate amount representing more than 10% of the daily composite trading volume of
common stock as reported by Bloomberg, LP on such applicable Trading Day.
On
February 1, 2022, we entered into an exchange agreement with the holder of that certain outstanding unsecured promissory note, issued
on March 18, 2020 in an aggregate initial principal amount of $6,465,000 (the “Original Note”), pursuant to which we and
the holder agreed to: (i) partition a new promissory note in the form of the Original Note equal to $500,000 and then cause the outstanding
balance of the Original Note to be reduced by $500,000; and (ii) exchange the partitioned note for the delivery of 1,191,611 shares of
the Company’s Common Stock, at an effective price per share equal to $0.4196, which was equal to Nasdaq’s “minimum
price” as defined by Nasdaq Listing Rule 5635(d).
On
February 18, 2022, the Company entered into an exchange agreement with the holder of the Original Note, pursuant to which the Company
and the holder agreed to: (i) partition a new promissory note in the form of the Original Note equal to $350,000 and then cause the outstanding
balance of the Original Note to be reduced by $350,000; and (ii) exchange the partitioned note for the delivery of 966,317 shares of
the Company’s Common Stock, at an effective price per share equal to $0.3622, which was equal to Nasdaq’s “minimum
price” as defined by Nasdaq Listing Rule 5635(d).
On
March 15, 2022, the Company entered into an exchange agreement with the holder of the Original Note, pursuant to which the Company and
the holder agreed to: (i) partition a new promissory note in the form of the Original Note equal to $650,000 and then cause the outstanding
balance of the Original Note to be reduced by $650,000; and (ii) exchange the partitioned note for the delivery of 2,152,317 shares of
the Company’s Common Stock, at an effective price per share equal to $0.3020, was equal to Nasdaq’s “minimum price”
as defined by Nasdaq Listing Rule 5635(d).
Series
7 Convertible Preferred Stock Redemptions
Between
March 15, 2022 and March 22, 2022, the Company received cash redemption notices from the holders of the Series 7 Convertible Preferred
Stock issued on September 15, 2021, totaling 49,250 shares of Series 7 Convertible Preferred Stock for aggregate cash required to be
paid of approximately $49.25 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 March 22, 2022,
49,250 shares of Series 7 Convertible Preferred Stock will be redeemed and 29,550,000 related warrants will be forfeited. Following such
redemption, there will be no shares of Series 7 Convertible Preferred Stock outstanding.
March
2022 Capital Raise
On
March 22, 2022, we entered into a securities purchase agreement with certain institutional investors named therein (the “Purchasers”),
pursuant to which we agreed to issue and sell in a registered direct offering (i) up to 53,197.7234 shares of Series 8 Convertible Preferred
Stock and (ii) related warrants to purchase up to an aggregate of 112,778,720 shares of common stock. Each share of Series 8 Convertible
Preferred Stock and the related warrants were sold at a subscription amount of $940.00, representing an original issue discount of 6%
of the stated value for an aggregate subscription amount of approximately $50 million. After deducting placement agent fees and other
expenses, the net proceeds from the offering was approximately $46.9 million, excluding the proceeds from the exercise of any of the
warrants issued in the offering.
Debenture
Investment
On
April 27, 2022 (the “Original Issue Date”), we entered into a securities purchase agreement with an unaffiliated company
operating in the insurance technology sector (“Seller”), pursuant to which we purchased a 10% Original Issue Discount Senior
Convertible Debenture (a “Debenture”) issued by Seller in an aggregate principal amount of $6,050,000 for a purchase price
of $5,500,000. Interest on the Debenture accrues at a rate of 12% per annum, of which 12 months will be guaranteed, and is payable on
each conversion date (as to the principal amount being converted) and on the maturity date, in cash, or in shares of Class A common stock
of Seller (the “Conversion Shares”) upon a conversion of all or a portion of the outstanding principal amount on the Debenture.
The Debenture will mature on the date that is 12 months from the Original Issue Date (the “Original Maturity Date”), which
may be extended or accelerated pursuant to the terms of the Debenture. Seller may elect to extend the maturity for an additional 3-month
period from the Original Maturity Date.
Exchange
Shares
Since the filing of our Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2022 on May 16, 2022 (the “Quarterly Report”), we have issued
an aggregate of 7,581,252 shares of common stock to the holder of that certain outstanding promissory note of the Company issued on March
18, 2020 (the “March 2020 Note”), in each case at a price per share equal to the Minimum Price as defined in Nasdaq Listing
Rule 5635(d) for a weighted average price per share equal to approximately $0.16 in connection with exchange agreements pursuant to which
we and the holder agreed to (i) partition new promissory notes in the form of the March 2020 Note in the aggregate original principal
amount equal to $1,250,000 and then cause the outstanding balance of the March 2020 Note to be reduced by an aggregate of $1,250,000;
and (ii) exchange the partitioned notes for the delivery of the shares of common stock. The March 2020 Note has a current outstanding
balance as of July 22, 2022 of approximately $1.7 million.
CVH Loan
On July 1, 2022, we loaned
$150,000 to Cardinal Venture Holdings LLC (“CVH”). We are a member of CVH. CVH owns certain interests in the sponsor entity
(the “Sponsor”) to a special purpose acquisition corporation (the “SPAC”). The loan bears no interest and is due
and payable in full on the earlier of: (i) the date by which the SPAC has to complete a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”), and
(ii) immediately prior to the date of consummation of the Business Combination of the SPAC, unless accelerated upon the occurrence of
an event of default. Nadir Ali, our Chief Executive Officer and director, is also a member in CVH through 3AM, LLC, which may, in certain
circumstances, be entitled to manage the affairs of CVH.
Promissory Note Financing
On July 22, 2022, we entered
into a note purchase agreement (the “Purchase Agreement”) with an accredited investor, an affiliate of the holder of the March
2020 Note, pursuant to which we agreed to issue and sell to the holder an unsecured promissory note (the “July 2022 Note”)
in an aggregate initial principal amount of $6,465,000 (the “Initial Principal Amount”), which is payable on or before the
date that is 12 months from the issuance date (the “Maturity Date”). The Initial Principal Amount includes an original issue
discount of $1,450,000 and $15,000 that we agreed to pay to the holder to cover its legal fees, accounting costs, due diligence, monitoring
and other transaction costs. In exchange for the July 2022 Note, the holder paid an aggregate purchase price of $5,000,000 (the “Transaction”).
The July 2022 Note accrues interest at 10% per annum, which is payable on the Maturity Date, is subject to a 115% prepayment premium provided
the July 2022 Note is prepaid prior to the Maturity Date as well as to redemption beginning 6 months from the issuance date in an amount
up to an aggregate of 1/3 of the initial principal balance each month, and a monitoring fee if the July 2022 Note is still outstanding
6 months from the issuance date equal to 10% of the then-current outstanding balance. In addition, we agreed to provide the holder with
a right of first refusal and a participation right for future offerings, which will not be applicable to certain issuances, including
but not limited to, registered offerings made pursuant to Form S-1 or Form S-3.
Corporate
Structure
We
have six operating subsidiaries: (i) Inpixon Canada, Inc. (100% ownership) based in Coquitlam, British Columbia (“Inpixon Canada”);
(i) Inpixon Limited (100% ownership) based in Slough, United Kingdom; (iii) Inpixon GmbH (100% ownership) based in Ratingen, Germany;
(iv) Design Reactor, Inc. (The CXApp) (100% ownership); (v) Game Your Game, Inc., based in Palo Alto, CA (55.4%); and (vi) Inpixon India
Limited (82.5% ownership) based in Hyderabad, India. In addition, Active Mind Technology Ltd. is an indirect subsidiary of the Company
and the wholly-owned subsidiary of Game Your Game, Nanotron Technologies GmBh (“Nanotron”), based in Berlin, Germany is an
indirect subsidiary of the Company and the wholly owned subsidiary of Inpixon GmbH and IntraNav GmbH, based in Eschborn, Germany is an
indirect subsidiary of the Company and the wholly owned subsidiary of Nanotron.
Corporate
Information
Our
principal executive offices are located at 2479 E. Bayshore Road, Suite 195, Palo Alto, CA 94303, and our telephone number is (408) 702-2167.
Our subsidiaries maintain offices in Coquitlam, British Columbia, New Westminster, British Columbia, Toronto, Ontario, Hyderabad, India,
Berlin Germany, Ratingen, Germany, Eschborn, Germany and Slough, UK. Our Internet website is www.inpixon.com. The information contained
on, or that may be obtained from, our website is not a part of this prospectus supplement and should not be considered a part of this
prospectus supplement. We have included our website address in this prospectus solely as an inactive textual reference.
OFFERING
SUMMARY
Common
Stock to be offered by us pursuant to this prospectus supplement |
|
Shares
of our common stock having an aggregate offering price of up to $25,000,000. |
|
|
|
Common
Stock outstanding after this offering(1) |
|
Up
to 320,622,796 shares of common stock, assuming sales of 160,565,189 shares of common stock at a price of $0.1557 per share, which
was the closing price of our common stock on the Nasdaq Capital Market on July 20, 2022. The actual number of shares of our common
stock issued will vary depending on the sales price under this offering. |
|
|
|
Market
for Common Stock |
|
Our
common stock is listed on the Nasdaq Capital Market under the symbol “INPX.” |
|
|
|
Manner
of offering |
|
Sales
of shares of our common stock, if any, will be made pursuant to the terms of the Equity Distribution Agreement between us and Maxim
Group LLC. Sales of the shares will be made in sales deemed to be “at-the-market” equity offerings as defined in Rule
415 promulgated under the Securities Act. Maxim Group LLC will act as sales agent and will use commercially reasonable efforts to
sell on our behalf all of the shares of common stock requested to be sold by us, consistent with its normal trading and sales practices.
See “Plan of Distribution.” |
|
|
|
Use
of Proceeds |
|
We
plan to use the net proceeds from this offering, if any, for general working capital and general corporate purposes. See “Use
of Proceeds.” |
|
|
|
Risk
factors |
|
See
“Risk Factors” beginning on page PS-5 of this prospectus supplement, as well as the other information included in or
incorporated by reference in this prospectus supplement and the accompanying base prospectus, for a discussion of risks you should
carefully consider before investing in our securities. |
|
|
|
Exclusive
Sales Agent |
|
Maxim
Group LLC is acting as the exclusive sales agent in connection with this offering. |
(1) | The
number of shares of our common stock to be outstanding after this offering is based on 160,057,607 shares of our common stock outstanding
as of July 20, 2022 and excludes, as of that date, the following: |
| ● | 70
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 $1,250,933.48 per share; |
| ● | 27,787,985
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 $1.08 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; |
| ● | 21,212,015
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; |
| ● | 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; |
| ● | 17,450,000
shares of common stock issuable upon the exercise of warrants at an exercise price of $1.25 per share; |
| ● | 112,778,720
shares of common stock issuable upon the exercise of the warrants at an exercise price of $0.4717 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; |
| ● | approximately
112,778,720 shares of common stock issuable upon conversion of 53,197.7234 outstanding shares of Series 8 Convertible Preferred Stock,
at a conversion price of $0.4717 per share; and |
| ● | rights
to receive an aggregate of 3,938,424 shares of common stock. |
RISK FACTORS
Before you make a decision
to invest in our securities, you should consider carefully the risks described below, together with other information in this prospectus
supplement, the accompanying base prospectus and the information incorporated by reference herein and therein, including any risk factors
contained in our annual and other reports filed with the SEC. If any of the following events actually occur, our business, operating results,
prospects or financial condition could be materially and adversely affected. This could cause the trading price of our common stock to
decline and you may lose all or part of your investment. The risks described below are not the only ones that we face. Additional risks
not presently known to us or that we currently deem immaterial may also significantly impair our business operations and could result
in a complete loss of your investment.
Risks Related to this Offering
Since we have broad discretion in how we use
the proceeds from this offering, we may use the proceeds in ways with which you disagree.
We have not allocated specific
amounts of the net proceeds from this offering for any specific purpose. Accordingly, our management will have flexibility in applying
the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds,
and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately.
It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us. The failure of
our management to use such funds effectively could have a material adverse effect on our business, financial condition, operating results
and cash flow.
Sales could occur, could depress the market
price of our common stock.
Sales of a substantial number
of shares of our common stock in the public markets could depress the market price of our common stock and impair our ability to raise
capital through the sale of additional equity securities. We cannot predict the effect that future sales of our common stock would have
on the market price of our common stock.
The common stock offered hereby will be sold
in “at the market” offerings, and investors who buy shares at different times will likely pay different prices.
Investors who purchase shares
in this offering at different times will likely pay different prices, and so may experience different outcomes in their investment results.
We will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold, and there is no minimum or
maximum sales price. Investors may experience a decline in the value of their shares as a result of share sales made at prices lower than
the prices they paid.
The actual number of shares we will issue under
the Equity Distribution Agreement, at any one time or in total, is uncertain.
Subject to certain limitations
in the Equity Distribution Agreement and compliance with applicable law, we have the discretion to deliver a sales notice to Maxim at
any time throughout the term of the Equity Distribution Agreement. The number of shares that are sold by Maxim after delivering a sales
notice will fluctuate based on the market price of the common shares during the sales period and limits we set with Maxim. Because the
price per share of each share sold will fluctuate based on the market price of our common stock during the sales period, it is not possible
at this stage to predict the number of shares that will be ultimately issued.
Our stockholders may experience substantial
dilution in the value of their investment if we issue additional shares of our capital stock.
Our articles of incorporation
allows us to issue up to 2,000,000,000 shares of our common stock, par value $0.001 per share, and to issue and designate the rights of,
without stockholder approval, up to 5,000,000 shares of preferred stock, par value $0.001 per share. To raise additional capital, we may
in the future sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock at
prices that are lower than the prices paid by existing stockholders, and investors purchasing shares or other securities in the future
could have rights superior to existing stockholders, which could result in substantial dilution to the interests of existing stockholders.
In addition, to the extent that
outstanding stock options or warrants have been or may be exercised or preferred stock converted or other shares issued, you may experience
further dilution.
We have outstanding debt. Such indebtedness,
along with the other contractual commitments of our Company, could adversely affect our business, financial condition and results of
operations.
As of July 22, 2022, we have
an outstanding principal and interest balance of approximately $1.7 million underlying the March 2020 Note, which matures on March 18,
2023, and approximately $6.5 million underlying the July 2022 Note, which matures on July 22, 2023. The holders of these notes may require
us to redeem 1/3 of the initial principal balance of their promissory notes each month in cash. The ability to meet payment and other
obligations under these notes depends on our ability to generate significant cash flow in the future. This, to some extent, is subject
to general economic, financial, competitive, legislative, regulatory and other factors beyond our control as described in our SEC filings.
If we are not able to generate sufficient cash flow to service our debt obligations, we may need to refinance or restructure debt, exchange
debt for other securities, sell assets, reduce or delay capital investments, or seek to raise additional capital. If we are unable to
implement one or more of these alternatives, we may not be able to meet debt payment and other obligations, which could have a material
adverse effect on our financial condition.
In addition, so long as these
notes are outstanding, the holders will have a right of first refusal on more favorable equity-linked financings and will be entitled
to participate in certain equity or debt financings, in each case, subject to certain exceptions. The existence of these rights may deter
potential financing sources and may lead to delays in our ability to close proposed financings. Any delay or inability to complete a financing
when needed could have a material adverse effect on our financial condition.
We may also incur additional
indebtedness in the future. If new debt or other liabilities are added to our current consolidated debt levels, the related risks that
we now face could intensify.
We may issue debt and equity securities or securities
convertible into equity securities, any of which may be senior to our common stock as to distributions and in liquidation, which could
negatively affect the value of our common stock.
In the future, we may attempt
to increase our capital resources by entering into debt or debt-like financing that is unsecured or secured by up to all of our assets,
or by issuing additional debt or equity securities, which could include issuances of secured or unsecured commercial paper, medium-term
notes, senior notes, subordinated notes, guarantees, preferred stock, hybrid securities, or securities convertible into or exchangeable
for equity securities. In the event of our liquidation, our lenders and holders of our debt and preferred securities would receive distributions
of our available assets before distributions to the holders of our common stock. Because our decision to incur debt and issue securities
in future offerings may be influenced by market conditions and other factors beyond our control, we cannot predict or estimate the amount,
timing or nature of our future offerings or debt financings. Further, market conditions could require us to accept less favorable terms
for the issuance of our securities in the future.
If our common stock is delisted,
market liquidity for our common stock could be severely affected and our stockholders’ ability to sell their shares of our common
stock could be limited. A delisting of our common stock from Nasdaq would negatively affect the value of our common stock. A delisting
of our common stock could also adversely affect our ability to obtain financing for our operations and could result in the loss of confidence
in our company.
If our common stock becomes subject to the penny
stock rules, it would become more difficult to trade our shares.
The SEC has adopted rules that
regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a
price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain
automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided
by the exchange or system. If we do not retain a listing on The Nasdaq Capital Market, and if the price of our common stock is less than
$5.00, our common stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock
not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition,
the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer
must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s
written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks;
and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the
trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.
We previously received a notice of failure to
satisfy a continued listing rule from the Nasdaq which may ultimately result in delisting of our common stock.
In several instances in the past,
including on October 25, 2021, we received written notification from Nasdaq informing us that because the closing bid price of our common
stock was below $1.00 for 30 consecutive trading days, our shares no longer complied with the minimum closing bid price requirement for
continued listing on Nasdaq under the Nasdaq Listing Rules. Each time, we were given a period of 180 days from the date of the notification
to regain compliance with Nasdaq’s listing requirements by having the closing bid price of our common stock listed on Nasdaq be
at least $1.00 for at least 10 consecutive trading days.
While we have regained compliance
within the applicable time periods in the past, we were not able to regain compliance within the applicable time period in connection
with the October 25, 2021 notice. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided a period of 180 calendar
days, or until October 24, 2022, in which to regain compliance. In order to regain compliance with the minimum bid price requirement,
the closing bid price of our common stock must be at least $1.00 per share for a minimum of ten consecutive business days during this
180-day period. In the event that we do not regain compliance within this 180-day period, we may be eligible to seek an additional compliance
period of 180 calendar days if we meet the continued listing requirement for market value of publicly held shares and all other initial
listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and provide written notice to Nasdaq
of our intent to cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary. However,
if it appears to the Nasdaq staff that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq will provide
notice to us that our common stock will be subject to delisting.
Delisting could adversely affect
our ability to raise additional capital through the public or private sale of equity securities, would significantly affect the ability
of investors to trade our securities and would negatively affect the value and liquidity of our common stock. Delisting could also have
other negative results, including the potential loss of confidence by employees, the loss of institutional investor interest and fewer
business development opportunities.
A significant portion of the purchase price
related to our strategic acquisitions are allocated to goodwill and intangible assets that are subject to periodic impairment evaluations.
An impairment loss could have a material adverse impact on our financial condition and results of operations.
A significant portion of the
purchase price related to our strategic acquisitions are allocated to goodwill and intangible assets that are subject to periodic impairment
evaluations. An impairment loss could have a material adverse impact on our financial condition and results of operations. As of December
31, 2021 we had approximately $7.7 million of goodwill and the net book value of our intangible assets is approximately $33.5 million
in connection with the various acquisitions that we have consummated.
As required by current accounting
standards, we review intangible assets for impairment either annually or whenever changes in circumstances indicate that the carrying
value may not be recoverable. The risk of impairment to goodwill is higher during the early years following an acquisition. This is because
the fair values of these assets align very closely with what we paid to acquire the reporting units to which these assets are assigned.
As a result, the difference between the carrying value of the reporting unit and its fair value (typically referred to as “headroom”)
is smaller at the time of acquisition. Until this headroom grows over time, due to business growth or lower carrying value of the reporting
unit, a relatively small decrease in reporting unit fair value can trigger impairment charges. When impairment charges are triggered,
they tend to be material due to the size of the assets involved. Our business could be adversely affected, and impairment of goodwill
could be triggered, if any of the following were to occur: higher attrition rates than planned as a result of the competitive environment
or our inability to provide products and services that are competitive in the marketplace, lower-than-planned adoption rates by customers,
higher-than-expected expense levels to provide services to customers, sustained declines in our stock price and related market capitalization
and changes in our business model that may impact one or more of these variables. During the years ended December 31, 2021 and December
31, 2020 we recorded a goodwill impairment charge of $14.8 million and $0, respectively.
In addition, we have experienced
a decrease in our stock price and market capitalization since December 31, 2021, which is one of the qualitative factors to be considered
as part of an impairment test. As a result, our remaining goodwill could become impaired, which could result in a material charge and
adversely affect our results of operations.
The impacts of the current Russia-Ukraine conflict
and the sanctions imposed on Russia remain uncertain and could have an adverse impact on the Corporation’s business and results
of operation
In February 2022, Russian military
forces invaded Ukraine. In response, Ukrainian military personnel and civilians are actively resisting the invasion. Many countries throughout
the world have provided aid to Ukraine in the form of financial aid and in some cases military equipment and weapons to assist in their
resistance to the Russian invasion.
The North Atlantic Treaty Organization
(“NATO”) has also mobilized forces to NATO member countries that are close to the conflict as deterrence to further Russian
aggression in the region. The outcome of the conflict is uncertain and is likely to have wide-ranging consequences on the peace and stability
of the region and the world economy.
In addition, certain countries
including the United States, have imposed strict financial and trade sanctions against Russia, which sanctions may have far reaching effects
on the global economy. As part of the sanctions package, the German government paused the certification process for the 1,200 km Nord
Stream 2 natural gas pipeline that was built to carry natural gas from Russia to Germany. Russia is a major exporter of oil and natural
gas. Disruption of supplies of oil and natural gas from Russia could cause a significant worldwide supply shortage of oil and natural
gas and have a significant impact on worldwide prices of oil and natural gas. A lack of supply and high prices of oil and natural gas
could have a significant adverse impact on the world economy and impact the supply chain for our products. The long-term impacts of the
conflict and the sanctions imposed on Russia remain uncertain and could have an adverse impact on our business and results of operation.
USE OF PROCEEDS
We may offer and sell shares of
our common stock having aggregate sales proceeds of up to $25,000,000 from time to time. The amount of proceeds we receive, if any, will
depend on the actual number of shares of our common stock sold and the market price at which such shares are sold. There can be no assurance
that we will be able to sell any shares or fully utilize the Equity Distribution Agreement with Maxim as a source of financing. Because
there is no minimum offering amount required as a condition to close this offering, the net proceeds to us, if any, are not determinable
at this time.
We currently intend to use the
net proceeds from this offering, if any, primarily for working capital and general corporate purposes. We may also use a portion of the
net proceeds to invest in or acquire businesses or technologies that we believe are complementary to our own, although we have no current
plans, commitments or agreements with respect to any acquisitions as of the date of this prospectus supplement.
We have broad discretion in determining
how the proceeds of this offering will be used, and our discretion is not limited by the aforementioned possible uses. Our board of directors
believes the flexibility in application of the net proceeds is prudent. See the section entitled “Risk Factors—Risks Relating
to this Offering—Since we have broad discretion in how we use the proceeds from this offering, we may use the proceeds in ways with
which you disagree.”
DILUTION
Investors purchasing our common
stock in this offering will not experience immediate or substantial dilution in the net tangible book value of their shares of common
stock. Our net tangible book value as of March 31, 2022 was approximately $77.7 million, or $0.51 per share. We calculate net tangible
book value per share by dividing our net tangible book value, which is tangible assets less total liabilities, by the number of outstanding
shares of our common stock. Dilution in net tangible book value per share represents the difference between the amount per share paid
by purchasers of common stock in this offering and the as adjusted net tangible book value per share of common stock immediately after
giving effect to this offering.
After giving effect to the sale
by us of shares of our common stock in the aggregate amount of $25,000,000 in this offering at an assumed offering price of $0.1557 per
share, the closing price of our common stock on the Nasdaq Capital Market on July 20, 2022, and after deducting commissions and estimated
offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2022 would have been approximately
$101.8 million, or $0.33 per share. This represents an immediate decrease in as adjusted net tangible book value of $0.18 per share to
existing stockholders and results in no immediate dilution in net tangible book value to investors purchasing our securities in this offering.
Instead, investors purchasing our common stock in this offering will experience immediate accretion in net tangible book value of $0.1743
per share. The following table illustrates this calculation on a per share basis:
Assumed public offering price per share for this offering | |
| | | |
$ | 0.1557 | |
Historical net tangible book value per share as of March 31, 2022 | |
$ | 0.51 | | |
| | |
Decrease in pro forma net tangible book value per share after this offering | |
$ | (0.18 | ) | |
| | |
As adjusted pro forma net tangible book value per share as of March 31, 2022, after giving effect to this offering | |
| | | |
$ | 0.33 | |
Accretion per share to new investors | |
| | | |
$ | 0.1743 | |
The foregoing table does not take
into account dilution to new investors that could occur upon the exercise of outstanding options and warrants having a per share exercise
price less than the assumed public offering price in this offering or shares of common stock issued after March 31, 2022.
The number of shares of our common
stock to be outstanding after this offering is based on 152,476,355 shares of our common stock outstanding as of March 31, 2022 and excludes,
as of that date, the following:
| ● | 70
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 $1,250,933.48 per share; |
| ● | 28,456,250 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 $1.08 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; |
|
● |
14,543,750 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; |
|
|
|
|
● |
17,450,000 shares of common stock issuable upon the exercise of warrants at an exercise price of $1.25 per share; |
|
|
|
|
● |
112,778,720 shares of common stock issuable upon the exercise of the warrants at an exercise price of $0.4717 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; |
|
|
|
|
● |
approximately 112,778,720 shares of common stock issuable upon conversion of 53,197.7234 outstanding shares of Series 8 Convertible Preferred Stock, at a conversion price of $0.4717 per share; and |
|
|
|
|
● |
rights to receive an aggregate of 3,938,424 shares of common stock. |
To the extent that the outstanding
options or warrants are exercised or preferred stock converted, new investors will experience further dilution. In addition, we may choose
to raise additional capital due to market conditions or strategic considerations. To the extent that additional capital is raised through
the sale of securities, the issuance of those securities could result in further dilution to our stockholders.
PLAN OF DISTRIBUTION
Pursuant to the Equity Distribution
Agreement, dated July 22, 2022, by and between us and Maxim Group LLC (“Maxim”), Maxim has agreed to act as exclusive sales
agent in connection with this offering of our common stock pursuant to this prospectus supplement and the accompanying base prospectus.
Maxim is not purchasing or selling any of the shares of our common stock offered by this prospectus supplement, nor is it required to
arrange the purchase or sale of any specific number or dollar amount of shares of our common stock, but has agreed to use its reasonable
best efforts to arrange for the sale of all of the shares of our common stock offered hereby.
Upon delivery of a placement notice
and subject to the terms and conditions of the Equity Distribution Agreement, Maxim may sell shares of our common stock by any method
permitted by law deemed to be an “at-the-market” equity offering as defined in Rule 415 promulgated under the Securities Act,
including sales made directly on or through the Nasdaq Capital Market, the existing trading market for our common stock, sales made to
or through a market maker other than on an exchange or otherwise, in negotiated transactions at market prices prevailing at the time of
sale or at prices related to such prevailing market prices, and/or any other method permitted by law, including in privately negotiated
transactions.
We will pay Maxim in cash, upon
each sale of shares of our common stock pursuant to the Equity Distribution Agreement, a commission equal to 3.0% of the gross proceeds
from each sale of shares of our common stock. Because there is no minimum offering amount required as a condition to this offering, the
actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. We have also agreed to
reimburse Maxim for certain specified expenses, including the fees and disbursements of its legal counsel up to $50,000, provided, however
that any costs and out-of-pocket expenses (excluding fees and expenses of legal counsel) in amount equal to or in excess of $5,000 individually
and in the aggregate shall require our advance written consent. In addition to such fees, at the end of each quarter in which the offering
is open and during which sales of our common stock have occurred, we have agreed to pay Maxim’s legal counsel an additional legal
fee equal to $5,000.
Settlement for sales of shares
of our common stock will occur on the second business day following the date on which any sales are made, or on some other date that is
agreed upon by us and Maxim in connection with a particular transaction, in return for payment of the net proceeds to us. There is no
arrangement for funds to be received in an escrow, trust or similar arrangement. Sales of shares of our common stock as contemplated in
this prospectus will be settled through the facilities of The Depository Trust Company or by such other means as we and Maxim may agree
upon.
We have agreed to provide indemnification
and contribution to Maxim and specified persons against certain civil liabilities, including liabilities under the Securities Act, and
the Securities Exchange Act of 1934, as amended, or the Exchange Act, and to contribute to payments that Maxim may be required to make
in respect of such liabilities.
Maxim may be deemed to be an underwriter
within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by them and any profit realized on the resale
of the shares sold by them while acting as principal might be deemed to be underwriting discounts or commissions under the Securities
Act. As an underwriter, Maxim would be required to comply with the requirements of the Securities Act and the Exchange Act, including,
without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations
may limit the timing of purchases and sales of shares by the agent acting as principal. Under these rules and regulations, Maxim:
| ● | may
not engage in any stabilization activity in connection with our securities; and |
| ● | may
not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted
under the Exchange Act, until it has completed its participation in the distribution. |
The offering of shares of our
common stock pursuant to the Equity Distribution Agreement will terminate upon the earliest of (i) twelve (12) months following the date
of this prospectus supplement, (ii) the sale of all common stock provided for in this prospectus supplement, and (iii) the termination
of the Equity Distribution Agreement by the provision of fifteen (15) days prior written notice by either party or otherwise pursuant
to the terms of the Equity Distribution Agreement.
Maxim and its affiliates have
provided and may in the future provide various investment banking, commercial banking and other financial services for us and our affiliates,
for which services they may in the future receive customary fees. To the extent required by Regulation M, Maxim will not engage in any
market making activities involving shares of our common stock while the offering is ongoing under this prospectus.
This prospectus supplement and
the accompanying base prospectus in electronic format may be made available on a website maintained by Maxim and Maxim may distribute
this prospectus supplement and the accompanying base prospectus electronically.
The foregoing does not purport
to be a complete statement of the terms and conditions of the Equity Distribution Agreement. A copy of the Equity Distribution Agreement
is included as an exhibit to our Current Report on Form 8-K that will be filed with the SEC and incorporated by reference into the registration
statement of which this prospectus supplement and the accompanying base prospectus form a part. See the sections entitled “Incorporation
of Documents by Reference” and “Where You Can Find More Information.”
Our common stock is traded on
the Nasdaq Capital Market under the symbol “INPX.”
Other than in the United States,
no action has or will be been taken by us or Maxim that would permit a public offering of the securities offered by this prospectus in
any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly
or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such
securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable
rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about
and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer
or a solicitation is unlawful.
LEGAL MATTERS
The validity of the securities
offered hereby will be passed upon for us by Mitchell Silberberg & Knupp LLP (“MSK”), New York, New York. As of the date
of this prospectus supplement, MSK and certain principals of the firm own securities of our company representing in the aggregate less
than five percent of the shares of our common stock outstanding immediately prior to the filing of this prospectus supplement. Although
MSK is not under any obligation to accept shares of our common stock in payment for services, it may do so in the future. Maxim is being
represented in connection with this offering by Ellenoff Grossman & Schole LLP, New York, New York.
EXPERTS
Marcum LLP, independent registered
public accounting firm, has audited our consolidated financial statements for the years ended December 31, 2020 and 2021 included in our
Annual Report on Form 10-K for the year ended December 31, 2021, as set forth in their report, which is incorporated by reference in this
prospectus. Our consolidated financial statements are incorporated by reference in reliance on Marcum LLP, given their authority as experts
in accounting and auditing.
BPM LLP, independent registered
public accounting firm, has audited the financial statements of Design Reactor, Inc. as of December 31, 2020 and 2019 and for each of
the two years in the period ended December 31, 2020, included in our Current Report on Form 8-K/A filed with on July 15, 2021, as set
forth in their report, which is incorporated herein by reference in this prospectus. Such financial statements are incorporated by reference
in reliance on BPM LLP, given their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities
and Exchange Commission (the “SEC”) a registration statement on Form S-3 under the Securities Act, with respect to the securities
covered by this prospectus. This prospectus, which is a part of the registration statement, does not contain all of the information set
forth in the registration statement or the exhibits and schedules filed therewith. For further information with respect to us and the
securities covered by this prospectus, please see the registration statement and the exhibits filed with the registration statement. The
SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants
that file electronically with the SEC. The address of the website is http://www.sec.gov.
We are subject to the information
and periodic reporting requirements of the Exchange Act and, in accordance therewith, we file periodic reports, proxy statements and other
information with the SEC. Such periodic reports, proxy statements and other information are available for inspection and copying at the
website of the SEC referred to above. We maintain a website at http://www.inpixon.com. You may access our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed pursuant to Sections 13(a) or 15(d)
of the Exchange Act with the SEC free of charge at our website as soon as reasonably practicable after such material is electronically
filed with, or furnished to, the SEC. Our website and the information contained on that site, or connected to that site, are not incorporated
into and are not a part of this prospectus.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate
by reference” the information we file with them, which means that we can disclose important information by referring you to those
documents. The information incorporated by reference is considered to be part of the accompanying base prospectus, and information that
we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed
below:
|
● |
our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on March 16, 2022; |
|
|
|
|
● |
our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, as filed with the SEC on May 16, 2022; |
|
|
|
|
● |
with the exception of the portions of the following filings that are furnished rather than filed, our Current Reports on Form 8-K, as filed with the SEC on January 10, 2022, January 28, 2022, March 9, 2022, March 11, 2022, March 22, 2022, March 24, 2022, April 28, 2022 and May 16, 2022 ; |
|
|
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|
● |
the description of our common stock included in our Registration Statement on Form 8-A , as filed with the SEC on April 7, 2014 pursuant to Section 12(b) of the Exchange Act, including any amendment or report filed for the purpose of updating such description; |
In addition, all filed information
contained in reports and documents filed with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of this prospectus supplement and before the termination or completion of this offering, shall be deemed to be incorporated by
reference in this prospectus supplement. Any statement contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that a statement contained herein or in
any other subsequently filed document which is also incorporated or deemed to be incorporated herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus
supplement.
We will provide, without charge,
to each person to whom a copy of this prospectus supplement is delivered, including any beneficial owner, upon the written or oral request
of such person, a copy of any or all of the documents incorporated by reference herein, including exhibits. Requests should be directed
to:
Inpixon
Attn: Secretary
2479 E. Bayshore Road, Suite 195
Palo Alto, CA 94303
(408) 702-2167
In addition, you may obtain a
copy of these filings from the SEC as described in the section entitled “Where You Can Find More Information.”
PROSPECTUS
$350,000,000
Common Stock
Preferred Stock
Subscription Rights
Units
Warrants
Debt Securities
By this prospectus and an
accompanying prospectus supplement, we may from time to time offer and sell, in one or more offerings, up to $350,000,000 in any combination
of common stock, preferred stock, warrants, units, debt securities and subscription rights.
We will provide you with
more specific terms of these securities in one or more supplements to this prospectus. We may also authorize one or more free-writing
prospectuses to be provided to you in connection with these offerings. You should read this prospectus and any applicable prospectus supplement
or free writing prospectus, as well as any documents incorporated by reference carefully before you invest.
We may offer these securities
from time to time in amounts, at prices and on other terms to be determined at the time of offering. We may offer and sell these securities
to or through underwriters, dealers or agents, or directly to investors, on a continuous or delayed basis. The supplements to this prospectus
will provide the specific terms of the plan of distribution. The price to the public of such securities and the net proceeds we expect
to receive from such sale will also be set forth in a prospectus supplement.
This prospectus also relates
to an aggregate of 49,394,058 shares of our common stock, par value $0.001 per share, including shares of common stock issuable upon (1)
the conversion of 1 outstanding share of Series 4 convertible preferred stock (the “Series 4 Preferred Stock”), (2) the conversion
of 126 outstanding shares of Series 5 convertible preferred stock (the “Series 5 Preferred Stock”), (3) the exercise of February
2018 Warrants (as defined and described below), (4) the exercise of the April 2018 Warrants (as defined below), (5) the exercise of the
January 2019 Warrants (as defined below), (6) the exercise of the November 2020 Warrants (as defined below), (7) the exercise of the January
2021 Warrants (as defined below), (8) the exercise of the First February 2021 Warrants (as defined below) and (9) the exercise of the
Second February 2021 Warrants (as defined below), each of which were previously registered by us in June 2018.
The Series 4 Preferred Stock
and the April 2018 Warrants were originally issued in our public offering of securities consummated on April 24, 2018 (the “April
2018 Offering”). Under the April 2018 Offering, we (i) issued 10,115 shares of Series 4 Preferred Stock, par value $0.001 per share,
with a stated value of $1,000 and initially convertible into an aggregate of 21,989,160 shares of our common stock, at a conversion price
of $0.46 per share (subject to adjustment), and (ii) warrants to purchase an aggregate of 21,989,160 shares of common stock at an exercise
price of $0.67 per share (subject to adjustment) (the “April 2018 Warrants”). As of June 1, 2021, there was 1 share of Series
4 Preferred Stock outstanding, convertible into 5 shares of our common stock. As of June 1, 2021, April 2018 Warrants to purchase an aggregate
of 61,562 shares of common stock have not been exercised and will expire five years after their issuance.
In addition, this prospectus
relates to the registration of up to an additional 24,055 shares of our common stock, issuable upon the exercise of those certain warrants,
at the applicable floor price of $1,141.20, issued on February 20, 2018 (the “February 2018 Warrants”). As of June 1, 2021,
February 2018 Warrants to purchase an aggregate of 24,055 shares of common stock have not been exercised and will expire five years after
their issuance.
On January 15, 2019, we closed
a rights offering whereby we sold an aggregate of 12,000 units consisting of an aggregate of 12,000 shares of Series 5 Preferred Stock
and 80 warrants to purchase common stock exercisable for one share of common stock at an exercise price of $149.85 per share in accordance
with the terms and conditions of a warrant agency agreement (the “January 2019 Warrant”), resulting in gross proceeds to us
of approximately $12 million, and net proceeds of approximately $10.77 million after deducting expenses relating to dealer-manager fees
and expenses, and excluding any proceeds received upon exercise of any warrants. As of June 1, 2021, there were 126 shares of Series 5
Preferred Stock outstanding, convertible into 841 shares of our common stock. As of June 1, 2021, January 2019 Warrants to purchase an
aggregate of 2,507 shares of common stock have not been exercised and will expire five years after their issuance.
On November 25, 2020, we
entered into a Securities Purchase Agreement with an institutional investor, pursuant to which we sold in a registered direct offering,
5,000,000 shares of our common stock, and warrants to purchase up to 8,000,000 shares of common stock at an exercise price of $1.25 per
share (the “November 2020 Warrants”) for a combined purchase price of $1.25 per share and pre-funded warrants, which pre-funded
warrants have been exercised in full, to purchase up to 3,000,000 shares of common stock at an exercise price of $0.001 per share at a
purchase price of $1.249 per share for net proceeds of $9.2 million after deducting placement agent commissions and offering expenses.
As of June 1, 2021, November 2020 Warrants to purchase an aggregate of 5,000,000 shares of common stock have not been exercised and will
expire five years after their issuance.
On January 24, 2021, we entered
into a Securities Purchase Agreement with an institutional investor, pursuant to which we sold in a registered direct offering, 5,800,000
shares of our common stock, and warrants to purchase up to 19,354,838 shares of common stock at an exercise price of $1.55 per share (the
“January 2021 Warrants”) for a combined purchase price of $1.55 per share and pre-funded warrants, which pre-funded warrants
have been exercised in full, to purchase up to 13,554,838 shares of common stock, at an exercise price of $0.001 per share, at a purchase
price of $1.549 per share for net proceeds of $27.8 million after deducting placement agent commissions and offering expenses. As of June
1, 2021, none of the January 2021 Warrants have been exercised and the January 2021 Warrants will expire five years after their issuance.
On February 12, 2021, we
entered into a Securities Purchase Agreement with an institutional investor, pursuant to which we sold in a registered direct offering,
7,000,000 shares of our common stock, and warrants to purchase up to 15,000,000 shares of common stock at an exercise price of $2.00 per
share (the “First February 2021 Warrants”) for a combined purchase price of $2.00 per share and pre-funded warrants, which
pre-funded warrants have been exercised in full, to purchase up to 8,000,000 shares of common stock at an exercise price of $0.001 per
share, at a purchase price of $1.999 per share for net proceeds of $27.8 million after deducting placement agent commissions and offering
expenses. As of June 1, 2021, none of the First February 2021 Warrants have been exercised and the First February 2021 Warrants will expire
five years after their issuance.
On February 16, 2021, we
entered into a Securities Purchase Agreement with an institutional investor, pursuant to which we sold in a registered direct offering,
3,000,000 shares of our common stock, and warrants to purchase up to 9,950,250 shares of common stock at an exercise price of $2.01 per
share (the “Second February 2021 Warrants”) for a combined purchase price of $2.01 per share and pre-funded warrants, which
pre-funded warrants have been exercised in full, to purchase up to 6,950,250 shares of common stock at an exercise price of $0.001 per
share, at a purchase price of $2.009 per share for net proceeds of $18.5 million after deducting placement agent commissions and offering
expenses. As of June 1, 2021, none of the Second February 2021 Warrants have been exercised and the Second February 2021 Warrants will
expire five years after their issuance.
In addition, this prospectus
relates to the resale by the selling security holders identified in this prospectus (the “Selling Security Holders”) of up
to 19,911,477 shares of our common stock, par value $0.001 per share, issued or issuable to the Selling Security Holders in connection
with our acquisition of all of the outstanding capital stock of Design Reactor, Inc., dba The CXApp (“CXApp”), a provider
of a SaaS-based mobile app platform that brings the customer, employee and visitor experience initiatives together in one system that
a client does not have to host, manage, support or maintain,. On April 30, 2021, we acquired over 99.9% of the outstanding capital stock
of CXApp, in accordance with the terms and conditions of a Stock Purchase Agreement, by and among us, CXApp, each of the sellers set forth
on signature page of the Stock Purchase Agreement and each other seller who owns shares of CXApp and executes a joinder to the Stock Purchase
Agreement, or the Sellers, and Leon Papkoff, as Sellers’ representative, dated April 30, 2021. As of the closing date, there was
one holder of CXApp shares that did not sign the Stock Purchase Agreement (the “Non-Signing Seller”). On May 10, 2021, we,
CXApp and the Non-Signing Seller executed a Joinder to Stock Purchase Agreement pursuant to which we purchased such Non-Signing Seller’s
CXApp shares. As a result of the transaction, CXApp became a wholly-owned subsidiary of our company. In connection with the acquisition
of CXApp, we issued 8,849,538 shares of our common stock to the Sellers as partial consideration, or the Purchaser Shares, and we agreed
to issue up to an additional 11,061,939 shares of our common stock, or the Earnout Shares, to selected Sellers, subject to the receipt
of stockholder approval of such shares, in accordance with and as required by the Nasdaq Listing Rules, and as such number of shares are
adjusted based on revenue recorded by us from CXApp sales during the period from the closing of the transaction until the 12 month anniversary
of such closing, or the Earnout Period, which shares will be issued on a scheduled payroll payment date occurring within ninety days following
the end of the Earnout Period. See “Our Business – Recent Developments – The CXApp Acquisition” for additional
information regarding our acquisition of CXApp. The Selling Security Holders may sell these shares of common stock in a number of different
ways and at varying prices. See “Plan of Distribution” for more information about how the Selling Security Holders
may sell the shares of common stock being registered. We will not receive any of the proceeds from the sale of shares by the Selling Security
Holders.
Our common stock is listed
on the Nasdaq Capital Market under the symbol “INPX.” On June 3, 2021, the closing price of our common stock as reported by
the Nasdaq Capital Market was $1.09 per share.
An investment in our common stock involves a high
degree of risk. See “Risk Factors” on page 5 of this prospectus for more information on these risks.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities, or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
The date of this prospectus is June 17, 2021.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement
filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. Under this
shelf process, we may sell the securities described in this prospectus in one or more primary offerings, up to the maximum aggregate dollar
amount $350 million, including unsold securities with a maximum aggregate offering price of $39,715,640.76 carried over from the registration
statement (File No. 333-223960) initially filed on March 27, 2018, as amended on May 15, 2018, and declared effective on June 5, 2018
(the “Prior Registration Statement”).
This prospectus also relates to the issuance by us
of up to 49,394,058 shares of our common stock issuable upon the conversion of outstanding shares of Series 4 Preferred Stock and Series
5 Preferred Stock and the exercise of outstanding February 2018 Warrants, the April 2018 Warrants, the January 2019 Warrants, the November
2020 Warrants, the January 2021 Warrants, the First February 2021 Warrants and the Second February 2021 Warrants. The outstanding Series
4 Preferred Stock, Series 5 Preferred Stock, the April 2018 Warrants, the January 2019 Warrants, the November 2020 Warrants, the January
2021 Warrants, the First February 2021 Warrants and the Second February 2021 Warrants, and the shares of common stock underlying these
securities were previously registered under the Prior Registration Statement.
In addition, this prospectus covers an aggregate of
19,911,477 shares of our common stock that were issued or are issuable to the Selling Security Holders as Purchaser Shares and Earnout
Shares in partial consideration for the acquisition of all of the outstanding capital stock of CXApp, and which may be offered and sold
by the Selling Security Holders from time to time in one or more secondary offerings.
This prospectus provides you with a general description
of the securities which may be offered. Each time we offer securities for sale, we will provide a prospectus supplement that contains
specific information about the terms of that offering. Any prospectus supplement may also add or update information contained in this
prospectus. You should read both this prospectus and any prospectus supplement together with additional information described below under
“Where You Can Find More Information” and “Information Incorporated by Reference.”
The registration statement that contains this prospectus
(including the exhibits thereto) contains additional important information about us and the securities we may offer under this prospectus.
Specifically, we have filed certain legal documents that establish the terms of the securities offered by this prospectus as exhibits
to the registration statement. We will file certain other legal documents that establish the terms of the securities offered by this prospectus
as exhibits to reports we file with the SEC. You may obtain copies of that registration statement and the other reports and documents
referenced herein as described below under the heading “Where You Can Find More Information.”
You should rely only on the information contained
or incorporated by reference in this prospectus and in any prospectus supplement. We have not authorized any other person to provide you
with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making
offers to sell or solicitations to buy the securities in any jurisdiction in which an offer or solicitation is not authorized or in which
the person making that offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make an offer or solicitation.
You should not assume that the information in this prospectus or any prospectus supplement, as well as the information we file or previously
filed with the SEC that we incorporate by reference in this prospectus or any prospectus supplement, is accurate as of any date other
than its respective date. Our business, financial condition, results of operations and prospects may have changed since those dates.
Unless otherwise stated or the context otherwise requires,
the terms “Inpixon,” “we,” “us,” “our,” and the “Company” refer collectively
to Inpixon and, where appropriate, its subsidiaries.
Note Regarding Reverse Stock Splits
Since January 1, 2018, the Company effected reverse
splits of its outstanding common stock, par value $0.001, at a ratio of 1-for-30, effective as of February 6, 2018, 1-for-40, effective
as of November 2, 2018 and 1-for-45 effective as of January 7, 2020 (collectively, the “Reverse Splits”), for the purpose
of complying with Nasdaq Listing Rule 5550(a)(2). We have reflected the Reverse Splits in this prospectus, unless otherwise indicated.
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements
that involve risks and uncertainties. You should not place undue reliance on these forward-looking statements. Our actual results could
differ materially from those anticipated in the forward-looking statements. In some cases, you can identify these forward-looking statements
by terms such as “anticipate,” “believe,” “continue,” “could,” “depends,”
“estimates,” “expects,” “intends,” “may,” “ongoing,” “plan,” “potential,”
“predict,” “project,” “should,” “will,” “would” or the negative of those terms
or other similar expressions, although not all forward-looking statements contain those words.
We have based these forward looking statements largely
on our current expectations and projections about future events and financial trends that we believe may affect our financial condition,
results of operations, business strategy and financial needs. These forward looking statements are subject to a number of known and unknown
risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” and elsewhere
in this prospectus, regarding, among other things:
| ● | our
limited cash and our history of losses; |
| ● | our
ability to achieve profitability; |
| ● | our
limited operating history with recent acquisitions; |
| ● | risks
related to our recent acquisitions; |
| ● | our
ability to successfully integrate companies or technologies we acquire; |
| ● | emerging
competition and rapidly advancing technology in our industry that may outpace our technology; |
| ● | customer
demand for the products and services we develop; |
| ● | the
impact of competitive or alternative products, technologies and pricing; |
| ● | our
ability to manufacture any products we develop; |
| ● | general
economic conditions and events and the impact they may have on us and our potential customers, including but not limited to the impact
of COVID-19; |
| ● | our
ability to obtain adequate financing in the future; |
| ● | our
ability to use the proceeds from this offering as discussed in the section entitled “Use of Proceeds”; |
| ● | our
ability to consummate strategic transactions, which may include acquisitions, mergers, dispositions or investments; |
| ● | our
ability to maintain compliance with the continued listing requirements of the Nasdaq Capital Market; |
| ● | lawsuits
and other claims by third parties or investigations by various regulatory agencies that we are required to report to including, but not
limited to, the U.S. Securities and Exchange Commission; |
| ● | our
success at managing the risks involved in the foregoing items; and |
| ● | other
factors discussed in this prospectus. |
These risks are not exhaustive. Other sections of
this prospectus may include additional factors that could adversely impact our business and financial performance. Moreover, we operate
in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management
to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from those contained in, or implied by, any forward looking statements. You
should read this prospectus with the understanding that our actual future results, levels of activity, performance and achievements may
be materially different from what we expect. Except as required by law, we undertake no obligation to update publicly any forward looking
statements for any reason after the date of this prospectus or to conform these statements to actual results or to changes in our expectations.
We qualify all of our forward looking statements by
these cautionary statements.
OUR BUSINESS
This is only a summary and may not contain all
the information that is important to you. You should carefully read both this prospectus and any accompanying prospectus supplement and
any other offering materials, together with the additional information described under the heading “Where You Can Find More Information.”
The Company
We are an indoor intelligence company. Our business
and government customers use our solutions to secure, digitize and optimize their indoor spaces with our positioning, mapping and analytics
products. Our indoor intelligence platform uses sensor technology to detect accessible cellular, Wi-Fi, Bluetooth, ultra-wide band (“UWB”)
and radio frequency identification (“RFID”) signals emitted from devices within a venue providing positional information similar
to what global positioning system (“GPS”) satellite systems provide for the outdoors. Combining this positional data with
our dynamic and interactive mapping solution and a high-performance analytics engine, yields near real time insights to our customers
providing them with visibility, security and business intelligence within their indoor spaces. Our highly configurable platform can also
ingest data from our customers’ and other third party sensors, Wi-Fi access points, Bluetooth beacons, video cameras, and big data
sources, among others to maximize indoor intelligence. We also offer digital tear-sheets with optional invoice integration, digital ad
delivery, and an e-edition designed for reader engagement for the media, publishing and entertainment industry. We believe that our Indoor
Intelligence products secure, digitize and optimize the interior of any premises with indoor positioning and data analytics that provide
rich positional information, similar to a global positioning system, and browser-like intelligence for the indoors.
Our indoor intelligence offerings consist of a variety
of software and hardware products for positioning, mapping and analytics offerings, including:
| ● | Sensors
with proprietary technology that can detect accessible cellular, Wi-Fi, Bluetooth, UWB and RFID signals emitted from devices within a
venue, as well as GPS technologies, to allow for the seamless positioning of people and assets homogeneously as they travel between the
indoor and outdoor. Utilizing various radio signal technologies permits device positioning from several meters down to centimeter level
accuracy depending on the product deployed. In retail applications, this provides a highly detailed understanding of customer journey
and dwell time, and in security applications, detection and identification of authorized and unauthorized devices, prevention of rogue
devices through alert notification based on rules when unknown devices are detected in restricted areas and asset tracking with centimeter
level precision. |
| ● | An
indoor mapping platform that provides enterprise organizations with the tools to add intelligence to complex indoor spaces by integrating
business data with indoor maps. Our mapping platform gives developers the flexibility and control to create tailored map-enabled solutions
that address multiple use cases with a single platform. Comprised of software development tools and a web-based content management system,
our mapping platform is highly configurable and able to address the varying security, extensibility and versatility needs of our customers. |
| ● | Data
science analytics, on-premise or in the cloud, along with specially optimized algorithms that are intended to both minimize data movement
and maximize system performance. This enables the system to deliver data reports to the user through our mapping platform as well as
dashboards, reports and tabular format. We also provide data output that can be integrated with common third-party visualization, charting,
graphing and dashboard systems. Our analytics capabilities also allow for the integration of a customer’s existing video surveillance
feed with location data collected via radio frequency, allowing customers to ascertain radio frequency coverage and access evidentiary
information that can be used for security and customer relations programs. Moreover, our platform can utilize GPS technologies to allow
for seamless transitioning of people and assets as they travel between the indoor and outdoor. |
We can assist a variety of
organizations, including retailers, shopping malls and shopping centers, hotels and resorts, gaming operators, airports, healthcare facilities,
office buildings and government agencies, to enhance security measures, offer better business intelligence, increase consumer confidence
and reduce rogue device risk.
Our Products and Services
Our indoor intelligence platform
uses sensor technology to detect accessible cellular, Wi-Fi, Bluetooth, UWB and RFID signals emitted from devices within a venue providing
valuable positional. When combined with our interactive mapping solution and a high-performance analytics engine, we are able to offer
our customers near real time insights for increased visibility, security and business intelligence about their indoor spaces.
Corporate Strategy
Since 2019, management has
pursued a corporate strategic acquisition strategy focused on building and developing its business as the Indoor IntelligenceTM
provider with the ability to provide end to end solutions ranging from the collection of data to delivering insights from that data to
our customers with a focus on securing, digitizing and optimizing premises with our indoor positioning, mapping and analytics solutions
for businesses and governments. In furtherance of this strategy, we have completed a series of strategic transactions to enhance our products
and solution offerings, including, the acquisition of (1) technologies allowing for wireless device positioning and radio frequency augmentation
of video surveillance systems; (2) GPS tracking products, software, technologies, and related intellectual property to provide ground
positioning, asset tracking, and situational awareness monitoring for those whose intelligence needs expand outdoors; (3) our indoor mapping
solution, Inpixon Mapping, to provide users with the tools to add intelligence to complex indoor spaces by integrating business data with
geospatially accurate indoor maps to create relevant views of indoor environments; (4) a suite of on-device “blue dot” indoor
location and motion technologies, including patents, trademarks, software and related intellectual property; (5) IoT solutions for real-time
location systems (RTLS) and indoor and outdoor positioning solutions utilizing both industry-standard technologies, such as ultra-wideband
(UWB), and patented proprietary wireless communication technologies, such as Chirp Spread Spectrum (CSS); and most recently (6) a suite
of augmented reality, computer vision, localization, navigation, mapping, and 3D reconstruction technologies, including patents, trademarks,
software and related intellectual property, and (7) 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.
We believe these transactions
have positioned us as a market leader with a comprehensive suite of products and solutions allowing us to provide organizations with actionable
indoor intelligence to make their indoor spaces smarter, safer and more secure. We also operate and compete in an industry that is characterized
by rapid technological innovation, changing customer needs, evolving industry standards and frequent introductions of new products, product
enhancements, services and distribution methods. Our success will depend on our ability to develop expertise with these new products,
product enhancements, services and distribution methods and to implement solutions that anticipate and respond to rapid changes in technology,
the industry, and customer needs. As a result, in order to continue to respond to rapid changes and required technological advancements
we may continue to evaluate various strategic transactions including acquisitions of companies with technologies and intellectual property
in order to continue to maintain pace with industry demands and if we believe that it will complement our goals in offering a comprehensive
Indoor Intelligence platform. Candidates with proven technologies that complement our overall strategy may come from anywhere in the world,
as long as there are strategic and financial reasons to make the acquisition. If we explore any such opportunities we expect to focus
primarily on looking for accretive acquisitions that have business value and operational synergies, however we will also be opportunistic
and may consider other strategic and/or attractive transactions that we believe may increase overall shareholder value, which may include,
but not be limited to other alternative investment opportunities, such as minority investments, joint ventures or special purpose acquisition
companies. If we make any acquisitions in the future, we expect that we may pay for such acquisitions with cash, equity securities and/or
debt in combinations appropriate for each acquisition.
Corporate Structure
We have five operating subsidiaries:
(i) Inpixon Canada, Inc. (100% ownership) based in Coquitlam, British Columbia (“Inpixon Canada”); (ii) Inpixon Limited (100%
ownership) based in Slough, United Kingdom; (iii) Inpixon GmbH (100% ownership) based in Ratingen, Germany; (iv) Design Reactor, Inc.
(dba The CXApp) (100% ownership) based in Pleasanton, California, and (v) Inpixon India Limited (82.5% ownership) based in Hyderabad,
India. In addition, Nanotron Technologies GmbH, based in Berlin, Germany is an indirect subsidiary of the Company and the wholly owned
subsidiary of Inpixon GmbH.
Corporate Information
Our principal executive offices
are located at 2479 E. Bayshore Road, Suite 195, Palo Alto, CA 94303, and our telephone number is (408) 702-2167. Our subsidiaries maintain
offices in Coquitlam, British Columbia, New Westminster, British Columbia, Toronto, Ontario, Hyderabad, India, Berlin Germany, Ratingen,
Germany, and Slough, UK. Our Internet website is www.inpixon.com. The information on, or that can be accessed through, our website is
not part of this Memorandum, and you should not rely on any such information in making any investment decision relating to our common
stock. For a description of our business, financial condition, results of operations and other important information regarding us, we
refer you to our filings with the SEC incorporated by reference in this prospectus. For instructions on how to find copies of these documents,
see “Where You Can Find More Information.”
RISK FACTORS
Investing in any securities offered pursuant to this
prospectus involves a high degree of risk. Please see the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K
and other filings we make with the SEC, which are incorporated by reference in this prospectus. Additional risk factors may be included
in a prospectus supplement relating to a particular offering of securities. Before making an investment decision, you should carefully
consider these risks as well as other information we include or incorporate by reference in this prospectus. The risks and uncertainties
we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem
immaterial may also affect our business operations. These risks could materially affect our business, results of operations or financial
condition and cause the value of our securities to decline.
USE OF PROCEEDS
Unless we state otherwise
in an accompanying prospectus supplement, we intend to use the net proceeds from the sale of the securities offered by us in primary offerings
under this prospectus and any related prospectus supplement for general corporate purposes. These purposes may include working capital,
acquisitions, retirement of debt and other business opportunities. Pending the application of the net proceeds, we may invest the proceeds
in short-term, interest-bearing instruments or other investment-grade securities. We cannot estimate precisely the allocation of the net
proceeds from these offerings. Accordingly, our management team will have broad discretion in the application of the net proceeds of these
offerings, if any.
We will not receive any additional
consideration from the conversion of the outstanding Series 4 Preferred Stock and the Series 5 Preferred Stock. Assuming the holders will
exercise all of the February 2018 Warrants, the April 2018 Warrants, the January 2019 Warrants, the November 2020 Warrants, the January
2021 Warrants, the First February 2021 Warrants and the Second February 2021 Warrants we offer by this prospectus for cash, we will receive
gross proceeds of approximately $127.88 million. We do not expect to pay any expense in connection with any conversion of outstanding
Series 4 Preferred Stock, Series 5 Preferred Stock or exercise of the February 2018 Warrants, the April 2018 Warrants, the January 2019
Warrants, the November 2020 Warrants, the January 2021 Warrants, the First February 2021 Warrants and the Second February 2021 Warrants.
We currently intend to use
the net proceeds from the exercise of the February 2018 Warrants, the April 2018 Warrants, the January 2019 Warrants, the November 2020
Warrants, the January 2021 Warrants, the First February 2021 Warrants and the Second February 2021 Warrants for general corporate purposes.
These purposes may include working capital, acquisitions, retirement of debt and other business opportunities. Pending the application
of the net proceeds, we may invest the proceeds in short-term, interest-bearing instruments or other investment-grade securities. However,
there can be no assurance that any of the February 2018 Warrants, the April 2018 Warrants, the January 2019 Warrants, the November 2020
Warrants, the January 2021 Warrants, the First February 2021 Warrants and the Second February 2021 Warrants will be exercised, or if these
warrants are exercised, how many would be exercised for cash. We cannot estimate precisely the allocation of the net proceeds from the
exercise of these warrants. Accordingly, our management team will have broad discretion in the application of the net proceeds of this
offering, if any.
We will not receive any proceeds
from the sale of our common stock by the Selling Security Holders.
DILUTION
We will set forth in a prospectus supplement the following
information regarding any material dilution of the equity interests of investors purchasing securities sold by Inpixon in a primary offering
under this prospectus:
| ● | the
net tangible book value per share of our equity securities before and after the offering; |
| ● | the
amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in the offering;
and |
| ● | the
amount of the immediate dilution from the public offering price which will be absorbed by such purchasers. |
DESCRIPTION OF THE SECURITIES THAT MAY BE OFFERED
The Securities We May Offer
Description of Debt Securities
We may issue debt securities
from time to time, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt pursuant
to indentures by and between the Company and a trustee (the “Indentures”). While the terms we have summarized below will apply
generally to any debt securities that we may offer under this prospectus, we will describe the particular terms of any debt securities
that we may offer in more detail in the applicable prospectus supplement. The terms of any debt securities offered under a prospectus
supplement may differ from the terms described below. Unless the context requires otherwise, whenever we refer to the Indenture, we also
are referring to any supplemental Indentures that specify the terms of a particular series of debt securities.
We will issue the debt securities
under the Indenture that we will enter into with the trustee named in the Indenture. The Indenture will be qualified under the Trust Indenture
Act of 1939, as amended, or the Trust Indenture Act. We will file the form of Indenture as an exhibit to the registration statement of
which this prospectus is a part, and supplemental Indentures and forms of debt securities containing the terms of the debt securities
being offered will be filed as exhibits to the registration statement of which this prospectus is a part or will be incorporated by reference
from reports that we file with the SEC.
The following summary of
material provisions of the debt securities and the Indenture is subject to, and qualified in its entirety by reference to, all of the
provisions of the Indenture applicable to a particular series of debt securities. We urge you to read the applicable prospectus supplements
and any related free writing prospectuses related to the debt securities that we may offer under this prospectus, as well as the complete
Indenture that contains the terms of the debt securities.
General
The Indenture will not limit
the amount of debt securities that we may issue. It provides that we may issue debt securities up to the principal amount that we may
authorize and may be in any currency or currency unit that we may designate. Except for the limitations on consolidation, merger and sale
of all or substantially all of our assets contained in the indenture, the terms of the indenture do not contain any covenants or other
provisions designed to give holders of any debt securities protection against changes in our operations, financial condition or transactions
involving us.
We may issue the debt securities
issued under the Indenture as “discount securities,” which means they may be sold at a discount below their stated principal
amount. These debt securities, as well as other debt securities that are not issued at a discount, may be issued with “original
issue discount,” or OID, for U.S. federal income tax purposes because of interest payment and other characteristics or terms of
the debt securities. Material U.S. federal income tax considerations applicable to debt securities issued with OID will be described in
more detail in any applicable prospectus supplement.
We may issue debt securities
from time to time in one or more series under the Indentures. We will describe the particular terms of each series of debt securities
we offer in a supplement to this prospectus or other offering material. The prospectus supplement and other offering material relating
to a series of debt securities will describe the terms of such debt securities being offered, including (to the extent such terms are
applicable to such debt securities):
| ● | the
title of the debt securities; |
| ● | designation,
aggregate principal amount, denomination and currency or currency unit; |
| ● | the
price or prices at which we sell the debt securities and the percentage of the principal amount at which the debt securities will be
issued; |
| ● | whether
the debt securities are senior debt securities or subordinated debt securities and applicable subordination provisions, if any; |
| ● | any
limit on the total principal amount of the debt securities and the ability to issue additional debt securities of the same series; |
| ● | currency
or currency units for which such debt securities may be purchased and in which principal of, premium, if any, and any interest will or
may be payable; |
| ● | interest
rate or rates (or the manner of calculation thereof), if any; |
| ● | the
times at which any such interest will be payable; |
| ● | the
date or dates from which interest will accrue on the debt securities, or the method used for determining those dates; |
| ● | the
place or places where the principal and interest, if any, will be payable; |
| ● | any
redemption, sinking fund, satisfaction and discharge, or defeasance provisions; |
| ● | whether
such debt securities will be issuable in registered form or bearer form or both and, if issuable in bearer form, restrictions applicable
to the exchange of one form for another and to the offer, sale and delivery of certificates in bearer form; |
| ● | whether
and under what circumstances we may from time to time, without the consent of holders of debt securities, issue additional debt securities,
having the same ranking and the same interest rate, maturity and other terms as the debt securities being offered, except for the issue
price and issue date and, in some cases, the first interest payment date, whereby such additional securities will, together with the
then outstanding debt securities, constitute a single class of debt securities under the Indentures, and will vote together on matters
under the Indenture; |
| ● | whether
and under what circumstances we will issue the debt securities in whole or in part as Global Securities as described below under “Global
Securities”; |
| ● | applicable
conversion or exchange privileges; |
| ● | any
defaults and events of defaults applicable to the debt securities to be issued; |
| ● | securities
exchange(s) on which the securities will be listed, if any; |
| ● | whether
any underwriter(s) will act as market maker(s) for the securities; |
| ● | extent
to which a secondary market for the securities is expected to develop; |
| ● | provisions
relating to covenant defeasance and legal defeasance; |
| ● | provisions
relating to satisfaction and discharge of the Indenture; |
| ● | any
covenants or restrictions on us or our subsidiaries; and |
| ● | any
other specific terms of the offered debt securities, including any terms in lieu of those described in this prospectus and any terms
which may be required by or advisable under United States laws or regulations such as those made a part of the applicable Indenture by
the Trust Indenture Act of 1939. |
Material United States federal
income tax consequences and special considerations, if any, applicable to any such securities will be described in the applicable prospectus
supplement.
Debt securities may be presented
for exchange, and registered debt securities may be presented for transfer, in the manner, at the places and subject to the restrictions
set forth in the debt securities and as summarized in the applicable prospectus supplement. Such services will be provided without
charge, other than any tax or other governmental charge payable in connection with such exchange or transfer, but subject to the limitations
provided in the applicable Indenture. Debt securities in bearer form and the coupons, if any, appertaining to such debt securities
will be transferable by delivery.
Subordination
The indebtedness represented
by subordinated debt securities will be subordinated in right of payment to existing and future “Senior Indebtedness,” as
to be described in subordinated indentures (the “Subordinated Indenture”) we may issue and any accompanying prospectus supplement.
The term “Senior Indebtedness” means:
| ● | all
indebtedness for money borrowed incurred by us, unless the terms of the instrument or instruments by which such indebtedness is incurred
or created expressly provide that such indebtedness is subordinate to the subordinated debt securities or that such indebtedness is not
superior in right of payment to the subordinated debt securities, |
| ● | any
other indebtedness, obligation or liability incurred by us (including any guaranty, endorsement or other contingent obligation of ours
in respect of, or to purchase, or otherwise acquire, any obligation of another), direct or indirect, absolute or contingent, or matured
or unmatured, which is specifically designated by us as Senior Indebtedness in the instruments evidencing such indebtedness, obligation
or liability at the time of its issuance or incurrence, or |
| ● | any
deferral, renewal or extension of any of the foregoing. |
“Senior Indebtedness”
does not include:
| ● | our
debt to any of our subsidiaries; |
| ● | any
series of subordinated debt securities issued under the Subordinated Indenture, unless otherwise specified by the terms of any such series; |
| ● | any
of our other debt which by the terms of the instrument creating or evidencing it is specifically designated as being subordinated to
or pari passu with the subordinated debt securities; and |
Except as may be described
in the Subordinated Indenture our ability to incur additional indebtedness, including indebtedness that ranks senior in priority of payment
to the subordinated debt securities is not limited. A prospectus supplement relating to each series of subordinated debt securities
will describe any subordination provisions applicable to such series in addition to or different from those described above.
By reason of such subordination,
in the event of dissolution, insolvency, bankruptcy or other similar proceedings, upon any distribution of assets, (i) the holders
of subordinated debt securities will be required to pay over their share of such distribution in respect of the subordinated debt securities
to the holders of Senior Indebtedness until such Senior Indebtedness is paid in full and (ii) creditors of ours who are not holders
of Senior Indebtedness may recover less, ratably, than holders of Senior Indebtedness and may recover more, ratably, than holders of subordinated
debt securities.
Conversion and Exchange
The terms, if any, on which
debt securities of any series will be convertible into or exchangeable for our common stock, our preferred stock, another series of our
debt securities, other securities, property or cash, or a combination of any of the foregoing, will be summarized in the prospectus supplement
relating to such series of debt securities. Such terms may include provisions for conversion or exchange, either on a mandatory
basis, at the option of the holder, or at our option, in which the number of shares or amount of our common stock, our preferred stock,
another series of our debt securities, other securities, property or cash to be received by the holders of the debt securities would be
calculated according to the factors and at such time as summarized in the related prospectus supplement.
Global Securities
The debt securities of a
series may be issued in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a
depositary identified in the prospectus supplement. Global securities will be issued in registered form and in either temporary
or definitive form. Unless and until it is exchanged in whole or in part for the individual debt securities, a global security may
not be transferred except as a whole by the depositary for such global security to a nominee of such depositary or by a nominee of such
depositary to such depositary or another nominee of such depositary or by such depositary or any such nominee to a successor of such depositary
or a nominee of such successor. The specific terms of the depositary arrangement with respect to any debt securities of a series
and the rights of and limitations upon owners of beneficial interests in a global security will be described in the applicable prospectus
supplement.
Restrictive Covenants
We will describe any restrictive
covenants, including restrictions on any subsidiary, for any series of debt securities in a prospectus supplement.
Defeasance
At our option, either (a) we
will be Discharged (as defined below) from any and all obligations in respect of any series of debt securities under the Indenture or
(b) we will cease to be under any obligation to comply with the restriction on our ability to merge, consolidate or sell assets set
forth in the applicable Indenture, the requirement that we maintain our existence or certain other restrictions, in either case if we
deposit irrevocably with the trustee, in trust, specifically for the benefit of the holders of such series, money or U.S. Government Obligations
(as defined below) which through the payment of interest thereon and principal thereof in accordance with their terms will provide money
in an amount sufficient (in the written opinion of a nationally recognized firm of independent public accountants in the case of U.S.
Government Obligations or a combination of money and U.S. Government Obligations) to pay all the principal of (including any sinking fund
payments or analogous obligations), and interest on, the debt securities of such series on the dates such payments are due in accordance
with the terms of such series of debt securities. To exercise such option, we are required to deliver to the trustee an opinion
of tax counsel to the effect that holders of the debt securities of such series will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and discharge and will be subject to federal income tax in the same amount and in the same manner
and at the same times as would have been the case if such deposit and discharge had not occurred.
The term “Discharged”
is defined to mean that we are deemed to have paid and discharged the entire indebtedness represented by, and obligations under, the debt
securities of such series and to have satisfied all the obligations under the Indenture relating to the debt securities of such series,
except for
| ● | the
rights of holders of the debt securities of such series to receive, from the trust fund described above, payment of the principal of
and the interest on the debt securities of such series when such payments are due; |
| ● | our
obligations with respect to the debt securities of such series with respect to temporary debt securities, registration, transfer, exchange,
replacement of mutilated, destroyed, lost and stolen certificates, maintenance of a paying office and holding money in trust; and |
| ● | the
rights, powers, trusts, duties and immunities of the trustee under the applicable Indenture. |
The term “U.S. Government
Obligations” is defined to mean securities that are (i) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency
or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case under clauses (i) or (ii) are not callable or redeemable at the option of
the issuer thereof, and also includes a depositary receipt issued by a bank or trust company, as custodian with respect to any such U.S.
Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any
amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the
U.S. Government Obligations evidenced by such depository receipt.
Satisfaction and Discharge
In addition, an Indenture
will cease to be of further effect with respect to the debt securities of a series issued under that Indenture, subject to certain exceptions
generally relating to compensation and indemnity of the trustee, when either:
| ● | all
outstanding debt securities of that series have been delivered to the trustee for cancellation and we have paid all sums payable by us
under the Indenture with respect to such series, or |
| ● | all
outstanding debt securities of that series not delivered to the trustee for cancellation either: (i) have become due and payable, (ii)
will become due and payable at their stated maturity within one year, or (iii) are to be called for redemption within one year; and we
have deposited irrevocably with the trustee, in trust, specifically for the benefit of the holders of such series, money or U.S. Government
Obligations which through the payment of interest thereon and principal thereof in accordance with their terms will provide money in
an amount sufficient (in the written opinion of a nationally recognized firm of independent public accountants in the case of U.S. Government
Obligations or a combination of money and U.S. Government Obligations) to pay all the principal of (including any sinking fund payments
or analogous obligations), and interest on, the debt securities of such series on the dates such payments are due in accordance with
the terms of such series of debt securities. |
Modification of the Indentures
Modifications and amendments
of each Indenture may be made by us and the trustee, through a supplemental indenture, without the consent of the holders of the debt
securities or with the consent of the holders of not less than a majority in principal amount of all outstanding debt securities affected
by such modification or amendment; provided however, that no such modification or amendment may, without the consent of the holder of
each outstanding debt security affected thereby:
| ● | change
the stated maturity of the principal of, or any installment of principal of or interest on, any debt security; |
| ● | reduce
the principal amount of or interest on, or any premium payable upon redemption of, any debt security; |
| ● | change
certain other terms related to waiver of past defaults or covenants (such as covenants and provisions of the Indenture that may not be
amended without the consent of the holder of each outstanding debt security of the series affected); |
| ● | reduce
the percentage of the principal amount of the outstanding debt security of any series, the consent of whose holders is required to modify
or amend the applicable Indenture or waive compliance with, or consent to certain defaults under, the provisions of such Indenture; or |
| ● | make
any change that adversely affects the right to convert or exchange any security into or for common stock or other securities, cash or
other property in accordance with the terms of such security. |
Our board of directors does
not have the power to waive any of the covenants of each Indenture, including those relating to consolidation, merger or sale of assets.
Our board of directors does
not have the power to waive any of the covenants of each Indenture, including those relating to consolidation, merger or sale of assets.
Events of Default, Notice and Waiver
The following will be “Events
of Default” with respect to any particular series of the debt securities under the Indentures:
| ● | default
in any payment of interest on such series when due, continued for 30 days; |
| ● | default
in any payment of principal and premium, if any, of, or sinking fund installment on, such series when due; |
| ● | default
in the performance, or breach, of any covenant or warranty of ours applicable to such series continued for 60 days after written notice
to us by the trustee or the holders of at least 25% in principal amount of such series; |
| ● | certain
events of bankruptcy, insolvency or reorganization; and |
| ● | any
other event of default we may provide for that series. |
No Event of Default with
respect to a particular series of debt securities necessarily constitutes an Event of Default with respect to any other series of debt
securities.
The trustee will, within
90 days after the occurrence of any default with respect to any series of the debt securities, give to the holders thereof notice of such
default known to the trustee, unless such default has been cured or waived (the term default for this purpose means any event which is,
or after notice or lapse of time, or both, would become, an Event of Default); provided that, except in the case of a default in the payment
of principal of (or premium, if any) or interest on any of such series of debt securities or in the payment of any sinking fund installments,
the trustee will be protected in withholding such notice if and so long as it in good faith determines that the withholding of such notice
is in the interest of the holders of the debt securities of that series.
We will be required to furnish
to the trustee each year a statement as to the fulfillment by us of our obligations under the applicable Indenture.
The holders of a majority
in principal amount of the outstanding debt securities of any series may, in respect of such series, waive certain defaults and may direct
the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred
on the trustee, provided that such direction shall not be in conflict with any rule of law or with the applicable Indenture. The
trustee has the right to decline to follow any such direction if the trustee in good faith determines that the proceeding so directed
would be unjustly prejudicial to the holders of debt securities of such series not joining in any such direction or would involve the
trustee in personal liability. Each Indenture provides that in case an Event of Default occurs and is continuing with respect to
any series of the debt securities, the trustee will be required to exercise any of its rights and powers under such Indenture with the
degree of care and skill such as a prudent man would exercise in the conduct of his own affairs. Notwithstanding the foregoing,
the trustee will not be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any
of its duties thereunder.
If an Event of Default
occurs and is continuing with respect to the debt securities of any series, the trustee or the holders of at least 25% in principal amount
of such series may declare such series due and payable.
Each Indenture provides that
no holder of debt securities of any series may institute any action against us under such Indenture (except in the case of an Event of
Default) unless the holder has previously given notice to the trustee of a continuing Event of Default, holders of at least 25% in principal
amount of such series have requested the trustee to institute such action and have offered the trustee reasonable indemnity, and the trustee
has not instituted such action within 60 days of such request.
Consolidating, Merger or Sale of Assets
We may not consolidate with
or merge into any other corporation or sell our assets substantially as an entirety, unless, among other conditions:
| ● | the
corporation formed by such consolidation or into which we are merged or the corporation which acquires our assets is organized in the
United States and expressly assumes the due and punctual payment of the principal of (and premium, if any) and interest on all the debt
securities, if any, issued under the applicable Indenture and the performance of every covenant of such Indenture to be performed by
us; and |
| ● | immediately
after giving effect to such transaction, no Event of Default, and no event which after notice or lapse of time or both would become an
Event of Default, has happened and is continuing. |
Upon any such consolidation,
merger or sale, the successor corporation formed by such consolidation, or into which we are merged or to which such sale is made, will
succeed to, and be substituted for, us under such Indenture.
Other than the covenants
described above, or as set forth in any accompanying prospectus supplement, the Indentures and the debt securities do not contain any
covenants or other provisions designed to afford holders of the debt securities protection in the event of a takeover, recapitalization
or a highly leveraged transaction involving us.
Governing Law
New York Law will govern
the Indentures and the debt securities, without regard to its conflicts of law principles.
Description of Common Stock
The following summary of the rights of our common
stock is not complete and is subject to and qualified in its entirety by reference to our Articles of Incorporation and bylaws, copies
of which have been filed with the SEC and are incorporated by reference as exhibits to the registration statement of which this prospectus
is a part. See “Where You Can Find More Information.”
We have authorized 255,000,000 shares of capital stock,
par value $0.001 per share, of which 250,000,000 are shares of common stock and 5,000,000 are shares of “blank check” preferred
stock.
As of June 1, 2021, we had 111,780,625 shares of common
stock outstanding. Our authorized but unissued shares of common stock are available for issuance without further action by our stockholders,
unless such action is required by applicable law or the rules of any stock exchange or automated quotation system on which our securities
may be listed or traded.
The holders of our common stock are entitled to one
vote per share. In addition, the holders of our common stock will be entitled to receive pro rata dividends, if any, declared by our board
of directors out of legally available funds; however, the current policy of our board of directors is to retain earnings, if any, for
operations and growth. Upon liquidation, dissolution or winding-up, the holders of our common stock are entitled to share ratably in all
assets that are legally available for distribution. The holders of our common stock have no preemptive, subscription, redemption or conversion
rights. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights
of the holders of any series of preferred stock, which may be designated solely by action of our board of directors and issued in the
future.
In the event of our liquidation, dissolution or winding
up, the holders of our common stock are entitled to receive pro rata our assets which are legally available for distribution, after payments
of all debts and other liabilities and subject to the prior rights of any holders of preferred stock then outstanding. All of the outstanding
shares of our common stock are fully paid and non-assessable. The shares of common stock offered by this prospectus will also be fully
paid and non-assessable.
Our common stock is listed on the Nasdaq Capital Market
under the symbol “INPX”. On June 3, 2021, the closing price of our common stock as reported by the Nasdaq Capital Market was
$1.09 per share. Our stock transfer agent is Computershare Trust Company, N.A., 6200 S. Quebec St. Greenwood Village, CO 80111.
Description of Preferred Stock
Our articles of incorporation
permits us to issue up to 5,000,000 shares of preferred stock in one or more series and with rights and preferences that may be fixed
or designated by our board of directors without any further action by our stockholders. Each series of preferred stock will have the number
of shares, designations, preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined
by our board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights
and preemptive rights.
It is not possible to state
the actual effect of the issuance of any shares of preferred stock upon the rights of holders of our common stock until the board of directors
determines the specific rights of the holders of our preferred stock. However, the effects might include, among other things:
| ● | Impairing
dividend rights of our common stock; |
| ● | Diluting
the voting power of our common stock; |
| ● | Impairing
the liquidation rights of our common stock; and |
| ● | Delaying
or preventing a change of control without further action by our stockholders. |
Series 4 Preferred Stock
On April 20, 2018, we entered into a Placement Agency
Agreement with Roth Capital Partners, LLC, as placement agent, pursuant to which we agreed to sell and the placement agent agreed to use
its “best efforts” to assist with selling, in a public offering pursuant to the Prior Registration Statement (also referred
to herein as the April 2018 Offering), approximately $10.4 million in securities of the Company, consisting of units (the “Units”),
at a price to the public of $1,000 per Unit, each consisting of (i) one share of our newly designated Series 4 Preferred Stock initially
convertible into approximately 2 shares of our common stock at a conversion price of $828.00 per share (subject to adjustment), and (ii)
one April 2018 Warrant to purchase such number of shares of common stock as each share of Series 4 Preferred is convertible into.
The Units, the shares of Series 4 Preferred, the April
2018 Warrants and the common stock underlying such securities, as applicable, were immediately separable and were issued separately in
the April 2018 Offering. The April 2018 Offering was closed on April 24, 2018. Pursuant to the terms of a Securities Purchase Agreement
by and between the Company and the investors in the April 2018 Offering, an aggregate of 10,115 Units were sold for an aggregate of 10,115
shares of Series 4 Preferred Stock initially convertible into an aggregate of 2 (subject to adjustment) shares of common stock and April
2018 Warrants to purchase an equivalent number of shares of common stock.
Our board of directors designated an aggregate
of 10,415 shares of preferred stock as Series 4 Convertible Preferred Stock, $0.001 par value with a stated value of $1,000 (also referred
to herein as the Series 4 Preferred Stock). As of June 1, 2021, there was 1 share of Series 4 Preferred Stock outstanding convertible
into 5 shares of common stock.
Although there is no current intent to do so, our
board of directors may, without stockholder approval, issue shares of an additional class or series of preferred stock with voting and
conversion rights which could adversely affect the voting power of the holders of the Series 4 Preferred Stock, except as prohibited by
the certificate of designation of preferences, rights and limitations of the Series 4 Preferred Stock.
Liquidation. Upon any dissolution, liquidation
or winding up, whether voluntary or involuntary, holders of Series 4 Preferred Stock will be entitled to receive distributions out of
our assets, whether capital or surplus, of the same amount that a holder of common stock would receive if the Series 4 Preferred Stock
were fully converted (disregarding for such purposes any conversion limitations hereunder) to common stock which amounts shall be paid
pari passu with all holders of common stock.
Dividends. Holders of the Series 4 Preferred
Stock will be entitled to receive dividends equal (on an “as converted to common stock” basis) to and in the same form as
dividends actually paid on shares of our common stock when, as and if such dividends are paid on shares of our common stock. No other
dividends will be paid on shares of Series 4 Preferred Stock.
Conversion. Each share of Series 4 Preferred
Stock is convertible, at any time and from time to time at the option of the holder thereof, into that number of shares of common stock
determined by dividing the stated value of $1,000 by the current conversion price equal to $223.20 per share (subject to adjustment described
below). This right to convert is limited by the beneficial ownership limitation described below.
Anti-Dilution Protection. The Series 4 Preferred
contain an anti-dilution protection feature, to adjust the conversion price if shares of common stock are sold or issued for a consideration
per share less than the conversion price then in effect (subject to certain exemptions), provided, that the conversion price will not
be less than $223.20. In addition, on the 60th day following the original issuance date of the Series 4 Preferred Stock, the conversion
price will be reduced, and only reduced, to the lesser of (x) the then conversion price, as may be adjusted, and (y) 80% of the VWAP (as
defined in the certificate of designation for the Series 4 Preferred Stock) on the trading day immediately prior to the 60th day, provided
that the conversion price will not be less than $223.20. On June 25, 2018, in accordance with the terms of the price reset provisions
described in the certificate of designation for the Series 4 Preferred Stock, the conversion price was adjusted to $320.40. On January
15, 2019, following the rights offering described below, the conversion price of the Series 4 Preferred Stock was reduced to the floor
price of $223.20.
Beneficial Ownership Limitation. A holder shall
have no right to convert any portion of Series 4 Preferred Stock, to the extent that, after giving effect to such conversion, such holder,
together with such holder’s affiliates, and any persons acting as a group together with such holder or any such affiliate, would beneficially
own in excess of 4.99% (or, upon election of a purchaser prior to the issuance of any shares, 9.99%) of the number of shares of common
stock outstanding immediately after giving effect to the issuance of shares of common stock upon such conversion (subject to the right
of the holder to increase such beneficial ownership limitation upon notice to us, provided that any increase in beneficial ownership limitation
shall not be effective until 61 days following notice to us and provided that such limitation can never exceed 9.99% and such 61 day period
cannot be waived). Beneficial ownership of the holder and its affiliates will be determined in accordance with Section 13(d) of the Exchange
Act, and the rules and regulations promulgated thereunder. Holders of Series 4 Preferred Stock who are subject to such beneficial ownership
limitation are and will remain responsible for ensuring their own compliance with Regulation 13D-G promulgated under the Exchange Act,
consistent with their individual facts and circumstances. In addition, pursuant to Rule 13d-3(d)(1)(i) promulgated under the Exchange
Act, any person who acquires Series 4 Preferred Stock with the purpose or effect of changing or influencing the control of our company,
or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition will be
deemed to be the beneficial owner of the underlying common stock.
Series 5 Preferred Stock
On January 15, 2019, we closed a rights offering whereby
we sold an aggregate of 12,000 units consisting of an aggregate of 12,000 shares of Series 5 Preferred Stock and 80January 2019 Warrants
to purchase common stock exercisable for one share of common stock at an exercise price of $149.85 per share in accordance with the terms
and conditions of a warrant agency agreement, resulting in gross proceeds to us of approximately $12 million, and net proceeds of approximately
$10.77 million after deducting expenses relating to dealer-manager fees and expenses, and excluding any proceeds received upon exercise
of any warrants. Following the rights offering, the conversion price of the Series 4 Preferred Stock was reduced to the floor price of
$223.20, the exercise price of the warrants issued in the April 2018 public offering were also reduced to the floor price of $223.20 and
the number of shares issuable upon exercise of such warrants was increased to 61,562 shares of common stock.
Our board of directors designated 12,000 shares of
preferred stock as Series 5 Convertible Preferred Stock, $0.001 par value with a stated value of $1,000 (also referred to herein as the
Series 5 Preferred Stock). As of June 1, 2021, there were 126 shares of Series 5 Preferred outstanding convertible into 841 shares of
common stock. Although there is no current intent to do so, our board of directors may, without stockholder approval, issue shares of
an additional class or series of preferred stock with voting and conversion rights which could adversely affect the voting power of the
holders of the Series 5 Preferred Stock, except as prohibited by the certificate of designation of preferences, rights and limitations
of the Series 5 Preferred Stock.
Conversion. Each share of Series 5 Preferred
Stock will be convertible at the option of the holder at any time, into the number of shares of our common stock determined by dividing
the $1,000 stated value per share of the Series 5 Preferred Stock by a conversion price of $149.85 per share. In addition, the conversion
price per share is subject to adjustment for stock dividends, distributions, subdivisions, combinations or reclassifications. Subject
to limited exceptions, a holder of the Series 5 Preferred Stock will not have the right to convert any portion of the Series 5 Preferred
Stock to the extent that, after giving effect to the conversion, the holder, together with its affiliates, would beneficially own in excess
of 4.99% (subject to adjustment to up to 9.99% solely at the holder’s discretion upon 61 days’ prior notice to us) of the
number of shares of our common stock outstanding immediately after giving effect to its conversion.
Fundamental Transactions. In the event we effect
certain mergers, consolidations, sales of substantially all of our assets, tender or exchange offers, reclassifications or share exchanges
in which our common stock is effectively converted into or exchanged for other securities, cash or property, we consummate a business
combination in which another person acquires 50% of the outstanding shares of our common stock, or any person or group becomes the beneficial
owner of 50% of the aggregate ordinary voting power represented by our issued and outstanding common stock, then, upon any subsequent
conversion of the Series 5 Preferred Stock, the holders of the Series 5 Preferred Stock will have the right to receive any shares of the
acquiring corporation or other consideration it would have been entitled to receive if it had been a holder of the number of shares of
common stock then issuable upon conversion in full of the Series 5 Preferred Stock.
Dividends. Holders of Series 5 Preferred Stock
shall be entitled to receive dividends (on an as-if-converted-to-common-stock basis) in the same form as dividends actually paid on shares
of the common stock when, as and if such dividends are paid on shares of common stock.
Voting Rights. Except as otherwise provided
in the certificate of designation or as otherwise required by law, the Series 5 Preferred Stock has no voting rights.
Liquidation Preference. Upon our liquidation,
dissolution or winding-up, whether voluntary or involuntary, holders of Series 5 Preferred Stock will be entitled to receive out of our
assets, whether capital or surplus, the same amount that a holder of common stock would receive if the Series 5 Preferred Stock were fully
converted (disregarding for such purpose any conversion limitations under the certificate of designation) to common stock, which amounts
shall be paid pari passu with all holders of common stock.
Redemption Rights. We are not obligated to
redeem or repurchase any shares of Series 5 Preferred Stock. Shares of Series 5 Preferred Stock are not otherwise entitled to any redemption
rights, or mandatory sinking fund or analogous provisions.
Description of Subscription
Rights
We may issue subscription
rights to purchase shares of our common stock, preferred stock or other securities. These subscription rights may be issued independently
or together with any other security offered hereby and may or may not be transferable by the stockholder receiving the subscription rights
in such offering. In connection with any offering of subscription rights, we may enter into a standby arrangement with one or more
underwriters or other purchasers pursuant to which the underwriters or other purchasers may be required to purchase any securities remaining
unsubscribed for after such offering.
The applicable prospectus
supplement will describe the specific terms of any offering of subscription rights for which this prospectus is being delivered, including
the following:
| ● | the
price, if any, for the subscription rights; |
| ● | the
exercise price payable for each share of common stock or preferred stock upon the exercise of the subscription rights; |
| ● | the
number of subscription rights issued to each stockholder; |
| ● | the
number and terms of the shares of common stock or preferred stock which may be purchased per each subscription right; |
| ● | the
extent to which the subscription rights are transferable; |
| ● | any
other terms of the subscription rights, including the terms, procedures and limitations relating to the exchange and exercise of the
subscription rights; |
| ● | the
date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights shall expire; |
| ● | the
extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities; and |
| ● | if
applicable, the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering
of subscription rights. |
The description in the applicable
prospectus supplement of any subscription rights we offer will not necessarily be complete and will be qualified in its entirety by reference
to the applicable subscription rights certificate, which will be filed with the SEC if we offer subscription rights.
Description of Units
We may, from time to time, issue units comprised of
one or more of the other securities described in this prospectus in any combination. A prospectus supplement will describe the specific
terms of the units offered under that prospectus supplement, and any special considerations applicable to investing in those units. You
must look at the applicable prospectus supplement and any applicable unit agreement for a full understanding of the specific terms of
any units. We will incorporate by reference into the registration statement of which this prospectus is a part the form of unit agreement,
including a form of unit certificate, if any, that describes the terms of the series of units we are offering before the issuance of the
related series of units. While the terms we have summarized below will generally apply to any future units that we may offer under this
prospectus, we will describe the particular terms of any series of units that we may offer in more detail in the applicable prospectus
supplement and incorporated documents. The terms of any units offered under a prospectus supplement may differ from the terms described
below.
General
We may issue units consisting of common stock, preferred
stock, debt securities, warrants or any combination thereof. Each unit will be issued so that the holder of the unit is also the holder
of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security.
The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately,
at any time, or at any time before a specified date.
We will describe in the applicable prospectus supplement
and any incorporated documents the terms of the series of units, including the following:
| ● | the
designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities
may be held or transferred separately; |
| ● | any
unit agreement under which the units will be issued; and |
| ● | any
provisions for the issuance, payment, settlement, transfer, or exchange of the units or of the securities comprising the units. |
The provisions described in this section, as well
as those described under “Description of Common Stock,” “Description of Preferred Stock,” Description of Debt
Securities and “Description of Warrants” will apply to each unit and to any common stock, preferred stock, debt security or
warrant included in each unit, respectively.
Issuance in Series
We may issue units in such amounts and in such numerous
distinct series as we determine.
Enforceability of Rights by Holders of Units
Each unit agent will act solely as our agent under
the applicable unit agreement and will not assume any obligation or relationship of agency or trust with any holder of any unit. A single
bank or trust company may act as unit agent for more than one series of units. A unit agent will have no duty or responsibility in case
of any default by us under the applicable unit agreement or unit, including any duty or responsibility to initiate any proceedings at
law or otherwise, or to make any demand upon us. Any holder of a unit, without the consent of the related unit agent or the holder of
any other unit, may enforce by appropriate legal action its rights as holder under any security included in the unit.
Title
We, the unit agent, and any of their agents may treat the registered holder
of any unit certificate as an absolute owner of the units evidenced by that certificate for any purposes and as the person entitled to
exercise the rights attaching to the units so requested, despite any notice to the contrary.
Description of Warrants
Warrants to Purchase Common Stock, Preferred Stock or Debt Securities
We may issue warrants for
the purchase of common stock, preferred stock or debt securities. We may issue warrants independently or together with any offered
securities. The warrants may be attached to or separate from those offered securities. We may issue the warrants under warrant
agreements to be entered into between us and a bank or trust company to be named in the applicable prospectus supplement, as warrant agent,
all as described in the applicable prospectus supplement. The warrant agent will act solely as our agent in connection with the
warrants and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants.
If we offer warrants, we will file the warrant agreement relating to the offered warrants as an exhibit to, or incorporate it by reference
in, the registration statement of which this prospectus is a part.
The prospectus supplement
relating to any warrants that we may offer will contain the specific terms of the warrants. These terms may include the following:
| ● | the
title of the warrants; |
| ● | the
price or prices at which the warrants will be issued; |
| ● | the
designation, amount and terms of the securities for which the warrants are exercisable; |
| ● | the
designation and terms of the other securities, if any, with which the warrants are to be issued and the number of warrants issued with
each other security; |
| ● | the
aggregate number of warrants; |
| ● | any
provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of the
warrants; |
| ● | the
price or prices at which the securities purchasable upon exercise of the warrants may be purchased; |
| ● | if
applicable, the date on and after which the warrants and the securities purchasable upon exercise of the warrants will be separately
transferable; |
| ● | a
discussion of any material U.S. federal income tax considerations applicable to the exercise of the warrants; |
| ● | the
date on which the right to exercise the warrants will commence, and the date on which the right will expire; |
| ● | the
maximum or minimum number of warrants that may be exercised at any time; |
| ● | information
with respect to book-entry procedures, if any; and |
| ● | any
other terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants. |
Exercise of Warrants
Each warrant will entitle
the holder of warrants to purchase for cash the amount of common stock, preferred stock or debt securities, at the exercise price stated
or determinable in the prospectus supplement for the warrants. Warrants may be exercised at any time up to the close of business
on the expiration date shown in the applicable prospectus supplement, unless otherwise specified in such prospectus supplement.
After the close of business on the expiration date, if applicable, unexercised warrants will become void. Warrants may be exercised
as described in the applicable prospectus supplement. When the warrant holder makes the payment and properly completes and signs
the warrant certificate at the corporate trust office of the warrant agent or any other office indicated in the prospectus supplement,
we will, as soon as possible, forward the common stock, preferred stock or debt securities that the warrant holder has purchased.
If the warrant holder exercises the warrant for less than all of the warrants represented by the warrant certificate, we will issue a
new warrant certificate for the remaining warrants.
Outstanding Second February 2021 Warrants
On February 16, 2021, we entered into a Securities
Purchase Agreement with an institutional investor, pursuant to which we sold in a registered direct offering, 3,000,000 shares of our
common stock, Second February 2021 Warrants to purchase up to 9,950,250 shares of common stock at an exercise price of $2.01 per share
and pre-funded warrants, which pre-funded warrants have been exercised in full, to purchase up to 6,950,250 shares of common stock at
an exercise price of $0.001 per share. As of June 1, 2021, none of the Second February 2021 Warrants have been exercised.
The material terms of the Second February 2021 Warrants
issued are summarized below, which summary is qualified in their entirety by reference to the form of warrant incorporated by reference
as an exhibit to the registration statement of which this prospectus is a part.
The Second February 2021 Warrants had an initial exercise
price of $2.01 per share. The Second February 2021 Warrants are exercisable for one share of common stock, were immediately exercisable
and may be exercised at any time on or after the initial exercise date and on or before the fifth anniversary of the initial issuance
date.
A holder shall have no right to exercise any portion
of a Second February 2021 Warrant, to the extent that, after giving effect to such exercise, such holder, together with such holder’s
affiliates, and any persons acting as a group together with such holder or any such affiliate, would beneficially own in excess of 9.99%
of the number of shares of common stock outstanding immediately after giving effect to the issuance of the shares of common stock upon
such exercise (subject to the right of the holder to increase or decrease such beneficial ownership limitation upon notice to us, provided
that an increase in the beneficial ownership limitation will not be effective until 61 days following notice to us and provided that such
limitation can never exceed 9.99% and such 61 day period cannot be waived). Beneficial ownership of the holder and its affiliates will
be determined in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder. Holders of Second
February 2021 Warrants who are subject to such beneficial ownership limitation are and will remain responsible for ensuring their own
compliance with Regulation 13D-G promulgated under the Exchange Act, consistent with their individual facts and circumstances. In addition,
pursuant to Rule 13d-3(d)(1)(i) promulgated under the Exchange Act, any person who acquires such warrants with the purpose or effect of
changing or influencing the control of our company, or in connection with or as a participant in any transaction having such purpose or
effect, immediately upon such acquisition will be deemed to be the beneficial owner of the underlying common stock.
The Second February 2021 Warrants are exercisable
for cash or, solely in the absence of an effective registration statement or prospectus, by cashless exercise, in which case the holder
would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the Second
February 2021 Warrant. No fractional shares will be issued upon the exercise of a Second February 2021 Warrant. As to any fraction of
a share which the holder would otherwise be entitled to purchase upon such exercise, we will, at our election, either pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied by the exercise price or round up to the next whole share.
The exercise price of the Second February 2021 Warrants
is subject to adjustment (but not below the par value of our common stock) in the case of stock dividends or other distributions on shares
of common stock or any other equity or equity equivalent securities payable in shares of common stock, stock splits, stock combinations,
reclassifications or similar events affecting our common stock, and also, subject to limitations, upon any distribution of assets, including
cash, stock or other property to our stockholders.
Outstanding First February 2021 Warrants
On February 12, 2021, we
entered into a Securities Purchase Agreement with an institutional investor, pursuant to which we sold in a registered direct offering,
7,000,000 shares of our common stock, First February 2021 Warrants to purchase up to 15,000,000 shares of common stock at an exercise
price of $2.00 per share and pre-funded warrants, which pre-funded warrants have been exercised in full, to purchase up to 8,000,000 shares
of common stock at an exercise price of $0.001 per share. As of June 1, 2021, none of the First February 2021 Warrants have been exercised.
The material terms of the First February 2021 Warrants
issued are summarized below, which summary is qualified in their entirety by reference to the form of warrant incorporated by reference
as an exhibit to the registration statement of which this prospectus is a part.
The First February 2021 Warrants had an initial exercise
price of $2.00 per share. The First February 2021 Warrants are exercisable for one share of common stock, were immediately exercisable
and may be exercised at any time on or after the initial exercise date and on or before the fifth anniversary of the initial issuance
date.
A holder shall have no right to exercise any portion
of a First February 2021 Warrant, to the extent that, after giving effect to such exercise, such holder, together with such holder’s
affiliates, and any persons acting as a group together with such holder or any such affiliate, would beneficially own in excess of 9.99%
of the number of shares of common stock outstanding immediately after giving effect to the issuance of the shares of common stock upon
such exercise (subject to the right of the holder to increase or decrease such beneficial ownership limitation upon notice to us, provided
that an increase in the beneficial ownership limitation will not be effective until 61 days following notice to us and provided that such
limitation can never exceed 9.99% and such 61 day period cannot be waived). Beneficial ownership of the holder and its affiliates will
be determined in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder. Holders of First
February 2021 Warrants who are subject to such beneficial ownership limitation are and will remain responsible for ensuring their own
compliance with Regulation 13D-G promulgated under the Exchange Act, consistent with their individual facts and circumstances. In addition,
pursuant to Rule 13d-3(d)(1)(i) promulgated under the Exchange Act, any person who acquires such warrants with the purpose or effect of
changing or influencing the control of our company, or in connection with or as a participant in any transaction having such purpose or
effect, immediately upon such acquisition will be deemed to be the beneficial owner of the underlying common stock.
The First February 2021 Warrants are exercisable for
cash or, solely in the absence of an effective registration statement or prospectus, by cashless exercise, in which case the holder would
receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the First February
2021 Warrant. No fractional shares will be issued upon the exercise of a First February 2021 Warrant. As to any fraction of a share which
the holder would otherwise be entitled to purchase upon such exercise, we will, at our election, either pay a cash adjustment in respect
of such final fraction in an amount equal to such fraction multiplied by the exercise price or round up to the next whole share.
The exercise price of the First February 2021 Warrants
is subject to adjustment (but not below the par value of our common stock) in the case of stock dividends or other distributions on shares
of common stock or any other equity or equity equivalent securities payable in shares of common stock, stock splits, stock combinations,
reclassifications or similar events affecting our common stock, and also, subject to limitations, upon any distribution of assets, including
cash, stock or other property to our stockholders.
Outstanding January 2021 Warrants
On January 24, 2021, we entered into a Securities
Purchase Agreement with an institutional investor, pursuant to which we sold in a registered direct offering, 5,800,000 shares of our
common stock, and January 2021 Warrants to purchase up to 19,354,838 shares of common stock at an exercise price of $1.55 per share and
pre-funded warrants, which pre-funded warrants have been exercised in full, to purchase up to 13,554,838 shares of common stock, at an
exercise price of $0.001 per share. As of June 1, 2021, none of the January 2021 Warrants have been exercised.
The material terms of the January 2021 Warrants issued
are summarized below, which summary is qualified in their entirety by reference to the form of warrant incorporated by reference as an
exhibit to the registration statement of which this prospectus is a part.
The January 2021 Warrants had an initial exercise
price of $1.55 per share. The January 2021 Warrants are exercisable for one share of common stock, were immediately exercisable and may
be exercised at any time on or after the initial exercise date and on or before the fifth anniversary of the initial issuance date.
A holder shall have no right to exercise any portion
of a January 2021 Warrant, to the extent that, after giving effect to such exercise, such holder, together with such holder’s affiliates,
and any persons acting as a group together with such holder or any such affiliate, would beneficially own in excess of 9.99% of the number
of shares of common stock outstanding immediately after giving effect to the issuance of the shares of common stock upon such exercise
(subject to the right of the holder to increase or decrease such beneficial ownership limitation upon notice to us, provided that an increase
in the beneficial ownership limitation will not be effective until 61 days following notice to us and provided that such limitation can
never exceed 9.99% and such 61 day period cannot be waived). Beneficial ownership of the holder and its affiliates will be determined
in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder. Holders of January 2021 Warrants
who are subject to such beneficial ownership limitation are and will remain responsible for ensuring their own compliance with Regulation
13D-G promulgated under the Exchange Act, consistent with their individual facts and circumstances. In addition, pursuant to Rule 13d-3(d)(1)(i)
promulgated under the Exchange Act, any person who acquires such warrants with the purpose or effect of changing or influencing the control
of our company, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition
will be deemed to be the beneficial owner of the underlying common stock.
The January 2021 Warrants are exercisable for cash
or, solely in the absence of an effective registration statement or prospectus, by cashless exercise, in which case the holder would receive
upon such exercise the net number of shares of common stock determined according to the formula set forth in the January 2021 Warrant.
No fractional shares will be issued upon the exercise of a January 2021 Warrant. As to any fraction of a share which the holder would
otherwise be entitled to purchase upon such exercise, we will, at our election, either pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the exercise price or round up to the next whole share.
The exercise price of the January 2021 Warrants is
subject to adjustment (but not below the par value of our common stock) in the case of stock dividends or other distributions on shares
of common stock or any other equity or equity equivalent securities payable in shares of common stock, stock splits, stock combinations,
reclassifications or similar events affecting our common stock, and also, subject to limitations, upon any distribution of assets, including
cash, stock or other property to our stockholders.
Outstanding November 2020 Warrants
On November 25, 2020, we entered into a Securities
Purchase Agreement with an institutional investor, pursuant to which we sold in a registered direct offering, 5,000,000 shares of our
common stock, November 2020 Warrants to purchase up to 8,000,000 shares of common stock at an exercise price of $1.25 per share and pre-funded
warrants, which pre-funded warrants have been exercised in full, to purchase up to 3,000,000 shares of common stock at an exercise price
of $0.001 per share. As of June 1, 2021, we had November 2020 Warrants outstanding to purchase an aggregate of 5,000,000 shares of common
stock.
The material terms of the November 2020 Warrants issued
are summarized below, which summary is qualified in their entirety by reference to the form of warrant incorporated by reference as an
exhibit to the registration statement of which this prospectus is a part.
The November 2020 Warrants had an initial exercise
price of $1.25 per share. The November 2020 Warrants are exercisable for one share of common stock, were immediately exercisable and may
be exercised at any time on or after the initial exercise date and on or before the fifth anniversary of the initial issuance date.
A holder shall have no right to exercise any portion
of a November 2020 Warrant, to the extent that, after giving effect to such exercise, such holder, together with such holder’s affiliates,
and any persons acting as a group together with such holder or any such affiliate, would beneficially own in excess of 9.99% of the number
of shares of common stock outstanding immediately after giving effect to the issuance of the shares of common stock upon such exercise
(subject to the right of the holder to increase or decrease such beneficial ownership limitation upon notice to us, provided that an increase
in the beneficial ownership limitation will not be effective until 61 days following notice to us and provided that such limitation can
never exceed 9.99% and such 61 day period cannot be waived). Beneficial ownership of the holder and its affiliates will be determined
in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder. Holders of November 2020 Warrants
who are subject to such beneficial ownership limitation are and will remain responsible for ensuring their own compliance with Regulation
13D-G promulgated under the Exchange Act, consistent with their individual facts and circumstances. In addition, pursuant to Rule 13d-3(d)(1)(i)
promulgated under the Exchange Act, any person who acquires such warrants with the purpose or effect of changing or influencing the control
of our company, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition
will be deemed to be the beneficial owner of the underlying common stock.
The November 2020 Warrants are exercisable for cash
or, solely in the absence of an effective registration statement or prospectus, by cashless exercise, in which case the holder would receive
upon such exercise the net number of shares of common stock determined according to the formula set forth in the November 2020 Warrant.
No fractional shares will be issued upon the exercise of a November 2020 Warrant. As to any fraction of a share which the holder would
otherwise be entitled to purchase upon such exercise, we will, at our election, either pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the exercise price or round up to the next whole share.
The exercise price of the November 2020 Warrants is
subject to adjustment (but not below the par value of our common stock) in the case of stock dividends or other distributions on shares
of common stock or any other equity or equity equivalent securities payable in shares of common stock, stock splits, stock combinations,
reclassifications or similar events affecting our common stock, and also, subject to limitations, upon any distribution of assets, including
cash, stock or other property to our stockholders.
Outstanding January 2019 Warrants
On January 15, 2019, we closed
a rights offering whereby it sold an aggregate of 12,000 units consisting of an aggregate of 12,000 shares of Series 5 Preferred Stock
and 80 January 2019 Warrants to purchase common stock exercisable for one share of common stock at an exercise price of $149.85 per share
in accordance with the terms and conditions of a warrant agency agreement, As of June 1, 2021, we had January 2019 Warrants outstanding
to purchase an aggregate of 2,507 shares of common stock.
The material terms of the January 2019 Warrants issued
are summarized below, which summary is qualified in their entirety by reference to the form of warrant incorporated by reference as an
exhibit to the registration statement of which this prospectus is a part.
The January 2019 Warrants are exercisable for one
share of common stock, were immediately exercisable and may be exercised at any time on or after the initial exercise date and on or before
the fifth anniversary of the initial issuance date.
A holder shall have no right to exercise any portion
of a January 2019 Warrant, to the extent that, after giving effect to such exercise, such holder, together with such holder’s affiliates,
and any persons acting as a group together with such holder or any such affiliate, would beneficially own in excess of 4.99% of the number
of shares of common stock outstanding immediately after giving effect to the issuance of the shares of common stock upon such exercise
(subject to the right of the holder to increase or decrease such beneficial ownership limitation upon notice to us, provided that an increase
in the beneficial ownership limitation will not be effective until 61 days following notice to us and provided that such limitation can
never exceed 9.99% and such 61 day period cannot be waived). Beneficial ownership of the holder and its affiliates will be determined
in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder. Holders of January 2019 Warrants
who are subject to such beneficial ownership limitation are and will remain responsible for ensuring their own compliance with Regulation
13D-G promulgated under the Exchange Act, consistent with their individual facts and circumstances. In addition, pursuant to Rule 13d-3(d)(1)(i)
promulgated under the Exchange Act, any person who acquires such warrants with the purpose or effect of changing or influencing the control
of our company, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition
will be deemed to be the beneficial owner of the underlying common stock.
The January 2019 Warrants are exercisable for cash
or, solely in the absence of an effective registration statement or prospectus, by cashless exercise, in which case the holder would receive
upon such exercise the net number of shares of common stock determined according to the formula set forth in the January 2019 Warrant.
In addition, a cashless exercise may occur after 25 days after the initial exercise date, if the VWAP (as defined in the January 2019
Warrant) of the common stock on any trading day on or after such date fails to exceed the initial exercise price (subject to adjustment
for any stock splits, stock dividends, stock combinations, recapitalizations and similar events). In such event, the aggregate number
of shares of common stock issuable in such cashless exercise will equal the product of (x) the aggregate number of shares of common stock
that would be issuable upon exercise of the January 2019 Warrant if such exercise were by means of a cash exercise rather than a cashless
exercise and (y) 0.60.
No fractional shares will be issued upon the exercise
of a January 2019 Warrant. As to any fraction of a share which the holder would otherwise be entitled to purchase upon such exercise,
we will, at our election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the exercise price or round up to the next whole share.
The exercise price of the January 2019 Warrants is
subject to adjustment (but not below the par value of our common stock) in the case of stock dividends or other distributions on shares
of common stock or any other equity or equity equivalent securities payable in shares of common stock, stock splits, stock combinations,
reclassifications or similar events affecting our common stock, and also, subject to limitations, upon any distribution of assets, including
cash, stock or other property to our stockholders.
Outstanding April 2018 Warrants
In the April 2018 Offering closed on April 24, 2018
(as described above), we issued warrants to all investors in the Units to purchase an aggregate of 10,230 shares of common stock. As of
June 1, 2021, we had April 2018 Warrants outstanding to purchase an aggregate of 61,562 shares of common stock.
The material terms of the April 2018 Warrants issued
are summarized below, which summary is qualified in their entirety by reference to the form of warrant incorporated by reference as an
exhibit to the registration statement of which this prospectus is a part.
The April 2018 Warrants had an initial exercise price
per share equal to $1,206.00. The April 2018 Warrants are exercisable for the number of shares of our common stock underlying the corresponding
Unit from its date of issuance and at any time up to the date that is five years after its original date of issuance.
A holder shall have no right to exercise any portion
of an April 2018 Warrant, to the extent that, after giving effect to such exercise, such holder, together with such holder’s affiliates,
and any persons acting as a group together with such holder or any such affiliate, would beneficially own in excess of 4.99% (or, upon
election of a purchaser, 9.99%) of the number of shares of common stock outstanding immediately after giving effect to the issuance of
the shares of common stock upon such exercise (subject to the right of the holder to increase or decrease such beneficial ownership limitation
upon notice to us, provided that an increase in the beneficial ownership limitation will not be effective until 61 days following notice
to us and provided that such limitation can never exceed 9.99% and such 61 day period cannot be waived). Beneficial ownership of the holder
and its affiliates will be determined in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated
thereunder. Holders of April Warrants who are subject to such beneficial ownership limitation are and will remain responsible for ensuring
their own compliance with Regulation 13D-G promulgated under the Exchange Act, consistent with their individual facts and circumstances.
In addition, pursuant to Rule 13d-3(d)(1)(i) promulgated under the Exchange Act, any person who acquires such warrants with the purpose
or effect of changing or influencing the control of our company, or in connection with or as a participant in any transaction having such
purpose or effect, immediately upon such acquisition will be deemed to be the beneficial owner of the underlying common stock.
The April 2018 Warrants are exercisable for cash or,
solely in the absence of an effective registration statement or prospectus, by cashless exercise, in which case the holder would receive
upon such exercise the net number of shares of common stock determined according to the formula set forth in the April 2018 Warrant. No
fractional shares will be issued upon the exercise of an April 2018 Warrant. As to any fraction of a share which the holder would otherwise
be entitled to purchase upon such exercise, we will, at our election, either pay a cash adjustment in respect of such final fraction in
an amount equal to such fraction multiplied by the exercise price or round up to the next whole share.
The exercise price of the April 2018 Warrants is subject
to adjustment (but not below the par value of our common stock) in the case of stock dividends or other distributions on shares of common
stock or any other equity or equity equivalent securities payable in shares of common stock, stock splits, stock combinations, reclassifications
or similar events affecting our common stock, and also, subject to limitations, upon any distribution of assets, including cash, stock
or other property to our stockholders. The April 2018 Warrants contain a full ratchet price protection feature, to the extent such warrants
have not been exercised previously, to adjust the exercise price and number of shares underlying the warrants if shares of common stock
are sold or issued for a consideration per share less than the exercise price per share then in effect, provided, that the exercise price
will not be less than $223.20, with certain standard exempt issuances. On January 15, 2019, following the rights offering described above,
the exercise price of the April 2018 Warrants was reduced to the floor price of $223.20 and the number of shares issuable upon exercise
of such warrants was increased to 61,562 shares of common stock.
Outstanding February 2018 Warrants
On February 20, 2018, we completed a public offering
for approximately $18 million in securities pursuant to an effective registration statement on Form S-1, consisting of (1) an aggregate
of 1,848 Class A units, at a price to the public of $4,230 per Class A unit, each consisting of one share of common stock, and a February
2018 Warrant to purchase one share of common stock, and (2) 10,184.9752 Class B units, at a price to the public of $1,000 per Class B
unit, each consisting of one share of the Company’s newly designated Series 3 convertible preferred stock, par value $0.001 per
share (“Series 3 Preferred Stock”), with a stated value of $1,000 and initially convertible into approximately 1 share of
common stock at a conversion price of $4,230 per share for up to an aggregate of 2,408 shares of common stock and February 2018 Warrants
exercisable for the number of shares of common stock into which the shares of Series 3 Preferred Stock were initially convertible.
The material terms of the February 2018 Warrants issued
are summarized below, which summary is qualified in their entirety by reference to the form of warrant incorporated by reference as an
exhibit to the registration statement of which this prospectus is a part.
The February 2018 Warrants were immediately exercisable
at an exercise price of $4,230 per share (subject to adjustment) and will expire five years after the issuance. If, at any time while
the February 2018 Warrants are outstanding we or any of our significant subsidiaries, as applicable, will sell or grant any option to
purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to
purchase or other disposition) any common stock or common stock equivalents, at an effective price per share that is less than the exercise
price then in effect (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”),
the applicable exercise price shall be reduced and only reduced to equal the Base Share Price, provided that the Base Share Price shall
not be less than $1,141.20 (subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions following
the date of the securities purchase agreement).
As a result of the April 2018 Offering, which constituted
a Dilutive Issuance under the February 2018 Warrants, the exercise price of the February 2018 Warrants was adjusted to the floor price
of $1,141.20 per share and the number of shares of common stock underlying the February 2018 Warrants was increased to an aggregate of
24,055 shares of common stock.
Outstanding Warrants
Outstanding warrants to purchase our common stock,
including the February 2018 Warrants, the April 2018 Warrants, the January 2019 Warrants, the November 2020 Warrants, the January 2021
Warrants, the First February 2021 Warrants and the Second February 2021 Warrants, are as follows:
As of June 1, 2021, we had warrants issued and outstanding
for the purchase of up to 49,398,338 shares of our common stock, at exercise prices ranging from $1.25 to $16,200. The warrants are held
by 120 security holders. Outstanding warrants to purchase our common stock are as follows:
Issuance Date |
|
Number of
Shares |
|
|
Exercise Period |
|
Exercise
Price |
|
June 30, 2017 |
|
4 |
|
|
June 30, 2017 to June 30, 2022 |
|
$ |
16,200 |
|
August 9, 2017 |
|
24 |
|
|
From August 9, 2017 to August 9, 2022 |
|
$ |
29,700 |
|
January 8, 2018 |
|
340 |
|
|
From February 2, 2018 to February 2, 2023 |
|
$ |
5,400 |
|
February 20, 2018 |
|
24,055 |
|
|
From February 20, 2018 to February 20, 2023 |
|
$ |
1,141.20 |
|
April 24, 2018 |
|
61,562 |
|
|
From April 24, 2018 to April 24, 2023 |
|
$ |
223.20 |
|
January 15, 2019 |
|
2,507 |
|
|
From January 15, 2019 to January 15, 2024 |
|
$ |
149.85 |
|
August 15, 2019 |
|
4,758 |
|
|
From August 15, 2019 to August 15, 2024 |
|
$ |
12.4875 |
|
November 25, 2020 |
|
5,000,000 |
|
|
From November 25, 2020 to November 25, 2025 |
|
$ |
1.25 |
|
January 24, 2021 |
|
19,354,838 |
|
|
From January 24, 2021 to January 24, 2025 |
|
$ |
1.55 |
|
February 12, 2021 |
|
15,000,000 |
|
|
From February 12, 2021 to February 12, 2026 |
|
$ |
2.00 |
|
February 16, 2021 |
|
9,950,250 |
|
|
From February 16, 2021 to February 16, 2026 |
|
$ |
2.01 |
|
Indemnification of Directors and Officers
Section 78.7502 of the Nevada Revised Statutes (“NRS”)
provides, in general, that a corporation incorporated under the laws of the State of Nevada, as we are, may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal,
administrative or investigative (other than a derivative action by or in the right of the corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person (a) is not liable pursuant to Section 73.138 of the NRS, and (b) acted
in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with
respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. In the case
of a derivative action, a Nevada corporation may indemnify any such person against expenses (including attorneys’ fees) actually
and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person (a) is not liable
pursuant to Section 73.138 of the NRS, and (b) acted in good faith and in a manner such person reasonably believed to be in or not opposed
to the best interests of the corporation.
Our articles of incorporation and Bylaws provide that
we will indemnify our directors, officers, employees and agents to the extent and in the manner permitted by the provisions of the NRS,
as amended from time to time, subject to any permissible expansion or limitation of such indemnification, as may be set forth in any stockholders’
or directors’ resolution or by contract.
Any repeal or modification of these provisions approved
by our stockholders will be prospective only and will not adversely affect any limitation on the liability of any of our directors or
officers existing as of the time of such repeal or modification.
We are also permitted to maintain insurance on behalf
of any director, officer, employee or other agent for liability arising out of his actions, whether or not the NRS would permit indemnification.
INSOFAR AS INDEMNIFICATION
FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933 MAY BE PERMITTED TO OUR DIRECTORS, OFFICERS AND CONTROLLING PERSONS PURSUANT
TO THE FORGOING PROVISIONS OR OTHERWISE, WE HAVE BEEN INFORMED THAT, IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION, SUCH INDEMNIFICATION
IS AGAINST PUBLIC POLICY AS EXPRESSED IN THAT ACT AND IS, THEREFORE, UNENFORCEABLE.
Anti-Takeover Effects of Nevada Law and our Articles of Incorporation
and Bylaws
Our articles of incorporation, our bylaws and the
Nevada Revised Statutes contain provisions that could delay or make more difficult an acquisition of control of our company not approved
by our board of directors, whether by means of a tender offer, open market purchases, proxy contests or otherwise. These provisions have
been implemented to enable us to develop our business in a manner that will foster our long-term growth without disruption caused by the
threat of a takeover not deemed by our board of directors to be in the best interest of our company and our stockholders. These provisions
could have the effect of discouraging third parties from making proposals involving an acquisition or change of control of our company
even if such a proposal, if made, might be considered desirable by a majority of our stockholders. These provisions may also have the
effect of making it more difficult for third parties to cause the replacement of our current management without the concurrence of our
board of directors.
Set forth below is a description of the provisions
contained in our articles of incorporation, bylaws and Nevada Revised Statutes that could impede or delay an acquisition of control of
our company that our board of directors has not approved. This description is intended as a summary only and is qualified in its entirety
by reference to our articles of incorporation and bylaws, forms of each of which are included as exhibits to the registration statement
of which this prospectus forms a part.
Authorized But Unissued Preferred Stock
We are currently authorized to issue a total of 5,000,000
shares of preferred stock. Our articles of incorporation provide that the board of directors may issue preferred stock by resolutions,
without any action of the stockholders. In the event of a hostile takeover, the board of directors could potentially use this preferred
stock to preserve control.
Filling Vacancies
Our bylaws establish that the board shall be authorized
to fill any vacancies on the board arising due to the death, resignation or removal of any director. The board is also authorized to fill
vacancies if the stockholders fail to elect the full authorized number of directors to be elected at any annual or special meeting of
stockholders. Vacancies in the board may be filled by a majority of the remaining directors then in office, even though less than a quorum
of the board, or by a sole remaining director.
Removal of Directors
The provisions of our bylaws may make it difficult
for our stockholders to remove one or more of our directors. Our bylaws provide that the entire board of directors, or any individual
director, may be removed from office at any special meeting of stockholders called for such purpose by vote of the holders of two-thirds
of the voting power entitling the stockholders to elect directors in place of those to be removed. Furthermore, according to our bylaws,
no director may be removed (unless the entire board is removed) when the votes cast against removal or not consenting in writing to such
removal would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast
(or, if such action is taken by written consent, all shares entitled to vote, were voted) and the entire number of directors authorized
at the time of the directors’ most recent election were then being elected. Our bylaws also provide that when, by the provisions
of our articles of incorporation, the holders of the shares of any class or series voting as a class or series are entitled to elect one
or more directors, any director so elected may be removed only by the applicable vote of the holders of the shares of that class or series.
Board Action Without Meeting
Our bylaws provide that the board may take action
without a meeting if all the members of the board consent to the action in writing. Board action through consent allows the board to make
swift decisions, including in the event that a hostile takeover threatens current management.
No Cumulative Voting
Our bylaws and articles of incorporation do not provide
the right to cumulate votes in the election of directors. This provision means that the holders of a plurality of the shares voting for
the election of directors can elect all of the directors. Non-cumulative voting makes it more difficult for an insurgent minority stockholder
to elect a person to the board of directors.
Stockholder Proposals
Except to the extent required under applicable laws,
we are not required to include on our proxy card, or describe in our proxy statement, any information relating to any stockholder proposal
and disseminated in connection with any meeting of stockholders.
Amendments to Articles of Incorporation and Bylaws
Our articles of incorporation give both the directors
and the stockholders the power to adopt, alter or repeal the bylaws of the corporation. Any adoption, alteration, amendment, change or
repeal of the bylaws by the stockholders requires an affirmative vote by a majority of the outstanding stock of the company. Any bylaw
that has been adopted, amended, or repealed by the stockholders may be amended or repealed by the board, except that the board shall have
no power to change the quorum for meetings of stockholders or of the board or to change any provisions of the bylaws with respect to the
removal of directors or the filling of vacancies in the board resulting from the removal by the stockholders. Any proposal to amend, alter,
change or repeal any provision of our articles of incorporation requires approval by the affirmative vote of a majority of the voting
power of all of the classes of our capital stock entitled to vote on such amendment or repeal, voting together as a single class, at a
duly constituted meeting of stockholders called expressly for that purpose.
Nevada Statutory Provisions
We are subject to the provisions of NRS 78.378 to
78.3793, inclusive, an anti-takeover law, which applies to any acquisition of a controlling interest in an “issuing corporation.”
In general, such anti-takeover laws permit the articles of incorporation, bylaws or a resolution adopted by the directors of an “issuing
corporation” (as defined in NRS 78.3788) to impose stricter requirements on the acquisition of a controlling interest in such corporation
than the provisions of NRS 78.378 to 78.3793, inclusive, as well as permit the directors of an issuing corporation to take action to protect
the interests of the corporation and its stockholders, including, but not limited to, adopting plans, arrangements or other instruments
that grant or deny rights, privileges, power or authority to holder(s) of certain percentages of ownership and/or voting power. Further,
an “acquiring person” (and those acting in association) only obtains such voting rights in the control shares as are conferred
by resolution of the stockholders at either a special meeting requested by the acquiring person, provided it delivers an offeror’s
statement pursuant to NRS 78.3789 and undertakes to pay the expenses thereof, or at the next special or annual meeting of stockholders.
In addition, the anti-takeover law generally provides for (i) the redemption by the issuing corporation of not less than all of the “control
shares” (as defined) in accordance with NRS 78.3792, if so provided in the articles of incorporation or bylaws in effect on the
10th day following the acquisition of a controlling interest in an “issuing corporation”, and (ii) dissenter’s rights
pursuant to NRS 92A.300 to 92A.500, inclusive, for stockholders that voted against authorizing voting rights for the control shares.
We are also subject to the provisions of NRS 78.411
to 78.444, inclusive, which generally prohibits a publicly held Nevada corporation from engaging in a “combination” with an
“interested stockholder” (each as defined) that is the beneficial owner, directly or indirectly, of at least ten percent of
the voting power of the outstanding voting shares of the corporation or is an affiliate or associate of the corporation that previously
held such voting power within the past three years, for a period of three years after the date the person first became an “interested
stockholder”, subject to certain exceptions for authorized combinations, as provided therein.
In accordance with NRS 78.195, our articles of incorporation
provide for the authority of the board of directors to issue shares of preferred stock in series by filing a certificate of designation
to establish from time to time the number of shares to be included in such series and to fix the designation, powers, preferences and
rights of the shares of each such series and the qualifications, limitations or restrictions thereof, subject to limitations prescribed
by law.
Market-Making, Stabilization and Other Transactions
There is currently no market
for any of the offered securities, other than our common stock which is traded on the Nasdaq Capital Market. If the offered securities
are traded after their initial issuance, they may trade at a discount from their initial offering price, depending upon prevailing interest
rates, the market for similar securities and other factors. While it is possible that an underwriter could inform us that it intends
to make a market in the offered securities, any such underwriter would not be obligated to do so, and any such market-making could be
discontinued at any time without notice. Therefore, no assurance can be given as to whether an active trading market will develop
for the offered securities. We have no current plans for listing of the debt securities, preferred stock, warrants or subscription
rights on any securities exchange or quotation system. Any such listing with respect to any particular debt securities, preferred
stock, warrants or subscription rights will be described in the applicable prospectus supplement or other offering materials, as the case
may be.
The Securities the Selling Security Holders
May Offer
In addition to the securities
we may offer, the Selling Security Holders may use this prospectus to offer and sell in one or more secondary offerings up to 19,911,477
shares of common stock that we issued or that are issuable to the Selling Security Holders as Purchaser Shares and Earnout Shares in partial
consideration for the acquisition of all of the outstanding capital stock of CXApp. The Selling Security Holders’ shares have been
included in the registration statement of which this prospectus is a part in satisfaction of registration rights granted to the Selling
Security Holders.
SELLING SECURITY HOLDERS
We are registering the Purchaser Shares and
the Earnout Shares in order to permit the Selling Security Holders to offer the shares of our common stock included in the Purchaser Shares
and the Earnout Shares, when issued, as applicable, for resale from time to time. See “Plan of Distribution.” None
of the Selling Security Holders nor any of their affiliates has held an executive office, or had any other material relationship, with
us or any of our affiliates in the past three years.
The table below lists information regarding
the beneficial ownership (as determined under Section 13(d) of the Exchange Act, and the rules and regulations thereunder) of the shares
of common stock held by each Selling Security Holder supplied to us by the Selling Security Holders.
The second column lists the number of shares
of common stock beneficially owned by each Selling Security Holder as of June 1, 2021, based on the ownership of shares of common stock
that have been issued and could be issued pursuant to warrants, options and other convertible securities that are currently exercisable
or exercisable within 60 days of June 1, 2021, without taking account of any limitations on exercise of these securities set forth therein.
The third column lists the shares of common
stock being offered by this prospectus by each Selling Security Holder.
The fourth column assumes the sale of all of
the shares offered by each selling stockholders pursuant to this prospectus.
Each Selling Security Holder agreed that, for
so long as such Selling Security Holder owns any Purchaser Shares or any Earnout Shares, such Selling Security Holder will not, directly
or indirectly, without our prior written consent, agree or offer to sell, dispose or otherwise transfer any such shares of common stock,
except that a Selling Security Holder may, on any trading day, sell that number of shares that, when aggregated, is equal to 10% of the
daily trading volume for the common stock on the Nasdaq Capital Market, or any other trading market on which the common stock is listed,
on such trading day; provided, that a Selling Security Holder will be permitted to sell during any 30-day period (i) an amount of Purchaser
Shares up to 25% of such Selling Security Holder’s initial aggregate amount of Purchaser Shares owned and (ii) an amount of Earnout
Shares up to 50% of such Selling Security Holder’s initial aggregate amount of Earnout Shares owned.
Name of Selling Security Holder | |
Number
of
Shares of
Common
Stock
Owned Prior
to
Offering |
| |
Maximum
Number of
Shares
of Common
Stock
to be Sold
Pursuant to
this
Prospectus |
| |
Number
of Shares of Common
Stock
of Owned
After
Offering | |
Leon Papkoff | |
| 9,545,646 |
(1) | |
| 9,545,646 |
(1) | |
| - | |
Skye Barcus | |
| 3,612,337 |
(2) | |
| 3,612,337 |
(2) | |
| - | |
Andrea Williams | |
| 1,587,086 |
(3) | |
| 1,587,086 |
(3) | |
| - | |
Darby Mason-Werner | |
| 779,399 |
(4) | |
| 779,399 |
(4) | |
| - | |
Chan Hok Leong (aka Jimmy Chan) | |
| 793,543 |
(5) | |
| 793,543 |
(5) | |
| - | |
Li Yuelin (aka Melanie Li) | |
| 711,508 |
(6) | |
| 711,508 |
(6) | |
| - | |
Thomas Wyatt | |
| 299,850 |
(7) | |
| 299,850 |
(7) | |
| - | |
Chen Chunguang (aka Neo Chen) | |
| 69,452 |
(8) | |
| 69,452 |
(8) | |
| - | |
Cai Chengyue (aka Sun Cai) | |
| 62,380 |
(9) | |
| 62,380 |
(9) | |
| - | |
Glenda R. Juele | |
| 117,690 |
(10) | |
| 117,690 |
(10) | |
| - | |
Lin Yanjia (aka Flyblue Lin) | |
| 57,572 |
(11) | |
| 57,572 |
(11) | |
| - | |
Lin Jiazhen (aka Root Lin) | |
| 57,572 |
(12) | |
| 57,572 |
(12) | |
| - | |
Tan Yongxiang (aka Xiang Tan) | |
| 29,917 |
(13) | |
| 29,917 |
(13) | |
| - | |
Yulih Lee (aka Lillie Lee) | |
| 22,630 |
(14) | |
| 22,630 |
(14) | |
| - | |
Alex Le | |
| 354,488 |
(15) | |
| 354,488 |
(15) | |
| - | |
Jeff Dumo | |
| 311,165 |
(16) | |
| 311,165 |
(16) | |
| - | |
Kenny Chen | |
| 311,165 |
(17) | |
| 311,165 |
(17) | |
| - | |
Patrick Lee | |
| 245,905 |
(18) | |
| 245,905 |
(18) | |
| - | |
Stephen Wang | |
| 238,579 |
(19) | |
| 238,579 |
(19) | |
| - | |
Senh Duong | |
| 245,905 |
(20) | |
| 245,905 |
(20) | |
| - | |
Joe Huang | |
| 41,855 |
(21) | |
| 41,855 |
(21) | |
| - | |
Bobby Lee | |
| 41,855 |
(22) | |
| 41,855 |
(22) | |
| - | |
Binh Ngo | |
| 41,855 |
(23) | |
| 41,855 |
(23) | |
| - | |
Chih-hung Yeh | |
| 41,855 |
(24) | |
| 41,855 |
(24) | |
| - | |
Alda Lee | |
| 29,299 |
(25) | |
| 29,299 |
(25) | |
| - | |
Paul Lee | |
| 29,299 |
(26) | |
| 29,299 |
(26) | |
| - | |
John Joh | |
| 29,299 |
(27) | |
| 29,299 |
(27) | |
| - | |
Mark Moran | |
| 28,136 |
(28) | |
| 28,136 |
(28) | |
| - | |
Susan Nakasora | |
| 28,136 |
(29) | |
| 28,136 |
(29) | |
| - | |
Chung Yu Wang | |
| 29,299 |
(30) | |
| 29,299 |
(30) | |
| - | |
Lily Chi | |
| 40,693 |
(31) | |
| 40,693 |
(31) | |
| - | |
Larry Barber | |
| 16,742 |
(32) | |
| 16,742 |
(32) | |
| - | |
Kai Chang | |
| 1,395 |
(33) | |
| 1,395 |
(33) | |
| - | |
Boon Khoo | |
| 1,395 |
(34) | |
| 1,395 |
(34) | |
| - | |
Matt Stone | |
| 56,575 |
(35) | |
| 56,575 |
(35) | |
| - | |
Total: | |
| |
| |
| 19,911,477 |
| |
| | |
| (1) | Includes
(i) 4,042,328 shares of common stock included in the Purchaser Shares, and (ii) 5,503,318 shares of common stock included in the Earnout
Shares issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (2) | Includes
(i) 1,510,568 shares of common stock included in the Purchaser Shares, and (ii) 2,101,769 shares of common stock included in the Earnout
Shares issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (3) | Includes
(i) 480,892 shares of common stock included in the Purchaser Shares, and (ii) 1,106,194 shares of common stock included in the Earnout
Shares issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (4) | Includes
(i) 226,302 shares of common stock included in the Purchaser Shares, and (ii) 553,097 shares of common stock included in the Earnout
Shares issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (5) | Includes
(i) 240,446 shares of common stock included in the Purchaser Shares, and (ii) 553,097 shares of common stock included in the Earnout
Shares issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (6) | Includes
(i) 158,411 shares of common stock included in the Purchaser Shares, and (ii) 553,097 shares of common stock included in the Earnout
Shares issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (7) | Includes
299,850 shares of common stock included in the Purchaser Shares. |
| (8) | Includes
(i) 14,143 shares of common stock included in the Purchaser Shares, and (ii) 55,309 shares of common stock included in the Earnout Shares
issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (9) | Includes
(i) 7,071 shares of common stock included in the Purchaser Shares, and (ii) 55,309 shares of common stock included in the Earnout Shares
issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (10) | Includes
(i) 7,071 shares of common stock included in the Purchaser Shares, and (ii) 110,619 shares of common stock included in the Earnout Shares
issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (11) | Includes
(i) 2,263 shares of common stock included in the Purchaser Shares, and (ii) 55,309 shares of common stock included in the Earnout Shares
issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (12) | Includes
(i) 2,263 shares of common stock included in the Purchaser Shares, and (ii) 55,309 shares of common stock included in the Earnout Shares
issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (13) | Includes
(i) 2,263 shares of common stock included in the Purchaser Shares, and (ii) 27,654 shares of common stock included in the Earnout Shares
issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
| (14) | Includes
22,630 shares of common stock included in the Purchaser Shares. |
(15) |
Includes (i) 22,630 shares of common stock included in the Purchaser Shares, and (ii) 331,858 shares of common stock included in the Earnout Shares issuable upon the receipt of stockholder approval, in accordance with and as required by the Nasdaq Listing Rules. |
(16) |
Includes 311,165 shares of common stock included in the Purchaser Shares. |
(17) |
Includes 311,165 shares of common stock included in the Purchaser Shares. |
(18) |
Includes 245,905 shares of common stock included in the Purchaser Shares. |
(19) |
Includes 238,579 shares of common stock included in the Purchaser Shares. |
(20) |
Includes 245,905 shares of common stock included in the Purchaser Shares. |
(21) |
Includes 41,855 shares of common stock included in the Purchaser Shares. |
(22) |
Includes 41,855 shares of common stock included in the Purchaser Shares. |
(23) |
Includes 41,855 shares of common stock included in the Purchaser Shares. |
(24) |
Includes 41,855 shares of common stock included in the Purchaser Shares. |
(25) |
Includes 29,299 shares of common stock included in the Purchaser Shares. |
(26) |
Includes 29,299 shares of common stock included in the Purchaser Shares. |
(27) |
Includes 29,299 shares of common stock included in the Purchaser Shares. |
(28) |
Includes 28,136 shares of common stock included in the Purchaser Shares. |
(29) |
Includes 28,136 shares of common stock included in the Purchaser Shares. |
(30) |
Includes 29,299 shares of common stock included in the Purchaser Shares. |
(31) |
Includes 40,693 shares of common stock included in the Purchaser Shares. |
(32) |
Includes 16,742 shares of common stock included in the Purchaser Shares. |
(33) |
Includes 1,395 shares of common stock included in the Purchaser Shares. |
(34) |
Includes 1,395 shares of common stock included in the Purchaser Shares. |
(35) |
Includes 56,575 shares of common stock included in the Purchaser Shares. |
PLAN OF DISTRIBUTION
We may offer and sell the
securities in any one or more of the following ways:
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to or through underwriters, brokers or dealers; |
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directly to one or more other purchasers; |
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through a block trade in which the broker or dealer engaged to handle the block trade will attempt to sell the securities as agent, but may position and resell a portion of the block as principal to facilitate the transaction; |
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through agents on a best-efforts basis; |
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in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on the Nasdaq Capital Market or sales made through a market maker other than on an exchange or other similar offerings through sales agents; or |
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otherwise through any other method permitted by applicable law or a combination of any of the above methods of sale. |
In addition, we may enter
into option, share lending or other types of transactions that require us to deliver shares of common stock to an underwriter, broker
or dealer, who will then resell or transfer the shares of common stock under this prospectus. We may also enter into hedging transactions
with respect to our securities. For example, we may:
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enter into transactions involving short sales of the shares of common stock by underwriters, brokers or dealers; |
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sell shares of common stock short and deliver the shares to close out short positions; |
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enter into option or other types of transactions that require the delivery of shares of common stock to an underwriter, broker or dealer, who will then resell or transfer the shares of common stock under this prospectus; or |
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loan or pledge the shares of common stock to an underwriter, broker or dealer, who may sell the loaned shares or, in the event of default, sell the pledged shares. |
We may enter into derivative
transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered
by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities
pledged by or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities
received from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions
will be an underwriter and, if not identified in this prospectus, will be identified in the applicable prospectus supplement (or a post-effective
amendment). In addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell
the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to
investors in our securities or in connection with a concurrent offering of other securities.
Each time we sell securities,
we will provide a prospectus supplement that will name any underwriter, dealer or agent involved in the offer and sale of the securities.
Any prospectus supplement will also set forth the terms of the offering, including:
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the purchase price of the securities and the proceeds we will receive from the sale of the securities; |
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any underwriting discounts and other items constituting underwriters’ compensation; |
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any public offering or purchase price and any discounts or commissions allowed or re-allowed or paid to dealers; |
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any commissions allowed or paid to agents; |
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any other offering expenses; |
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any securities exchanges on which the securities may be listed; |
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the method of distribution of the securities; |
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the terms of any agreement, arrangement or understanding entered into with the underwriters, brokers or dealers; and |
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any other information we think is important. |
If underwriters or dealers
are used in the sale, the securities will be acquired by the underwriters or dealers for their own account. The securities may be sold
from time to time by us in one or more transactions:
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at a fixed price or prices, which may be changed; |
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at market prices prevailing at the time of sale; |
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at prices related to such prevailing market prices; |
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at varying prices determined at the time of sale; or |
Such sales may be effected:
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in transactions on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
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in transactions in the over-the-counter market; |
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in block transactions in which the broker or dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction, or in crosses, in which the same broker acts as an agent on both sides of the trade; |
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through the writing of options; or |
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through other types of transactions. |
The securities may be offered
to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more of such
firms. Unless otherwise set forth in the prospectus supplement, the obligations of underwriters or dealers to purchase the securities
offered will be subject to certain conditions precedent and the underwriters or dealers will be obligated to purchase all the offered
securities if any are purchased. Any public offering price and any discount or concession allowed or reallowed or paid by underwriters
or dealers to other dealers may be changed from time to time.
The securities may be sold
directly by us or through agents designated by us from time to time. Any agent involved in the offer or sale of the securities in respect
of which this prospectus is delivered will be named, and any commissions payable to such agent will be set forth in, the prospectus supplement.
Unless otherwise indicated in the prospectus supplement, any such agent will be acting on a best efforts basis for the period of its appointment.
Unless otherwise specified
in the related prospectus supplement, all securities we offer, other than common stock, will be new issues of securities with no established
trading market. Any underwriters may make a market in these securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Any common stock sold pursuant to a prospectus supplement will be listed for trading on the Nasdaq
Capital Market or other principal market for our common stock. We may apply to list any series of preferred stock or warrants on an exchange,
but we are not obligated to do so. Therefore, there may not be liquidity or a trading market for any series of securities.
Offers to purchase the securities
offered by this prospectus may be solicited, and sales of the securities may be made by us directly to institutional investors or others,
who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale of the securities. The terms
of any offer made in this manner will be included in the prospectus supplement relating to the offer.
Some of the underwriters,
dealers or agents used by us in any offering of securities under this prospectus may be customers of, engage in transactions with, and
perform services for us or affiliates of ours in the ordinary course of business. Underwriters, dealers, agents and other persons may
be entitled to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act,
and to be reimbursed for certain expenses.
Subject to any restrictions
relating to debt securities in bearer form, any securities initially sold outside the United States may be resold in the United States
through underwriters, dealers or otherwise.
Any underwriters to which offered securities are sold
by us for public offering and sale may engage in transactions that stabilize, maintain or otherwise affect the price of the common shares
during and after the offering, but those underwriters will not be obligated to do so and may discontinue any market making at any time.
Specifically, the underwriters may over-allot or otherwise create a short position in the common shares for their own accounts by selling
more shares of common stock than have been sold to them by us. The underwriters may elect to cover any such short position by purchasing
common stock in the open market or by exercising the over-allotment option granted to the underwriters. In addition, the underwriters
may stabilize or maintain the price of the common stock by bidding for or purchasing common stock in the open market and may impose penalty
bids. If penalty bids are imposed, selling concessions allowed to syndicate members or other broker-dealers participating in the offering
are reclaimed if shares of common stock previously distributed in the offering are repurchased, whether in connection with stabilization
transactions or otherwise. The effect of these transactions may be to stabilize or maintain the market price of the common stock at a
level above that which might otherwise prevail in the open market. The imposition of a penalty bid may also affect the price of the common
stock to the extent that it discourages resales of the common stock. The magnitude or effect of any stabilization or other transactions
is uncertain. These transactions may be effected on the Nasdaq Capital Market or otherwise and, if commenced, may be discontinued at any
time.
In connection with the offering, the underwriters
and selling group members may also engage in passive market making transactions in our common stock. Passive market making consists of
displaying bids on the Nasdaq Capital Market limited by the prices of independent market makers and effecting purchases limited by those
prices in response to order flow. Rule 103 of Regulation M promulgated by the SEC limits the amount of net purchases that each passive
market maker may make and the displayed size of each bid. Passive market making may stabilize the market price of the common shares at
a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.
We are subject to the applicable provisions of the
Exchange Act and the rules and regulations under the Exchange Act, including Regulation M. This regulation may limit the timing of purchases
and sales of any of the shares of common stock offered in this prospectus by any person. The anti-manipulation rules under the Exchange
Act may apply to sales of shares in the market and to our activities.
The anticipated date of delivery
of the securities offered by this prospectus will be described in the applicable prospectus supplement relating to the offering.
Any broker-dealer participating
in the distribution of the shares of common stock may be deemed to be an “underwriter” within the meaning of the Securities
Act with respect to any securities such entity sells pursuant to this prospectus.
To comply with the securities
laws of some states, if applicable, the securities may be sold in these jurisdictions only through registered or licensed brokers or dealers.
In addition, in some states the securities may not be sold unless they have been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is complied with.
We are offering an aggregate
of 49,394,058 shares of common stock, which were previously registered under the Prior Registration Statement. upon the conversion of
the outstanding Series 4 Preferred Stock, the Series 5 Preferred Stock and exercise of the February 2018 Warrants, the April 2018 Warrants,
the January 2019 Warrants, the November 2020 Warrants, the January 2021 Warrants, the First February 2021 Warrants and the Second February
2021 Warrants, provided that we will not receive an additional consideration for the conversion of the Series 4 Preferred Stock and the
Series 5 Preferred Stock. Shares of common stock issuable upon the conversion of the outstanding Series 4 Preferred Stock and Series 5
Preferred Stock or the exercise of the February 2018 Warrants, the April 2018 Warrants, the January 2019 Warrants, the November 2020 Warrants,
the January 2021 Warrants, the First February 2021 Warrants and the Second February 2021 Warrants will trade on the Nasdaq Capital Market
under the symbol “INPX.”
The shares of common stock
issuable upon the conversion of the outstanding Series 4 Preferred Stock and Series 5 Preferred Stock and the exercise of the February
2018 Warrants, the April 2018 Warrants, the January 2019 Warrants, the November 2020 Warrants, the January 2021 Warrants, the First February
2021 Warrants and the Second February 2021 Warrants will not be offered through underwriters, brokers or dealers. We will not pay any
compensation in connection with the offering of these shares upon conversion of the outstanding Series 4 Preferred Stock or Series 5 Preferred
Stock or the exercise of the February 2018 Warrants, the April 2018 Warrants, the January 2019 Warrants, the November 2020 Warrants, the
January 2021 Warrants, the First February 2021 Warrants or the Second February 2021 Warrants. The shares of common stock will be distributed
to those holders of the Series 4 Preferred Stock, the Series 5 Preferred Stock, the February 2018 Warrants, the April 2018 Warrants, the
January 2019 Warrants, the November 2020 Warrants, the January 2021 Warrants, the First February 2021 Warrants or the Second February
2021 Warrants who properly converted their Series 4 Preferred Stock or Series 5 Preferred Stock or exercised their warrants and deliver
payment of the aggregate exercise price, in accordance with the terms of the warrants.
We are also registering the shares of our common stock
issued or issuable to the Selling Security Holders as Purchaser Shares and Earnout Shares to permit the resale of these shares by the
Selling Security Holders from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by
the Selling Security Holders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register
the Purchaser Shares and the Earnout Shares. Each Selling Security Holder may sell all or a portion of the shares of common stock held
by it and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of common
stock are sold through underwriters or broker-dealers, the Selling Security Holder will be responsible for underwriting discounts or commissions
or agent’s commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market
prices at the time of the sale, at varying prices determined at the time of sale or at negotiated prices. These sales may be effected
in transactions, which may involve crosses or block transactions, pursuant to one or more of the following methods:
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on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
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in the over-the-counter market; |
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in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
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through the writing or settlement of options, whether such options are listed on an options exchange or otherwise; |
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
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block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
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an exchange distribution in accordance with the rules of the applicable exchange; |
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privately negotiated transactions; |
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short sales made after the date the registration statement is declared effective by the SEC; |
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broker-dealers may agree with a Selling Security Holder to sell a specified number of such shares at a stipulated price per share; |
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a combination of any such methods of sale; and |
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any other method permitted pursuant to applicable law. |
Each Selling Security Holder may also sell shares
of common stock under Rule 144 promulgated under the Securities Act, if available, rather than under this prospectus. In addition, each
Selling Security Holder may transfer the shares of common stock by other means not described in this prospectus. If any Selling Security
Holder effects such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the Selling Security Holder
or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal (which
discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the
types of transactions involved). In connection with sales of the shares of common stock or otherwise, each Selling Security Holder may
enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course
of hedging in positions they assume. Each Selling Security Holder may also sell shares of common stock short and deliver shares of common
stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. Each
Selling Security Holder may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.
Each Selling Security Holder may pledge or grant a
security interest in part or all of its Purchaser Shares and Earnout Shares and, if it defaults in the performance of the secured obligations,
the pledgees or secured parties may offer and sell the shares of common stock included in the Purchaser Shares and the Earnout Shares
time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act amending, if necessary, the list of selling security holders to include the pledgee, transferee or other successors in
interest as selling security holders under this prospectus. Each Selling Security Holder also may transfer and donate the shares of common
stock included in the Purchaser Shares and the Earnout Shares in other circumstances in which case the transferees, donees, pledgees or
other successors in interest will be the selling beneficial owners for purposes of this prospectus.
To the extent required by the Securities Act and the
rules and regulations thereunder, the Selling Security Holders and any broker-dealer participating in the distribution of the shares of
common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any
discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities
Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed,
which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name or
names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the Selling Security
Holders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
Under the securities laws of some states, the shares
of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares
of common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.
There can be no assurance that the Selling Security
Holders will sell any or all of the shares of common stock registered pursuant to the registration statement, of which this prospectus
forms a part.
The Selling Security Holders and any other person
participating in such distribution will be subject to applicable provisions of the Exchange Act, and the rules and regulations thereunder,
including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases
and sales of any of the shares of common stock by the Selling Security Holders and any other participating person. To the extent applicable,
Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making
activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock
and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.
We will pay all expenses of the registration of the
shares of common stock, including, without limitation, SEC filing fees and expenses of compliance with state securities or “blue
sky” laws; provided, however, the Selling Security Holders will pay all underwriting discounts and selling commissions, if any.
Once sold under the registration
statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than
our affiliates.
LEGAL MATTERS
The validity of the issuance of the securities offered
hereby will be passed upon for us by Mitchell Silberberg & Knupp LLP (“MSK”), New York, New York. Additional legal matters
may be passed on for us, or any underwriters, dealers or agents, by counsel we will name in the applicable prospectus supplement. As of
the date of this filing, MSK and certain principals of the firm beneficially own securities of the Company representing in the aggregate
less than five percent of the shares of the registrant’s common stock outstanding immediately prior to the filing of this registration
statement. Although MSK is not obligated to, it may accept securities of the Company as payment for services in the future.
EXPERTS
Marcum LLP, independent registered public accounting
firm, has audited our consolidated financial statements included in our Annual Report on Form 10-K for the years ended December 31,
2020 and 2019, as set forth in their report, which is incorporated by reference in the prospectus and elsewhere in this registration statement.
Our consolidated financial statements are incorporated by reference in reliance on Marcum LLP, given on their authority as experts in
accounting and auditing.
ECOVIS Audit AG, independent registered public accounting
firm, has audited the financial statements of nanotron Technologies GmbH as of December 31, 2019 and for the year ended December 31, 2019,
included in our Current Report on Form 8-K/A filed with the SEC on January 15, 2021, as set forth in their report, which is incorporated
herein by reference in this prospectus. Such financial statements are incorporated by reference in reliance on ECOVIS Audit AG, given
their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement
on Form S-3 under the Securities Act, with respect to the securities covered by this prospectus. This prospectus, which is a part of the
registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules
filed therewith. For further information with respect to us and the securities covered by this prospectus, please see the registration
statement and the exhibits filed with the registration statement. A copy of the registration statement and the exhibits filed with the
registration statement may be inspected without charge at the Public Reference Room maintained by the SEC, located at 100 F Street,
N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the Public Reference
Room. The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC. The address of the website is http://www.sec.gov.
We are subject to the information and periodic reporting
requirements of the Exchange Act and, in accordance therewith, we file periodic reports, proxy statements and other information with the
SEC. Such periodic reports, proxy statements and other information are available for inspection and copying at the Public Reference Room
and website of the SEC referred to above. We maintain a website at http://www.inpixon.com. You may access our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed pursuant to Sections 13(a)
or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as reasonably practicable after such material is electronically
filed with, or furnished to, the SEC. Our website and the information contained on that site, or connected to that site, are not incorporated
into and are not a part of this prospectus.
INFORMATION INCORPORATED BY REFERENCE
The SEC and applicable law permits us to “incorporate
by reference” into this prospectus information that we have or may in the future file with the SEC (excluding those portions of
any Form 8-K that are not deemed “filed” pursuant to the General Instructions of Form 8-K). This means that we can disclose
important information by referring you to those documents. You should read carefully the information incorporated herein by reference
because it is an important part of this prospectus. We hereby incorporate by reference the following documents into this prospectus:
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our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on March 31, 2021; |
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Our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, as filed with the SEC on May 17, 2021 ; |
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our Current Reports on Form 8-K, as filed with the SEC on January 25, 2021 (other than any portion of the filing that is furnished rather than filed pursuant to Item 7.01), February 12, 2021 (other than any portion of the filing that is furnished rather than filed pursuant to Item 7.01), February 17, 2021 (other than any portion of the filing that is furnished rather than filed pursuant to Item 7.01), February 26, 2021, March 19, 2021, April 14, 2021, April 29, 2021 and May 6, 2021 and on Form 8-K/A, as filed with the SEC on January 15, 2021 and April 23, 2021; and |
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the description of our common stock included in our Registration Statement on Form 8-A, as filed with the SEC on April 7, 2014 pursuant to Section 12(b) of the Exchange Act, including any amendment or report filed for the purpose of updating such description. |
Additionally, all documents filed by us subsequent
to those listed above with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than any portions of filings
that are furnished rather than filed pursuant to Items 2.02 and 7.01 of a Current Report on Form 8-K), prior to the termination or completion
of the offerings (including all such documents filed with the SEC after the date of the initial registration statement and prior to the
effectiveness of the registration statement) shall be deemed to be incorporated by reference into this prospectus from the respective
dates of filing of such documents. Any information that we subsequently file with the SEC that is incorporated by reference as described
above will automatically update and supersede any previous information that is part of this prospectus.
Upon written or oral request, we will provide you
without charge, a copy of any or all of the documents incorporated by reference, other than exhibits to those documents unless the exhibits
are specifically incorporated by reference in the documents. Please send requests to:
Inpixon
Attn: Secretary
2479 E. Bayshore Road, Suite 195
Palo Alto, CA 94303
Up to $25,000,000
PROSPECTUS SUPPLEMENT
MAXIM GROUP LLC
July 22, 2022
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