Inpixon Reports First Quarter 2023 Financial Results and Provides Business Update

Completed the Spin-off of Workplace Experience Business Line on March 14

Conference Call to be Held Today at 4:30 p.m. Eastern Time

PALO ALTO, Calif., May 15, 2023 /PRNewswire/ -- Inpixon® (Nasdaq: INPX), the Indoor Intelligence® company, today provided a business update and reported financial results for the first quarter ended March 31, 2023.

"The spinoff of the workplace experience business line was our most significant accomplishment in the first quarter of this year," commented Nadir Ali, CEO of Inpixon. "This transaction was a key focus for the company throughout the last several months and demonstrates our commitment to increasing value for shareholders. At the same time, for the remainder of our business, we were also able to achieve a 17% increase in revenue to $3.1 million for the first quarter of 2023 as compared to the same period of last year, while effectively reducing our operating expenses as compared to the same period of last year. We have reallocated resources and streamlined our operations to focus on the growth of our real-time location system (RTLS) business line. RTLS enables customers to digitally track the real-time location and movement of physical things throughout large facilities and delivers actionable data that can seamlessly integrate into third-party systems, such as automated workflows or asset and supply chain management solutions. Through our solution, customers are able to locate, learn, and leverage information to make more informed business decisions. We remain committed to innovation and to providing a full-stack RTLS solution that supports a multitude of use cases and industries. In addition, the negotiation and diligence process with respect to a potential transaction for the remainder of our business continues to advance.  We look forward to providing further updates as that process continues.

"Overall, we have maintained a solid balance sheet with over $15 million in cash and cash equivalents as of March 31, 2023. We believe we are well positioned to solidify our leadership position within the RTLS industry, and we look forward to further executing on our business initiatives," concluded Mr. Ali.

Financial Results

Revenues for the three months ended March 31, 2023 were $3.1 million compared to $2.6 million for the comparable period in the prior year for an increase of approximately $0.5 million, or approximately 17%. This increase is primarily attributable to the increase in Indoor Intelligence sales from the Aware and RTLS component product lines. Gross profit for the three months ended March 31, 2023, was $2.3 million compared to a gross profit of $1.9 million for the comparable period in the prior year, representing an increase of 25%. The gross profit margin for the three months ended March 31, 2023, was 75% compared to 70% for the three months ended March 31, 2022. This increase in gross profit margin is due to the sales mix during the period. Operating expenses for the three months ended March 31, 2023, were $10.5 million and $11.1 million for the comparable period ended March 31, 2022. This decrease of $0.6 million is primarily attributable to lower compensation, professional fees and legal expense in the three months ended March 31, 2023. Net loss from continuing operations for the three months ended March 31, 2023, was $12.3 million compared to $10.8 million for the comparable period in the prior year. This increase in loss of approximately $1.5 million was primarily attributable to a deferred tax provision expense of approximately $2.5 million offset by higher gross profit of approximately $0.5 million and lower operating expenses of approximately $0.6 million.

Non-GAAP Adjusted EBITDA for the three months ended March 31, 2023, was a loss of $7.7 million compared to a loss of $8.8 million for the prior year period. Non-GAAP Adjusted EBITDA is defined as net income or loss before interest, provision for income taxes, depreciation, and amortization plus adjustments for other income or expense items, non-recurring items and non-cash items including stock-based compensation.

Proforma non-GAAP net loss per basic and diluted common share for the three months ended March 31, 2023, was a loss of $1.01 per share compared to a loss of $4.79 per share for the prior year period. Non-GAAP net loss per share is defined as net loss per basic and diluted share adjusted for non-cash items including stock-based compensation, amortization of intangibles and one-time charges and other adjustments including transaction costs, provision for unrealized loss on equity securities, and acquisition costs.

In accordance with applicable accounting guidance, the results of the workplace experience business line are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented prior to the completion of the CXApp Spin-off. The Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. Please refer to the quarterly report on Form 10-Q for the quarterly period ended March 31, 2023 to be filed with the SEC for additional information.

Conference Call

Inpixon management will host a conference call today at 4:30 p.m. Eastern Time to discuss the company's financial results for the first quarter of 2023 ended March 31, 2023, as well as provide an update on the company's corporate progress and other developments.

The conference call will be available via telephone by dialing toll-free 888-506-0062 for U.S. callers or 973-528-0011 for international callers and entering access code 794029. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2235/48349 or on the company's Investor Relations section of the website, ir.inpixon.com/ir-news-events/ir-calendar.

Investors and other interested parties are invited to submit questions to management prior to the call's start via email to inpx@crescendo-ir.com.

A webcast replay will be available on the company's Investor Relations section of the website (ir.inpixon.com/ir-news-events/ir-calendar) through May 15, 2024. A telephone replay of the call will be available approximately one hour following the call, through May 22, 2023, and can be accessed by dialing 877-481-4010 for U.S. callers or +1 919-882-2331 for international callers and entering access code 48349.

About Inpixon

Inpixon® (Nasdaq: INPX) is the innovator of Indoor Intelligence®, delivering actionable insights for people, places and things. Combining the power of mapping, positioning and analytics, Inpixon helps to create smarter, safer, and more secure environments. The company's Indoor Intelligence and industrial real-time location system (RTLS) solutions are leveraged by a multitude of industries to optimize operations, increase productivity, and enhance safety. Inpixon customers can take advantage of industry leading location awareness, analytics, sensor fusion, IIoT and the IoT to create exceptional experiences and to do good with indoor data. For the latest insights, follow Inpixon on LinkedIn, and Twitter, and visit inpixon.com.

Safe Harbor Statement

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

Non-GAAP Financial Measures

Management believes that certain financial measures not in accordance with generally accepted accounting principles in the United States ("GAAP") are useful measures of operations. EBIDTA, Adjusted EBITDA and pro forma net loss per share are non-GAAP measures. Inpixon defines "EBITDA" as net income (loss) before interest, provision for (benefit from) income taxes, and depreciation and amortization. Management uses Adjusted EBITDA as a metric for which it manages the business, and Inpixon defines "Adjusted EBITDA" as EBITDA plus adjustments for other income or expense items, non-recurring items and non-cash items. Inpixon defines "pro forma net loss per share" as GAAP net loss per share adjusted for stock-based compensation, amortization of intangibles and one-time charges unrealized gains/losses from equity securities and transaction costs.

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

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

Contacts

General inquiries:
Inpixon
Email:
 marketing@inpixon.com
Web: inpixon.com/contact-us

Investor relations:
Crescendo Communications for Inpixon
Tel: +1 212-671-1020
Email:
 INPX@crescendo-ir.com

INPIXON AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEETS

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








As of 


March 31, 2023



December 31,
2022









ASSETS




Current Assets






Cash and cash equivalents

$

15,254


$

10,235

Accounts receivable, net of allowances of $268 and $272, respectively


2,999



1,889

Notes and other receivables


430



86

Inventory


2,179



2,442

Note receivable


--



150

Prepaid assets and other current assets


2,797



2,803

Current assets of discontinuted operations


--



12,261

Total Current Assets


23,659



29,866







Property and equipment, net


1,052



1,064

Operating lease right-of-use asset, net


484



531

Software development costs, net


1,313



1,265

Investment in equity securities


364



330

Long-term investments


50



716

Intangible assets, net


2,810



2,994

Other assets


175



158

Non-current assets of discontinued operations


--



20,711

Total Assets

$

29,907


$

57,635







LIABILITIES AND STOCKHOLDERS' EQUITY






Current Liabilities






Accounts payable

$

1,767


$

1,503

Accrued liabilities


5,112



2,619

Operating lease obligation, current


199



211

Deferred revenue


1,382



1,323

Short-term debt


14,971



13,643

Acquisition liability


--



197

Current liabilities of deconsolidated operations


--



5,218

Total Current Liabilities


23,431



24,714







Long Term Liabilities






Operating lease obligations, noncurrent


297



334

Non-current liabilities of deconsolidated operations


--



472

Total Liabilities


23,728



25,520







Commitments and Contingencies


--



--







Stockholders' Equity






Preferred Stock - $0.001 par value; 5,000,000 shares authorized.






Series 4 Convertible Preferred Stock - 10,415 shares authorized; 1 issued and 1 outstanding as of March 31, 2023 and December 31, 2022, respectively; 


--



--

Series 5 Convertible Preferred Stock - 12,000 shares authorized; 126 issued and 126 outstanding as of March 31, 2023 and December 31, 2022, respectively.


--



--

Common Stock - $0.001 par value; 500,000,000 shares authorized; 16,478,253 and 3,570,894 issued and 16,478,252 and 3,570,893 outstanding as of March 31, 2023 and December 31, 2022, respectively.


16



4

Additional paid-in capital


339,148



346,668

Treasury stock, at cost, 1 share


(695)



(695)

Accumulated other comprehensive (loss) income


(198)



1,061

Accumulated deficit 


(330,586)



(313,739)

Stockholders' Equity Attributable to Inpixon


7,685



33,299







Non-controlling interest


(1,506)



(1,184)







Total Stockholders' Equity


6,179



32,115







Total Liabilities and Stockholders' Equity

$

29,907


$

57,635

 

INPIXON AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)








For the Three Months Ended


March 31,


2023


2022









Revenues

$

3,104


$

2,649

Cost of Revenues


791



797







Gross Profit


2,313



1,852







Operating Expenses






Research and development


1,983



2,124

Sales and marketing


1,115



1,169

General and administrative


5,613



7,334

Acquisition related costs


164



115

Transaction costs


1,400



--

Amortization of intangibles


220



347

Total Operating Expenses


10,495



11,089







Loss from Operations


(8,182)



(9,237)







Other (Expense) Income






Interest (expense)/ income, net


(1,725)



1

Other income/(expense), net


29



(44)

Unrealized gain/(loss) on equity securities


34



(1,503)

Total Other Expense


(1,662)



(1,546)







Net Loss from Continuing Operations, before tax


(9,844)



(10,783)

Income tax provision


(2,478)



--

Net Loss from Continuing Operations


(12,322)



(10,783)







Loss from Discontinued Operations, Net of Tax


(4,856)



(774)

Net Loss     


(17,178)



(11,557)







Net Loss Attributable to Non-controlling Interest


(305)



(346)







Net Loss Attributable to Stockholders of Inpixon

$

(16,873)


$

(11,211)

Accretion of Series 7 preferred stock


--



(4,555)

Accretion of Series 8 Preferred Stock


--



(548)

Deemed dividend for the modification related to Series 8 Preferred Stock


--



(2,627)

Deemed contribution for the modification related to Warrants issued in connection with Series 8 Preferred Stock


--



1,469

Amortization premium- modification related to Series 8 Prefered Stock


--



110







Net Loss Attributable to Common Stockholders

$

(16,873)


$

(17,362)







Net Loss Per Share - Basic and Diluted

$

(1.38)


$

(9.05)







Weighted Average Shares Outstanding






Basic and Diluted


12,238,684



1,917,629







Comprehensive Loss






Net Loss

$

(17,178)


$

(11,557)

Unrealized foreign exchange loss from cumulative translation adjustments


(1,259)



(102)

Comprehensive Loss

$

(18,437)


$

(11,659)

 

INPIXON AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)








For the Three Months Ended


March 31,


2023


2022


Cash Flows Used In Operating Activities






  Net loss

$

(17,178)


$

(11,557)

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






Depreciation and amortization


429



317

Amortization of intangible assets


1,025



1,489

Amortization of right of use asset


110



169

Stock based compensation


329



1,533

Earnout expense valuation benefit


--



(2,827)

Amortization of debt discount


834



--

Unrealized loss on foreign currency transactions


(205)



(167)

Distribution of equity method investment shares to employees as compensation


666



--

Deferred income tax


2,478



--

Unrealized loss on equity securities


(34)



1,503

Other


--



146







Changes in operating assets and liabilities:






Accounts receivable and other receivables


(1,994)



(239)

Inventory


283



181

Prepaid expenses and other current assets


274



(3,607)

Other assets


(4)



41

Accounts payable


(534)



(1,345)

Accrued liabilities


3,545



(109)

Income tax liabilities


(2)



(40)

Deferred revenue


584



(666)

Operating lease obligation


(109)



(141)

Net Cash Used in Operating Activities

$

(9,503)


$

(15,319)







Cash Flows Used in Investing Activities






   Purchase of property and equipment


(6)



(81)

Investment in capitalized software


(220)



(107)

Sales of treasury bills


--



28,001

Proceeds from repayment of note receivable


150



--

Issuance of note receivable


(300)



--

Net Cash (Used in) Provided By Investing Activities

$

(376)


$

27,813







Cash From Financing Activities






Net proceeds from issuance of preferred stock and warrants

$

--


$

46,906

Net proceeds from promissory note


125



--

Net proceeds for registered direct offering


14,966



--

Cash paid for redemption of preferred stock series 7


--



(49,250)

Taxes paid related to net share settlement of restricted stock units


--



(336)

Net proceeds from promissory notes


--



364

Repayment of CXApp acquisition liability


(197)



(1,787)

Common shares issued for net proceeds from warrants


1



--

Distribution to shareholders related to spin-off of CXApp


(10,003)



--

Net Cash Provided By (Used in) Financing Activities

$

4,892


$

(4,103)







Effect of Foreign Exchange Rate on Changes on Cash


6



(19)







Net (Decrease) Increase in Cash and Cash Equivalents


(4,981)



8,372







Cash and Cash Equivalents - Beginning of year


20,235



52,480







Cash and Cash Equivalents  - End of year

$

15,254


$

60,852

 

Reconciliation of Non-GAAP Financial Measures:






For the 3 Months Ended

(In thousands)

March 31,

2023


2022





Net loss attributable to common stockholders

$            (16,873)


$              (17,362)

Interest expense/(income), net

1,724


(2)

Income tax provision

2,478


100

Depreciation and amortization

1,454


1,806

EBITDA

(11,217)


(15,458)

Adjusted for:




Non-recurring one-time charges:




Unrealized (gain)/loss on equity securities

(34)


1,503

Acquisition transaction/financing costs

164


121

Earnout compensation benefit

-


(2,827)

      Professional service fees

-


8

     Transaction costs

2,443


-

     Accretion of series 7 preferred stock

-


4,555

     Accretion of series 8 preferred stock

-


548

     Deemed dividend modification Series 8 preferred stock

-


2,627

     Deemed contribution for the modication related to warrants issued in connection with the Series 8 Preferred Stock

-


(1,469)

     Amortization premium - modification to Series 8 preferred stock

-


(110)

     Distribution of equity method investment shares to employees as compensation

666


-

Unrealized foreign exchange (gains)/losses

(205)


89

Stock-based compensation – compensation and related benefits

329


1,533

Severance costs

127


111

Adjusted EBITDA

$              (7,727)


$                (8,769)










For the 3 Months Ended

(In thousands, except share data)

March 31,

2023


2022





Net loss attributable to common stockholders

$            (16,873)


$              (17,362)

Adjustments:




Non-recurring one-time charges:




Unrealized (gain)/loss on equity securities

(34)


1,503

Acquisition transaction/financing costs

164


121

Earnout compensation benefit

-


(2,827)

      Professional service fees

-


8

     Transaction costs

2,443


-

     Accretion of series 7 preferred stock

-


4,555

     Accretion of series 8 preferred stock

-


548

     Deemed dividend modification Series 8 preferred stock

-


2,627

     Deemed contribution for the modication related to warrants issued in connection with the Series 8 Preferred Stock

-


(1,469)

     Amortization premium - modification to Series 8 preferred stock

-


(110)

     Distribution of equity method investment shares to employees as compensation

666


-

Unrealized foreign exchange (gains)/losses

(205)


89

Stock-based compensation – compensation and related benefits

329


1,533

Severance costs

127


111

Amortization of intangibles

1,025


1,489

Proforma non-GAAP net loss

$            (12,358)


$                (9,184)

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

$                (1.01)


$                  (4.79)

Weighted average basic and diluted common shares outstanding

12,238,684


1,917,629

 

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SOURCE Inpixon