UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 8, 2019

 

INPIXON

(Exact name of registrant as specified in its charter)

 

Nevada   001-36404   88-0434915
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (I.R.S. Employer
Identification No.)

 

2479 E. Bayshore Road, Suite 195

Palo Alto, CA

  94303
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (408) 702-2167

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading Symbol(s)   Name of Each Exchange on Which Registered
Common Stock   INPX   The Nasdaq Capital Market

 

 

 

 

 

 

Item 1.01Entry into a Material Definitive Agreement.

 

Note Purchase Agreement and Promissory Note

 

On August 8, 2019, Inpixon (the “Company”) entered into a note purchase agreement (the “Purchase Agreement”) with Chicago Venture Partners, L.P. (the “Holder”), pursuant to which the Company agreed to issue and sell to the Holder an unsecured promissory note (the “Note”) in an aggregate principal amount of $1,895,000.00 (the “Initial Principal Amount”), which is payable on or before the date that is 9 months from the issuance date. The Initial Principal Amount includes an original issue discount of $375,000.00 and $20,000.00 that the Company agreed to pay to the Holder to cover the Holder’s legal fees, accounting costs, due diligence, monitoring and other transaction costs. In exchange for the Note, the Holder paid an aggregate purchase price of $1,500,000.00 (the “Transaction”). The Holder is also a holder of the Company’s outstanding promissory notes issued on May 3, 2019 and June 27, 2019, with outstanding balances, as of August 8, 2019, of $3,872,946.95 and $1,917,234.70, respectively. The Holder is an affiliate of Iliad Research and Trading, L.P. (“Iliad”). Iliad is a holder of the Company’s outstanding promissory note issued on December 21, 2018 (the “December Note”) with an outstanding balance, as of August 8, 2019, of $2,268,214.18 as a result of the Standstill Agreement (as defined below).

 

The terms of the Note include:

 

Interest. Interest on the Note accrues at a rate of 10% per annum and is payable on the maturity date or otherwise in accordance with the Note.

 

Prepayment. The Company may pay all or any portion of the amount owed earlier than it is due; provided, that in the event the Company elects to prepay all or any portion of the outstanding balance, it shall pay to the Holder 115% of the portion of the outstanding balance the Company elects to prepay.

 

Redemption. Beginning on the date that is 6 months from the issuance date and at the intervals indicated below until the Note is paid in full, the Holder shall have the right to redeem up to an aggregate of 1/3 of the initial principal balance of the Note each month (each monthly exercise, a “Monthly Redemption Amount”) by providing written notice (each, a “Monthly Redemption Notice”) delivered to the Company; provided, however, that if the Holder does not exercise any Monthly Redemption Amount in its corresponding month then such Monthly Redemption Amount shall be available for the Holder to redeem in any future month in addition to such future month’s Monthly Redemption Amount. Upon receipt of any Monthly Redemption Notice, the Company shall pay the applicable Monthly Redemption Amount in cash to the Holder within five business days of the Company’s receipt of such Monthly Redemption Notice.

 

Default Events. The Note includes customary event of default provisions, subject to certain cure periods, and provides for a default interest rate of 22%. Upon the occurrence of an event of default (except a default due to the occurrence of bankruptcy or insolvency proceedings (the “Bankruptcy-Related Event of Default”)), the Holder may, by written notice, declare all unpaid principal, plus all accrued interest and other amounts due under the Note to be immediately due and payable at an amount equal to 115% of the outstanding balance of the Note (the “Mandatory Default Amount”). Upon the occurrence of a Bankruptcy-Related Event of Default, without notice, all unpaid principal, plus all accrued interest and other amounts due under the Note will become immediately due and payable at the Mandatory Default Amount.

  

In addition, at any time while the Note is outstanding, if the Company intends to enter into a financing pursuant to which it will issue securities that (A) have or may have conversion rights of any kind, contingent, conditional or otherwise, in which the number of shares that may be issued pursuant to such conversion right varies with the market price of the Company’s common stock, or (B) are or may become convertible into common stock (including without limitation convertible debt, warrants or convertible preferred stock), with a conversion price that varies with the market price of the common stock, even if such security only becomes convertible following an event of default, the passage of time, or another trigger event or condition (a “Future Offering”), then the Company must first offer such opportunity to the Holder to provide such financing to the Company on the same terms no later than five (5) trading days immediately prior to the trading day of the expected announcement of the Future Offering (the “Right of First Refusal”). If the Holder is unwilling or unable to provide such financing to the Company within five (5) trading days from the Holder’s receipt of notice of the Future Offering from the Company, then the Company may obtain such financing upon the exact same terms and conditions offered by the Company to the Holder, which transaction must be completed within 30 days after the date of the notice. If the Company does not receive the financing within 30 days after the date of the notice, then the Company must again offer the financing opportunity to the Holder as described above, and the process detailed above will be repeated. The Right of First Refusal does not apply to an Exempt Issuance (as defined in the Purchase Agreement) or to a registered offering made pursuant to a registration statement on Form S-1 or Form S-3.

 

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In addition, pursuant to the terms of the Purchase Agreement, so long as the Note is outstanding, the Holder has the right to participate in any offering of securities by the Company which contains any term or condition more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to the Holder (the “Participation Right”). The Participation Right does not apply in connection with an offering of securities which qualifies as an Exempt Issuance, a transaction under Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), a registered offering made pursuant to a registration statement on Form S-1 or Form S-3, or in connection with the satisfaction of outstanding trade payables.

 

The Purchase Agreement also provides for indemnification of the Holder and its affiliates in the event that they incur loss or damage related to, among other things, a breach by the Company of any of its representations, warranties or covenants under the Purchase Agreement.

 

The Company intends to use the net proceeds from the sale of the Note for general working capital purposes.

 

The description of the Note and the Purchase Agreement is qualified in its entirety by the full text of the Note and the Purchase Agreement, copies of which are filed herewith as Exhibits 4.1 and 10.1, respectively, and which are incorporated herein by reference.

 

Standstill Agreement

 

On August 8, 2019, the Company and Iliad entered into a standstill agreement with respect to the December Note (the “Standstill Agreement”).

 

Pursuant to the Standstill Agreement, Iliad agreed that it will not redeem all or any portion of the December Note for a period beginning on August 8, 2019, and ending on the date that is 90 days from August 8, 2019. As consideration for Iliad’s agreement to enter into the Standstill Agreement, the outstanding balance of the December Note was increased by $206,149.23, resulting in an outstanding balance of $2,268,214.18 as of August 8, 2019.

 

The description of the Standstill Agreement is qualified in its entirety by the full text of the Standstill Agreement, a copy of which is filed herewith as Exhibit 10.2, which is incorporated herein by reference.

 

Amendment to Jibestream Share Purchase Agreement

 

On July 8, 2019, the Company entered into a Share Purchase Agreement (the “Jibestream Purchase Agreement”) to acquire all of the issued and outstanding shares of Jibestream Inc. (“Jibestream”), a provider of highly configurable indoor mapping and location platforms, in order to expand the Company’s suite of products (such acquisition, the “Transaction”).

 

On August 9, 2019, the Company amended the Jibestream Purchase Agreement pursuant to the terms of an amendment (the “Amendment”), whereby the parties agreed to, among other things, (i) reduce the amount of funds the Company is required to receive from an offering of debt or equity or equity linked securities (the “Offering”) in order to complete the Transaction, from $15 million to an amount of funds sufficient when aggregated with other immediately available funds to pay the Estimated Cash Closing Amount (as defined in the Jibestream Purchase Agreement), (ii) set the price per share of common stock of the Company that will be paid out as partial consideration in the Transaction equal to the price per share at which shares of the Company’s common stock are sold in the Offering and (iii) limit the amount of shares of common stock that the Company may issue to the Vendors (as defined in the Jibestream Purchase Agreement) to no more than 19.99% of the Company’s outstanding shares of common stock prior to the closing of the Transaction, unless stockholder approval is obtained, if required by the Nasdaq Listing Rules, prior to December 31, 2019.

 

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In addition, the Company agreed to loan Jibestream, at its option, cash amounts up to a maximum of $250,000 in the aggregate, in accordance with the terms of a promissory note (a “Jibestream Note”). A Jibestream Note will be issued for each loan and will have a maturity date of December 31, 2019 and will accrue interest at a rate of 5% per annum. It is anticipated that Jibestream will use such funds for its operating expenses prior to the closing of the Transaction.

 

The description of the Amendment and the Jibestream Note is qualified in its entirety by the full text of the Amendment and the form of Jibestream Note, copies of which are filed herewith as Exhibits 2.1 and 10.3, respectively, which are incorporated herein by reference.

 

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information set forth in Item 1.01 of this Current Report on Form 8-K, to the extent required by this Item 2.03, is incorporated herein by reference.

 

Cautionary Note Regarding Forward-Looking Statements

 

The information contained in this Current Report on Form 8-K and the exhibits attached hereto contain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements related to the benefits of the Transaction. The words “intend,” “may,” “should,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. While the Company believes its plans, intentions and expectations reflected in those forward-looking statements are reasonable, these plans, intentions or expectations may not be achieved. The Company’s actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements. For information about the factors that could cause such differences, please refer to the Company’s filings with the U.S. Securities Exchange Commission (the “SEC”). Given these uncertainties, you should not place undue reliance on these forward-looking statements. The Company assumes no obligation to update any forward-looking statement.

 

Item 9.01 Financial Statements and Exhibits.

 

  (d) Exhibits

 

Exhibit No.   Description
     
2.1*   Amendment to Share Purchase Agreement, dated as of August 8, 2019, by and among Inpixon, Inpixon Canada, Inc., Chris Wiegand, in his capacity as the Vendors’ Representative, any other shareholder who subsequently signs an adoption agreement, and Jibestream Inc.
     
4.1   Promissory Note, dated as of August 8, 2019.
     
10.1*   Note Purchase Agreement, dated as of August 8, 2019.
     
10.2   Standstill Agreement, dated as of August 8, 2019.
     
10.3   Form of Jibestream Note.

 

*Certain schedules, exhibits and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Inpixon hereby undertakes to furnish copies of such omitted materials supplementally upon request by the SEC.

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  INPIXON
   
Date: August 9, 2019 By: /s/ Nadir Ali
  Name:  Nadir Ali
  Title: Chief Executive Officer

 

 

 

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