Note 4 – Locality Acquisition

On May 21, 2019, Inpixon, through its wholly owned subsidiary, Inpixon Canada as purchaser, completed its acquisition of Locality in which Locality's stockholders sold all of their Locality Shares to the purchaser in exchange for consideration of (i) $1,500,000 (the "Aggregate Cash Consideration") plus or minus the amount by which the estimated working capital is more or less than the working capital target (as defined in the purchase agreement), and (ii) 650,000 shares of common stock of Inpixon.

The Aggregate Cash Consideration, plus or minus the estimated working capital adjustment to be applied against the Aggregate Cash Consideration (which will be calculated within 90 days of the closing date), will be paid in installments as follows: (i) the initial installment representing $250,000 minus or plus the estimated working capital adjustment was paid on the closing date; (ii) three additional installments each equal to $250,000, will be paid every six months following the closing date; and (iii) one final installment representing $500,000 will be paid on the second anniversary of the closing date, in each case minus the cash fees payable to the advisor in connection with the acquisition. Inpixon Canada will have the right to offset any loss, as defined in the purchase agreement, first, against any installment of the installment cash consideration that has not been paid and second, against the sellers and the advisor on a several basis, in accordance with the indemnification provisions of the purchase agreement.

The total recorded purchase price for the transaction was approximately $1,928,000 which consisted of cash at closing of $204,000, approximately $1,210,000 of cash that will be paid in installments as discussed above and $514,000 representing the value of the stock issued upon closing.

Proforma information has not been presented as it has been deemed to be immaterial.