3 unchanged sentences
In the opinion of management, the condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.
−Removed: The results for the period ended March 31, 2023 are not necessarily indicative of the results of operations for the full year.
+Added: The results for the period ended June 30, 2023 are not necessarily indicative of the results of operations for the full year.
These financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in our audited consolidated financial statements for the fiscal years ended December 31, 2022 and 2021 included in the annual report on Form 10-K for the year ended December 31, 2022 filed with the U.S.
−Removed: Securities and Exchange Commission (the “SEC”) on April 17, 2023.
+Added: Securities and Exchange Commission (the “SEC”) on April 17, 2023 and the recasted audited consolidated financial statements within Exhibit 99.1 on Form 8-k filed with the SEC on June 20, 2023 to reflect the presentation of CXApp operations as discontinued operations to the consolidated financial statements for the years ended December 31, 2022 and 2021.
INPIXON AND SUBSIDIARIES
1 unchanged sentence
(In thousands, except number of shares and par value data)
−Removed: As of March 31,
+Added: As of June 30,
2023 As of December 31,
22 unchanged sentences
(In thousands, except number of shares and par value data)
−Removed: As of March 31,
+Added: As of June 30,
2023 As of December 31,
8 unchanged sentences
Acquisition liability — 197
+Added: Warrant liability 1,500 —
Current liabilities of discontinued operations — 5,218
9 unchanged sentences
Series 4 Convertible Preferred Stock - 10,415 shares authorized;
−Removed: 1 issued and 1 outstanding as of March 31, 2023 and December 31, 2022
+Added: 1 issued and 1 outstanding as of June 30, 2023 and December 31, 2022
Series 5 Convertible Preferred Stock - 12,000 shares authorized;
−Removed: 126 issued and 126 outstanding as of March 31, 2023 and December 31, 2022
+Added: 126 issued and 126 outstanding as of June 30, 2023 and December 31, 2022
Common Stock - $ 0.001 par value;
500,000,000 shares authorized;
−Removed: 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.
+Added: 43,154,195 and 3,570,894 issued and 43,154,194 and 3,570,893 outstanding as of June 30, 2023 and December 31, 2022, respectively.
Additional paid-in capital 346,799 346,668
11 unchanged sentences
(In thousands, except share and per share data)
−Removed: For the Three Months Ended March 31,
+Added: For the Three Months Ended June 30, For the Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Revenues $ 2,057 $ 2,576 $ 5,161 $ 5,225
7 unchanged sentences
Transaction costs 43 — 1,443 —
+Added: Impairment of goodwill — 2,030 — 2,030
Amortization of intangibles 230 396 450 743
18 unchanged sentences
Amortization premium- modification related to Series 8 Preferred Stock — 1,252 — 1,362
−Removed: Net Loss Attributable to Common Stockholders $ ( 16,873 ) $ ( 17,362 )
INPIXON AND SUBSIDIARIES
1 unchanged sentence
(In thousands, except share and per share data)
+Added: Net Loss Attributable to Common Stockholders $ ( 6,966 ) $ ( 24,857 ) $ ( 23,840 ) $ ( 42,219 )
Net Loss Per Share - Basic and Diluted
+Added: Continuing Operations $ ( 0.19 ) $ ( 6.99 ) $ ( 0.92 ) $ ( 14.90 )
+Added: Discontinued Operations $ — $ ( 5.88 ) $ ( 0.24 ) $ ( 6.01 )
+Added: Net Loss Per Share - Basic and Diluted $ ( 0.19 ) $ ( 12.87 ) $ ( 1.16 ) $ ( 20.91 )
Weighted Average Shares Outstanding
4 unchanged sentences
(In thousands)
−Removed: For the Three Months Ended March 31,
+Added: For the Three Months Ended June 30, For the Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Net Loss $ ( 7,329 ) $ ( 20,330 ) $ ( 24,507 ) $ ( 31,887 )
+Added: Unrealized gain on available for sale debt securities — 375 — 375
Unrealized foreign exchange loss from cumulative translation adjustments 9 281 ( 1,250 ) 180
3 unchanged sentences
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
+Added: For the three and six months ended June 30, 2023
(In thousands, except share and per share data)
11 unchanged sentences
Balance - March 31, 2023 1 $ — 126 $ — 16,478,253 $ 16 $ 339,148 ( 1 ) $ ( 695 ) $ ( 198 ) $ ( 330,586 ) $ ( 1,506 ) $ 6,179
+Added: Stock options and restricted stock awards granted to employees for services — — — — — — 241 — — — — — 241
+Added: Common shares issued for extinguishment of debt — — — — 7,349,420 7 2,013 — — — — — 2,020
+Added: Common shares issued for net cash proceeds of a public offering — — — — 19,326,522 20 5,397 — — — — — 5,417
+Added: Cumulative translation adjustment — — — — — — — — — 9 ( 3 ) 3 9
+Added: Net loss — — — — — — — — — — ( 6,966 ) ( 363 ) ( 7,329 )
+Added: Balance - June 30, 2023 1 $ — 126 $ — 43,154,195 $ 43 $ 346,799 ( 1 ) $ ( 695 ) $ ( 189 ) $ ( 337,555 ) $ ( 1,866 ) $ 6,537
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements
1 unchanged sentence
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
+Added: For the three and six months ended June 30, 2022
(In thousands, except share and per share data)
17 unchanged sentences
Balance - March 31, 2022 — $ — 53,197.72 $ 43,173 1 $ — 126 $ — 2,103,949 $ 2 $ 338,333 ( 1 ) $ ( 695 ) $ ( 58 ) $ ( 261,535 ) $ 1,357 $ 77,404
+Added: Stock options and restricted stock awards granted to employees for services — — — — — — — — — — 741 — — — — — 741
+Added: Common shares issued for cashless stock options exercised — — — — — — — — 35,062 — 500 — — — — — 500
+Added: Series 8 Preferred stock issued for cash — — — — — — — — — — — — — — — — —
+Added: Accretion Discount- Series 8 Preferred Shares — — — 6,236 — — — — — — ( 6,236 ) — — — — — ( 6,236 )
+Added: Restricted stock grants withheld for taxes — — — — — — — — — — 1,251 — — — — — 1,251
+Added: Deemed contribution for the modification related to Warrants issued in connection with Series 8 Preferred Stock — — — — — — — — — — — — — — — — —
+Added: Amortization Premium- modification related to Series 8 Preferred Stock — — — ( 1,251 ) — — — — — — — — — — — — —
+Added: Cumulative translation adjustment — — — — — — — — — — — — — 656 ( 56 ) 57 657
+Added: Net income (loss) — — — — — — — — — — — — — — ( 19,872 ) ( 458 ) ( 20,330 )
+Added: Balance - June 30, 2022 — $ — 53,197.7234 $ 48,158 1 $ — 126 $ — 2,139,011 $ 2 $ 334,589 ( 1 ) $ ( 695 ) $ 598 $ ( 281,463 ) $ 956 $ 53,987
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements
2 unchanged sentences
(In thousands)
−Removed: For the Three Months Ended March 31,
+Added: For the Six Months Ended June 30,
Cash Flows Used in Operating Activities (Unaudited)
5 unchanged sentences
Stock based compensation 570 2,274
+Added: Amortization of warrant liability to redemption value 20 —
Earnout expense valuation benefit — ( 2,827 )
−Removed: Amortization of debt discount 834 —
+Added: Gain on settlement with FOXO ( 1,142 ) —
+Added: Amortization of debt issuance costs 1,686 ( 92 )
+Added: Unrealized gain on note — 344
Unrealized loss on foreign currency transactions ( 178 ) —
2 unchanged sentences
Unrealized loss on equity securities 58 1,256
+Added: Impairment of goodwill — 7,570
+Added: Gain on fair value of warrant liability 71 —
Changes in operating assets and liabilities:
12 unchanged sentences
Investment in capitalized software ( 135 ) ( 306 )
+Added: Purchase of convertible note — ( 5,500 )
Sales of treasury bills — 43,001
2 unchanged sentences
Net Cash (Used in) Provided By Investing Activities ( 480 ) 37,055
−Removed: Cash From Financing Activities
−Removed: Net proceeds from issuance of preferred stock and warrants — 46,906
−Removed: Net proceeds from promissory note 125 364
−Removed: Net proceeds for registered direct offering 14,966 —
−Removed: Cash paid for redemption of preferred stock series 7 — ( 49,250 )
INPIXON AND SUBSIDIARIES
1 unchanged sentence
(In thousands)
+Added: Cash From Financing Activities
+Added: Net proceeds from issuance of preferred stock — 46,906
+Added: Net proceeds from promissory note 125 364
+Added: Net proceeds from ATM 20,383 —
+Added: Cash paid for redemption of preferred stock series 7 — ( 49,250 )
Taxes paid related to net share settlement of restricted stock units — ( 336 )
+Added: Net proceeds from the issuance of warrants 1,409 —
Repayment of CXApp acquisition liability ( 197 ) ( 1,847 )
12 unchanged sentences
Common shares issued for extinguishment of debt $ 3,446 $ 2,000
+Added: Noncash debt modification fees $ 144 $ —
+Added: Marketable securities received for settlement of FOXO $ 1,142 $ —
Common shares issued for CXApp Earnout Payment $ — $ 3,697
4 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 1 - Organization and Nature of Business
Inpixon is the Indoor Intelligence™ company.
−Removed: Our solutions and technologies help organizations create and redefine exceptional experiences that enable smarter, safer and more secure environments.
−Removed: Inpixon customers can leverage our real-time positioning, mapping and analytics technologies to achieve higher levels of productivity and performance, increase safety and security, improve worker and employee satisfaction rates and drive a more connected work environment.
−Removed: We have focused our corporate strategy on being the primary provider of the full range of foundational technologies needed to form a comprehensive suite of solutions that make indoor data available and actionable to organizations and their employees.
−Removed: Together, our technologies allow organization to create and utilize the digital twin of a physical location and to deliver enhanced experiences in their current environment and in the metaverse.
−Removed: Inpixon specializes in providing real-time location systems (RTLS) for the industrial sector.
+Added: Our solutions and technologies help organizations enable smarter, safer and more secure environments.
+Added: Inpixon customers can leverage our real-time positioning and analytics technologies to achieve higher levels of productivity and performance, increase safety and security, and drive a more connected work environment.
+Added: We specialize in providing real-time location systems (RTLS) for the industrial sector.
As the manufacturing industry has evolved, RTLS technology has become a crucial aspect of Industry 4.0.
20 unchanged sentences
Enterprise Apps Spin-off and Business Combination
−Removed: On March 14, 2023, we completed the Enterprise Apps Spin-off and subsequent Business Combination (the "Closing") In connection with the Closing, KINS was renamed CXApp Inc.
+Added: On March 14, 2023, we completed the Enterprise Apps Spin-off and subsequent Business Combination (the "Closing").
+Added: In connection with the Closing, KINS was renamed CXApp Inc.
(“New CXApp”).
3 unchanged sentences
Pursuant to the Merger Agreement, each share of Legacy CXApp common stock was thereafter exchanged for the right to receive 0.09752221612415190 of a share of New CXApp Class A common stock (with fractional shares rounded down to the nearest whole share) and 0.3457605844401750 of a share of New CXApp Class C common stock (with fractional shares rounded down to the nearest whole share).
−Removed: New CXApp Class A common stock and New CXApp Class C common stock are identical in all respects, except that New CXApp Class C common stock is not listed and will automatically convert into New CXApp Class A common stock on the earlier to occur of (i) the 180 th day following the closing of the Merger and (ii) the day that the last reported sale price of New CXApp Class A common stock equals or exceeds $ 12.00
+Added: New CXApp Class A common stock and New CXApp Class C common stock are identical in all respects, except that New CXApp Class C common stock is not listed and will automatically convert into New CXApp Class A common stock on the earlier to occur of (i) the 180 th day following the closing of the Merger and (ii) the day that the last reported sale price of New CXApp Class A common stock equals or exceeds $ 12.00 per share for any 20 trading days within any 30 -trading day period following the closing of the Merger.
+Added: Upon the closing of the Transactions, Inpixon’s existing security holders held approximately 50.0 % of the shares of New CXApp common stock outstanding.
+Added: In accordance with applicable accounting guidance, the results of CXApp are presented as discontinued operations in the Condensed Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment
INPIXON AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
−Removed: per share for any 20 trading days within any 30 -trading day period following the closing of the Merger.
−Removed: Upon the closing of the Transactions, Inpixon’s existing security holders held approximately 50.0 % of the shares of New CXApp common stock outstanding.
−Removed: The transaction is expected to be tax-free to Inpixon and its stockholders for U.S.
−Removed: federal income tax purposes.
−Removed: On March 15, 2023, New CXApp began regular-way trading on NASDAQ under the ticker symbol “CXAI.” Inpixon continues to trade under the ticker symbol “INPX.”
−Removed: In accordance with applicable accounting guidance, the results of CXApp are presented as discontinued operations in the Condensed 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 Enterprise Apps Spin-off.
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: results for all periods presented prior to the completion of the Enterprise Apps Spin-off.
The Condensed Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations.
7 unchanged sentences
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
−Removed: Interim results for the three months ended March 31, 2023 are not necessarily indicative of the results for the full year ending December 31, 2023.
−Removed: These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the years ended December 31, 2022 and 2021 included in the annual report on Form 10-K for the year ended December 31, 2022, filed with the SEC on April 17, 2023.
+Added: Interim results for the three and six months ended June 30, 2023 are not necessarily indicative of the results for the full year ending December 31, 2023.
+Added: These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the years ended December 31, 2022 and 2021 included in the annual report on Form 10-K for the year ended December 31, 2022, filed with the SEC on April 17, 2023 and the recasted audited consolidated financial statements within Exhibit 99.1 on Form 8-k filed with the SEC on June 20, 2023 to reflect the presentation of CXApp operations as discontinued operations to the consolidated financial statements for the years ended December 31, 2022 and 2021.
Note 3 - Summary of Significant Accounting Policies
The Company's complete accounting policies are described in Note 2 to the Company's audited consolidated financial statements and notes for the year ended December 31, 2022.
−Removed: As of March 31, 2023, the Company has a working capital surplus of approximately $ 0.2 million, and cash of approximately $ 15.3 million.
−Removed: For the three months ended March 31, 2023, the Company had a net loss of approximately $ 17.2 million.
−Removed: During the three months ended March 31, 2023, the Company used approximately $ 9.5 million of cash for operating activities.
+Added: As of June 30, 2023, the Company has a working capital surplus of approximately $ 0.02 million, and cash of approximately $ 15.7 million.
+Added: For the three and six months ended June 30, 2023, the Company had a net loss of approximately $ 7.3 million and $ 24.5 million, respectively.
+Added: During the six months ended June 30, 2023, the Company used approximately $ 15.8 million of cash for operating activities.
Risks and Uncertainties
1 unchanged sentence
In order to continue our operations, we have supplemented the revenues we earned with proceeds from the sale of our equity and debt securities and proceeds from loans and bank credit lines.
−Removed: While the impact of the COVID-19 pandemic is generally subsiding, the lasting impact on our business and results of operations continues to remain uncertain.
−Removed: While we were able to continue operations remotely throughout the pandemic, we have experienced supply chain cost increases and constraints and delays in the receipt of certain components of our hardware products impacting delivery times for our products.
−Removed: In addition, to the extent that certain customers continue to be challenged by the lasting effects of the pandemic, including delays in returning employees to the office, we have and may continue to see an impact in the demand of certain products and delays in certain projects and customer orders.
−Removed: INPIXON AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
−Removed: Note 3 - Summary of Significant Accounting Policies (continued)
−Removed: Certain global events, such as the continued impact of the pandemic, the recent military conflict between Russia and Ukraine, market volatility and other general economic factors that are beyond our control may impact our results of operations.
+Added: Certain global events, such as the recent military conflict between Russia and Ukraine, market volatility and other general economic factors that are beyond our control may impact our results of operations.
These factors can include interest rates;
5 unchanged sentences
We also expect that supply chain interruptions and constraints, and increased costs on parts, materials and labor may continue to be a challenge for our business.
−Removed: While we have been able to realize growth in the three months ended March 31, 2023 as compared to the same period in 2022, the impact that these global events will have on general economic conditions is continuously evolving and the ultimate impact that they will have on our results of operations continues to remain uncertain.
−Removed: There are no assurances that we will be able to continue to experience the same growth or not be materially adversely effected.
−Removed: The Company's recurring losses and utilization of cash in its operations are indicators of going concern however with the Company's current liquidity position, including $ 15.3 million cash on hand plus the $ 4.1 million raised under the ATM Offering since April 1, 2023, approximately $ 3.8 million in additional funds available under the ATM Offering, and additional financing available to the Company, we believe we have the ability to mitigate such concerns for a period of at least one year from the date these financial statements are issued.
+Added: The impact that these global events will have on general economic conditions is continuously evolving and the impact that they will have on our results of operations continues to remain uncertain.
+Added: There are no assurances that we will not be materially adversely effected.
+Added: The Company's recurring losses and utilization of cash in its operations are indicators of going concern however with the Company's current liquidity position, including $ 15.7 million cash and cash equivalents on hand plus the $ 1.4 million raised
+Added: INPIXON AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: Note 3 - Summary of Significant Accounting Policies (continued)
+Added: under the ATM Offering and $ 2.3 million from warrants exercised since July 1, 2023, approximately $ 6.4 million in additional funds available under the ATM Offering, and additional financing available to the Company, we believe we have the ability to mitigate such concerns for a period of at least one year from the date these financial statements are issued.
Consolidations
24 unchanged sentences
Any unrealized appreciation or depreciation on investment securities is reported in the Condensed Consolidated Statement of Operations within Unrealized Loss on Equity Securities.
−Removed: The unrealized gain on equity securities for the three months ended March 31, 2023 was approximately $ 0.03 million, and for the three months ended March 31, 2022 was a unrealized loss of approximately $ 1.5 million.
−Removed: INPIXON AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
−Removed: Note 3 - Summary of Significant Accounting Policies (continued)
+Added: The unrealized loss on equity securities for the three and six months ended June 30, 2023 was approximately $( 0.09 ) million and $( 0.06 ) million, respectively, and for the three and six months ended June 30, 2022 was approximately a gain (loss) of $ 0.2 million and $( 1.3 ) million, respectively.
Revenue Recognition
4 unchanged sentences
This is when the customer has title to the product and the risks and rewards of ownership.
−Removed: The delivery of products to Inpixon's customers occurs in a variety of ways, including (i) as a physical product shipped from the Company’s warehouse, (ii) via drop-shipment by a third-party vendor, or (iii) via electronic delivery with respect to software licenses.
+Added: INPIXON AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: Note 3 - Summary of Significant Accounting Policies (continued)
+Added: of products to Inpixon's customers occurs in a variety of ways, including (i) as a physical product shipped from the Company’s warehouse, (ii) via drop-shipment by a third-party vendor, or (iii) via electronic delivery with respect to software licenses.
The Company leverages drop-ship arrangements with many of its vendors and suppliers to deliver products to customers without having to physically hold the inventory at its warehouse.
23 unchanged sentences
Anticipated losses are recognized as soon as they become known.
−Removed: For the three months ended March 31, 2023 and 2022, the Company did not incur any such losses.
+Added: For the three and six months ended June 30, 2023 and 2022, the Company did not incur any such losses.
These amounts are based on known and estimated factors.
License Revenue Recognition
−Removed: INPIXON AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
−Removed: Note 3 - Summary of Significant Accounting Policies (continued)
The Company enters into contracts with its customers whereby it grants a non-exclusive on-premise license for the use of its proprietary software.
3 unchanged sentences
All software provides customers with the same functionality and differ mainly in the duration over which the customer benefits from the software.
+Added: INPIXON AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: Note 3 - Summary of Significant Accounting Policies (continued)
The timing of the Company's revenue recognition related to the licensing revenue stream is dependent on whether the software licensing agreement entered into represents a good or service.
13 unchanged sentences
Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied.
−Removed: The Company had deferred revenue of approximately $ 1.4 million and $ 1.3 million as of March 31, 2023 and December 31, 2022, respectively, related to cash received in advance for product maintenance services and professional services provided by the Company’s technical staff.
+Added: The Company had deferred revenue of approximately $ 1.1 million and $ 1.3 million as of June 30, 2023 and December 31, 2022, respectively, related to cash received in advance for product maintenance services and professional services provided by the Company’s technical staff.
The Company expects to satisfy its remaining performance obligations for these maintenance services and professional services, and recognize the deferred revenue and related contract costs over the next twelve months.
+Added: The Company recognized revenue in the reporting period of $ 0.9 million that was included in the contract liability balance at the beginning of the period, for the period ended June 30, 2023.
Stock-Based Compensation
5 unchanged sentences
Forfeitures of unvested stock options are recorded when they occur.
+Added: The Company incurred stock-based compensation charges of approximately $ 0.2 million and $ 0.6 million, respectively, for the three and six months ended June 30, 2023.
+Added: The Company incurred stock-based compensation charges of approximately $ 0.7 million and $ 2.3 million for the three and six months ended June 30, 2022, respectively, which are included in general and administrative expenses.
+Added: Stock-based compensation charges are related to employee compensation and related benefits.
+Added: Net Income (Loss) Per Share
INPIXON AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 3 - Summary of Significant Accounting Policies (continued)
−Removed: The Company incurred stock-based compensation charges of approximately $ 0.3 million and $ 1.5 million for the three months ended March 31, 2023 and 2022, respectively, which are included in general and administrative expenses.
−Removed: Stock-based compensation charges are related to employee compensation and related benefits.
−Removed: Net Income (Loss) Per Share
The Company computes basic and diluted earnings per share by dividing net loss by the weighted average number of common shares outstanding during the period.
Basic and diluted net loss per common share were the same since the inclusion of common shares issuable pursuant to the exercise of options and warrants in the calculation of diluted net loss per common shares would have been anti-dilutive.
−Removed: The following table summarizes the number of common shares and common share equivalents excluded from the calculation of diluted net loss per common share for the three months ended March 31, 2023 and 2022:
−Removed: For the Three Months Ended March 31,
+Added: The following table summarizes the number of common shares and common share equivalents excluded from the calculation of diluted net loss per common share for the six months ended June 30, 2023 and 2022:
+Added: For the Three Months Ended June 30, For the Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Options 341,034 370,760 346,252 370,760
16 unchanged sentences
Short-term debt approximates market value based on similar terms available to the Company in the market place.
−Removed: Recently Issued and Adopted Accounting Standards
−Removed: The Company reviewed recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to the condensed consolidated financial statements.
+Added: Recently Issued Accounting Standards Not Yet Adopted
+Added: The Company reviewed recently issued accounting pronouncements and concluded that they were not applicable to the condensed consolidated financial statements, except for the following:
+Added: In July 2023, the FASB issued ASU 2023-03, "Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718)", which updates codification on how an entity would apply the scope guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards should be accounted for in accordance with Topic 718, Compensation—Stock Compensation.
+Added: The effective date of this update is for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.
+Added: The Company is currently assessing
INPIXON AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 3 - Summary of Significant Accounting Policies (continued)
+Added: potential impacts of ASU 2023-03 and does not expect the adoption of this guidance will have a material impact on its condensed consolidated financial statements and disclosures.
Reclassifications
1 unchanged sentence
These reclassifications had no material effect on the reported results of operations or cash flows.
−Removed: The condensed consolidated financial statements included approximately $ 1.1 million of earnings reclassified from controlling accumulated deficit to non-controlling interest.
+Added: The condensed consolidated balance sheet as of December 31, 2022 included approximately $ 1.1 million of earnings reclassified from controlling accumulated deficit to non-controlling interest.
This reclassification did not effect the Company’s total stockholders’ equity.
1 unchanged sentence
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 4 - Disaggregation of Revenue
3 unchanged sentences
Revenues consisted of the following (in thousands):
−Removed: For the Three Months Ended March 31,
+Added: For the Three Months Ended June 30, For the Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Recurring revenue
7 unchanged sentences
Total Revenue $ 2,057 $ 2,576 $ 5,161 $ 5,225
−Removed: For the Three Months Ended March 31,
+Added: For the Three Months Ended June 30, For the Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Revenue recognized at a point in time
15 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 5- Goodwill and Intangible Assets
1 unchanged sentence
The Company’s significant assumptions in these analyses include, but are not limited to, project revenue, the weighted average cost of capital, the terminal growth rate, derived multiples from comparable market transactions and other market data.
−Removed: As of March 31, 2023, the Company's cumulative impairment charges are approximately $ 13.5 million with approximately $ 11.6 million related to the Indoor Intelligence reporting unit, approximately $ 1.2 million related to the Shoom reporting unit and approximately $ 0.7 million related to the SAVES reporting unit.
−Removed: Intangibles assets at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):
−Removed: March 31, 2023
−Removed: Gross Amount Accumulated Amortization Spin-Off Net Carrying Amount Remaining Weighted Average Useful Life
+Added: As of June 30, 2023, the Company's cumulative impairment charges are approximately $ 13.5 million with approximately $ 11.6 million related to the Indoor Intelligence reporting unit, approximately $ 1.2 million related to the Shoom reporting unit and approximately $ 0.7 million related to the SAVES reporting unit.
+Added: There is no unimpaired goodwill as of June 30, 2023 or December 31, 2022.
+Added: Intangibles assets at June 30, 2023 and December 31, 2022 consisted of the following (in thousands):
+Added: June 30, 2023
+Added: Gross Amount, net of impairment Accumulated Amortization Spin-Off Net Carrying Amount Remaining Weighted Average Useful Life
IP Agreement $ 164 $ ( 113 ) $ — $ 51 1.25
14 unchanged sentences
Amortization Expense:
−Removed: Amortization expense from continuing operations for the three months ended March 31, 2023 and 2022 was approximately $ 0.2 million and $ 0.7 million respectively.
+Added: Amortization expense from continuing operations for the three and six months ended June 30, 2023 was approximately $ 0.2 million and $ 0.4 million, respectively, and for the three and six months ended June 30, 2022 was approximately $ 0.4 million and $ 1.1 million respectively.
INPIXON AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 5 - Goodwill and Intangible Assets (continued)
8 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 6 - Inventory
−Removed: Inventory as of March 31, 2023 and December 31, 2022 consisted of the following (in thousands):
−Removed: As of March 31, 2023 As of December 31, 2022
+Added: Inventory as of June 30, 2023 and December 31, 2022 consisted of the following (in thousands):
+Added: As of June 30, 2023 As of December 31, 2022
Raw materials $ 439 $ 351
5 unchanged sentences
The composition of the Company’s investment securities—fair value was as follows (in thousands):
−Removed: As of March 31, 2023
−Removed: Cost Fair Value
+Added: As of June 30, 2023
+Added: As of December 31, 2022
+Added: Cost Fair Value Cost Fair Value
Investments in equity securities- fair value
2 unchanged sentences
Total investments in equity securities- fair value $ 66,443 $ 1,414 $ 65,301 $ 330
−Removed: For the three months ended March 31, 2023 and 2022, the Company recognized a net unrealized gain on equity securities of $ 0.03 million and an unrealized loss of $ 1.5 million, respectively, in the other income/expense section of the condensed consolidated statements of operations.
+Added: As of June 30, 2023, the Company owned equity shares which include approximately 4.5 million shares of FOXO Technologies Inc.
+Added: common stock and 13.0 million shares of Sysorex common stock.
+Added: As of December 31, 2022, the Company owned approximately 0.8 million shares of FOXO Technologies Inc.
+Added: common stock and 13.0 million shares of Sysorex common stock.
+Added: As of June 30, 2023 and December 31, 2022, the Company owned equity rights which include the right to acquire 3.0 million shares of Sysorex common stock.
+Added: For the three months ended June 30, 2023 and 2022, the Company recognized a net unrealized gain (loss) on equity securities of $( 0.09 ) million and $ 0.2 million, respectively.
+Added: For the six months ended June 30, 2023 and 2022, the Company recognized a net unrealized gain (loss) on equity securities of $( 0.06 ) million and $( 1.3 ) million, respectively, in the other income/expense section of the condensed consolidated statements of operations.
On April 27, 2022, the Company purchased a 10 % convertible note in aggregate principal amount of approximately $ 6.1 million for a purchase price of $ 5.5 million from FOXO Technologies Operating Company, formerly FOXO Technologies Inc.
(“FOXO Legacy”), pursuant to the terms of a securities purchase agreement between FOXO Legacy and the Company (the “April 2022 Purchase Agreement”).
−Removed: Interest on the convertible note accrues at 12 % per annum.
+Added: Interest on the convertible note accrued at 12 % per annum.
The term of the convertible note is twelve months , however FOXO Legacy has the ability to extend the maturity date for an additional 3 months.
6 unchanged sentences
The Company recognized an unrealized gain on conversion of $ 0.8 million recognized in the income statement for the year ended December 31, 2022.
+Added: On June 20, 2023 (the "Release Effective Date"), the Company entered into a general release agreement (the "General Release Agreement") with FOXO, pursuant to which the Company received 0.67 shares of FOXO Class A Common Stock for every $ 1.00 of subscription amount of the 10 % convertible note purchased on April 27, 2022 in exchange for an agreement by the
+Added: INPIXON AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: Company to release, waive and forever discharge FOXO (including its officers, directors, affiliates, etc.) from any causes of action, losses, costs and expenses from the beginning of time through the Release Effective Date.
+Added: The Company received 3,685,000 shares of FOXO Class A Common Stock in exchange for such release.
+Added: The Company recognized a realized gain on receipt of FOXO securities of $ 1.1 million based on the fair value of the FOXO securities for the six months ended June 30, 2023, included in Other income/(expense), net, on the accompanying unaudited condensed consolidated statement of operations.
FOXO common stock is traded in active markets, as the security is trading under “FOXO” on the NYSE American.
FOXO common stock is accounted for as available-for-sale equity securities based on “Level 1” inputs, which consist of quoted prices in active markets, with unrealized holding gains and losses included in earnings.
−Removed: The fair value was determined by the closing trading price of the security as of March 31, 2023.
−Removed: The Company recognized an unrealized gain on FOXO common stock of $ 0.03 million and zero on the income statement for the three months ended March 31, 2023 and 2022, respectively.
+Added: The fair value was determined by the closing trading price of the security as of June 30, 2023.
+Added: The Company recognized an unrealized gain (loss) on FOXO common stock of $( 0.1 ) million and zero on the income statement for the three months ended June 30, 2023 and 2022, respectively.
+Added: The Company recognized an unrealized gain (loss) on FOXO common stock of $( 0.06 ) million and zero on the income statement for the six months ended June 30, 2023 and 2022, respectively.
Note 8 - Other Long Term Investments
−Removed: INPIXON AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
−Removed: In 2020, the Company paid $ 1.8 million for 599,999 Class A Units and 2,500,000 Class B Units of Cardinal Venture Holdings LLC (“CVH”).
+Added: In October 2020, the Company paid $ 1.8 million for 599,999 Class A Units and 1,800,000 Class B Units of Cardinal Venture Holdings LLC (“CVH”).
+Added: In December 2020, the Company increased its capital contribution by $ 0.7 million in exchange for an additional 700,000 Class B Units.
The Company is a member of CVH.
1 unchanged sentence
The $ 1.8 million purchase price was paid on October 12, 2020 and therefore is the date the purchase of the Units was closed.
−Removed: On December 16, 2020, the Company increased its capital contribution by $ 0.7 million in exchange for an additional 700,000 Class B Units.
The capital contribution was used by CVH to fund the Sponsor's purchase of securities in KINS.
1 unchanged sentence
The Company generally records its share of earnings in its equity method investments using a three-month lag methodology and within net investment income.
−Removed: During the period January 1, 2021 to December 31, 2021 and January 1, 2022 to March 31, 2023, CVH had no operating results as CVH is a holding company.
+Added: During the period January 1, 2022 to December 31, 2022 and January 1, 2023 to June 30, 2023, CVH had no operating results as CVH is a holding company.
CVH only contains units and has not been allocated shares of KINS, therefore CVH is not allocating any portion of income or expense incurred by KINS.
As such, there was no share of earnings recognized by the Company in its statement of operations on its proportional equity investment.
−Removed: The following component represents components of Other long-term investments as of March 31, 2023:
−Removed: Ownership interest as of March 31, Ownership interest as of December 31,
+Added: The following component represents components of Other long-term investments as of June 30, 2023 and December 31, 2022:
+Added: Ownership interest as of June 30, Ownership interest as of December 31,
2023 2022 Instrument Held
1 unchanged sentence
CVH Class B 38.4 % 38.4 % Units
−Removed: Inpixon’s investment in equity method eligible entities are represented on the balance sheet as an asset of approximately $ 0.1 million as of March 31, 2023 and approximately $ 0.7 million as of December 31, 2022.
+Added: Inpixon’s investment in equity method eligible entities are represented on the condensed consolidated balance sheets as a long term asset of approximately $ 0.1 million as of June 30, 2023 and approximately $ 0.7 million as of December 31, 2022.
On July 1, 2022, the Company loaned $ 150,000 to CVH.
1 unchanged sentence
(i) the date by which KINS 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 KINS, unless accelerated upon the occurrence of an event of default.
−Removed: Nadir Ali, the Company’s Chief Executive Officer and director, is also a member in CVH through 3AM, LLC, which is a member of CVH, and which may, in certain circumstances, be entitled to manage the affairs of CVH.
+Added: Nadir Ali, the Company’s Chief Executive Officer and director, is also a member in CVH through 3AM, LLC, which is
+Added: INPIXON AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: a member of CVH, and which may, in certain circumstances, be entitled to manage the affairs of CVH.
As a result of the closing of the Business Combination, on March 15, 2023, the $ 150,000 loan was repaid.
On February 27, 2023, the Company entered into Limited Liability Company Unit Transfer and Joinder Agreements with certain of the Company’s employees and directors (the “Transferees”), pursuant to which (i) the Company transferred all of its Class A Units of CVH (the “Class A Units”), an aggregate of 599,999 Class A Units, to the Transferees as bonus consideration in connection with each Transferee’s services performed for and on behalf of the Company as an employee, as applicable, and (ii) each Transferee became a member of CVH and a party to the Amended and Restated Limited Liability Company Agreement of CVH, dated as of September 30, 2020.
−Removed: The Company recorded approximately $ 0.7 million of compensation expense for the fair market value of the shares transferred to the Transferees which is included in the operating expenses section of the condensed consolidated statements of operations in the quarter ended March 31, 2023.
+Added: The Company recorded approximately $ 0.7 million of compensation expense for the fair market value of the shares transferred to the Transferees which is included in the operating expenses section of the condensed consolidated statements of operations in the six months ended June 30, 2023.
Note 9 - Accrued Liabilities
−Removed: Accrued liabilities as of March 31, 2023 and December 31, 2022 consisted of the following (in thousands):
−Removed: INPIXON AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
−Removed: As of March 31, 2023 As of December 31, 2022
+Added: Accrued liabilities as of June 30, 2023 and December 31, 2022 consisted of the following (in thousands):
+Added: As of June 30, 2023 As of December 31, 2022
Accrued compensation and benefits $ 903 $ 655
6 unchanged sentences
Note 10 - Debt
−Removed: Debt as of March 31, 2023 and December 31, 2022 consisted of the following (in thousands):
−Removed: Short-Term Debt Maturity March 31, 2023 December 31, 2022
−Removed: March 2020 10 % Note
−Removed: 3/18/2023 $ — $ —
−Removed: July 2022 Promissory Note, less debt discount of $ 398 and $ 760 , respectively.
+Added: Debt as of June 30, 2023 and December 31, 2022 consisted of the following (in thousands):
+Added: Short-Term Debt Maturity June 30, 2023 December 31, 2022
+Added: July 2022 Promissory Note, less debt discount and extension fee of $ 85 and $ 760 , respectively.
5/17/2024 $ 4,231 $ 6,045
−Removed: December 2022 Promissory Note , less debt discount of $ 1,409 and $ 1,880 , respectively.
+Added: December 2022 Promissory Note , less debt discount and extension fee of $ 1,013 and $ 1,880 , respectively.
5/17/2024 8,366 6,520
1 unchanged sentence
Total Short-Term Debt $ 13,800 $ 13,643
−Removed: Interest expense on the short-term debt totaled approximately $ 1.7 million and $ 0.1 million for the three months ended March 31, 2023 and 2022, respectively, which was amortized to interest expense from the combined amortization of deferred financing costs and note discounts recorded at issuance for the Short Term Debt.
+Added: Interest expense on the short-term debt totaled approximately $ 1.7 million and $ 0.1 million for the three months ended June 30, 2023 and 2022, respectively, and approximately $ 3.5 million and $ 0.2 million for the six months ended June 30, 2023 and 2022, respectively.
+Added: Interest expense includes the interest on the outstanding balance of the note and the amortization of deferred financing costs and note discounts recorded at issuance for the Short Term Debt.
Notes Payable
−Removed: March 2020 10 % Note Purchase Agreement and Promissory Note
−Removed: On March 18, 2020, the Company entered into a note purchase agreement with Iliad Research and Trading, L.P.
−Removed: ("Iliad"), pursuant to which the Company agreed to issue and sell to the holder an unsecured promissory note (the “March 2020 10 % Note”) in an aggregate initial principal amount of $ 6.5 million, which is payable on or before the date that is 12 months from the issuance date.
−Removed: The initial principal amount includes an original issue discount of $ 1.5 million and $ 0.02 million 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.
−Removed: In exchange for the March 2020 10 % Note, the holder paid an aggregate purchase price of $ 5.0 million.
−Removed: Interest on the March 2020 10 % Note accrues at a rate of 10 % per annum and is payable on the maturity date or otherwise in accordance with the March 2020 10 % Note.
−Removed: The Company may pay all or any portion of the amount owed earlier than it is due;
−Removed: 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.
−Removed: Beginning on the date that is 6 months from the issuance date and at the intervals indicated below until the March 2020 10 % 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 March 2020 10 % Note each month by providing written notice delivered to the Company;
−Removed: 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.
−Removed: 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.
−Removed: The March 2020 10 % Note
+Added: July 2022 Note Purchase Agreement and Promissory Note
+Added: On July 22, 2022, the Company entered into a note purchase agreement (the "Purchase Agreement") with Streeterville Capital, LLC (the “Holder” or "Streeterville"), pursuant to which the Company agreed to issue and sell to the Holder an unsecured promissory note (the “July 2022 Note”) in an aggregate initial principal amount of $ 6.5 million (the “Initial Principal Amount”), which is payable on the maturity date or otherwise in accordance with the July 2022 Note.
+Added: The Initial Principal Amount includes an original issue discount of $ 1.5 million and $ 0.02 million that the Company agreed to pay to the Holder to
INPIXON AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 10- Debt (continued)
−Removed: includes customary event of default provisions, subject to certain cure periods, and provides for a default interest rate of 22 %.
−Removed: Upon the occurrence of an event of default (except a default due to the occurrence of bankruptcy or insolvency proceedings, the holder may, by written notice, declare all unpaid principal, plus all accrued interest and other amounts due under the March 2020 10 % Note to be immediately due and payable.
−Removed: 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 March 2020 10 % Note will become immediately due and payable at the mandatory default amount.
−Removed: On September 17, 2020, the Company amended the one time monitoring fee applicable in the event the note was outstanding on the date that was 6 months from the issuance date, from 10 % to 5 %.
−Removed: The monitoring fee of approximately $ 0.3 million was added to the March 2020 10 % Note balance as of that date.
−Removed: On March 17, 2021, the Company extended the maturity date of the March 2020 10 % Note from March 18, 2021 to March 18, 2022 for which the Company agreed to pay an extension fee of approximately $ 0.1 million which was added to the outstanding balance of the March 2020 10 % Note.
−Removed: Effective as of March 16, 2022, we entered into a third amendment (the “Third Amendment”) to the March 2020 10 % Note which was accounted for as a modification.
−Removed: Pursuant to the terms of the Third Amendment, the maturity date of the March 2020 10 % Note was extended from March 18, 2022 to March 18, 2023 (the “Maturity Date Extension”).
−Removed: In exchange for the Maturity Date Extension, we agreed to pay a 2 % extension fee in the amount of approximately $ 0.1 million (the “Extension Fee”), which was added to the outstanding balance of the March 2020 10 % Note.
−Removed: During the year ended December 31, 2022, the Company entered into exchange agreements with Iliad, pursuant to which the Company and Iliad agreed to:
−Removed: (i) partition new promissory notes in the form of the March 2020 10 % Note equal to approximately $ 3.7 million and then cause the outstanding balance of the March 2020 10 % Note to be reduced by approximately $ 3.7 million;
−Removed: and (ii) exchange the partitioned notes for the delivery of 287,802 shares of the Company’s common stock, at effective prices between $ 4.78 and $ 31.47 per share.
−Removed: The Company analyzed the exchange of the principal under the March 2020 10 % Note as an extinguishment and compared the net carrying value of the debt being extinguished to the reacquisition price (shares of common stock being issued) and there was no loss on the exchange for debt for equity.
−Removed: During the quarter ended March 31, 2023, the Company entered into exchange agreements with Iliad, pursuant to which the Company and Iliad agreed to:
−Removed: (i) partition new promissory notes in the form of the March 2020 10 % Note equal to approximately $ 0.9 million and then cause the outstanding balance of the March 2020 10 % Note to be reduced by approximately $ 0.9 million;
−Removed: and (ii) exchange the partitioned note for the delivery of 611,258 shares of the Company's common stock at effective prices between $ 1.09 and $ 1.68 per share.
−Removed: The Company analyzed the exchange of the principal under the March 2020 10 % Note as an extinguishment and compared the net carrying value of the debt being extinguished to the reacquisition price (shares of common stock being issued) and there was no loss on the exchange for debt for equity.
−Removed: July 2022 Note Purchase Agreement and Promissory Note
−Removed: On July 22, 2022, the Company entered into a note purchase agreement (the "Purchase Agreement") with Streeterville Capital, LLC (the “Holder” or "Streeterville"), pursuant to which the Company agreed to issue and sell to the Holder an unsecured promissory note (the “July 2022 Note”) in an aggregate initial principal amount of $ 6.5 million (the “Initial Principal Amount”), which is payable on or before the date that is 12 months from the issuance date (the “Maturity Date”).
−Removed: The Initial Principal Amount includes an original issue discount of $ 1.5 million and $ 0.02 million 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.
−Removed: In exchange for the Note, the Holder paid an aggregate purchase price of $ 5.0 million (the “Transaction”).
+Added: cover the Holder’s legal fees, accounting costs, due diligence, monitoring and other transaction costs.
+Added: In exchange for the Note, the Holder paid an aggregate purchase price of $ 5.0 million.
Interest on the Note accrued at a rate of 10 % per annum, which is payable on the maturity date.
7 unchanged sentences
On January 31, 2023, the Holder agreed to reduce the one time monitoring fee from 10 % to 5 %.
−Removed: INPIXON AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
−Removed: Note 10- Debt (continued)
During the quarter ended March 31, 2023, the Company entered into exchange agreements with Streeterville, pursuant to which the Company and Streeterville agreed to:
2 unchanged sentences
The Company analyzed the exchange of the principal under the July 2022 Note as an extinguishment and compared the net carrying value of the debt being extinguished to the reacquisition price (shares of common stock being issued) and there was no loss on the exchange for debt for equity.
+Added: On May 16, 2023, the Company entered into an amendment (the “July 2022 Note Amendment”) to the July 2022 Note pursuant to which the maturity date was extended from July 22, 2023 to May 17, 2024 (the “July 2022 Note Maturity Date Extension”).
+Added: In exchange for the July 2022 Note Maturity Date Extension, the Company agreed to pay Streeterville an extension fee in the amount of $ 0.1 million, which was added to the outstanding balance of the July 2022 Note.
+Added: The extension was treated as a modification and capitalized and amortized to interest expense over the term of the extension.
+Added: During the quarter ended June 30, 2023, the Company entered into exchange agreements with Streeterville, pursuant to which the Company and Streeterville agreed to:
+Added: (i) partition new promissory notes in the form of the July 2022 Note equal to approximately $ 2.0 million and then cause the outstanding balance of the July 2022 Note to be reduced by approximately $ 2.0 million;
+Added: and (ii) exchange the partitioned notes for the delivery of 7,349,420 shares of the Company’s common stock, at effective prices between $ 0.1950 and $ 0.3966 per share.
+Added: The Company analyzed the exchange of the principal under the July 2022 Note as an extinguishment and compared the net carrying value of the debt being extinguished to the reacquisition price (shares of common stock being issued) and there was no loss on the exchange for debt for equity.
December 2022 Note Purchase Agreement and Promissory Note
6 unchanged sentences
Beginning on the date that is 6 months from the issuance date and at the intervals indicated below until the December 2022 Note is paid in full, the Holder shall have the right to redeem up to an aggregate of 1/6th of the initial principal balance of the December 2022 Note plus any interest accrued thereunder each month by providing written notice delivered to us;
−Removed: 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 further month in addition to such future month's monthly redemption amount.
+Added: provided, however, that if the Holder does not exercise any monthly redemption
+Added: INPIXON AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: Note 10- Debt (continued)
+Added: amount in its corresponding month then such monthly redemption amount shall be available for the Holder to redeem in any further month in addition to such future month's monthly redemption amount.
Upon receipt of any monthly redemption notice, we shall pay the applicable monthly redemption amount in cash to the Holder within five ( 5 ) business days of the Company's receipt of such monthly redemption notice.
2 unchanged sentences
Upon the occurrence of bankruptcy-related event of default, without notice, all unpaid principal, plus all accrued interest and other amounts due under the December 2022 Note will become immediately due and payable at the mandatory default amount.
+Added: On May 16, 2023, the Company entered into an amendment (the “December 2022 Note Amendment”) to the December 2022 Note pursuant to which the maturity date of the December 2022 Note was extended from December 30, 2023 to May 17, 2024 (the “December 2022 Note Maturity Date Extension”).
+Added: In exchange for the December 2022 Note Maturity Date Extension, the Company agreed to pay the Holder an extension fee in the amount of $ 0.1 million which was added to the outstanding balance of the December 2022 Note.
+Added: This extension was treated as a modification and capitalized and amortized to interest expense over the term of the extension.
Third Party Note Payable
Game Your Game entered into promissory notes with an individual whereby it received approximately $ 0.2 million on October 29, 2021, approximately $ 0.2 million on January 18, 2022, approximately $ 0.1 million on March 22, 2022, approximately $ 0.1 million on August 26, 2022, approximately $ 0.1 million on September 16, 2022, approximately $ 0.1 million on October 26, 2022, approximately $ 0.1 million on November 29, 2022, approximately $ 0.1 million on December 22, 2022, approximately $ 0.03 million on January 18, 2023 and approximately $ 0.1 million on March 30, 2023 for funding of outside liabilities and working capital needs.
−Removed: All of the promissory notes have an interest rate of 8 % and are due on or before June 30, 2023.
−Removed: As of March 31, 2023, the balance owed under the notes was $ 1.2 million.
+Added: All of the promissory notes have an interest rate of 8 % and are due on or before September 30, 2023.
+Added: As of June 30, 2023, the balance owed under the notes was $ 1.2 million.
Note 11 - Capital Raises
3 unchanged sentences
In connection with this offering, the Company filed a Certificate of Designation for the Series 8 Convertible Preferred Stock with the Nevada Secretary of State.
−Removed: Each share of Series 8 Convertible Preferred Stock has
−Removed: INPIXON AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
−Removed: Note 11- Capital Raises (continued)
−Removed: a par value of $ 0.001 per share and stated value of $ 1,000 per share.
+Added: Each share of Series 8 Convertible Preferred Stock has a par value of $ 0.001 per share and stated value of $ 1,000 per share.
The shares of Series 8 Convertible Preferred Stock are convertible into shares of the Company’s common stock, at a conversion price of $ 35.38 per share.
7 unchanged sentences
See Note 1 3 for Preferred Stock and Note 15 for Warrant details.
−Removed: During the quarter ended December 31, 2022, the Company received cash redemption notices from the holders of the Series 8 Convertible Preferred Stock issued on March 22, 2022, totaling 53,197.72 shares of Series 8 Convertible Preferred Stock for aggregate cash paid of approximately $ 53.2 million which were therefore fully redeemed.
+Added: During the quarter ended December 31, 2022, the Company received cash redemption notices from the holders
+Added: INPIXON AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: Note 11- Capital Raises (continued)
+Added: of the Series 8 Convertible Preferred Stock issued on March 22, 2022, totaling 53,197.72 shares of Series 8 Convertible Preferred Stock for aggregate cash paid of approximately $ 53.2 million which were therefore fully redeemed.
In conjunction with the redemption, 751,841 warrants were forfeited.
7 unchanged sentences
On July 22, 2022, the Company entered into an Equity Distribution Agreement (the "Sales Agreement") with Maxim Group LLC (“Maxim”) under which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $ 25.0 million (the “Shares”) from time to time through Maxim, acting exclusively as the Company’s sales agent (the “ATM Offering”).
+Added: On June 13, 2023, the Company entered into an amendment to the Sales Agreement with Maxim, pursuant to which the aggregate offering price of the ATM Offering was increased from $ 25.0 million to approximately $ 27.4 million.
The Company intends to use the net proceeds of the ATM Offering primarily for working capital and general corporate purposes.
−Removed: During the quarter ended March 31, 2023, the Company sold 9,655,207 shares of common stock at share prices between $ 1.15 and $ 1.86 per share under the Sales Agreement for gross proceeds of approximately $ 15.4 million or net proceeds of $15.0 million after deducting the placement agency fees and other offering expenses.
+Added: During the six months ended June 30, 2023, the Company sold 28,981,729 shares of common stock at share prices between $ 0.200034 and $ 1.86 per share under the Sales Agreement for gross proceeds of approximately $ 21.0 million or net proceeds of $ 20.4 million after deducting the placement agency fees and other offering expenses.
The Company is not obligated to make any sales of the Shares under the Sales Agreement and no assurance can be given that the Company will sell any additional Shares under the Sales Agreement, or if it does, as to the price or amount of Shares that the Company will sell, or the date on which any such sales will take place.
3 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 12 - Common Stock
6 unchanged sentences
See Note 15 .
+Added: During the three months ended June 30, 2023, the Company issued 7,349,420 shares of common stock under exchange agreements to settle outstanding balance and interest totaling approximately $ 2.0 million under partitioned notes.
+Added: See Note 10 .
+Added: During the three months ended June 30, 2023, the Company issued 19,326,522 shares of common stock in connection with the ATM Offering at per share prices between $ 0.200034 and $ 0.54 , resulting in gross proceeds to the Company of approximately $ 5.6 million and net proceeds of $ 5.4 million after subtracting sales commissions and other offering expenses.
+Added: Se e Note 11 .
Note 1 3 - Preferred Stock
3 unchanged sentences
The Series 4 Preferred is non-voting (except to the extent required by law) and was convertible into the number of shares of common stock, determined by dividing the aggregate stated value of the Series 4 Preferred of $ 1,000 per share to be converted by $ 16,740 .
−Removed: As of March 31, 2023, there was 1 share of Series 4 Preferred outstanding.
+Added: As of June 30, 2023, there was 1 share of Series 4 Preferred outstanding.
Series 5 Convertible Preferred Stock
2 unchanged sentences
The Series 5 Convertible Preferred Stock is convertible into the number of shares of common stock, determined by dividing the aggregate stated value of the Series 5 Convertible Preferred Stock of $ 1,000 per share to be converted by $ 11,238.75 .
−Removed: As of March 31, 2023, there were 126 shares of Series 5 Convertible Preferred Stock outstanding.
+Added: As of June 30, 2023, there were 126 shares of Series 5 Convertible Preferred Stock outstanding.
Series 7 Convertible Preferred Stock
On September 13, 2021, the Company entered into a securities purchase agreement with certain institutional investors named therein, pursuant to which the Company agreed to issue and sell in a registered direct offering (i) up to 58,750 shares of Series 7 Convertible Preferred Stock and (ii) related warrants to purchase up to an aggregate of 626,667 shares of common stock (the “Warrants”).
−Removed: Each share of Series 7 Convertible Preferred Stock and the related Warrants were sold at a subscription amount of $ 920 , representing an original issue discount of 8 % of the stated value for an aggregate subscription amount of $ 54.1 million.
−Removed: The shares of Series 7 Convertible Preferred Stocks were recorded as Mezzanine Equity as the holder has the option to redeem these shares for cash.
−Removed: The aggregate net proceeds from the offering, after deducting the placement agent fees and other estimated offering expenses, was approximately $ 50.6 million.
+Added: Each share of Series 7 Convertible Preferred Stock and the related Warrants were sold at a subscription amount of
INPIXON AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 13- Preferred Stock (continued)
+Added: $ 920 , representing an original issue discount of 8 % of the stated value for an aggregate subscription amount of $ 54.1 million.
+Added: The shares of Series 7 Convertible Preferred Stocks were recorded as Mezzanine Equity as the holder has the option to redeem these shares for cash.
+Added: The aggregate net proceeds from the offering, after deducting the placement agent fees and other estimated offering expenses, was approximately $ 50.6 million.
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 paid of approximately $ 49.3 million.
−Removed: As of March 31, 2023, there were zero shares of Series 7 Convertible Preferred Stock outstanding.
+Added: As of June 30, 2023, there were zero shares of Series 7 Convertible Preferred Stock outstanding.
Series 8 Convertible Preferred Stock
4 unchanged sentences
During the quarter ended December 31, 2022, the Company received cash redemption notices from the holders of the Series 8 Convertible Preferred Stock issued on March 22, 2022, totaling 53,197.72 shares of Series 8 Convertible Preferred Stock for aggregate cash paid of approximately $ 53.2 million which were therefore fully redeemed.
−Removed: As of March 31, 2023, there were zero shares of Series 8 Convertible Preferred Stock outstanding.
+Added: As of June 30, 2023, there were zero shares of Series 8 Convertible Preferred Stock outstanding.
Note 14 - Stock Award Plans and Stock-Based Compensation
6 unchanged sentences
Options granted under the Option Plans vest over periods ranging from immediately to four years and are exercisable over periods not exceeding ten years .
−Removed: The aggregate number of shares that may be awarded under the 2018 Plan as of March 31, 2023 is 52,000,000 .
−Removed: As of March 31, 2023, 341,034 of stock options were granted to employees, directors and consultants of the Company (including 1 share outside of our plan and 57 shares under our 2011 Plan) and 49,330,234 options were available for future grant under the 2018 Plan.
+Added: The aggregate number of shares that may be awarded under the 2018 Plan as of June 30, 2023 is 52,714,178 .
+Added: As of June 30, 2023, 289,818 of stock options were granted to employees, directors and consultants of the Company (including 1 share outside of our plan and 47 shares under our 2011 Plan) and 52,381,440 options were available for future grant under the 2018 Plan.
Employee Stock Options
−Removed: During the three months ended March 31, 2023 and 2022, the Company recorded a charge for the amortization of stock options of approximately $ 0.3 million and $ 0.9 million, respectively, which is included in the general and administrative section of the condensed consolidated statement of operations.
−Removed: As of March 31, 2023, the fair value of non-vested stock options totaled approximately $ 1.7 million, which will be amortized to expense over the weighted average remaining term of 1.09 years.
+Added: During the three months ended June 30, 2023 and 2022, the Company recorded a charge for the amortization of stock options of approximately $ 0.2 million and $ 0.7 million, respectively, and approximately $ 0.5 million and $ 1.6 million, respectively, for
INPIXON AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 14 - Stock Award Plans and Stock-Based Compensation (continued)
+Added: the six months ended June 30, 2023 and 2022, which is included in the general and administrative section of the condensed consolidated statement of operations.
+Added: As of June 30, 2023, the fair value of non-vested stock options totaled approximately $ 1.5 million, which will be amortized to expense over the weighted average remaining term of 0.99 years.
See below for a summary of the stock options granted under the 2011 and 2018 plans:
5 unchanged sentences
Forfeited — ( 9,273 ) — ( 9,273 )
−Removed: Ending balance as of March 31, 2023 57 340,976 1 341,034
−Removed: The fair value of each employee option grant is estimated on the date of the grant using the Black-Scholes option-pricing model, however there were no stock option grants during the three months ended March 31, 2023.
+Added: Ending balance as of June 30, 2023 47 289,770 1 289,818
+Added: The fair value of each employee option grant is estimated on the date of the grant using the Black-Scholes option-pricing model, however there were no stock option grants during the six months ended June 30, 2023.
The expected stock price volatility for the Company’s stock options was determined by the historical volatilities for industry peers and used an average of those volatilities.
5 unchanged sentences
On February 19, 2022, 12,802 restricted stock grants were forfeited for employee taxes.
−Removed: During the three months ended March 31, 2023 and 2022, the Company recorded a charge of $ 0.02 million and $ 0.7 million, respectively, for the amortization of vested restricted stock awards.
+Added: During the three months ended June 30, 2023 and 2022, the Company recorded a charge of $ 0.01 million and $ 0.04 million, respectively, and $ 0.03 million and $ 0.7 million for the six months ended June 30, 2023 and 2022, respectively, for the amortization of vested restricted stock awards.
The following table summarizes restricted stock based award activity granted:
1 unchanged sentence
Beginning balance as of January 1, 2023 42,968
−Removed: Ending balance as of March 31, 2023 42,968
+Added: Ending balance as of June 30, 2023 42,968
The Company determined the fair value of these grants based on the closing price of the Company’s common stock on the respective grant dates.
2 unchanged sentences
On January 28, 2022, the Company entered into an exchange agreement with the holder of certain existing warrants of the Company which were exercisable for an aggregate of 657,402 shares of the Company’s common stock.
−Removed: Pursuant to the exchange agreement, the Company agreed to issue to the warrant holder an aggregate of 184,153 shares of common stock and rights to receive an aggregate of 52,513 shares of common stock in exchange for the existing warrants.
+Added: Pursuant to the
+Added: INPIXON AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: Note 15 - Warrants (continued)
+Added: exchange agreement, the Company agreed to issue to the warrant holder an aggregate of 184,153 shares of common stock and rights to receive an aggregate of 52,513 shares of common stock in exchange for the existing warrants.
The Company accounted for the exchange agreement as a warrant modification.
3 unchanged sentences
The total fair value of the warrants prior to modification was greater than the fair value of the common stock issued, and therefore, there was no incremental fair value related to the exchange.
−Removed: INPIXON AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
−Removed: Note 15 - Warrants (continued)
Between March 15 and March 22, 2022, we received cash redemption notices from the holders of the Company's 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 $ 49.3 million.
1 unchanged sentence
394,000 corresponding warrants issued in connection with the issuance of the Series 7 Convertible Preferred Stock have been forfeited and 232,675 related warrants remain outstanding.
+Added: As of June 30, 2023, there are no Series 7 Warrants outstanding as they were exchanged under the warrant amendments below.
On March 22, 2022, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company agreed to issue and sell, in a registered direct offering sold an aggregate of 53,197.7234 shares of the Company’s Series 8 Convertible Preferred Shares, par value $ 0.001 per share, and warrants to purchase up to 1,503,726 shares of common stock.
11 unchanged sentences
The fair value of the common stock issued was based on the closing stock price of the date of the Warrant Amendment.
−Removed: The total fair value of the Existing Warrants prior to modification was greater than the fair value of the Exchange Shares issued, and therefore, there was no incremental fair value related to the Warrant Amendments.
−Removed: Note 16- Income Taxes
−Removed: There is an income tax expense of approximately $ 2.5 million and $ 0.0 million for the three months ended March 31, 2023 and 2022, respectively.
−Removed: The income tax expense in the three months ended March 31, 2023 includes a $ 2.6 million deferred tax expense to increase the valuation allowance, which is offset by a current tax benefit of $ 0.1 million, due to the Enterprise Apps Spin-off.
+Added: The total fair value of the Existing Warrants prior to modification was greater
INPIXON AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: Note 15 - Warrants (continued)
+Added: than the fair value of the Exchange Shares issued, and therefore, there was no incremental fair value related to the Warrant Amendments.
+Added: May 2023 Warrant Purchase Agreement
+Added: On May 15, 2023, the Company entered into a Warrant Purchase Agreement (the “Agreement”) with multiple purchasers for the purchase and sale of up to an aggregate of 150,000,000 of warrants (the “May 2023 Warrants”).
+Added: The Agreement and the May 2023 Warrants were subsequently amended on June 20, 2023.
+Added: The purchase price for one (1) May 2023 Warrant is $ 0.01 (the “Per Warrant Purchase Price”).
+Added: The May 2023 Warrants have an initial exercise price $ 0.26 , payable in cash or the cancellation of indebtedness ( the “Initial Exercise Price”).
+Added: The exercise price will equal the lower of (i) the Initial Exercise Price and (ii) 90 % of the lowest VWAP (as defined in the Agreement) of the Common Stock for the five Trading Days (as defined in the Agreement) immediately prior to the date on which a Notice of Exercise is submitted to the Company (the “Adjusted Exercise Price” and together with the Initial Price, as applicable, the “Exercise Price”);
+Added: provided, however, that the Adjusted Exercise Price shall not be less than $ 0.10 ;
+Added: and provided further that any exercise of the May 2023 Warrants with an Adjusted Exercise Price will be subject to the Company’s consent unless the trading price of the Common Stock as of the time the Notice of Exercise is delivered to the Company is at least 10 % or more above the prior Trading Day’s Nasdaq Official Closing Price.
+Added: No warrant holder may exercise the May 2023 Warrants to the extent such exercise would cause such warrant holder, together with its affiliates and attribution parties, to beneficially own a number of shares of Common Stock which would exceed 9.99 % of the Company’s then outstanding Common Stock following such exercise.
+Added: Each May 2023 Warrant is immediately exercisable for one share of Common Stock and will expire 1 year from the issuance date (the “Termination Date”) unless extended by the Company with the consent of the warrant holder.
+Added: Pursuant to the terms of the May 2023 Warrants, at any time prior to the Termination Date, the Company may, in its sole discretion, redeem any portion of a May 2023 Warrants that have not been exercised, in cash, at the Per Warrant Purchase Price, plus all liquidated damages and other costs, expenses or amounts due in respect of the Warrants (the “ Redemption Amount ”) upon five Trading Days’ written notice to the warrant holder (the “ Redemption Date ”).
+Added: On the Termination Date, the Company will be required to redeem any portion of the May 2023 Warrants that have not been exercised or redeemed prior to such date through payment of the Redemption Amount in cash.
+Added: The Company will be required to pay any Redemption Amount within five Trading Days after the Redemption Date or the Termination Date, as applicable.
+Added: The 150,000,000 May 2023 Warrants were issued on May 17, 2023 for aggregate gross proceeds of approximately $ 1.5 million.
+Added: The aggregate net proceeds from the offerings, after deducting the placement agent fees and other estimated offering expenses, were approximately $ 1.4 million.
+Added: The May 2023 Warrants were determined to be within the scope of ASC 480 as they represent obligations to the Company, as the Company is obligated to redeem any May 2023 Warrants that have not been exercised at the Termination Date.
+Added: As such, the Company recorded the May 2023 Warrants as a liability at fair value on the issuance date.
+Added: The fair value of the May 2023 Warrants was determined using level 3 inputs utilizing a Monte-Carlo simulation.
+Added: The May 2023 Warrants are subsequently measured as if the May 2023 Warrants were to be settled on the current redemption value with subsequent changes recognized as interest cost.
+Added: The fair value of the Warrants was determined to be $ 1.48 million at the date of issuance, and the redemption value of the Warrants was determined to be approximately $ 1.5 million as of June 30, 2023.
+Added: The fair value of the Warrants are reflected within Warrant Liability on the Condensed Consolidated Balance Sheet.
+Added: An immediate loss was recognized on the initial measurement date of $ 71,250 as a result of the difference between fair value and net proceeds.
+Added: The change in fair value of Warrants of $ 71,250 for the three and six months ended June 30, 2023 was reported as other expense on the Condensed Consolidated Statement of Operations.
+Added: The interest cost of $ 20,000 for the three and six months ended June 30, 2022 was included in interest expense, net on the Condensed Consolidated Statement of Operations.
+Added: The following table summarizes the activity to warrants outstanding:
+Added: INPIXON AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: Note 15 - Warrants (continued)
+Added: Number of Warrants
+Added: Beginning balance as of January 1, 2023 6,212,026
+Added: Granted 150,000,000
+Added: Exercised ( 1,380,000 )
+Added: Expired ( 1,224 )
+Added: Exchanged ( 984,542 )
+Added: Ending balance as of June 30, 2023 153,846,260
+Added: Exercisable as of June 30, 2023 153,846,260
+Added: Note 16- Income Taxes
+Added: There is an income tax expense of approximately $ 0.007 million and $ 0.02 million for the three months ended June 30, 2023 and 2022, respectively, and $ 2.5 million and $ 0.02 million for the six months ended June 30, 2023 and 2022, respectively.
+Added: The income tax expense in the six months ended June 30, 2023 includes a $ 2.6 million deferred tax expense to increase the valuation allowance, which is offset by a current tax benefit of $ 0.1 million, due to the Enterprise Apps Spin-off.
Note 17 - Credit Risk and Concentrations
4 unchanged sentences
Cash is also maintained at foreign financial institutions for its UK subsidiary, German subsidiaries and its majority-owned India subsidiary.
−Removed: Cash in foreign financial institutions as of March 31, 2023 and December 31, 2022 was immaterial.
+Added: Cash in foreign financial institutions as of June 30, 2023 and December 31, 2022 was immaterial.
The Company has not experienced any losses and believes it is not exposed to any significant credit risk from cash.
−Removed: During the three months ended March 31, 2023 and 2022, three customers and one customer accounted for at least 10% of revenue, respectively.
−Removed: As of March 31, 2023, three customers represented approximately 49 % of total accounts receivable.
−Removed: As of March 31, 2022, one customer represented approximately 11 % of total accounts receivable.
−Removed: As of March 31, 2023, one vendor represented approximately 21 % of total gross accounts payable.
−Removed: Purchases from these vendors during the three months ended March 31, 2023 was approximately $ 0.4 million.
−Removed: As of March 31, 2022, three vendors represented approximately 48 % of total gross accounts payable.
−Removed: Purchases from these vendors during the three months ended March 31, 2022 was approximately $ 0.8 million.
−Removed: For the three months ended March 31, 2023, one vendor represented approximately 21 %, and one vendor represented approximately 10 % of total purchases.
−Removed: For the three months ended March 31, 2022, one vendor represented approximately 48 %, and one vendor represented approximately 14 % of total purchases.
+Added: During the six months ended June 30, 2023 and 2022, two customers and two customers accounted for at least 10% of revenue, respectively.
+Added: As of June 30, 2023, two customers represented approximately 38 % of total accounts receivable.
+Added: As of June 30, 2022, two customers represented approximately 42 % of total accounts receivable.
+Added: As of June 30, 2023, two vendors represented approximately 48 % of total gross accounts payable.
+Added: Purchases from these vendors during the six months ended June 30, 2023 was approximately $ 1.2 million.
+Added: As of June 30, 2022, three vendors represented approximately 47 % of total gross accounts payable.
+Added: Purchases from these vendors during the six months ended June 30, 2022 was approximately $ 0.6 million.
+Added: For the six months ended June 30, 2023, one vendor represented approximately 17 % of total purchases.
+Added: For the six months ended June 30, 2022, one vendor represented approximately 33 % of total purchases.
Note 18 - Segments
1 unchanged sentence
Indoor Intelligence, SAVES, and Shoom.
+Added: INPIXON AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: Note 18 - Segments (continued)
The Company completed the Enterprise Apps Spin-off during the three months ended March 31, 2023.
6 unchanged sentences
Revenues and gross profit segments consisted of the following (in thousands):
−Removed: INPIXON AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
−Removed: Note 18 - Segments (continued)
−Removed: For the Three Months Ended March 31,
+Added: For the Three Months Ended June 30, For the Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Revenue by Segment
16 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 19 - Fair Value of Financial Instruments
4 unchanged sentences
We classified our financial instruments measured at fair value on a recurring basis in the following valuation hierarchy.
−Removed: The Company's assets measured at fair value consisted of the following at March 31, 2023 and December 31, 2022:
−Removed: Fair Value at March 31, 2023
+Added: The Company's assets measured at fair value consisted of the following at June 30, 2023 and December 31, 2022:
+Added: Fair Value at June 30, 2023
Total Level 1 Level 2 Level 3
10 unchanged sentences
Investments in debt securities are valued using an option pricing model under the income approach methodology as the investment does not have observable inputs of identical or comparable instruments.
−Removed: The Company noted that there was no change in Level 3 instruments for which significant unobservable inputs were used to determine fair value for the three months ended March 31, 2023.
−Removed: The following table is a reconciliation of assets for Level 3 investments for which significant unobservable inputs were used to determine fair value for the three months ended March 31, 2023:
+Added: The Company noted that there was no change in Level 3 instruments for which significant unobservable inputs were used to determine fair value for the three months ended June 30, 2023.
+Added: The following table is a reconciliation of assets for Level 3 investments for which significant unobservable inputs were used to determine fair value for the three months ended June 30, 2023:
Level 3 Investments
1 unchanged sentence
Unrealized loss on equity securities —
−Removed: Balance at March 31, 2023 $ 11
+Added: Balance at June 30, 2023 $ 11
INPIXON AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 20 - Foreign Operations
−Removed: The Company’s operations are located primarily in the United States, Canada, India, Germany, Ireland, and the United Kingdom.
+Added: Prior to the Enterprise Apps Spin-off (see Note 1), the Company’s operations were located primarily in the United States, Canada, India, Germany, Ireland, and the United Kingdom.
+Added: After the Enterprise Apps Spin-off (see Note 1), the Company's operations are located primarily in the United States, India, Germany, Ireland, and the United Kingdom.
Revenues by geographic area are attributed by country of domicile of our subsidiaries.
The financial data by geographic area are as follows (in thousands):
−Removed: States Canada India Germany United Kingdom Ireland Eliminations Total
−Removed: For the Three months ended March 31, 2023:
+Added: States Canada India Germany United Kingdom Ireland Philippines Eliminations Total
+Added: For the Three Months Ended June 30, 2023:
Revenues by geographic area $ 1,340 $ — $ 294 $ 763 $ 139 $ 4 $ — $ ( 483 ) $ 2,057
1 unchanged sentence
Net (loss) income from continuing operations by geographic area $ ( 6,152 ) $ — $ 19 $ ( 1,009 ) $ ( 1 ) $ ( 186 ) $ — $ — $ ( 7,329 )
−Removed: For the Three Months Ended March 31, 2022:
+Added: For the Three Months Ended June 30, 2022:
Revenues by geographic area $ 1,427 $ — $ 141 $ 1,023 $ 125 $ 2 $ — $ ( 142 ) $ 2,576
1 unchanged sentence
Net (loss) income from continuing operations by geographic area $ ( 6,144 ) $ — $ 45 $ ( 2,639 ) $ 46 $ ( 263 ) $ — $ ( 10 ) $ ( 8,965 )
−Removed: As of March 31, 2023:
+Added: For the Six months ended June 30, 2023:
+Added: Revenues by geographic area $ 3,255 $ — $ 793 $ 1,918 $ 229 $ 4 $ — $ ( 1,038 ) $ 5,161
+Added: Operating (loss) income by geographic area $ ( 12,756 ) $ — $ 120 $ ( 1,923 ) $ ( 5 ) $ ( 275 ) $ — $ — $ ( 14,839 )
+Added: Net (loss) income from continuing operations by geographic area $ ( 17,685 ) $ — $ 124 $ ( 1,811 ) $ ( 5 ) $ ( 275 ) $ — $ 1 $ ( 19,651 )
+Added: For the Six Months Ended June 30, 2022:
+Added: Revenues by geographic area $ 2,970 $ — $ 267 $ 1,971 $ 243 $ 6 $ — $ ( 232 ) $ 5,225
+Added: Operating (loss) income by geographic area $ ( 14,181 ) $ — $ 84 $ ( 4,108 ) $ 59 $ ( 464 ) $ — $ ( 1 ) $ ( 18,611 )
+Added: Net (loss) income from continuing operations by geographic area $ ( 15,415 ) $ — $ 84 $ ( 4,012 ) $ 59 $ ( 464 ) $ — $ — $ ( 19,748 )
+Added: As of June 30, 2023:
Identifiable assets by geographic area $ 51,794 $ — $ 712 $ 20,056 $ 362 $ 86 $ — $ ( 42,565 ) $ 30,445
5 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 21 - Related Party Transactions
9 unchanged sentences
In connection with the closing of the Enterprise Apps Spin-off and Business Combination and the terms of the Merger Agreement, New CXAPP was obligated to reimburse the Company for certain transaction expenses related to the Business Combination.
−Removed: As of March 31, 2023, New CXApp owed the Company approximately $ 1.3 million for reimbursable transaction expenses which is included in the prepaid and other current assets line of the condensed Consolidated Balance Sheets.
−Removed: During the three months ended March 31, 2023, the Company incurred approximately $ 0.08 million in reimbursable expenses payable in connection with the terms and conditions of the Transition Services Agreement, which is included in other receivables on the Company’s Condensed Consolidated Balance Sheets.
−Removed: This amount was repaid in April 2023.
+Added: As of June 30, 2023, New CXApp owed the Company approximately $ 1.0 million for reimbursable transaction expenses which is included in the prepaid and other current assets line of the condensed Consolidated Balance Sheets.
+Added: During the three and six months ended June 30, 2023, the Company incurred approximately $ 0.2 million and $ 0.3 million, respectively, in reimbursable expenses payable in connection with the terms and conditions of the Transition Services Agreement, of which $ 0.2 million remains outstanding as of June 30, 2023 and is included in other receivables on the Company’s Condensed Consolidated Balance Sheets.
Note 22 - Leases
−Removed: The Company has operating leases for administrative offices in the United States (California), Canada, India, the United Kingdom, Germany, and the Philippines.
+Added: The Company has operating leases for administrative offices in the United States (California), India, the United Kingdom and Germany.
The Company entered into two new operating leases for its administrative offices in Ratingen, Germany, both from February 1, 2021 through January 1, 2023.
11 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 22 - Leases (continued)
−Removed: As of March 31, 2023 As of December 31, 2022
+Added: As of June 30, 2023 As of December 31, 2022
Palo Alto, CA Office $ 630 $ 630
6 unchanged sentences
Lease expense for operating leases recorded in the balance sheet is included in operating costs and expenses and is based on the future minimum lease payments recognized on a straight-line basis over the term of the lease plus any variable lease costs.
−Removed: Operating lease expenses, inclusive of short-term and variable lease expenses, recognized in our condensed consolidated statement of income for the three months ended March 31, 2023 and 2022 was $ 0.1 million and $ 0.2 million, respectively.
+Added: Operating lease expenses, inclusive of short-term and variable lease expenses, recognized in our condensed consolidated statement of income for the three months ended June 30, 2023 and 2022 was $ 0.2 million and $ 0.1 million, respectively, and for the six months ended June 30, 2023 and 2022 was $ 0.3 million and $ 0.3 million, respectively.
Lease liability is summarized below (in thousands):
−Removed: As of March 31, 2023 As of December 31, 2022
+Added: As of June 30, 2023 As of December 31, 2022
Total lease liability $ 445 $ 545
2 unchanged sentences
Maturity analysis under the lease agreement is as follows (in thousands):
−Removed: Nines months ending December 31, 2023 $ 162
+Added: Six months ending December 31, 2023 $ 108
Year ending December 31, 2024 216
7 unchanged sentences
In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the date of adoption of ASC 842, "Leases" ("ASC 842").
−Removed: As of March 31, 2023, the weighted average remaining lease term is 2.6 years and the weighted average discount rate used to determine the operating lease liabilities was 4.1 %.
+Added: As of June 30, 2023, the weighted average remaining lease term is 2.4 years and the weighted average discount rate used to determine the operating lease liabilities was 4.0 %.
Note 23 - Commitments and Contingencies
4 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 23 - Commitments and Contingencies (continued)
5 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 24 - Discontinued Operations
4 unchanged sentences
Included within the $ 24.2 million dividend recorded to Additional Paid in Capital as a result of the deconsolidation of CXApp through distribution to shareholders recorded during the three months ended March 31, 2023, is approximately $ 1.2 million in accumulated other comprehensive income that was recognized as a result of those distributed assets and liabilities included in the foreign operations of CXApp.
−Removed: The following table summarizes certain selected components of discontinued operations for the spun-off entity:
−Removed: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
+Added: Three Months Ended June 30, 2022 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022
Revenues $ 2,149 $ 1,620 $ 4,731
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Transaction costs — 1,043 —
+Added: Impairment of goodwill 5,540 — 5,540
Amortization of intangibles 973 805 1,948
1 unchanged sentence
Loss from Operations ( 11,411 ) ( 4,857 ) ( 12,086 )
−Removed: Other Income (Expense)
Interest (expense)/income, net 8 1 9
+Added: Other income/(expense) — — —
Total Other Income (Expense) 8 1 9
6 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 24 - Discontinued Operations (continued)
25 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 25 - Subsequent Events
−Removed: From April 1, 2023 through the date of this filing, the Company exchanged approximately $ 1.2 million of the outstanding principal and interest under the July 2022 10 % Note Purchase Agreement and Promissory Note for 3,260,379 shares of the Company's common stock at prices from $ 0.3336 to $ 0.3966 per share, calculated in accordance with Nasdaq's “minimum price” as defined by Nasdaq Listing Rule 5635(d).
−Removed: From April 1, 2023 through the date of this filing, the Company sold 12,046,742 shares of common stock at share prices between $ 0.22771 and $ 0.54 per share under the Sales Agreement for gross proceeds of approximately $ 4.1 million.
−Removed: Warrant Purchase Agreement
−Removed: On May 15, 2023, the Company entered into a Warrant Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Purchasers”), pursuant to which the Company agreed to issue and sell in a private placement (the “Private Placement”) up to an aggregate of 150,000,000 warrants (the “Warrants”) to purchase up to 150,000,000 shares (the “Warrant Shares”) of the Company’s common stock, par value $ 0.001 per share (the “Common Stock”), at an offering price of $ 0.01 per Warrant (subject to adjustment as set forth in the Purchase Agreement) (the “Per Warrant Purchase Price”) for an aggregate warrant offering price equal to $ 1,500,000 .
−Removed: The Warrants have an initial exercise price which is equal to the Minimum Price as defined in Nasdaq Listing Rule 5635(d) (subject to adjustment as set forth in the Warrants) (the “Initial Exercise Price”), payable in cash or the cancellation of indebtedness.
−Removed: Upon receipt of stockholder approval, the exercise price will equal the lower of (i) the Initial Exercise Price and (ii) 90 % of the lowest VWAP (as defined in the Purchase Agreement) of the Common Stock for the five Trading Days (as defined in the Purchase Agreement) immediately prior to the date on which a Notice of Exercise is submitted to the Company (the “Adjusted Exercise Price” and together with the Initial Price, as applicable, the “Exercise Price”);
−Removed: provided, however, that any exercise of the Warrants with an Adjusted Exercise Price will be subject to the Company’s consent unless the trading price of the Common Stock as of the time the Notice of Exercise is delivered to the Company is at least 10 % or more above the prior Trading Day’s Nasdaq Official Closing Price.
−Removed: The Purchaser may not exercise the Warrants to the extent such exercise would cause such Purchaser, together with its affiliates and attribution parties, to beneficially own a number of shares of Common Stock which would exceed 9.99 % of the Company’s then outstanding Common Stock following such exercise.
−Removed: Each Warrant is immediately exercisable for one share of Common Stock and will expire one year from the issuance date (the “Termination Date”) unless extended by the Company with the consent of the Warrant holder.
−Removed: Pursuant to the terms of the Warrants, at any time prior to the Termination Date, the Company may, in its sole discretion, redeem any portion of a Warrant that has not been exercised, in cash, at the Per Warrant Purchase Price, plus all liquidated damages and other costs, expenses or amounts due in respect of the Warrants (the “ Redemption Amount ”) upon five Trading Days’ written notice to the Warrant holder (the “ Redemption Date ”).
−Removed: On the Termination Date, the Company will be required to redeem any portion of the Warrants that has not been exercised or redeemed prior to such date through payment of the Redemption Amount in cash.
−Removed: The Company will be required to pay any Redemption Amount within five Trading Days after the Redemption Date or the Termination Date, as applicable.
−Removed: Subject to the satisfaction of certain conditions set forth in the Warrants during a period of seven consecutive Trading Days (the “Measurement Period”), the Company may, within one Trading Day of the end of such Measurement Period (the “Forced Exercise Eligibility Date”), force the holder to exercise its Warrants into up to such aggregate number of Warrant Shares equal to 25% of the quotient obtained by dividing the Traded Value (as defined in the Warrants) by the Exercise Price then in effect (less any Warrant Shares voluntarily exercised by the holder during such Measurement Period or at any time thereafter and prior to the applicable Forced Exercise Date (as defined in the Warrants) (the “Maximum Forced Exercise Share Amount”) as designated in the applicable Forced Exercise Notice (as defined in the Warrants) (each, a “Forced Exercise”).
−Removed: Following any Forced Exercise, a minimum of seven Trading Days must elapse after the Forced Exercise Date prior to the Company sending the Holders a new Forced Exercise Notice.
−Removed: The Company’s right to a Forced Exercise shall be exercised ratably among the Warrant holders based on each Holder’s initial purchase of Warrants.
−Removed: On May 15, 2023, the Company and Maxim Group LLC (the “Placement Agent”) entered into a Placement Agency Agreement (the “Placement Agency Agreement”), whereby the Placement Agent, in connection with the Private Placement, agreed to act as the Company’s exclusive placement agent on a reasonable best efforts basis.
−Removed: Pursuant to the Placement Agency Agreement, the Company agreed to pay to the Placement Agent (i) a cash fee equal to 2.75 % of the gross proceeds received by the Company from the Purchasers at the Closing, to be paid on the Closing Date and (ii) a cash fee equal to 5.5 % of the gross proceeds received by the Company from a Purchaser upon the exercise of Warrants for cash, to be paid on a weekly basis
+Added: From July 1, 2023 through the date of this filing, the Company exchanged approximately $ 2.5 million of the outstanding principal and interest under the July 2022 10 % Note Purchase Agreement and Promissory Note for 13,369,256 shares of the Company's common stock at prices from $ 0.1523 to $ 0.2272 per share, calculated in accordance with Nasdaq's “minimum price” as defined by Nasdaq Listing Rule 5635(d).
+Added: From July 1, 2023 through the date of this filing, the Company sold 6,520,000 shares of common stock at share prices between $ 0.200725 and $ 0.22291 per share under the Sales Agreement for gross proceeds of approximately $ 1.4 million.
+Added: During July 2023, the Company issued 9,000,000 shares of common stock in connection with the exercise of 9,000,000 warrants with an exercise price of $ 0.26 per share in connection with the May 2023 warrant offering for which the Company received gross proceeds of approximately $ 2.3 million.
+Added: XTI Transaction
+Added: On July 24, 2023, the Company entered into an Agreement and Plan of Merger ( the “Merger Agreement”) by and among Inpixon, Superfly Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Inpixon (“Merger Sub”), and XTI Aircraft Company, a Delaware corporation (“XTI”).
+Added: Shares of XTI common stock are not publicly traded.
+Added: The Merger Agreement was unanimously approved by Inpixon’s and XTI’s board of directors.
+Added: If the Merger Agreement is approved by Inpixon’s and XTI’s stockholders, and the transactions contemplated by the Merger Agreement are consummated, Merger Sub will merge with and into XTI, with XTI surviving the merger as a wholly-owned subsidiary of Inpixon (collectively, the “Proposed Transaction”).
+Added: In addition, upon the consummation of the Proposed Transaction, Inpixon will be renamed “XTI Aerospace, Inc.” (the “Name Change”).
+Added: Inpixon upon the closing is referred to herein as the “combined company.”
+Added: Subject to the terms and conditions of the Merger Agreement, at the effective time of the merger (the “Effective Time”):
+Added: (i) Each share of XTI common stock outstanding immediately prior to the Effective Time will automatically be converted into the right to receive a number of shares of Inpixon common stock equal to the Exchange Ratio (as described below).
+Added: Prior to the Effective Time, subject to obtaining the consent of requisite note holders, all outstanding XTI convertible notes will be converted into XTI common stock and will participate in the merger on the same basis as the other shares of XTI common stock, except for (1) a promissory note dated April 1, 2023, in the initial principal amount of $ 1,817,980 , which will be amended to extend the maturity date thereof until no sooner than December 31, 2026 and be assumed by the combined company at the Closing to become convertible into the shares of common stock of the combined company, and (2) a promissory note dated December 31, 2021, in the initial principal amount of $ 1,007,323 , which will provide for, at Closing, payment in cash of $ 507,323 of the principal plus interest accrued to the date of payment, and the conversion of the remaining $ 500,000 of outstanding principal into shares of common stock of the combined company (collectively, the “Note Amendments”).
+Added: (ii) Each option to purchase shares of XTI common stock outstanding and unexercised immediately prior to the Effective Time will be assumed by Inpixon and will become an option, subject to any applicable vesting conditions, to purchase shares of Inpixon common stock with the number of shares of Inpixon common stock underlying the unexercised portions of such options and the exercise prices for such options to be adjusted to reflect the Exchange Ratio.
+Added: (iii) Each warrant to purchase shares of XTI common stock outstanding and unexercised immediately prior to the Effective Time will be assumed by Inpixon and will become a warrant to purchase shares of Inpixon common stock with the number of shares of Inpixon common stock underlying such warrants and the exercise prices for such warrants will be adjusted to reflect the Exchange Ratio.
+Added: Subject to adjustment pursuant to the formula for the Exchange Ratio set forth in Exhibit A of the Merger Agreement, the Exchange Ratio will be determined based on (a) the fully diluted capitalization of each of Inpixon and XTI immediately prior to the Effective Time, provided, however, that for this purpose the calculation of Inpixon’s fully diluted capitalization will not take into account any shares of Inpixon common stock issuable after Closing for cash consideration upon conversion, exercise or exchange of derivative securities that are issued by Inpixon in Inpixon Permitted Issuances.
+Added: “Inpixon Permitted Issuances” are any issuances of common stock or derivative securities by Inpixon for financing or debt cancellation purposes that are permitted under the Merger Agreement and occur after the date of the Merger Agreement but before the Closing.
INPIXON AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Note 27 - Subsequent Events (continued)
−Removed: during the exercise period of the Warrants as to any exercise proceeds received by the Company from a Purchaser pursuant to the exercise of Warrants for cash during the preceding week (the "Exercise Cash Fee").
−Removed: The Company is not required to pay the Exercise Cash Fee to the extent that a Purchaser exercises its Warrants through the cancellation of indebtedness owed by the Company to such Purchaser.
−Removed: The Company has also agreed to reimburse the Placement Agent up to $ 50,000 for certain expenses and legal fees incurred by the Placement Agent.
−Removed: The Placement Agency Agreement contains customary representations and warranties and agreements of the Company and the Placement Agent and customary indemnification rights and obligations of the parties.
+Added: The Exchange Ratio will be subject to certain adjustments to the extent that Inpixon’s net cash is greater than or less than $ 21.5 million and/or any principal and accrued or unpaid interest remains outstanding under those certain promissory notes issued by Inpixon to Streeterville Capital, LLC on July 22, 2022 and December 30, 2022.
+Added: After application of the Exchange Ratio and subject to those certain adjustments described above, Inpixon stockholders immediately prior to the Effective Time will retain approximately 40 % of the issued and outstanding capital stock of the combined company and XTI security holders will retain approximately 60 % of the issued and outstanding capital stock of the combined company.
+Added: At or prior to the Effective Time, Inpixon will effect transactions for the divestiture of its Shoom, SAVES and Game Your Game lines of business and investment securities, as applicable, by any lawful means, including a sale to one or more third parties, spin off, plan of arrangement, merger, reorganization, or any combination of these.
+Added: The Proposed Transaction is anticipated to be accounted for using the acquisition method (as a reverse acquisition) in accordance with GAAP.
+Added: Although the Company is the legal acquirer and will issue shares of its common stock to effect the merger with XTI, XTI is expected to be the accounting acquirer.
+Added: Under this method of accounting, the Company is expected to be treated as the “acquired” company for financial reporting purposes.
+Added: XTI has been determined to be the accounting acquirer because XTI is expected to maintain control of the Board of Directors and management of the combined company, and the preexisting shareholders of XTI are expected to have majority voting rights of the combined company.
+Added: For accounting purposes, the acquirer is the entity that has obtained control of another entity and, those consummated a business combination.
+Added: Under the acquisition method of accounting (as a reverse acquisition), XTI’s assets and liabilities will be recorded at carrying value and the assets and liabilities associated with the Company will be recorded at estimated fair value as of the acquisition date.
+Added: The excess of the purchase price over the estimated fair values of the net assets acquired, if applicable will be recognized as goodwill.
+Added: In order to consummate the Proposed Transaction, the Company's stockholders must approve (i) the issuance of shares of the Company's common stock to stockholders of XTI pursuant to the terms of the Merger Agreement and the change of control of Inpixon resulting from the merger under The Nasdaq Stock Market LLC rules (the Nasdaq Stock Issuance Proposal).
+Added: The Proposed Transaction cannot be consummated without the approval of the Nasdaq Stock Issuance Proposal.
+Added: The Company anticipates that the Proposed Transaction will occur shortly after the Company's special meeting to be held for stockholder approval, but currently cannot predict the exact timing.
+Added: It is expected that Inpixon’s Chief Executive Officer, Nadir Ali, and Chief Financial Officer, Wendy Loundermon, will resign upon the Closing, effective as of the Closing Date.
+Added: In addition, pursuant to a Financial Advisory and Investment Banking Services Agreement dated May 16, 2023, between Inpixon and Maxim Group LLC (“Maxim”) (the “Maxim Agreement”), as part of compensation for Maxim’s services in connection with the transaction, Inpixon has agreed to pay to Maxim, upon Closing, a cash fee equal to $ 800,000 (the “Cash Fee”), and to issue to Maxim (or its designees) registered common stock of Inpixon pursuant to the applicable registration statement on Form S-4 for the transaction, if permitted under SEC rules, or unregistered stock if not permitted, equal to the quotient obtained by dividing $1,000,000 by the closing price of Inpixon common stock as reported by Nasdaq on the date immediately preceding the announcement of the transaction, at the closing of the transaction.
+Added: However, to the extent that Maxim would beneficially own more than 4.99% of the number of shares of Inpixon common stock outstanding immediately after giving effect to such issuance, then Maxim will receive rights to such remaining amount of shares in accordance with a rights to shares agreement, in such form reasonably acceptable to the parties.
+Added: Based on the closing price of Inpixon common stock as of July 24, 2023, which equals $ 0.1523 per share, Maxim will be entitled to approximately 6,565,988 shares of Inpixon common stock in connection with the Closing of the Proposed Transaction.
+Added: These shares will be issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act, if they are not registered.
+Added: XTI Promissory Note & Security Agreement
+Added: Pursuant to the Merger Agreement, on the first calendar day of the month following the date of the Merger Agreement and on the first calendar day of each month thereafter until the earlier of (i) four months following the date of the Merger Agreement and (ii) the Closing Date, Inpixon shall provide loans to XTI on a senior secured basis (each, a “Future Loan”), in such amounts requested by XTI in writing prior to the first calendar day of each such month.
+Added: Each Future Loan will be in the principal amount of up to $ 500,000 , and the aggregate amount of the Future Loans will be up to $ 1,775,000 (or such greater
+Added: INPIXON AND SUBSIDIARIES
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
+Added: FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
+Added: Note 27 - Subsequent Events (continued)
+Added: amount as Inpixon shall otherwise agree in its sole and absolute discretion).
+Added: These Future Loans and security will be evidenced by a Senior Secured Promissory Note (the “Promissory Note”) and a Security and Pledge Agreement (the “Security Agreement”).
+Added: The Promissory Note provides an aggregate principal amount up to $ 2,313,407 , which amount includes the principal sum of $ 525,000 which Inpixon previously advanced to XTI (the “Existing Loans”, collectively with the Future Loans, the “Inpixon Loans to XTI”) plus accrued interest on such amount, and the aggregate principal amount of the Future Loans.
+Added: The Promissory Note will bear interest at 10 % per annum, compounded annually, and for each Future Loan, beginning on the date the Future Loan is advanced to XTI.
+Added: The Promissory Note is included in the Company's condensed consolidated balance sheet as of June 30, 2023 in Notes and Other Receivables.
+Added: The outstanding principal amount under the Promissory Note, together with all accrued and unpaid interest, shall be due and payable upon the earlier of (a) December 31, 2023, (b) when declared due and payable by Inpixon upon the occurrence of an event of default, or (c) within three business days following termination of the Merger Agreement (i) by XTI because the XTI Board adopts a superior proposal prior to delivering the XTI Stockholder Consent, or (ii) by Inpixon because the XTI Board has made a change in recommendation, or XTI has breached or failed to perform in any material respect any of its covenants and agreements regarding obtaining its required stockholder approval or non-solicitation.
+Added: The Promissory Note will be forgiven and of no further force if the Merger Agreement is terminated by the Inpixon Board because it adopts a superior proposal prior to obtaining the required Inpixon stockholder approval, subject to Inpixon’s rights and remedies under the Promissory Note, the Security Agreement, and the Merger Agreement.
+Added: If the Merger Agreement is terminated by XTI because the Inpixon Board makes a change in recommendation or Inpixon is in material breach of its covenants and agreements regarding obtaining its required stockholder approval or non-solicitation, the maturity date of the Promissory Note will be extended to December 31, 2024.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.