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Item 5. Other Information

2023-08-18 compared with 2023-05-16 · 40 added, 51 removed, 88 unchanged (51% of the section changed)

Other Information

The information set forth below is included herein for the purpose of providing the disclosure required under "Item 1.01 - E ntry into a Material Definitive Agreement." and "Item 3.02 – Unregistered Sales of Equity Securities.” of Form 8-K.

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.

Exercise Price :

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.

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 (subject to adjustment as set forth in the Warrants) (the “Adjusted Exercise Price” and together with the Initial Price, as applicable, the “Exercise Price”);

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.

The Purchasers 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 (the “Beneficial Ownership Limitation”).

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 holder.

Stockholder Approval:

The exercise of the Warrants at the Adjusted Exercise Price is subject to stockholder approval in accordance with Nasdaq Listing Rule 5635.

In addition, to the extent stockholder approval is determined to be required by Nasdaq Listing Rule 5635 for issuances at the Initial Exercise Price, then the Company may not issue Warrant Shares or Right Shares, which, in the aggregate, would exceed 19.99% of the number of shares of Common Stock outstanding on the Trading Day immediately preceding the date of the Purchase Agreement (subject to adjustment as set forth in the Warrants) (such number of shares, the “Issuable Maximum”).

Forced Exercise:

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”).

Among other conditions set forth in the Warrants, the Company may not deliver a Forced Exercise Notice, unless, from the beginning of the Measurement Period through the Forced Exercise Date, the Registration Statement (as defined below) is effective as to all Warrant Shares and the prospectus thereunder is available for use by the Warrant holder for the resale of all such Warrant Shares and the Company has not withheld its consent to an exercise by the holder anytime during the Measurement Period.

In the event that the issuance of Warrant Shares as a result of a Forced Exercise would result in a Warrant holder exceeding the Beneficial Ownership Limitation (such shares, the “Excess Shares”), then, in lieu of the issuance of such Excess Shares, the Company will issue such holder rights to receive such number of Excess Shares (the “Rights”), which such holder may exercise for shares of Common Stock (the “Rights Shares”) at any time pursuant to the terms and conditions of the Warrants, provided that such exercise would not result in such holder exceeding the Beneficial Ownership Limitation.

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.

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.

Redemption Right :

.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 ”).

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.

The Company will be required to pay any Redemption Amount within five Trading Days after the Redemption Date or the Termination Date, as applicable.

Exercise Standstill:

The Warrant holder will not be permitted to exercise their Warrants upon two Trading Days’ written notice from the Company to the holders (the “ Exercise Standstill ”) in connection with an offering of the Company’s Common Stock or Common Stock Equivalents (as defined in the Warrants) that results in gross proceeds to the Company in excess of $1,000,000 for such period of time as set forth in such written notice.

Each Warrant holder will only be subject to the Exercise Standstill to the extent that the holders of the other Warrants issued pursuant to the Purchase Agreement are also bound to the Exercise Standstill.

Registration Rights:

The Purchase Agreement requires the Company to (i) as soon as practicable (and in any event within 30 calendar days of the date of the Purchase Agreement), file a registration statement (the “Registration Statement”) with the U.S.

Securities and Exchange Commission (the “SEC”) providing for the resale by the Purchasers of the Warrant Shares and the Rights Shares issued and issuable upon exercise of the Warrants and the Rights, as applicable, (ii) use commercially reasonable efforts to cause such Registration Statement to become effective no later than the later of (a) 30 days following the filing thereof and (b) 60 days following the Closing Date, and (iii) keep such Registration Statement effective at all times until no Purchaser owns any Warrants.

Closing Date:

The Purchase Agreement contains customary representations and warranties and agreements of the Company and the Purchasers, customary conditions to closing and customary indemnification rights and obligations of the parties.

The closing of the Private Placement (the “Closing”) is expected to occur on or about May 17, 2023 (the “Closing Date”), subject to the satisfaction of customary closing conditions.

Placement Agent Agreement:

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.

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 the Purchaser upon the exercise of Warrants for cash, to be paid on a weekly basis during the exercise period of the Warrants as to any exercise proceeds received by the Company from the Purchaser pursuant to the exercise of Warrants for cash during the preceding week (the "Exercise Cash Fee").

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.

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.

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.

Registration Exemption :

The Warrants, the Rights, the Warrant Shares and the Rights Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are instead being offered pursuant to the exemption provided in Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder.

The foregoing description of the Purchase Agreement, the Placement Agency Agreement and the form of Warrants does not purport to be complete and is subject to, and qualified in its entirety by reference to the Purchase Agreement, the Placement Agency Agreement and the form of Warrants, which are filed as Exhibits 10.6, 10.7 and 4.7, respectively, to this Form 10-Q and incorporated herein by reference.

The Purchase Agreement has been included to provide security holders with

information regarding its terms but it is not intended to provide any other factual information about the Company or its affiliates.

The Purchase Agreement contains representations, warranties and covenants by the Company and the Purchasers.

These representations, warranties and covenants were made solely for the benefit of the other party to the Purchase Agreement and (a) are not intended to be treated as categorical statements of fact, but rather as a way of allocating risk to one of the parties if those statements prove to be inaccurate, (b) may have been qualified in the Purchase Agreement by confidential disclosure schedules that were delivered to the other party in connection with the signing of the Purchase Agreement, which disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations, warranties and covenants set forth in the Purchase Agreement, (c) may be subject to standards of materiality applicable to the parties that differ from what might be viewed as material to stockholders and (d) were made only as of the date of the Purchase Agreement or such other date or dates as may be specified in the Purchase Agreement.

Accordingly, you should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company.

Since July 1, 2023 the Company issued 13,369,256 shares of the Company's common stock (the “Exchange Common Shares”) to the holder of that certain outstanding promissory note of Inpixon issued on July 22, 2022 (the “July 2022 Note”), 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), in connection with the terms and conditions of Exchange Agreements, pursuant to which Inpixon and the holder agreed to (i) partition new promissory notes in the form of the July 2022 Note in the aggregate original principal amount equal to approximately $2.5 million and then cause the outstanding balance of the July 2022 Note to be reduced by an aggregate of approximately $2.5 million;

and (ii) exchange the partitioned notes for the delivery of the Exchange Common Shares.

The offer and sale of the Exchange Common Shares was not registered under the Securities Act, in reliance on an exemption from registration under Section 3(a)(9) of the Securities Act, in that (a) the Exchange Common Shares were issued in exchanges for partitioned notes which are other outstanding securities of Inpixon;

(b) there was no additional consideration of value delivered by the holder in connection with the exchanges;

and (c) there were no commissions or other remuneration paid by Inpixon in connection with the exchanges.

See the Exhibit index following the signature page to this Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

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

May 15, 2023 By:

August 18, 2023 By:

/s/ Nadir Ali

8 unchanged sentences

Exhibit Filing Date Filed Herewith

2.1† Agreement and Plan of Merger, dated July 24, 2023, among Inpixon, Superfly Merger Sub Inc.

and XTI Aircraft Company

8-K 001-36404 2.1 July 25, 2023

3.1 Restated Articles of Incorporation.

22 unchanged sentences

8-K 001-36404 3.1 October 6, 2022

3.13 Certificate of Amendment to the Articles of Incorporation increasing the number of authorized shares of Common Stock from 26,666,667 to 500,000,000 filed with the Secretary of State of the State of Nevada on November 29, 2022

8-K 001-36404 3.1 December 2, 2022

Exhibit Number Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

8-K 001-36404 3.1 December 2, 2022

3.14 Bylaws, as amended.

23 unchanged sentences

4.7 Common Stock Purchase Warrant

10-Q 001-36404 4.7 May 16, 2023

10.1 Form of Amendment No.

1 unchanged sentence

8-K 001-36404 10.1 February 28, 2023

10.2 Form of Limited Liability Company Unit Transfer and Joinder Agreement.

8-K 001-36404 10.2 February 28, 2023

Exhibit Number Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

10.2 Form of Limited Liability Company Unit Transfer and Joinder Agreement.

8-K 001-36404 10.2 February 28, 2023

10.3† Employee Matters Agreement, dated March 14, 2023, by and among KINS, KINS Merger Sub Inc., Inpixon, and Legacy CXApp.

5 unchanged sentences

10.6† Warrant Purchase Agreement

10-Q 001-36404 10.6 May 16, 2023

10.7 Placement Agency Agreement

31.1 Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.

31.2 Certification of the Company’s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.

10-Q 001-36404 10.7 May 16, 2023

10.8 Amendment #2 to Promissory Note, dated as of May 16, 2023.

8-K 001-36404 10.1 May 19, 2023

10.9 Amendment to Promissory Note, dated as of May 16, 2023.

8-K 001-36404 10.2 May 19, 2023

10.10 Amendment No.

1 to Equity Distribution Agreement, dated as of June 13, 2023, by and between Inpixon and Maxim Group LLC

8-K 001-36404 10.1 June 13, 2023

10.11 Form of Amendment Agreement.

8-K 001-36404 10.1 June 21, 2023

10.12 Form of Senior Secured Promissory Note.

8-K 001-36404 10.1 July 25, 2023

10.13 Form of Security and Pledge Agreement

8-K 001-36404 10.2 July 25, 2023

10.14* Inpixon Transaction Bonus Plan, dated July 24, 2023

8-K 001-36404 10.3 July 25, 2023

10.15* Inpixon Transaction Bonus Plan, dated July 24, 2023

8-K 001-36404 10.4 July 25, 2023

10.16* First Amendment to Employment Agreement, dated July 24, 2023, between Inpixon and Wendy Loundermon.

8-K 001-36404 10.5 July 25, 2023

Exhibit Number Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

32.1# Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.

8 unchanged sentences

† Exhibits, schedules and similar attachments have been omitted pursuant to Item 601 of Regulation S-K and the registrant undertakes to furnish supplemental copies of any of the omitted exhibits and schedules upon request by the SEC.

* Indicates management contract or compensatory plan or arrangement.

# This certification is deemed not filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

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.

What changed 10-Q

Item 5. Other Information