Financial Performance - The company reported a net loss of approximately $7.5 million for Q3 2020, compared to a net loss of $6.6 million for Q3 2019, and a net loss of $20.9 million for the nine months ended September 30, 2020, compared to $17.0 million for the same period in 2019[221]. - Revenues for Q3 2020 were $2,554,000, a 66% increase from $1,534,000 in Q3 2019, driven by sales growth in Aware and Mapping product lines and new Systat licensing[273]. - Revenues for the nine months ended September 30, 2020 were $5,434,000, a 24% increase from $4,387,000 in the prior year, mainly due to additional mapping revenues and new Systat licensing[283]. - Adjusted EBITDA for Q3 2020 was a loss of $4.6 million, compared to a loss of $2.4 million in Q3 2019, indicating worsening operational performance[294]. - Net loss attributable to stockholders for Q3 2020 was $7.5 million, compared to $6.6 million in Q3 2019, reflecting a 13% increase in loss due to higher operating expenses[281]. - Net loss attributable to stockholders for the nine months ended September 30, 2020 was $20.9 million, compared to $17.0 million in the prior year, reflecting a 23% increase in loss[292]. Revenue and Cost Analysis - Cost of revenues for Q3 2020 increased by 69% to $645,000 from $382,000 in Q3 2019, primarily due to increased sales[274]. - Cost of revenues for the nine months ended September 30, 2020 rose by 32% to $1,459,000 from $1,109,000 in the prior year, driven by increased sales[284]. - Operating expenses for Q3 2020 were $8.2 million, up 19% from $6.8 million in Q3 2019, mainly due to higher expenses related to the Systat licensing product line[276]. - Operating expenses for the nine months ended September 30, 2020 were $20.9 million, a 13% increase from $18.6 million in the prior year, primarily due to Systat licensing and Jibestream division expenses[286]. - Loss from operations for Q3 2020 was $6.2 million, an increase of approximately 10% from $5.7 million in Q3 2019, attributed to higher operating expenses despite increased revenue[277]. Capital and Funding - The company raised approximately $44.0 million in net proceeds during the nine months ended September 30, 2020, through sales under its at-the-market equity facility, with a maximum gross proceeds potential of $150 million[221]. - The company issued and sold 31,574,358 shares of common stock during the nine months ended September 30, 2020, resulting in net proceeds of approximately $44 million[241]. - The company raised approximately $44 million in net proceeds through an ATM equity facility during the nine months ended September 30, 2020[306]. - The company is pursuing strategic transactions and may raise additional capital as needed, potentially up to $150 million under the ATM[306]. - The company experienced a net cash increase of $26.5 million for the nine months ended September 30, 2020, compared to a decrease of $0.7 million in the same period of 2019[307]. Strategic Acquisitions - The company acquired a suite of "blue-dot" indoor location and motion technologies for $1.5 million in cash and 480,000 shares of common stock on August 19, 2020[227]. - The company acquired Nanotron Technologies GmbH for an aggregate purchase price of $8.7 million on October 6, 2020, enhancing its capabilities in location-aware IoT systems[233]. - The company has a corporate strategy focused on acquiring complementary technologies and intellectual property to enhance its product offerings and expand its market presence[225]. - The company is exploring opportunities for strategic transactions, including acquisitions and joint ventures, to supplement revenue growth and increase shareholder value[225]. Operational Challenges - The company has faced supply chain constraints and delays due to the COVID-19 pandemic, impacting product delivery times and customer demand[222]. - The impact of the COVID-19 pandemic on the company's operations remains uncertain, with supply chain constraints affecting product delivery times[306]. Financial Position - As of September 30, 2020, the company had cash and cash equivalents of $31.4 million, a substantial increase from $4.8 million as of December 31, 2019[307]. - The overall working capital surplus as of September 30, 2020 was $23.2 million, compared to a deficit of $6.975 million as of September 30, 2019[307]. - The company has sufficient funds to support ongoing operations for the next twelve months based on its cash balances and budgeted cash flow requirements[221]. Deferred Revenue and Accounting - As of September 30, 2020, the company had deferred revenue of approximately $1,761,000 related to software license agreements and $81,000 for cash received in advance for product maintenance services[251]. - The company expects to satisfy its remaining performance obligations for maintenance services and recognize the deferred revenue over the next twelve months[251]. - The company capitalizes direct internal costs of labor for software development, amortizing these costs over an estimated useful life of one to four years[262]. - The company utilizes the percentage of completion method for mapping services revenue recognition, recognizing contract revenue in proportion to the stage of completion[249]. - The company has not recognized any impairment charges for long-lived assets for the three and nine months ended September 30, 2020 and 2019[261]. Non-Cash Adjustments and Cash Flows - Net cash used in operating activities for the nine months ended September 30, 2020 was $15.6 million, compared to $9.1 million for the same period in 2019[308][309]. - Non-cash adjustments for the nine months ended September 30, 2020 totaled $8.3 million, primarily due to depreciation and amortization expenses[308]. - Net cash flows used in investing activities for the nine months ended September 30, 2020, were approximately $4.9 million, unchanged from the same period in 2019[311]. - Cash flows related to investing activities in 2020 included $2.2 million for the Systat Licensing Agreement and $1.5 million for the Ten Degrees acquisition[311]. - Net cash flows provided by financing activities for the nine months ended September 30, 2020, were approximately $47.1 million, compared to $13.3 million in 2019[312]. Miscellaneous - The company has made progress in raising capital and gaining industry recognition for its technologies, including awards from leading industry analysts[260]. - There were no off-balance sheet guarantees or trading activities involving non-exchange traded contracts reported[313]. - The company does not engage in interest rate swap transactions or foreign currency contracts[313]. - Recent accounting standards discussions can be found in Note 3 of the financial statements included in the Form 10-Q[314]. - There were no applicable quantitative and qualitative disclosures about market risk[315].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-36404 INPIXON (Exact name of registrant as specified in its charter) | Nevada | 88-0434915 | | --- | --- | | (State or other jur ...

Financial Performance - Revenues increased by approximately 32% in Q1 2020 compared to Q1 2019, primarily due to an increase in revenue from mapping services [209]. - The company experienced a net loss of approximately $6.2 million in Q1 2020, compared to a net loss of $5.2 million in Q1 2019 [210]. - Revenues for the three months ended March 31, 2020, were $1,804,000, representing a 32% increase from $1,363,000 in the same period of 2019 [252]. - Cost of revenues increased by approximately 51%, from $337,000 in Q1 2019 to $510,000 in Q1 2020, primarily due to increased mapping revenue [253]. - Gross profit margin decreased to 72% in Q1 2020 from 75% in Q1 2019, attributed to lower margins from mapping services [255]. - Operating expenses rose to $6.9 million in Q1 2020 from $5.9 million in Q1 2019, an increase of approximately $1.0 million due to the Jibestream acquisition and higher professional fees [256]. - The net loss for the three months ended March 31, 2020, was $6,168,000, compared to a net loss of $5,150,000 in the same period of 2019, reflecting a 20% increase in losses [251]. - Loss from operations for Q1 2020 was $5.6 million, an increase of approximately 14.3% from $4.9 million in Q1 2019 [257]. - Other income/expense for Q1 2020 resulted in a loss of $689,000, compared to a loss of $287,000 in Q1 2019, reflecting an increase in loss of 140% [258]. - Net loss attributable to stockholders for Q1 2020 was $6.2 million, up from $5.2 million in Q1 2019, representing an increase of approximately 19.2% [261]. - Adjusted EBITDA for Q1 2020 was a loss of $3.9 million, compared to a loss of $2.6 million in Q1 2019, indicating an increase in loss of approximately 50% [264]. - Proforma non-GAAP net loss per share for Q1 2020 was ($0.92), compared to ($31.98) in Q1 2019, showing a significant reduction in loss per share [270]. Cash Flow and Financing - The company raised aggregate gross proceeds of $5 million from recent debt financing and has access to an additional $50 million through an at-the-market equity facility [210]. - The company issued 937,010 shares of common stock during Q1 2020, resulting in net proceeds of approximately $1.33 million after compensation [213]. - Subsequent to Q1 2020, the company issued 9,551,636 shares of common stock, resulting in net proceeds of approximately $10.62 million [214]. - The company entered into exchange agreements, issuing 1,896,557 shares of common stock in exchange for approximately $4.19 million of outstanding promissory notes [216]. - The company reported a working capital deficit of $6.2 million as of March 31, 2020 [273]. - Cash on hand as of March 31, 2020 was approximately $6.1 million [273]. - Net cash used in operating activities for Q1 2020 was $4.5 million, driven by a net loss of $6.2 million offset by non-cash adjustments [274]. - The company has raised approximately $1.4 million from an ATM equity facility out of a total offering amount of up to $50 million as of March 31, 2020 [273]. - Net cash used in operating activities for Q1 2020 was $4.5 million, compared to $3.5 million in Q1 2019, representing a 29.9% increase in cash outflow [280]. - Net cash provided by financing activities was $6.1 million in Q1 2020, down from $6.6 million in Q1 2019, a decrease of 7.6% [286]. - The company experienced a net increase in cash of $1.3 million for Q1 2020, compared to a net increase of $2.8 million in Q1 2019, a decline of 53.6% [279]. Strategic Initiatives - The company is pursuing strategic acquisitions to enhance its technology and revenue, including the acquisition of Locality Systems, Inc. and Jibestream Inc. [211]. - The company has a corporate strategy focused on providing end-to-end solutions for indoor intelligence, including data collection and analytics [211]. - The company continues to seek additional resources for the development of technologies acquired through previous acquisitions, including AirPatrol and Jibestream [238]. Revenue Recognition and Deferred Revenue - The company’s revenue recognition follows the "Revenue from Contracts with Customers" standard, recognizing revenue either at a point in time or over time [225]. - Deferred revenue as of March 31, 2020, included approximately $692,000 related to software license agreements and $185,000 for cash received in advance for maintenance services [229]. Impairment and Other Charges - The company did not incur any anticipated losses for the three months ended March 31, 2020, and 2019 [228]. - Stock-based compensation charges for Q1 2020 were $399,000, down from $890,000 in Q1 2019 [250]. - The company has not recognized any impairment charges for long-lived assets for the three months ended March 31, 2020 [240]. - The effect of foreign exchange rate changes on cash was a loss of $27,000 in Q1 2020, compared to a loss of $8,000 in Q1 2019, indicating a 237.5% increase in foreign exchange losses [279].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to _______________ Commission File Number 001-36404 INPIXON (Exact name of registrant as specified in its charter) Nevada 88-0434915 (State or other ...

Financial Performance - Revenues increased by approximately 63% in Q3 2019 compared to Q3 2018, driven by a focus on the Indoor Positioning Analytics (IPA) product line and a new customer contributing about 33% of revenues [212]. - The company reported a net loss of $6.6 million for Q3 2019, compared to a net loss of $5.2 million for Q3 2018, and a total net loss of $17.0 million for the nine months ended September 30, 2019 [213]. - Revenues for the three months ended September 30, 2019 were $1,534,000, representing a 63% increase from $940,000 in the same period of 2018 [260]. - Revenues for the nine months ended September 30, 2019 were $4.4 million, a 67% increase from $2.6 million in the same period of 2018 [272]. - Net loss attributable to stockholders of Inpixon for the three months ended September 30, 2019 was $6.6 million, compared to $5.2 million in the same period of 2018, reflecting a higher loss of approximately $1.4 million [269]. - Net loss attributable to stockholders of Inpixon for the nine months ended September 30, 2019 was $17.0 million, slightly lower than $17.3 million in the same period of 2018 [281]. - Adjusted EBITDA for the three months ended September 30, 2019 was a loss of $2.4 million, an improvement from a loss of $3.4 million in the prior period of 2018 [283]. - Proforma non-GAAP net loss per basic and diluted common share for the three months ended September 30, 2019 was ($0.17), compared to ($3.61) for the same period in 2018 [290]. Operating Expenses - Operating expenses for the three months ended September 30, 2019 were $6.8 million, an increase of approximately $2.8 million compared to $4.0 million in the same period of 2018 [264]. - Operating expenses for the nine months ended September 30, 2019 were $18.6 million, an increase of approximately $5.2 million from $13.4 million in the same period of 2018 [275]. - Stock-based compensation charges for the three months ended September 30, 2019 were $871,000, compared to $122,000 in the same period of 2018 [258]. Cash Flow and Financing - The company has no committed source of financing except for its Payplant facility, raising concerns about its ability to continue operations without additional funding [213]. - The company expressed substantial doubt about its ability to continue as a going concern without additional capital becoming available [298]. - The company plans to pursue additional equity or debt financing to mitigate concerns regarding its ability to continue operations [298]. - Cash and cash equivalents were approximately $494,000 as of September 30, 2019 [295]. - Net cash used in operating activities for the nine months ended September 30, 2019 was $9.1 million, consisting of a net loss of $17.0 million offset by non-cash adjustments of $8.4 million [296]. - Cash flows from financing activities provided $13.3 million in the nine months ended September 30, 2019, down from $26.0 million in the same period of 2018 [307]. Acquisitions and Strategic Initiatives - The company completed the acquisition of Locality, GTX's GPS products, and Jibestream, expanding its indoor positioning product line and patent portfolio [211][215][225]. - The company is focused on strategic acquisitions that add technology and operational synergies to enhance its Indoor Data Platform [215]. - The company anticipates utilizing Jibestream's mapping technology to enhance its existing indoor positioning offerings, targeting various indoor spaces [225]. - Inpixon Canada acquired Jibestream for a total consideration of CAD $5,000,000 plus cash equivalents held by Jibestream at closing, with an estimated cash closing amount adjusted for various factors [226]. Revenue Recognition and Deferred Revenue - The Company recognizes revenue from contracts with customers based on the five-step model outlined in Topic 606, with specific methods for Software as a Service and professional services [234][235][236]. - As of September 30, 2019, the Company had deferred revenue of approximately $789,000 related to software license agreements and $262,000 for cash received in advance for maintenance services [238]. Assets and Liabilities - The company reported a working capital deficit of $11.7 million as of September 30, 2019 [295]. - Working capital deficit increased to $11.7 million as of September 30, 2019, compared to $3.9 million as of December 31, 2018 [300]. - The principal amount outstanding under the Loan Agreement was $259,000 as of September 30, 2019 [299]. - The company does not have any off-balance sheet guarantees or foreign currency contracts [309].

Financial Performance - Revenues increased by approximately 78% in Q2 2019 compared to Q2 2018, driven by a new customer contributing about 50% of the revenues[172] - The company reported a net loss of $5.2 million for Q2 2019, an improvement from a net loss of $5.9 million in Q2 2018[173] - Revenues for the three months ended June 30, 2019 were $1.491 million, an increase of approximately 78% compared to $839,000 for the same period in 2018[242] - Revenues for the six months ended June 30, 2019 were $2.854 million, an increase of approximately 69% compared to $1.687 million for the same period in 2018[253] - Adjusted EBITDA for the three months ended June 30, 2019 was a loss of $1.940 million, an improvement from a loss of $4.064 million for the same period in 2018[263] - Proforma non-GAAP net loss per basic and diluted common share for Q2 2019 was ($0.30), a significant improvement from ($13.67) in Q2 2018[272] - The net loss attributable to common stockholders for Q2 2019 was $5.24 million, down from $15.59 million in Q2 2018[274] Acquisitions and Strategic Initiatives - The company completed the acquisition of Locality on May 21, 2019, and certain GPS products from GTX on June 27, 2019, to expand its indoor positioning product line[171] - The Company acquired Locality for $1,500,000 in cash and 650,000 shares of common stock, enhancing its capabilities in video surveillance systems[196] - The Company completed the acquisition of certain assets of GTX Corp for $250,000 in cash and 1,000,000 shares of common stock[199] - The pending acquisition of Jibestream Inc. involves a cash consideration of CAD $5,000,000 and additional shares valued at CAD $3,000,000[204] - Jibestream's technology integrates with third-party indoor positioning systems, enhancing the Company's indoor mapping and location technology offerings[209] - The Company is evaluating strategic transactions and acquisitions to enhance its technology and intellectual property, aiming for operational synergies[175] Financial Position and Cash Flow - The company raised approximately $10.77 million in net proceeds from a rights offering closed on January 15, 2019[182] - The company reported a working capital deficit of $5.45 million as of June 30, 2019[277] - Cash and cash equivalents as of June 30, 2019 were $1.65 million, an increase from $1.01 million at the end of 2018[282] - Net cash used in operating activities for the six months ended June 30, 2019 was $6.57 million, a decrease from $17.93 million in the same period of 2018[282] - The company plans to pursue additional capital through equity or debt financing to support operations over the next twelve months[278] - Net cash flows provided by financing activities for the six months ended June 30, 2019, were $8.1 million, a decrease of 69.6% from $26.7 million in 2018[287] Expenses and Losses - Operating expenses for the three months ended June 30, 2019 were $5.825 million, an increase of approximately 15% from $5.066 million in the prior year[245] - Operating expenses for the six months ended June 30, 2019 were $11.714 million, an increase of approximately 24% from $9.430 million in the prior year[256] - The Company incurred stock-based compensation charges of $858,000, compared to $571,000 for the same period in 2018[239] - The Company incurred stock-based compensation charges of $1,748,000 for the six months ended June 30, 2019, compared to $857,000 for the same period in 2018[239] - Other income/expense for the three months ended June 30, 2019 was a loss of $506,000, compared to a loss of $89,000 for the same period in 2018[247] Revenue Recognition and Deferred Revenue - The Company recognizes revenue from maintenance and consulting services evenly over the service period, reflecting continuous access to its services[216] - The Company had deferred revenue of approximately $195,000 as of June 30, 2019, related to cash received in advance for product maintenance services[219] - The Company expects to satisfy its remaining performance obligations for maintenance services and recognize the deferred revenue over the next twelve months[219] Market and Industry Insights - The video surveillance market is projected to grow from $36.9 billion in 2018 to $68.3 billion by 2023, at a CAGR of 13.1%[195] Management and Future Outlook - Management expresses substantial doubt about the company's ability to continue as a going concern without additional capital[279] - The company has made progress in raising capital and gaining industry recognition since its recent acquisitions[228]

Financial Performance - Revenues increased by approximately 65% in Q1 2019 compared to Q1 2018, driven by the IPA product line and a new customer contributing about 55% of total revenues [145]. - The company reported a net loss of $5.2 million for the three months ended March 31, 2019, compared to a net loss of $6.2 million for the same period in 2018 [146]. - Revenues for Q1 2019 were $1.4 million, a 65% increase from $849,000 in Q1 2018, driven by a new customer contributing approximately 55% of revenues [195]. - Gross profit for Q1 2019 was $1,026,000, representing a 76% increase compared to $584,000 in Q1 2018 [194]. - Net loss for Q1 2019 was $5,150,000, an 18% improvement compared to a net loss of $6,243,000 in Q1 2018 [194]. - Net loss attributable to stockholders for Q1 2019 was $6,395,000, a 17% decrease from $7,751,000 in Q1 2018 [194]. - Adjusted EBITDA loss improved to $2.6 million for the three months ended March 31, 2019, compared to a loss of $3.4 million in the same period of 2018 [206]. - Basic and diluted net loss per share for the three months ended March 31, 2019, was ($1.42), a significant decrease from ($73.88) in the prior year [210]. - The net loss for the three months ended March 31, 2019 was $5.15 million, compared to a net loss of $6.24 million for the same period in 2018 [223][224]. Operating Expenses - Operating expenses for Q1 2019 were $5,889,000, a 35% increase from $4,364,000 in Q1 2018 [194]. - Operating expenses rose to $5.9 million for the three months ended March 31, 2019, compared to $4.4 million in the prior year, an increase of $1.5 million attributed to higher IT infrastructure costs and compensation [198]. - Loss from operations increased to $4.9 million for the three months ended March 31, 2019, compared to $3.8 million in the same period of 2018, reflecting higher operating expenses [199]. - Stock-based compensation charges for Q1 2019 were $890,000, compared to $286,000 in Q1 2018 [192]. Cash Flow and Capital Resources - Net cash used in operating activities was $3.5 million for the three months ended March 31, 2019, consisting of a net loss of $5.2 million offset by non-cash adjustments [216]. - The company reported a working capital deficit of $93,000 as of March 31, 2019, with total assets of $6.78 million and total liabilities of $6.87 million [216]. - The company plans to pursue additional capital through equity or debt financing to support operations over the next twelve months [217]. - Management expressed substantial doubt about the company's ability to continue as a going concern without additional capital becoming available [218]. - As of March 31, 2019, the company reported cash and cash equivalents of $3.83 million, an increase from $1.01 million as of December 31, 2018 [222]. - The working capital deficit improved to $93,000 as of March 31, 2019, compared to a deficit of $3.93 million as of December 31, 2018 [222]. - Net cash used in operating activities for the three months ended March 31, 2019 was $3.5 million, a significant decrease from $11 million for the same period in 2018 [223]. - Non-cash income and expenses for the three months ended March 31, 2019 totaled $2.47 million, down from $3.18 million in the same period of 2018 [223][225]. - Net cash flows provided by financing activities for the three months ended March 31, 2019 was $6.6 million, a decrease from $17.7 million in the same period of 2018 [227]. - The company received $10.9 million from the issuance of common stock, preferred stock, and warrants during the three months ended March 31, 2019 [227]. Strategic Initiatives - The company signed a non-binding term sheet on April 10, 2019, to acquire Locality Systems Inc., with the acquisition expected to be accretive and involve a combination of cash and equity [148]. - The company is focused on strategic acquisitions to enhance its technology offerings and operational synergies [148]. - The company continues to seek additional resources for the development of AirPatrol technology, with progress noted in capital raising efforts [181]. - The company anticipates improved sales cycles in 2019 as the customer base transitions from early adopters to mainstream customers [145]. Revenue and Profitability Metrics - Cost of revenues for Q1 2019 was $337,000, up 27% from $265,000 in Q1 2018, primarily due to increased IPA revenue [196]. - Gross profit margin increased to 75% for the three months ended March 31, 2019, up from 69% in the same period of 2018, primarily due to higher margin IPA revenue [197]. - Deferred revenue as of March 31, 2019, was approximately $173,000 related to cash received in advance for maintenance services [173]. - The company had reserves for credit losses of approximately $260,000 as of March 31, 2019, down from $464,000 as of December 31, 2018 [186]. Financing and Debt - The company closed a rights offering on January 15, 2019, generating gross proceeds of $12.0 million and net proceeds of approximately $10.77 million [154]. - The maximum principal amount under the Secured Note was increased from $3.0 million to $8.0 million through amendments in February and April 2019 [153]. - The company issued an unsecured promissory note for an aggregate principal amount of $3,770,000 on May 3, 2019, which includes an original issue discount of $750,000 [165]. - The company has no off-balance sheet guarantees or trading activities involving non-exchange traded contracts [228]. - There are no applicable quantitative and qualitative disclosures about market risk [230].

Market Growth and Trends - Inpixon's Indoor Positioning Analytics market is projected to grow from $7.11 billion in 2017 to $40.99 billion by 2022, representing a CAGR of 42%[26] - The overall location-based services market is expected to grow from $22.18 billion in 2018 to $68.85 billion by 2023, at a CAGR of 25.4%[26] - The global location-based services market was estimated to be over $17.4 billion in 2017 and is projected to grow to $68.5 billion by 2023, at a CAGR of 25.4%[53] Financial Performance - The company incurred net losses of approximately $24.6 million and $35.0 million for the fiscal years ended 2018 and 2017, respectively[86] - Revenues declined by 4.6% for the year ended December 31, 2018, due to lower revenues from the Shoom product line[88] - The Company had a working capital deficiency of approximately $3.9 million and $32.8 million as of December 31, 2018 and December 31, 2017, respectively[86] - The company expects to need additional cash financing to support its growth plans, but may face challenges in obtaining financing on acceptable terms[128] - The company incurred significant transaction-related costs for the Spin-off, including legal, accounting, and consulting fees, which may impact financial performance[164] - Following the Spin-off, the company generates significantly less revenue, although it is positioned for future growth[169] Research and Development - Research and development expenses for the years ended December 31, 2018, and 2017 totaled approximately $2.4 million and $1.7 million, respectively[36] - The company’s future plans include significant investments in research and development, although these may not yield immediate revenue or expected benefits[134] Technology and Innovation - Inpixon plans to leverage blockchain technology to enhance device reputation profiles, improving security and data integrity[32] - Inpixon's AI engine aims to provide predictive analytics for security and marketing, enhancing customer insights and operational efficiency[33] - The asset tracking solution aims for accuracy of less than 0.5 meters, utilizing RFID, Dash7, and UWB technologies[35] - The company intends to leverage open-source blockchain technology in its IPA platform, which may face regulatory scrutiny and could limit its use within product offerings[148] - Rapid technological changes in the industry necessitate the development of new products and applications; failure to innovate could harm business and financial results[151] Customer Concentration and Revenue Sources - The Company's top three customers accounted for approximately 49% of gross revenue in 2018, with one customer alone representing 33%[39] - Approximately 49% of the company's gross revenue in 2018 came from its top three customers, indicating a significant reliance on a limited customer base[127] Acquisitions and Growth Strategy - The company is evaluating several complementary technology companies for potential acquisitions to enhance its product offerings and operational synergies[23] - Inpixon completed five acquisitions since 2013, including Lilien, Shoom, AirPatrol, LightMiner, and Integrio, and spun off its VAR business in August 2018[69] - The company acquired approximately 82.5% of Sysorex India for $666,000 in outstanding receivables[59] - The company acquired $1.2 million of goodwill and $2.8 million of intangible assets relating to the acquisition of Shoom, $7.4 million of goodwill and $13.3 million of intangible assets for AirPatrol, and $3.5 million of intangible assets for LightMiner[75] Operational Challenges - Significant operating losses are expected to continue, raising doubts about the company's ability to continue as a going concern[82] - The integration of acquired companies may expose the company to unknown or contingent liabilities that could materially affect its financial condition[77] - The company faces potential delays in contract completion due to challenges in attracting and retaining necessary personnel, which could adversely affect financial results and customer relationships[92] - Future acquisitions may disrupt business operations and could lead to dilution for stockholders, with risks including integration difficulties and unanticipated costs that may not justify the acquisition[94] Legal and Regulatory Risks - The company is subject to numerous legal and regulatory requirements, and violations could result in significant fines, reputational damage, and restrictions on business operations[111] - The company may face legal claims related to trade secrets and intellectual property, which could result in substantial costs and distract management from core operations[102] - Responding to governmental inquiries, such as those from the SEC, could have a materially adverse effect on the company's business and financial condition[103] - The uncertain regulatory environment surrounding data privacy may inhibit customer willingness to provide necessary data for effective service utilization[157] Stock and Market Risks - The market price of the common stock is likely to be highly volatile due to various factors, including the ability to execute business plans and complete acquisitions[188] - The common stock currently trades on the Nasdaq Capital Market under the symbol "INPX," with a minimum bid price requirement of $1.00 per share to maintain listing[197] - The company may face delisting from the Nasdaq Capital Market if it fails to meet continued listing requirements, which could adversely affect stock price and capital access[195] Employee and Management Considerations - As of March 20, 2019, the Company had 69 employees, including 49 technical/engineering personnel[45] - The loss of key personnel, including the CEO, could adversely affect operations and productivity, with challenges in hiring qualified successors[106] - The company anticipates needing to expand its employee infrastructure to manage future growth effectively[84] Financial Obligations and Debt - The company has approximately $23,000 in outstanding revolving credit loans as of December 31, 2018, secured by a security interest in substantially all assets, posing risks if obligations are not met[97] - The Payplant Loan Agreement includes restrictions on business activities, such as selling assets and incurring new debt, which could limit operational flexibility and access to credit[100] - A loan arrangement with Sysorex was established, allowing for up to $5 million, but repayment is not guaranteed, posing a risk to the company's financial condition[168] Compliance and Internal Controls - Internal control deficiencies could harm the company's ability to report financial results accurately, affecting reputation and stock price[186] - The company is subject to various compliance costs and management attention due to public company obligations, which may divert resources from growth strategies[184]