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Inpixon(INPX) - 2024 Q3 - Quarterly Report
INPXInpixon(INPX)2024-11-14 22:18

Merger and Acquisition - The company completed its merger with Legacy XTI on March 12, 2024, structured as a reverse triangular merger[235]. - The XTI Merger was completed on March 12, 2024, with Legacy Inpixon as the legal acquirer and Legacy XTI as the accounting acquirer under GAAP[318]. - Legacy XTI's historical financial statements are considered the financial statements of the combined company[318]. - The integration of Legacy XTI into the company's system of disclosure controls and procedures is currently being evaluated by a third-party consulting firm[319]. Aircraft Development - The company is primarily focused on developing the TriFan 600, a VTOL aircraft, which is expected to offer speed, range, and comfort comparable to business aircraft while providing helicopter versatility[217]. - The company reported that the Commercial Aviation segment is currently pre-revenue as it is still in the development phase of the TriFan 600 aircraft[219]. - The company plans to seek FAA certification for the TriFan 600, with significant milestones including the critical design review and preliminary testing of a full-scale flight test aircraft[227][230]. - The company is pursuing additional capital to complete the development of the TriFan 600 and is exploring multiple funding alternatives[223]. Financial Performance - Revenue for the three months ended September 30, 2024, was 0.9million,anincreaseofapproximately0.9 million, an increase of approximately 0.9 million compared to 0.0millioninthesameperiodlastyear[271].−CostofrevenuesforthethreemonthsendedSeptember30,2024,was0.0 million in the same period last year[271]. - Cost of revenues for the three months ended September 30, 2024, was 0.4 million, compared to 0.0millionforthesameperiodintheprioryear[272].−GrossprofitforthethreemonthsendedSeptember30,2024,was0.0 million for the same period in the prior year[272]. - Gross profit for the three months ended September 30, 2024, was 0.5 million, compared to 0.0millionintheprioryear,withadeclineofapproximately0.0 million in the prior year, with a decline of approximately 0.2 million from the previous quarter due to a one-time inventory impairment charge[273]. - Operating expenses for the three months ended September 30, 2024, were 4.7million,anincreasefrom4.7 million, an increase from 2.4 million in the same period last year, primarily due to increased expenditures related to the TriFan 600 aircraft development[274]. - Net loss for the three months ended September 30, 2024, was 4.4million,comparedtoanetlossof4.4 million, compared to a net loss of 2.7 million in the prior year, reflecting an increase of 64%[268]. - Revenues for the nine months ended September 30, 2024, were 2.2million,asignificantincreasefrom2.2 million, a significant increase from 0.0 million in the same period of 2023, attributed to the Industrial IoT segment post-XTI Merger[280]. - Cost of revenues for the same period was 0.8million,comparedto0.8 million, compared to 0.0 million in the prior year, reflecting the operational results of the Industrial IoT segment[281]. - Gross profit for the nine months ended September 30, 2024, was 1.3million,upfrom1.3 million, up from 0.0 million in the comparable period of 2023[282]. - Operating expenses increased to 28.3millionfrom28.3 million from 7.7 million year-over-year, primarily due to nonrecurring transaction bonuses and merger-related costs[283]. - Net loss for the nine months ended September 30, 2024, was approximately 21.7million,comparedtoanetlossof21.7 million, compared to a net loss of 8.9 million in the same period of 2023, representing a 144% increase in losses[299]. - Other income for the nine months ended September 30, 2024, was a gain of 5.3million,aturnaroundfromalossof5.3 million, a turnaround from a loss of 1.2 million in the prior year, largely due to the remeasurement of convertible notes[285]. Cash Flow and Working Capital - As of September 30, 2024, the company had a working capital deficit of approximately 11.9millionandcashandcashequivalentsofapproximately11.9 million and cash and cash equivalents of approximately 0.5 million[288]. - The company used approximately 14.3millionincashforoperatingactivitiesduringtheninemonthsendedSeptember30,2024[299].−TheCompanysold3,190,727sharesofcommonstockundertheATMOffering,generatingnetproceedsofapproximately14.3 million in cash for operating activities during the nine months ended September 30, 2024[299]. - The Company sold 3,190,727 shares of common stock under the ATM Offering, generating net proceeds of approximately 1.0 million during the three months ended September 30, 2024[301]. - The Company reported a net cash used in operating activities of approximately 14.3millionfortheninemonthsendedSeptember30,2024,comparedto14.3 million for the nine months ended September 30, 2024, compared to 3.0 million for the same period in 2023[304][310]. - Net cash provided by investing activities was approximately 2.9millionfortheninemonthsendedSeptember30,2024,comparedto2.9 million for the nine months ended September 30, 2024, compared to 0.0 million for the same period in 2023[313]. - Net cash provided by financing activities was 11.9millionfortheninemonthsendedSeptember30,2024,with11.9 million for the nine months ended September 30, 2024, with 9.6 million from the ATM Offering and 2.0millionfrompromissorynotes[314].−TheCompanyhasaworkingcapitaldeficitof2.0 million from promissory notes[314]. - The Company has a working capital deficit of 11.9 million as of September 30, 2024, compared to 13.0millionasofDecember31,2023[304].ComplianceandGovernance−ThecompanyreceivedaletterfromNasdaqonJuly9,2024,indicatingitnolongermeetstheminimumbidpricerequirementof13.0 million as of December 31, 2023[304]. Compliance and Governance - The company received a letter from Nasdaq on July 9, 2024, indicating it no longer meets the minimum bid price requirement of 1 per share, with a compliance period until January 6, 2025[236]. - The company is in the process of preparing a plan to regain compliance with Nasdaq listing rules following a Low Price Deficiency Letter received on November 7, 2024[237]. - The company is currently seeking additional financing to meet cash requirements, with potential actions including curtailing operations or seeking bankruptcy protection if unable to secure funding[303]. - The integration of Legacy XTI into the Company's disclosure controls and procedures is ongoing and being evaluated by a third-party consulting firm[318]. - As of September 30, 2024, the company concluded that its disclosure controls and procedures were not effective[318]. - There have been no material changes in internal control over financial reporting during the quarter ended September 30, 2024[320]. - The company has no material pending legal proceedings as defined by Item 103 of Regulation S-K[322]. Research and Development - Research and development expenses are expected to increase significantly as the company increases staffing to support aircraft engineering and software development[259]. - General and administrative expenses are anticipated to increase substantially in the future as the company expands its headcount to support continued research and development[263]. Industrial IoT Segment - The Industrial IoT segment has focused on building the Indoor Intelligence platform since 2019, positioning the company as a market leader in providing comprehensive solutions for data collection and insights[226]. - The company believes its RTLS products offer superior accuracy compared to competitors, which primarily rely on BLE or Wi-Fi technologies[234].