Inpixon(INPX) - 2021 Q4 - Annual Report

Indoor Intelligence Solutions - Inpixon reported a focus on Indoor Intelligence solutions, leveraging technologies such as positioning, mapping, and analytics to enhance productivity and safety in workplaces [21]. - The company generates revenue from three segments: Indoor Intelligence, Shoom, and SAVES, with Indoor Intelligence revenue derived from hardware, software licenses, and professional services [24]. - The Smart Office App integrates over 75 products, enhancing employee experience through features like desk booking and indoor navigation [26]. - Inpixon's RTLS IoT platform offers real-time location solutions for industrial applications, including vehicle localization and production tracking, enabling significant process optimizations [33]. - The company plans to expand its use of machine learning and AI to improve positioning accuracy and reliability, impacting both commercial and industrial deployments [43]. - Inpixon is investing in R&D to enhance its app capabilities and SDKs, aiming to improve integration with workplace systems and tools [46]. - The corporate strategy includes aggressive acquisitions to build a comprehensive Indoor Intelligence platform, enhancing data collection and insights for workplace environments [48]. - The company aims to leverage LIDAR technology and AR to validate changes in physical spaces against digital twins, enhancing navigation and asset deployment [45]. - Inpixon's analytics platform allows for data visualization from multiple sources, enabling clients to export data to internal business intelligence systems [47]. Financial Performance and Revenue - The company incurred net losses attributable to stockholders of approximately $69.2 million and$ 29.2 million for the fiscal years ended December 31, 2021 and 2020, respectively, reflecting an increase in loss of approximately $39.9 million [107]. - Revenues increased by 72% compared to the same period in 2020, but were still insufficient to fund operations and cover operating losses [108]. - The company's top three customers accounted for approximately 16% of gross revenue in 2021, down from 43% in 2020, indicating a diversification in the customer base [56]. - The company operates primarily on a SaaS model, generating recurring revenue through 2-3 year contracts, which includes maintenance upgrades [53]. - The company has secured indemnification for certain matters related to acquisitions, but risks associated with historic operations may still adversely affect its business [94]. - The company has a history of operating losses and working capital deficiency, raising concerns about its ability to achieve profitability [87]. - The company does not intend to pay cash dividends to stockholders, limiting potential returns on investment [87]. Acquisitions and Strategic Transactions - The company has made several acquisitions, including the purchase of Locality Systems, Inc. and a portfolio of GPS technologies, to enhance its product offerings and market position [68][69]. - In April 2021, the company acquired over 99.9% of Design Reactor, Inc. (The CXApp), a leading SaaS app platform, and by May 2021, it owned 100% of the outstanding capital stock [76]. - On December 9, 2021, the company, through its subsidiary Nanotron Technologies GmbH, acquired 100% of IntraNav GmbH, a provider of industrial IoT and real-time location systems [77]. - The company has completed several strategic acquisitions since 2014, including Locality, Jibestream, and Nanotron, which may complicate future evaluations of its business [88]. - The company is exploring strategic transactions, including potential asset sales, mergers, or spin-offs, to enhance shareholder value and has received preliminary indications of interest [50]. Risks and Challenges - The COVID-19 pandemic has caused significant volatility and disruptions, impacting supply chains and customer demand, with uncertain future effects on operations [96]. - The company faces risks related to the integration of acquired businesses, which may disrupt current operations and affect financial performance [89]. - The company may need additional capital to support operations, which could involve dilutive equity offerings or unfavorable financing terms [102]. - The company faces risks associated with future acquisitions, including potential disruption to operations and dilution to existing stockholders [114]. - The company is subject to regulatory investigations which could result in increased legal fees and divert management's attention from business operations [125]. - The loss of key personnel, including the CEO, could adversely affect operations and productivity [128]. - Digital threats such as cyber-attacks could disrupt operations and harm the company's reputation, potentially leading to liability issues [147]. - The company faces challenges from natural disasters, public health issues, and political instability that could disrupt manufacturing and impact customer orders [168]. Market and Competitive Environment - The company emphasizes the importance of keeping pace with rapid technological changes to maintain competitiveness and growth prospects [140]. - The company must innovate and develop new products to keep pace with rapidly changing technology and customer requirements, or risk losing market competitiveness [175]. - The newspaper publishing industry is facing challenges, leading to potential negative impacts on the sales of Shoom products, which are focused on this sector [139]. - The company’s growth strategy includes continued acquisitions, which may strain administrative, financial, and operational resources [103]. Stock and Financing - The company may face delisting from the Nasdaq Capital Market if it fails to meet continued listing requirements, including a minimum bid price of$ 1.00 per share [196]. - The company has received notifications from Nasdaq regarding non-compliance with the minimum bid price requirement, with a 180-day period to regain compliance [198]. - The market price of the company's common stock is likely to be highly volatile, influenced by various external factors [203]. - The company may issue additional common stock to raise capital or satisfy debt obligations, which could materially dilute existing stockholders' interests [211]. - The company has a remaining amount of $232.5 million available for issuance under a shelf registration statement filed with the SEC [209]. - The company has the ability to issue up to 2,000,000,000 shares of common stock and 5,000,000 shares of preferred stock without stockholder approval [212].