Inpixon(INPX) - 2019 Q2 - Quarterly Report

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]