Inpixon(US:INPX)2024-11-14 22:18Merger 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 $0.9 million, an increase of approximately $0.9 million compared to $0.0 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 $0.0 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 $0.0 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 $4.7 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 $4.4 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 $2.2 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 $0.8 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 $1.3 million, up from $0.0 million in the comparable period of 2023[282]. - Operating expenses increased to $28.3 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 $21.7 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 $5.3 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 $11.9 million and cash and cash equivalents of approximately $0.5 million[288]. - The company used approximately $14.3 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 $14.3 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 $2.9 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 $11.9 million for the nine months ended September 30, 2024, with $9.6 million from the ATM Offering and $2.0 million from promissory notes[314]. - The Company has a working capital deficit of $11.9 million as of September 30, 2024, compared to $13.0 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].