Inpixon(US:INPX)2022-11-14 22:08Financial Performance - Inpixon reported a net loss of approximately $49.9 million for the nine months ended September 30, 2022, compared to a net loss of approximately $32.0 million for the same period in 2021[317]. - The company reported revenues of $4.2 million for the three months ended September 30, 2022, a decrease of approximately 6% from $4.5 million in the prior year[356]. - Revenues for the nine months ended September 30, 2022, were $14.1 million, an increase of approximately $3.3 million or 30% compared to $10.9 million in the prior year[364]. - Net loss attributable to stockholders of Inpixon was $48.7 million for the nine months ended September 30, 2022, compared to a loss of $31.4 million in the prior year, representing a change of $17.2 million or 55%[373]. - Adjusted EBITDA for the nine months ended September 30, 2022, was a loss of $26.9 million, compared to a loss of $18.5 million in the prior year[372]. - Basic and diluted net loss per share for the nine months ended September 30, 2022, was $31.08, compared to a loss of $23.95 in the prior year[378]. Operational Challenges - The company has experienced supply chain cost increases and constraints, impacting delivery times for hardware products due to the ongoing effects of the COVID-19 pandemic[318]. - Inpixon anticipates ongoing challenges from global events, including inflation and supply chain interruptions, which may impact future operations and demand[320]. - The company anticipates that supply chain interruptions and increased costs may continue to challenge its operations[392]. Strategic Initiatives - Inpixon's corporate strategy includes a focus on strategic acquisitions to enhance its Indoor Intelligence solutions, with several key acquisitions completed since 2019[321]. - The company plans to separate its enterprise apps business into a wholly-owned subsidiary, which will merge with a special purpose acquisition corporation, valuing the subsidiary at $69 million[321]. - The proposed business combination with KINS Technology Group Inc. values the enterprise apps business at $69 million, expected to complete in Q4 2022[338]. - The company is focused on enhancing its product offerings through technological innovations and strategic partnerships to meet evolving customer needs[321]. Financial Position - As of September 30, 2022, the company reported a working capital surplus of approximately $51.6 million, with cash and cash equivalents totaling $63.2 million[387]. - The company raised net proceeds of $14.2 million from a registered direct offering of common stock and warrants[347]. - The company raised net proceeds of approximately $14.2 million from a registered direct offering in October 2022 and $5 million from a debt offering in July 2022[390]. - The total obligation for operating leases as of September 30, 2022, was approximately $1.5 million, with $0.6 million expected to be paid in the next twelve months[386]. - The company owed approximately $6.2 million in principal under promissory notes with third parties, payable within the next twelve months[389]. Revenue and Cost Analysis - Cost of revenues increased by approximately $1.1 million or 36%, totaling $4.0 million for the nine months ended September 30, 2022, compared to $3.0 million in the prior year[365]. - Gross profit margin decreased to 71% for the nine months ended September 30, 2022, down from 73% in the prior year, attributed to the sales mix during the period[366]. - Gross profit margin decreased to 70% for the three months ended September 30, 2022, down from 73% in the same period of 2021[358]. - Operating expenses rose to $50.4 million, an increase of $4.4 million or 10% compared to $46.1 million in the prior year, primarily due to a $7.6 million goodwill impairment[367]. - Operating expenses decreased by approximately $2.4 million to $13.3 million for the three months ended September 30, 2022, primarily due to lower compensation and professional fees[359]. Investment Activities - Net cash flows from investing activities for the nine months ended September 30, 2022, were approximately $36.7 million, a significant improvement from a net cash outflow of approximately $52.7 million in the same period of 2021[399]. - Cash flows related to investing activities in 2022 included $43.0 million from the sales of treasury bills, while in 2021, $63.4 million was spent on purchasing treasury bills[399]. Other Financial Information - A note purchase agreement was executed for an unsecured promissory note with an initial principal amount of approximately $6.5 million, accruing interest at a rate of 10% per annum[325]. - The company purchased a 10% Original Issue Discount Senior Convertible Debenture from FOXO Technologies for approximately $6.1 million, with a purchase price of $5.5 million[333]. - An impairment charge of $7.6 million was recorded for goodwill as of June 30, 2022, resulting in remaining goodwill being fully impaired[353]. - Other income/expense resulted in a loss of $9.4 million for the nine months ended September 30, 2022, a decrease of approximately $17.0 million compared to a gain of $7.5 million in the prior year[368]. - Other income/expense loss improved to $7.6 million for the three months ended September 30, 2022, compared to a loss of $22.3 million in the prior year, reflecting lower unrealized losses on equity securities[360]. - Unrealized losses on equity securities amounted to $7.1 million for the nine months ended September 30, 2022[368]. Stock and Financing Activities - The company completed a reverse stock split at a ratio of 1:75 effective October 7, 2022, to comply with Nasdaq listing requirements[343]. - The company has filed an At-The-Market financing facility with an aggregate offering price of up to $25 million to support its capital needs[390]. - The company received $46.9 million from the issuance of preferred stock and warrants, while in 2021, it received $77.9 million from the issuance of common stock and warrants[400]. - The company paid $49.3 million for the redemption of preferred series 7 stock during the nine months ended September 30, 2022[400]. Accounting and Risk Disclosures - Recent accounting standards and their implications are discussed in Note 3 of the financial statements included in the report[402]. - There were no applicable quantitative and qualitative disclosures about market risk provided by the company[403]. - There were no off-balance sheet guarantees or trading activities involving non-exchange traded contracts reported by the company[401]. - The company has not engaged in any interest rate swap transactions or foreign currency contracts[401].