Inpixon(INPX) - 2023 Q3 - Quarterly Report

Financial Performance - Inpixon reported a net loss from continuing operations of approximately $30.5 million for the nine months ended September 30, 2023, compared to a net loss of approximately $27.1 million for the same period in 2022[290]. - Revenues for the three months ended September 30, 2023, were $2.0 million, a decrease of approximately $0.4 million or 17% compared to $2.4 million in the same period last year[356]. - Revenues for the nine months ended September 30, 2023, were $7.2 million, a decrease of approximately $0.5 million or 6% compared to $7.7 million in the same period of 2022, primarily due to longer sales cycles in the IIOT business[365]. - Net loss attributable to stockholders for the nine months ended September 30, 2023, was $34.2 million, a decrease of $14.5 million or 30% from a loss of $48.7 million in the prior year[364]. - For the three months ended September 30, 2023, the net loss attributable to stockholders was $10,384,000, compared to a net loss of $22,631,000 for the same period in 2022[384]. - The proforma non-GAAP net loss for the nine months ended September 30, 2023, was $21,368,000, which is an increase from a loss of $9,964,000 in the same period of 2022[384]. Revenue and Cost Analysis - Cost of revenues for the three months ended September 30, 2023, were $0.5 million, a decrease of approximately $0.3 million or 40% compared to $0.8 million in the prior year[357]. - Cost of revenues for the nine months ended September 30, 2023, was $1.6 million, a decrease of approximately $0.8 million or 32% from $2.4 million in the prior year, mainly due to lower costs in the SAVES product line[366]. - Gross profit for the three months ended September 30, 2023, was $1.6 million, representing 78% of revenues, compared to $1.7 million or 69% of revenues in the prior year[355]. - Gross profit margin for the three months ended September 30, 2023, was 78%, up from 69% in the same period of 2022, primarily due to lower costs in the SAVES and indoor intelligence product lines[358]. - Gross profit margin for the nine months ended September 30, 2023, was 77%, up from 69% in the same period of 2022, driven by lower costs in the SAVES product line[367]. Strategic Transactions and Corporate Actions - Inpixon is exploring strategic transactions, including possible asset sales, mergers, or spin-offs, to enhance shareholder value[293]. - Inpixon entered into a merger agreement with XTI Aircraft Company on July 24, 2023, and plans to divest its Shoom, SAVES, and Game Your Game lines of business[294]. - The Company entered into a Merger Agreement with XTI Aircraft Company on July 24, 2023, with the anticipated exchange ratio allowing Inpixon stockholders to retain approximately 40% of the combined company[319]. - Inpixon plans to spin off Grafiti Holding Inc. by distributing all outstanding common shares of Grafiti to stockholders on a pro rata basis[345]. - Inpixon entered into a Business Combination Agreement with Damon Motors Inc. and anticipates that holders of Grafiti Common Shares will retain approximately 18.75% of the outstanding capital stock of the combined company[348]. Cash Flow and Liquidity - As of September 30, 2023, the company had cash and cash equivalents of $13,489,000, an increase from $10,235,000 as of December 31, 2022[396]. - The company reported a working capital surplus of approximately $2,986,000 as of September 30, 2023, down from $5,152,000 at the end of 2022[396]. - Net cash used in operating activities for the nine months ended September 30, 2023, was $25,090,000, compared to $26,943,000 for the same period in 2022[394]. - The company raised gross proceeds of approximately $27,400,000 in connection with the ATM Offering and received $2,300,000 from warrants exercised since January 1, 2023[392]. - The company expects that general economic conditions may materially impact its liquidity and ability to access capital for growth plans[393]. Expenses and Impairments - Operating expenses for the three months ended September 30, 2023, were $10.6 million, an increase of approximately $3.5 million or 49% compared to $7.1 million in the prior year[355]. - The Company paid approximately $3.5 million to management under the Transaction Bonus Plan during the three months ended September 30, 2023[333]. - Non-cash income and expenses totaled approximately $22.2 million, primarily due to stock-based compensation and impairment of goodwill[399]. - As of September 30, 2023, the Company's previously recorded goodwill has been fully impaired[354]. Compliance and Regulatory Matters - The company received a notice from Nasdaq regarding non-compliance with the minimum bid price requirement, with a deadline to regain compliance by April 8, 2024[302]. - A reverse stock split was approved by shareholders to potentially cure bid price deficiencies, with a ratio between 1-for-2 and 1-for-50 to be determined by the board[304]. Market and Economic Conditions - The company anticipates challenges from global events, including supply chain interruptions and increased costs, which may impact its operations[292]. - There were no significant market risks disclosed in the report[405].