Inpixon(INPX) - 2023 Q4 - Annual Report

Corporate Actions and Mergers - The company completed a reverse stock split at a ratio of 1-for-100 effective March 12, 2024, to comply with Nasdaq Listing Rule 5550(a)(2) and satisfy bid price requirements for the XTI Merger[136]. - The merger between XTI Aerospace and XTI Aircraft Company was completed on March 12, 2024, with Legacy XTI becoming a wholly-owned subsidiary of XTI Aerospace[219]. - The merger transaction was executed under the XTI Merger Agreement, originally dated July 24, 2023, and amended on December 30, 2023, and March 12, 2024[219]. - The company reported its audited consolidated financial statements for the years ended December 31, 2023, and 2022, which were filed with the SEC on March 15, 2024[221]. Product Development and Technology - The TriFan 600 is expected to have a range of 700 miles, providing significant advantages over eVTOL aircraft, which rely on charging infrastructure not yet commercially available[139]. - The company has established a baseline bill-of-materials for the TriFan 600 by negotiating with key suppliers globally during the design phase[145]. - The company is pursuing a phased approach to hybrid-electric propulsion for future TriFan configurations, considering current technology readiness and regulatory guidance[139]. - The company emphasizes the importance of securing required certifications for the TriFan 600 aircraft to ensure successful development and commercialization[217]. - The company is committed to developing new products and technologies to meet customer demand and enhance its competitive position[217]. Market and Customer Dynamics - The company aims to diversify its product offerings and increase market presence through acquisitions, although future consumer demand remains uncertain[157]. - The company's RTLS business growth depends on increasing sales to existing customers and acquiring new customers, which is influenced by competitive pricing and product quality[152]. - Two customers accounted for over 27% of revenue in 2023, with one customer contributing 17% and another 10%[176]. - In 2022, one customer represented 23% of revenue, indicating a potential volatility in customer contributions to revenue[176]. - The market acceptance of RTLS products is critical, with potential impacts from technological changes and competition affecting growth prospects[181]. Financial Risks and Challenges - The company faces risks related to the timely collection of receivables, which could adversely affect cash flow and working capital[179]. - The company may be subject to product liability claims due to manufacturing or design defects, which could have a material adverse effect on its financial condition[170]. - The company is subject to risks from reliance on a limited number of significant customers, which could materially affect operations if lost[178]. - The company has a history of losses and is focused on achieving profitability in the future[207]. - The company has outlined potential risks associated with its ability to maintain profitability and manage operational challenges[215]. Operational and Geopolitical Risks - The company faces risks from potential changes in U.S.-China trade relations, which could impact its ability to source hardware products necessary for manufacturing[149]. - The company is vulnerable to cyber threats that could disrupt operations and harm its reputation, despite implementing security measures[162]. - The company is exposed to risks associated with foreign operations, including currency fluctuations and longer payment cycles[213]. - The company faces risks related to geopolitical and economic factors that could impact international sales and operations[209]. - XTI Aerospace's international business is sensitive to changes in customer priorities and budgets, influenced by geopolitical uncertainties[211]. Supply Chain and Operational Efficiency - The company is navigating challenges related to supply chain disruptions and increased costs for materials and labor[208]. - The company may experience delays or cancellations in installations if its products do not effectively interoperate with customers' IT infrastructure[197]. - Defects or vulnerabilities in products could lead to significant financial expenditures to address issues, impacting overall operational results[184]. - The company is focused on integrating acquired technologies and companies to achieve operational synergies[218].