Subsequent Events

12 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Game Your Game, the Company's subsidiary, entered into a promissory note with an individual whereby it received approximately 0.03 million on January 13, 2023 for funding of liabilities and working capital needs. The promissory note has an interest rate of 8% and is due on or before June 30, 2023.

On February 27, 2023, the Company entered into Limited Liability Company Unit Transfer and Joinder Agreements with certain of the Company’s employees (the “Transferees”), pursuant to which (i) the Company transferred all of its Class A Units of CVH (the “Class A Units”), an aggregate of 599,999 Class A Units, to the Transferees as bonus consideration in connection with each Transferee’s services performed for and on behalf of the Company as an employee, as applicable, which was approved by the board of directors during the quarter ended March 31, 2023 and (ii) each Transferee became a member of CVH and a party to the Amended and Restated Limited Liability Company Agreement of CVH, dated as of September 30, 2020.

During the quarter ended March 31, 2023, the Company exchanged approximately $0.9 million of the outstanding principal and interest under the March 2020 10% Note Purchase Agreement and Promissory Note for 611,258 shares of the Company's common stock at prices from $1.09 to $1.682 per share, calculated in accordance with Nasdaq's “minimum price” as defined by Nasdaq Listing Rule 5635(d). This note was full satisfied as of January 31, 2023.

During 2023 through the date of this filing, the Company exchanged approximately $1.1 million of the outstanding principal and interest under the July 2022 Note Purchase Agreement and Promissory Note for 2,517,397 shares of the Company's common stock at prices from $0.3336 to $0.915 per share, calculated in accordance with Nasdaq's “minimum price” as defined by Nasdaq Listing Rule 5635(d).

During the quarter ended March 31, 2023, the Company sold 9,655,207 shares of common stock at share prices between $1.15 and $1.86 per share under an equity distribution agreement for gross proceeds of approximately $15.4 million.

During January 2023, the Company issued 1,380,000 shares of common stock in connection with the exercise of 1,380,000 pre-funded warrants at $0.001 per share in connection with the October 2022 registered direct offering.

On April 14, 2023, the Company received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business days beginning on March 2, 2023, and ending on April 13, 2023, the Company no longer meets the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided a period of 180 calendar days, or until October 11, 2023, in which to regain compliance. In order to regain compliance with the minimum bid price requirement, the closing bid price of our common stock must be at least $1 per share for a minimum of ten consecutive business days during this 180-day period. In the event that the Company does not regain compliance within this 180-day period, the Company may be eligible to seek an additional compliance period of 180 calendar days if it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and provides written notice to Nasdaq of its intent to cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary. However, if it appears to the Nasdaq staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq will provide notice to the Company that our common stock will be subject to delisting. The letter does not result in the immediate delisting of our common stock from the Nasdaq Capital Market. The Company intends to monitor the closing bid price of our common stock and consider its available options in the event that the closing bid price of our common stock remains below $1 per share.

Warrant Amendments

On February 28, 2023, the Company entered into warrant amendments (the “Warrant Amendments”) with certain holders (each, including its successors and assigns, a “Holder” and collectively, the “Holders”) of (i) those certain Common Stock Purchase Warrants issued by the Company in April 2018 (the “April 2018 Warrants”) pursuant to the registration statement on Form S-3 (File No. 333-204159), (ii) those certain Common Stock Purchase Warrants issued by the Company in September 2021 (the “September 2021 Warrants”) pursuant to the registration statement on Form S-3 (File No. 333-256827), and (iii) those certain Common Stock Purchase Warrants issued by the Company in March 2022 (the “March 2022 Warrants” and together with the April 2018 Warrants and the September 2021 Warrants, the “Existing Warrants”) pursuant to the registration statement on Form S-3 (File No. 333-256827).

Pursuant to the Warrant Amendments, the Company and the Holders have agreed to amend (i) the September 2021 Warrants and the March 2022 Warrants to provide that all of such outstanding warrants shall be automatically exchanged for shares of common stock of the Company, at a rate of 0.33 shares of Common Stock (the “Exchange Shares”) for each September 2021 Warrant or March 2022 Warrant, as applicable, and (ii) the April 2018 Warrants to remove the obligation of the Company to hold the portion of a Distribution (as defined in the April 2018 Warrants) in abeyance in connection with the Beneficial Ownership Limitation (as defined in the April 2018 Warrants).

In connection with the exchange for all of the then outstanding September 2021 Warrants and March 2022 Warrants as of the effective date of the Warrant Amendments, the Company issued 76,794 Exchange Shares and 248,124 Exchange Shares, respectively, resulting in the issuance of 324,918 Exchange Shares in the aggregate.

Enterprise Apps Spin-off and Business Combination

On March 14, 2023, Inpixon completed (the “Closing”) the separation (the “Separation”) of its enterprise apps business (including its workplace experience technologies, indoor mapping, events platform, augmented reality and related business solutions) (the “Enterprise Apps Business”) through a spin-off of CXApp Holding Corp., a Delaware corporation ("CXApp"), to certain holders of Inpixon securities as of March 6, 2023 (the “Record Date”) on a pro rata basis (the “Distribution” or “Enterprise Apps Spin-off”) and merger (the “Merger”) of CXApp with a wholly owned subsidiary of KINS Technology Group

Inc., a Delaware corporation (“KINS”), in a Reverse Morris Trust transaction (collectively, the “Transactions”) pursuant to (i) an Agreement and Plan of Merger, dated as of September 25, 2022, by and among Inpixon, KINS, CXApp, and KINS Merger Sub Inc. (the "Merger Agreement") and (ii) a Separation and Distribution Agreement, dated as of September 25, 2022, among KINS, Inpixon, CXApp and Design Reactor, Inc. (the "Separation Agreement”, and collectively with the Merger Agreement and the other related transaction documents, the “Transaction Agreements”).

In connection with the Closing, KINS was renamed CXApp Inc. (“New CXApp”). Pursuant to the Transaction Agreements, Inpixon contributed to CXApp cash and certain assets and liabilities constituting the Enterprise Apps Business, including certain related subsidiaries of Inpixon, to CXApp (the “Contribution”). In consideration for the Contribution, CXApp issued to Inpixon additional shares of CXApp common stock such that the number of shares of CXApp common stock then outstanding equaled the number of shares of CXApp common stock necessary to effect the Distribution. Pursuant to the Distribution, Inpixon shareholders as of the Record Date received one share of CXApp common stock for each share of Inpixon common stock held as of such date. Pursuant to the Merger Agreement, each share of Legacy CXApp common stock was thereafter exchanged for the right to receive 0.09752221612415190 of a share of New CXApp Class A common stock (with fractional shares rounded down to the nearest whole share) and 0.3457605844401750 of a share of New CXApp Class C common stock (with fractional shares rounded down to the nearest whole share). New CXApp Class A common stock and New CXApp Class C common stock are identical in all respects, except that New CXApp Class C common stock is not listed and will automatically convert into New CXApp Class A common stock on the earlier to occur of (i) the 180th day following the closing of the Merger and (ii) the day that the last reported sale price of New CXApp Class A common stock equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period following the closing of the Merger. Upon the closing of the Transactions, Inpixon’s existing securityholders held approximately 50.0% of the shares of New CXApp common stock outstanding.

As of the Closing, CXApp is expected to have approximately $10 million of net cash. The transaction is expected to be tax-free to Inpixon and its stockholders for U.S. federal income tax purposes.

The following unaudited Pro Forma Condensed Consolidated Statements of Operations for the years ended December 31, 2022 are presented as if the Enterprise Apps Spin-Off had occurred as of January 1, 2022 in that they reflect the reclassification of Enterprise Apps as a discontinued operation for all periods presented. The following unaudited Pro Forma Condensed Consolidated Balance Sheet of the Company as of December 31, 2022 is presented as if the Enterprise Apps Spin-Off occurred on December 31, 2022. The unaudited Pro Forma Condensed Consolidated Financial Statements are presented based on information currently available including certain assumptions and estimates. They are intended for informational purposes only, and do not purport to represent what the Company’s financial position and operating results would have been had the Enterprise Apps Spin-Off and related events occurred on the dates indicated above, or to project the Company’s financial position or results of operations for any future date or period. Furthermore, they do not reflect all actions that may be undertaken by the Company after the Enterprise Apps Spin-Off. The unaudited Pro Forma Condensed Consolidated Financial Statements and the accompanying notes should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report for the fiscal year ended December 31, 2022. In the enclosed unaudited Pro Forma Condensed Consolidated Statements of Operations and Balance Sheets, the amounts reflected in the columns presented are described below:

Inpixon and Subsidiaries Historical

This column reflects the Company’s historical financial statements for the periods presented and does not reflect any adjustments related to the Enterprise Apps Spin-Off and related events. The Inpixon and Subsidiaries Historical Consolidated Balance Sheet as of December 31, 2022 and the Consolidated Statements of Operations for the year ended December 31, 2022 were derived from the Company’s audited Consolidated Financial Statements included in its Annual Report for the year ended December 31, 2022.

Enterprise Apps Discontinued Operations

The unaudited pro forma financial information related to the Enterprise Apps Discontinued Operations has been prepared in accordance with the discontinued operations guidance in Accounting Standards Codification 205, “Financial Statement Presentation” and therefore does not reflect what the Company’s or Enterprise Apps’ results of operations would have been on

a stand-alone basis and are not necessarily indicative of the Company’s or Enterprise Apps' future results of operations. The information in the Enterprise Apps Discontinued Operations column in the unaudited Pro Forma Statements of Operations was prepared based on the Company’s annual audited financial statements. The Company believes that the adjustments included within the Enterprise Apps Discontinued Operations column of the unaudited Pro Forma Condensed Consolidated Financial Statements are consistent with the guidance for discontinued operations in accordance with U.S. GAAP.

Pro Forma Adjustments

The information in the “Pro Forma Adjustments” columns in the unaudited Pro Forma Condensed Consolidated Statements of Operations and the unaudited Pro Forma Condensed Consolidated Balance Sheets reflect additional pro forma adjustments which are further described in the accompanying notes. The Pro Forma Adjustments are based on available information and assumptions that the Company’s management believes are reasonable, that reflect the impact of events directly attributable to the Enterprise Apps Spin-Off that are factually supportable, and for purposes of the Pro Forma Condensed Consolidated Statements of Operations, are expected to have a continuing impact on the Company. The Pro Forma Adjustments do not reflect future events that may occur after the Enterprise Apps Spin-Off.

INPIXON AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of December 31, 2022
(In thousands, except number of shares and par value data)
	Inpixon and Subsidiaries Historical (a)		Enterprise Apps Discontinued Operations (b)		Pro Forma Adjustments		Note	Pro Forma Inpixon and Subsidiaries Continuing Operations
Assets
Current Assets
Cash and cash equivalents	$	20,235	$	(6,308)	$	(3,692)	(c)	$	10,235
Accounts receivable, net of allowances	3,227		(1,338)		—			1,889
Other receivables	359		(273)		—			86
Inventory	2,442		—		—			2,442
Note receivable	150		—		—			150
Prepaid expenses and other current assets	3,453		(650)		—			2,803
Total Current Assets	29,866		(8,569)		(3,692)			17,605
Property and equipment, net	1,266		(202)		—			1,064
Operating lease right-of-use asset, net	1,212		(681)		—			531
Software development costs, net	1,752		(487)		—			1,265
Investments in equity securities	330		—		—			330
Long-term investments	716		—		(716)		(d)	—
Intangible assets, net	22,283		(19,289)		—			2,994
Other assets	210		(52)		—			158
Total Assets	$	57,635	$	(29,280)	$	(4,408)		$	23,947
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	2,557	$	(1,054)	$	—		$	1,503
Accrued liabilities	4,355		(1,736)		—			2,619
Operating lease obligation, current	477		(266)		—			211
Deferred revenue	3,485		(2,162)		—			1,323
Short-term debt	13,643		—		—			13,643
Acquisition liability	197		(197)		197		(e)	197
Total Current Liabilities	24,714		(5,415)		197			19,496
Long Term Liabilities

Operating lease obligation, noncurrent	778		(444)		—			334
Other liabilities, noncurrent	28		(30)		—			(2)
Total Liabilities	25,520		(5,889)		197			19,828
Commitments and Contingencies
Mezzanine Equity
Series 8 Convertible Preferred Stock- 53,197.7234 shares authorized, 0 issued and outstanding as of December 31, 2022.	—		—		—			—
Stockholders’ Equity
Preferred Stock -$0.001 par value; 5,000,000 shares authorized	—		—		—			—
Series 4 Convertible Preferred Stock - 10,415 shares authorized; 1 issued and outstanding as of December 31, 2022.	—		—		—			—
Series 5 Convertible Preferred Stock - 12,000 shares authorized; 126 issued and outstanding as of December 31, 2022.	—		—		—			—
Common Stock - $0.001 par value; 500,000,000 shares authorized; 3,570,894 issued and 3,570,893 outstanding as of December 31, 2022	4		—		—			4
Additional paid-in capital	346,668		—		—			346,668
Treasury stock, at cost, 1 share	(695)		—		—			(695)
Accumulated other comprehensive income	1,061		—		—			1,061
Accumulated deficit	(314,841)		(23,391)		(4,605)		(c), (d), (e)	(342,837)
Stockholders’ Equity Attributable to Inpixon	32,197		(23,391)		(4,605)			4,201
Non-controlling Interest	(82)		—		—			(82)
Total Stockholders’ Equity	32,115		(23,391)		(4,605)			4,119
Total Liabilities, Mezzanine Equity and Stockholders’ Equity	$	57,635	$	(29,280)	$	(4,408)		$	23,947

INPIXON AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the year ended December 31, 2022
(In thousands, except number of shares and par value data)
	Inpixon and Subsidiaries Historical (a)		Enterprise Apps Discontinued Operations (f)		Pro Forma Adjustments		Note	Pro Forma Inpixon and Subsidiaries Continuing Operations
Revenues	$	19,418	$	(8,470)	$	—		$	10,948
Cost of Revenues	5,489		(2,064)		—			3,425
Gross Profit	13,929		(6,406)		—			7,523
Operating Expenses
Research and development	17,661		(9,323)		—			8,338
Sales and marketing	8,872		(5,096)		100		(g)	3,876
General and administrative	26,060		(11,571)		1,031		(g)	15,520
Acquisition-related costs	426		(16)		—			410
Impairment of goodwill and intangibles	12,199		(5,540)		—			6,659
Amortization of intangibles	5,411		(3,885)		—			1,526
Total Operating Expenses	70,629		(35,431)		1,131			36,329
Loss from Operations	(56,700)		29,025		(1,131)			(28,806)
Other Income (Expense)
Interest expense, net	(673)		(4)		—			(677)
Other expense, net	692		1		—			693
Unrealized loss on equity securities	(7,904)		—		—			(7,904)
Unrealized loss on equity method investment	(1,784)		—		—			(1,784)
Total Other Expense	(9,669)		(3)		—			(9,672)
Net Loss, before tax	(66,369)		29,022		(1,131)			(38,478)
Income tax provision	65		153					218
Net Loss	(66,304)		29,175		(1,131)			(38,260)
Net Loss Attributable to Non-controlling Interest	(2,910)		—		—			(2,910)
Net Loss Attributable to Stockholders of Inpixon	(63,394)		29,175		(1,131)			(35,350)
Accretion of Series 7 preferred stock	(4,555)		—		—			(4,555)

Accretion of Series 8 Preferred Stock	(13,090)		—		—		(13,090)
Deemed dividend for the modification related to Series 8 Preferred Stock	(2,627)		—		—		(2,627)
Deemed contribution for the modification related to Warrants issued in connection with Series 8 Preferred Stock	1,469		—		—		1,469
Amortization premium- modification related to Series 8 Preferred Stock	2,627		—		—		2,627
Net Loss Attributable to Common Stockholders	$	(79,570)	$	29,175	$	(1,131)	$	(51,526)
Basic and diluted loss per share	$	(34.12)					$	(22.09)
Weighted Average Shares Outstanding, basic and diluted	2,332,041						2,332,041

The following is a summary of the unaudited pro forma adjustments reflected in the unaudited pro forma consolidated financial statements based on preliminary estimates, which may change as additional information is obtained.

a.Reflects amounts reported by the Company within its Annual Report on Form 10-K for the year ended December 31, 2022.

b.Reflects the elimination of the Enterprise Apps Business assets, liabilities, and historical balances within the Company's consolidated financial statements that were discontinued as result of the Business Combination. The Company notes $69 million of consideration was to be received by the Company in connection with the Business Combination. The consideration was paid directly to the shareholders of the Company, and no adjustment was included in the unaudited pro forma consolidated balance sheet as a result.

c.Reflects adjustments for remaining cash contribution of $3.7 million to reach $10 million cash balance for Enterprise Apps Business in accordance with the Separation and Distribution Agreement.

d.Reflects adjustments to the Company's investment in Class A and Class B Units of Cardinal Ventures Holdings LLC, which has certain interests in the sponsor of KINS. The Company distributed its ownership interests to certain employees and members of management on February 28, 2023 as a pre-requisite to the Business Combination.

e.Reflects adjustment for acquisition liability that is within the Enterprise Apps Business, but will be retained by the Company subsequent to the Enterprise Apps Spin-off.

f.Reflects the elimination of the historical revenue and expenses directly related to the Enterprise Apps Business that will not recur in the Company combined statement of operations as a result of the Enterprise Apps Spin-off.

g.Reflects management’s estimates of approximately $1.1 million of historical costs mainly for executive salaries and benefits in general and administrative expenses ($1.0 million) and sales and marketing expenses ($0.1 million) that were allocated to Enterprise Apps Business. The historical costs were added back to the statement of operations for the year ended December 31, 2022 as the costs would be incurred by the Company.