Filing identity and reporting period
The supplied filing is Inpixon’s unaudited Form 10-Q for the quarter ended March 31, 2022—not a filing identified as XTI Aerospace, Inc. This summary reflects the filing text provided; verify that it is the intended issuer and filing.
Inpixon described itself as an indoor-intelligence technology company, with Indoor Intelligence, SAVES and Shoom reporting segments. Its offerings include indoor positioning and mapping, workplace apps, asset tracking, software and related services. The quarter’s results include contributions from acquisitions completed in 2021, including CXApp and IntraNav.
Financial performance
Amounts below are in U.S. dollars; financial statement amounts are in millions unless otherwise noted.
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Revenue | $5.23 | $2.95 |
| Gross profit / margin | $3.85 / 73% | $2.07 / 70% |
| Operating expenses | $13.91 | $14.49 |
| Operating loss | $(10.06) | $(12.42) |
| Net loss | $(11.56) | $(12.54) |
| Net loss attributable to Inpixon common stockholders | $(17.36) | $(12.56) |
| GAAP loss per share, basic and diluted | $(0.13) | $(0.16) |
| Adjusted EBITDA (non-GAAP) | $(8.77) | $(5.56) |
Revenue rose 77%, principally from Indoor Intelligence, including the CXApp and IntraNav product lines. Indoor Intelligence revenue was $3.98 million versus $1.62 million; SAVES revenue was $0.73 million versus $0.83 million; Shoom revenue was $0.52 million versus $0.51 million. Management attributed lower operating expenses partly to reduced stock-based compensation and a $2.8 million benefit from the CXApp earnout valuation, offset by higher compensation, professional fees, infrastructure costs and acquired-intangible amortization. Other expense increased to $1.39 million, mainly reflecting a $1.50 million unrealized loss on Sysorex securities.
Cash flow, balance sheet and capital
- Cash and cash equivalents were $60.85 million at March 31, 2022, compared with $52.48 million at year-end 2021; short-term investments were $15.04 million, down from $43.13 million. Working capital surplus was $74.34 million.
- Operating cash use was $15.32 million, versus $5.66 million in Q1 2021. Investing activities provided $27.81 million, largely from $28.00 million of Treasury bill sales. Financing used $4.10 million: $46.91 million of Series 8 proceeds was substantially offset by $49.25 million to redeem Series 7 preferred stock.
- Total assets were $137.23 million and total liabilities were $16.65 million. Short-term debt was $2.41 million; acquisition liabilities totaled about $3.55 million. The March 2020 10% note’s maturity was extended to March 2023, with a 2% extension fee added to its balance; additional notes carry 8% interest and are due by December 2022.
- The March 2022 Series 8 financing raised $50.0 million gross and approximately $46.9 million net. It included 53,197.7234 preferred shares convertible at $0.4717 per common share and warrants to purchase up to 112.78 million common shares. The Series 8 shares have a holder redemption window beginning October 1, 2022; potential cash redemption is about $53.2 million, potentially $58.5 million upon specified defaults, plus applicable amounts. A cash-balance covenant applies through the earlier of full conversion or redemption and January 1, 2023.
- Common shares outstanding were 152,476,356 at quarter-end; the filing reported 152,476,355 at May 12, 2022. The filing also reports 28.46 million options and other warrants and potential common shares, including Series 8 conversion shares, creating substantial potential dilution.
Outlook, commentary and risks
- Management gave no quantified revenue, earnings or cash-flow guidance. It said current liquidity and budgeted cash needs were expected to support operations for at least 12 months from issuance of the financial statements, while acknowledging recurring losses and operating cash use as going-concern indicators.
- Management cited supply-chain constraints, higher materials and labor costs, inflation, COVID-19 after-effects and the Russia-Ukraine conflict as risks to delivery timing, customer demand and costs. It cautioned that continued revenue growth was not assured.
- The company said its board had authorized a review of strategic alternatives, including a possible asset sale, merger or spin-off, and that it was evaluating a preliminary inbound indication of interest. No outcome was assured.
- Inpixon reported a Nasdaq minimum-bid-price deficiency. After the quarter, Nasdaq granted an additional compliance period through October 24, 2022; failure to regain compliance could lead to delisting.
- After quarter-end, on April 27, 2022, the company bought a convertible debenture with approximately $6.1 million principal for $5.5 million; it carries 12% annual interest and a 12-month stated maturity.
- The filing reported no material pending legal proceedings other than ordinary routine litigation and stated that disclosure controls were effective.
Most important facts to verify
- Confirm issuer and period: the supplied document is Inpixon’s Q1 2022 10-Q, despite the request naming XTI Aerospace, Inc.
- Review the Series 8 redemption terms, cash-maintenance covenant, default provisions and warrant terms; assess liquidity against the potential redemption obligation.
- Reconcile the reported liquidity with the $15.32 million quarterly operating cash burn and expected near-term acquisition, lease, vendor and debt payments.
- Assess potential dilution from preferred-stock conversion, warrants, options, shares issued for debt and acquisition earnouts.
- Check subsequent updates on the Nasdaq bid-price deficiency, strategic-alternatives review, supply-chain effects and Sysorex investment value.