Business Context and Reporting Period
This Form 8-K was filed by Inpixon (trading symbol: INPX) on October 18, 2022. The filing discloses a material definitive agreement regarding a registered direct offering and the redemption of Series 8 Convertible Preferred Stock. The company is incorporated in Nevada and its principal executive offices are located in Palo Alto, California.
Key Financial Metrics and Transaction Details
- Offering Proceeds: The company expects to receive gross proceeds of approximately $15 million from the registered direct offering.
- Offering Structure:
- 253,112 shares of Common Stock.
- Warrants to purchase up to 3,846,153 shares of Common Stock (Purchase Warrants) at an exercise price of $5.85 per share.
- Pre-Funded Warrants to purchase up to 2,310,990 shares of Common Stock at a purchase price of $5.849 and an exercise price of $0.001.
- Combined Offering Price: $5.85 per share (for Common Stock and Purchase Warrants).
- Redemption Liability: The company received redemption notices for 45,755.72 shares of Series 8 Convertible Preferred Stock, requiring aggregate cash payment of approximately $45.76 million.
- Placement Agent Fees: A cash fee of 5% of aggregate gross proceeds plus reimbursement of up to $50,000 for expenses and legal fees.
Material Changes and Events
The filing reports two significant capital events occurring in October 2022:
- Capital Raise: Entry into a Securities Purchase Agreement with an institutional investor to raise approximately $15 million. The closing is expected on or about October 20, 2022.
- Debt/Equity Redemption: Between October 1 and October 3, 2022, holders redeemed the majority of the Series 8 Convertible Preferred Stock issued in March 2022. This resulted in a cash outflow obligation of ~$45.76 million and the forfeiture of 646,679 related warrants. As of October 17, 2022, only 7,442 shares of Series 8 Convertible Preferred Stock remained outstanding.
Guidance, Outlook, and Restrictions
Standstill Period: The company agreed to a 30-day standstill period following the closing of the offering. During this time, Inpixon cannot issue new shares or securities convertible into common stock, nor file new registration statements, with specific exceptions for the offering prospectus, Form S-8, and a merger registration statement related to CXApp Holding Corp.
Ownership Limitations: Holders are restricted from exercising warrants if it would result in ownership exceeding 4.99% (Purchase Warrants) or 9.99% (Pre-Funded Warrants) of outstanding common stock, unless they provide notice to increase the limit (subject to a 61-day delay).
Risks and Contingencies: The closing of the offering is subject to customary closing conditions. The filing includes standard forward-looking statement disclaimers, noting that actual results may differ materially from expectations. The company assumes no obligation to update forward-looking statements.
Investor Verification Checklist
- Verify the actual closing date and final gross proceeds of the registered direct offering.
- Confirm the company's ability to fund the ~$45.76 million redemption of Series 8 Convertible Preferred Stock and its impact on liquidity.
- Review the definitive merger agreement with KINS Technology Group Inc. referenced in the standstill exceptions.
- Monitor the dilution impact from the issuance of 253,112 shares plus the potential exercise of over 6 million warrants (Purchase and Pre-Funded).
- Check subsequent filings for any updates on the remaining 7,442 shares of Series 8 Convertible Preferred Stock.