Business Context and Reporting Period
This Form 8-K, filed on August 19, 2019, reports on events occurring on August 15, 2019, for Inpixon (trading symbol: INPX). The registrant is an emerging growth company incorporated in Nevada. The filing primarily documents the closing of the acquisition of Jibestream Inc., a British Columbia corporation, which became an indirect, wholly owned subsidiary of Inpixon.
Key Financial Metrics and Transaction Details
The acquisition of Jibestream was completed on August 15, 2019. The consideration structure includes:
- Cash Consideration: CAD $5,000,000, subject to adjustments for Jibestream's cash on hand, working capital, indebtedness, option payouts, deferred revenue costs ($150,000), and audit fees.
- Stock Consideration: Inpixon common stock valued at CAD $3,000,000, calculated using a price of $0.2775 per share and the Royal Bank of Canada exchange rate as of August 15, 2019.
- Holdback Provision: Shares held back due to Nasdaq listing limitations ("Excess Shares") will be issued pro rata to vendors. If stockholder approval is not obtained by December 31, 2019, these shares will be paid in cash.
Capital Structure as of August 19, 2019:
- Common Stock Outstanding: 35,008,436 shares (including shares issued for the acquisition).
- Convertible Preferred Stock: Series 4 (convertible to 202 shares), Series 5 (convertible to ~37,838 shares), and Series 6 (convertible to ~1,553,154 shares).
- Warrants Outstanding: 112,800 shares (rights offering, $3.33 exercise price) and 17,297,410 shares (public offering, $0.2775 exercise price).
The filing does not provide specific revenue, profit, cash flow, or debt metrics for Inpixon or Jibestream. Financial statements and pro forma information are scheduled to be filed within 71 days.
Material Changes
The primary material change is the expansion of Inpixon's operations through the acquisition of Jibestream. Additionally, the company's capital structure changed significantly with the issuance of new common stock and warrants associated with the transaction and a recent public offering.
Guidance, Outlook, and Risks
The filing includes a cautionary note regarding forward-looking statements, indicating that actual results may differ materially from expectations. No specific financial guidance or outlook was provided in this document. Key risks and contingencies include:
- Regulatory Approval: The requirement for stockholder approval for the issuance of Inpixon shares by December 31, 2019, to avoid converting the stock portion of the holdback into cash.
- Valuation Adjustments: The final cash consideration is subject to working capital adjustments and other deductions defined in the Purchase Agreement.
- Future Filings: Detailed financial data regarding the acquired business is not yet available and will be filed in an amendment.
Investor Verification Checklist
- Verify the final cash consideration amount once the working capital adjustment and other deductions are finalized.
- Confirm whether stockholder approval for the issuance of Inpixon shares is obtained before December 31, 2019, to determine if the "Excess Shares" will be paid in cash or stock.
- Review the upcoming amendment (due within 71 days) for Jibestream's financial statements and pro forma financial information.
- Assess the impact of the significant increase in outstanding shares and warrants on existing shareholder dilution.