Business Context and Reporting Period
This Form 8-K is a current report filed by Inpixon (trading symbol: INPX) on May 28, 2019. The company is incorporated in Nevada and its common stock is listed on The Nasdaq Capital Market. The filing primarily addresses a material definitive agreement regarding debt restructuring and a notice of failure to satisfy a continued listing rule regarding minimum bid price.
Key Financial Metrics and Capital Structure
- Debt Restructuring: The company entered into an Exchange Agreement to convert $250,000 of an outstanding promissory note (total outstanding balance was $1,815,462.74 as of May 28, 2019) into equity.
- Equity Issuance: 312,891 shares of common stock were issued at an effective price of $0.799 per share.
- Capital Structure (as of May 30, 2019):
- Common Stock Outstanding: 10,313,678 shares (including new issuance).
- Series 4 Convertible Preferred Stock: 1 share (convertible into 202 common shares).
- Series 5 Convertible Preferred Stock: 421 shares (convertible into approximately 126,427 common shares).
- Warrants Outstanding: 112,800 shares exercisable at $3.33 per share.
- Revenue and Profit: The filing text does not provide a clear value for revenue, profit, cash flow, or margins.
Material Changes and Listing Status
Nasdaq Delisting Notice: On May 30, 2019, Inpixon received a notice from Nasdaq indicating non-compliance with Listing Rule 5550(a)(2) due to the closing bid price of its common stock remaining below $1.00 per share for 30 consecutive business days (April 15, 2019, to May 28, 2019).
Compliance Period: The company has been granted 180 calendar days (until November 26, 2019) to regain compliance. To do so, the closing bid price must be at least $1.00 per share for a minimum of ten consecutive business days within this period.
Future Options: If compliance is not met, the company may seek an additional 180-day period if it meets other listing standards, potentially by effecting a reverse stock split. Failure to cure the deficiency could result in delisting.
Guidance, Risks, and Unusual Items
- Unregistered Sales: The issuance of the 312,891 exchange shares was not registered under the Securities Act of 1933, relying on an exemption under Section 3(a)(9) as an exchange of securities without additional consideration or commissions.
- Risks: There is no assurance that the company will be able to regain compliance with the minimum bid price requirement or maintain other listing requirements. Delisting remains a risk if the stock price does not recover.
- Management Commentary: Management intends to monitor the closing bid price and consider available options, including a reverse stock split, if necessary.
Investor Verification Checklist
- Verify the current trading price of INPX to assess the likelihood of regaining the $1.00 minimum bid price before November 26, 2019.
- Review the full text of the Exchange Agreement (Exhibit 10.1) for specific terms regarding the remaining $1.565 million debt balance.
- Monitor subsequent filings for any announcement of a reverse stock split or further communication from Nasdaq regarding delisting status.
- Check the dilution impact of the outstanding warrants and convertible preferred stock on future earnings per share.