Business Context and Reporting Period
This Form 8-K, dated December 7, 2018, reports on Inpixon (the "Company"), a Nevada corporation. The filing announces the commencement of a rights offering to existing stockholders and certain warrant holders of record as of December 6, 2018. The Company is an emerging growth company.
Key Financial Metrics and Offering Structure
- Offering Size: Up to 10,000 units at a subscription price of $1,000 per unit, representing a maximum aggregate of $10.0 million.
- Unit Composition: Each unit consists of one share of Series 5 Convertible Preferred Stock (stated value $1,000) and 200 warrants.
- Conversion Terms: Series 5 Preferred is convertible into Common Stock at a price of $5.00 per share. Warrants are exercisable for Common Stock at $5.00 per share.
- Expected Net Proceeds: Approximately $8.9 million if all units are sold, after deducting commissions and expenses.
- Allocation: 30% (3,000 units) is reserved for "January 2018 Investors" per a prior agreement; the remainder is allocated pro rata to other holders.
Material Changes and Agreements
The Company entered into a Dealer-Manager Agreement with Maxim Group LLC to manage the offering. Maxim will receive a cash fee of 6.5% of proceeds plus $75,000 for expenses. Roth Capital Partners, LLC acted as financial advisor, with a fee of $250,000 if proceeds reach $10 million, or $200,000 if proceeds are less than $10 million. The subscription rights are non-transferable and exercisable from December 7, 2018, through December 21, 2018.
Outlook, Risks, and Unusual Items
- Warrant Redemption: The Company may redeem warrants for $12.50 per warrant if the Common Stock closes above $12.50 for ten consecutive trading days, provided at least one year has passed since issuance.
- Closing Conditions: The offering is subject to customary conditions, including the filing of the Certificate of Designation and the absence of a material adverse effect on the Company's business or financial position.
- Underwriting Status: Maxim Group LLC is not underwriting the offering and has no obligation to purchase any securities.
Investor Verification Checklist
- Verify the final number of units subscribed and total gross proceeds raised.
- Confirm the filing of the Certificate of Designation for Series 5 Convertible Preferred Stock with the Nevada Secretary of State.
- Review the specific terms of the "January 2018 SPA" to understand the rights of the 30% reserved allocation.
- Monitor the Company's Common Stock price relative to the $5.00 conversion/exercise price and the $12.50 warrant redemption threshold.