Business Context and Reporting Period
This Form 8-K, filed on September 4, 2018, reports events occurring on August 31, 2018, for Inpixon (the registrant). The filing documents the completion of a corporate separation and distribution of Sysorex, Inc. (Sysorex), which became an independent public company trading under the symbol "SYSX" on the OTC Markets. The separation divided Inpixon's operations, transferring IT solutions and professional services to Sysorex while retaining the indoor positioning analytics business within Inpixon.
Key Financial Metrics and Agreements
- Cash Contribution: Inpixon contributed $2 million in existing cash to Sysorex for working capital and to satisfy outstanding payables prior to the separation.
- Debt Restructuring: Inpixon entered into a Standstill Agreement with Chicago Venture Partners, L.P., regarding a Convertible Promissory Note with a principal amount of $1,745,000.
- Transaction Costs: Inpixon paid $75,000 to the lender as consideration for the Standstill Agreement.
- Debt Maturity Extension: The maturity date of the $1,745,000 Note was extended to December 31, 2018.
- Redemption Rights: The lender's right to redeem the Note is deferred until the earlier of 12 months after the purchase price date or five trading days following stockholder approval to amend the Note's conversion and minimum redemption prices.
Material Changes Versus Prior Period
The primary material change is the structural separation of the company. As of the Effective Date (August 31, 2018, at 4:01 p.m. Eastern Time):
- Corporate Structure: Sysorex is no longer a subsidiary; it is an independent entity. Inpixon distributed 100% of Sysorex's outstanding common stock to its stockholders of record as of August 21, 2018.
- Distribution Ratio: Stockholders received one share of Sysorex common stock for every three shares of Inpixon common stock held.
- Asset and Liability Transfer: Through an Assignment and Assumption Agreement, specific assets and liabilities were formally assigned to either Inpixon or Sysorex.
- Contractual Obligations: Sysorex and its subsidiary were released from obligations under the Payplant Client Agreement, which was amended to remove them as parties.
Guidance, Outlook, and Management Commentary
The filing does not provide specific financial guidance, revenue outlook, or management commentary regarding future performance metrics. The document focuses on the legal and operational mechanics of the separation. Key contingencies and unusual items include:
- Transition Services: Inpixon and Sysorex executed Transition Services, Tax Matters, and Employee Matters Agreements to govern their post-separation relationship.
- Executive Employment: Soumya Das, previously employed by Sysorex, had his employment agreement assigned to Inpixon, where he serves as Chief Operating Officer.
- Regulatory Compliance: The Standstill Agreement regarding the debt instrument is contingent upon potential future stockholder approval to amend note terms in accordance with Nasdaq Listing Rules.
Important Facts for Investor Verification
- Verify the trading status and ticker symbol (SYSX) of the newly independent Sysorex on the OTC Markets.
- Confirm the terms of the $1,745,000 Convertible Promissory Note and the conditions required to lift the redemption standstill.
- Review the Transition Services Agreement to understand the duration and scope of operational dependencies between Inpixon and Sysorex.
- Check the impact of the $2 million cash outflow to Sysorex on Inpixon's remaining liquidity position.
- Monitor the status of stockholder approval required to amend the debt instrument's conversion price and minimum redemption price.