Inpixon Reports 2021 Financial Results and Provides Business Update

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    <br /> Inpixon Reports 2021 Financial Results and Provides Business Update<br />

    Reports Record Revenue of $16 Million and 72% Increase in Revenue for the Fiscal Year Ended December 31, 2021

    Conference Call to be Held Today at 11:00 a.m. Eastern Time

    PR Newswire


    PALO ALTO, Calif.

    ,

    March 11, 2022

    /PRNewswire/ — Inpixon

    ®

    (Nasdaq: INPX), the Indoor Intelligence

    ®

    company, today provided a business update and reported financial results for the fiscal year ended

    December 31, 2021

    .


    2021 Business Highlights:

    • Achieved record revenue of approximately

      $16 million

      , an increase of 72% over the prior year
    • Increased SaaS annual recurring revenue bookings approximately 70% over the prior year
    • Completed three strategically significant acquisitions expanding the scope of intellectual property, customer base, and geographic presence, as well as adding advanced enterprise smart office apps, virtual and hybrid events platform, augmented reality and industrial IoT solutions
    • Increased the total contract value of existing customers by 89% of the initial order executing on our land and expand strategy

    “I’m extremely proud of the progress we’ve made throughout 2021,” commented,

    Nadir Ali

    , CEO of Inpixon. “We’ve continued to execute on our business growth strategy resulting in a significant increase in our customer base and a 72% increase in revenue year-over-year. Over the last four years, Inpixon increased revenue more than five-fold, from approximately

    $3 million

    to

    $16 million

    . We currently expect to achieve even higher revenue growth in 2022, with a particular focus on organic growth within the existing product lines. Importantly, we have maintained gross margins at 70%, while increasing our recurring revenue as a percentage of sales. We improved our operations by completing three strategically significant acquisitions that complemented and enhanced our existing Indoor Intelligence platform. As a result, we have effectively expanded our technologies, capabilities, and solutions to address various use cases including the hybrid workplace, virtual and hybrid events, augmented reality and Industry 4.0. To date, we have secured important contracts with top-tier organizations as well as expanded relationships with existing customers, thereby increasing our exposure and penetration within the market. Given the pace of digital transformation, we anticipate demand for our solutions to remain strong, as organizations seek solutions that improve operational efficiency and enhance the workplace experience.

    “Overall, we have industry leading technologies, a well-established customer base, strong demand for our solutions within numerous industries including healthcare, corporate enterprises, manufacturing, and more. We are a recognized industry leader, identified by Gartner as a Leader in the 2022 Magic Quadrant for Indoor Location Services. We believe we have built a foundation for continued success, both operationally and financially, and that we are very well positioned for strong organic growth given the opportunities within the corporate environment, metaverse, Industry 4.0, and AR markets. We are encouraged by the outlook of the business and look forward to providing additional updates throughout the year,” concluded, Mr. Ali.


    Recent Milestones:


    • Named

      a Leader in the 2022 Gartner

      ®

      Magic Quadrant™ for Indoor Location Services [1]. This is the fourth consecutive year that Inpixon was recognized in the Magic Quadrant for completeness of vision and ability to execute

    • Released

      State of Indoor Intelligence 2022 report which explored how changes happening in the world have impacted the state of indoor intelligence in organizations

    • Secured

      contract for hybrid event solution to support conference with 50,000 in-person and virtual attendees

    • Announced

      contract with a premier automotive vehicle manufacturer to provide its employee experience app

    • Acquired

      INTRANAV, a leading industrial IoT, RTLS, and sensor data services provider, positioning Inpixon as a one-stop-shop for comprehensive location intelligence solutions for both the corporate and industrial sides of an organization

    • Recognized

      as an IDC Innovator for Location & Geospatial Intelligence

    • Announced

      that Inpixon’s CXApp Event platform was selected by the Association of Briefing Program Managers as their exclusive event management solution


    Financial Results

    Revenues for the year ended

    December 31, 2021

    , were approximately

    $16.0 million

    compared to

    $9.3 million

    for the comparable period in the prior year for an increase of

    $6.7 million

    , or approximately 72%. This increase is primarily attributable to an approximate

    $5.0 million

    increase in Indoor Intelligence sales, including the smart office app and real time location-based technologies, and an increase of approximately

    $1.7 million

    of SAVES sales. Gross profit for the year ended

    December 31, 2021

    , was

    $11.6 million

    compared to

    $6.7 million

    for the comparable period in the prior year, an increase of 74%. The gross profit margin for the year ended

    December 31, 2021

    , was 73% compared to 72% for the year ended

    December 31, 2020

    . This increased margin is primarily due to the sales mix. Net loss attributable to stockholders of Inpixon for the year ended

    December 31, 2021

    , was

    $69.2 million

    compared to

    $29.2 million

    for the comparable period in the prior year. This increase in loss of approximately

    $39.9 million

    was primarily attributable to the increase in operating expenses of

    $53.8 million

    , offset by the higher gross profit of

    $4.9 million

    , and reduced other loss of

    $5.5 million

    . Although total operating expenses were higher as compared to the prior year, over

    $21 million

    was comprised of non-recurring and non-cash expenses which are not anticipated for 2022. Moreover, we anticipate additional synergies as a result of the integration of the acquired companies that we believe will substantially reduce our operating expenses in the coming year.

    Non-GAAP Adjusted EBITDA for the year ended

    December 31, 2021

    , was a loss of

    $29.6 million

    compared to a loss of

    $17.1 million

    for the prior year period. EBITDA is defined as net income (loss) before interest, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is used by Inpixon management as a metric by which it manages the business. It is defined as EBITDA plus adjustments for other income or expense items, non-recurring items and other non-cash items including stock-based compensation.

    Proforma non-GAAP net loss per basic and diluted common share for the year ended

    December 31, 2021

    was a loss of

    ($0.26)

    compared to a loss of

    ($0.71)

    per share for the prior year period. Proforma non-GAAP net income (loss) per share is used by Inpixon management as an evaluation tool as it manages the business and is defined as net income (loss) per basic and diluted share adjusted for non-cash items including stock-based compensation, amortization of intangibles and one-time charges and other adjustments including provision for valuation allowances, severance costs, provision for doubtful accounts, acquisition costs and costs associated with public offerings.


    Conference Call

    Inpixon management will host a conference call today at

    11:00 AM Eastern Time

    to discuss the company’s financial results for the fiscal year ended

    December 31, 2021

    , as well as to review the company’s corporate progress and other developments.

    The conference call will be available via telephone by dialing toll free 888-506-0062 for U.S. callers or +1 973-528-0011 for international callers and using entry code 628452. A webcast of the call may be accessed at

    https://www.webcaster4.com/Webcast/Page/2235/44806

    or on the company’s Investor Relations section of the website at

    ir.inpixon.com

    .

    Investors and other interested parties are invited to submit questions to management prior to the call’s start via email to

    [email protected]

    .

    A webcast replay will be available on the company’s Investor Relations section of the website (

    ir.inpixon.com

    ) through

    March 7, 2023

    . A telephone replay of the call will be available approximately one hour following the call, through

    March 15, 2022

    , and can be accessed by dialing 877-481-4010 for U.S. callers or +1 919-882-2331 for international callers and entering conference ID 44806.

    [1] Gartner, Magic Quadrant for Indoor Location Services,

    Tim Zimmerman

    ,

    Annette Zimmermann

    ,

    Feb. 23, 2022

    .


    Gartner Disclaimer

    Gartner and Magic Quadrant is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved. Gartner does not endorse any vendor, product or service depicted in our research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.


    About Inpixon

    Inpixon

    ®

    (Nasdaq: INPX) is the innovator of Indoor Intelligence

    ®

    , delivering actionable insights for people, places and things. Combining the power of mapping, positioning and analytics, Inpixon helps to create smarter, safer, and more secure environments. The company’s Indoor Intelligence and mobile app solutions are leveraged by a multitude of industries to optimize operations, increase productivity, and enhance safety. Inpixon customers can take advantage of industry leading location awareness, RTLS, workplace and hybrid event solutions, analytics, sensor fusion and the IoT to create exceptional experiences and to do good with indoor data. For the latest insights, follow Inpixon on

    LinkedIn

    ,

    Twitter

    , and visit

    inpixon.com

    .


    Safe Harbor Statement


    All statements in this release that are not based on historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of the control of Inpixon and its subsidiaries, which could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not limited to, the fluctuation of economic conditions, the impact of COVID-19 and other global events on Inpixon’s results of operations and global supply chain constraints, Inpixon’s ability to integrate the products and business from recent acquisitions into its existing business, the performance of management and employees, the regulatory landscape as it relates to privacy regulations and their applicability to Inpixon’s technology, Inpixon’s ability to maintain compliance with Nasdaq’s minimum bid price requirement and other continued listing requirements, the ability to obtain financing if needed, competition, general economic conditions and other factors that are detailed in Inpixon’s periodic and current reports available for review at sec.gov. Furthermore, Inpixon operates in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. Inpixon disclaims any intention to, and undertakes no obligation to, update or revise forward-looking statements.


    Non-GAAP Financial Measures

    Management believes that certain financial measures not in accordance with generally accepted accounting principles in the United States (“GAAP”) are useful measures of operations. EBIDTA, Adjusted EBITDA and pro forma net loss per share are non-GAAP measures. Inpixon defines “EBITDA” as net income (loss) before interest, provision for (benefit from) income taxes, and depreciation and amortization. Management uses Adjusted EBITDA as a metric for which it manages the business, and Inpixon defines “Adjusted EBITDA” as EBITDA plus adjustments for other income or expense items, non-recurring items and non-cash items. Inpixon defines “pro forma net loss per share” as GAAP net loss per share adjusted for stock-based compensation, amortization of intangibles and one-time charges including loss on the exchange of debt for equity and provision for valuation allowances.

    Management provides Adjusted EBITDA and pro forma net loss per share measures so that investors will have the same financial information that management uses, which may assist investors in assessing Inpixon’s performance on a period-over-period basis. Adjusted EBITDA or pro forma net loss per share is not a measure of financial performance under GAAP, and should not be considered an alternative to net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA and pro forma net loss per share have limitations as analytical tools and should not be considered either in isolation or as a substitute for analysis of Inpixon’s results as reported under GAAP.

    For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the “Reconciliation of Non-GAAP Financial Measures” table accompanying this press release.


    Inpixon Contacts


    General inquiries:


    Inpixon

    Email:

    [email protected]


    Web:

    inpixon.com/contact-us


    Media relations:


    Offleash PR for Inpixon

    Email:

    [email protected]


    Investor relations:


    Crescendo Communications, LLC

    Tel: +1 212-671-1020

    Email:

    [email protected]



    INPIXON AND SUBSIDIARIES



    CONSOLIDATED BALANCE SHEETS



    (In thousands, except number of shares and par value data)


    As of


    December 31,

    2021


    December 31,

    2020



    ASSETS



    Current Assets


    Cash and cash equivalents


    $


    52,480


    $


    17,996


    Accounts receivable, net of allowances of $272 and $235, respectively


    3,218


    1,739


    Notes and other receivables


    321


    152


    Inventory


    1,976


    1,243


    Short-term investments


    43,125


    7,998


    Prepaid assets and other current assets


    4,842


    1,197



    Total Current Assets


    105,962


    30,325


    Property and equipment, net


    1,442


    1,445


    Operating lease right-of-use asset, net


    1,736


    2,077


    Software development costs, net


    1,792


    1,721


    Investment in Equity Securities


    1,838


    —


    Long-term investments


    2,500


    2,500


    Intangible assets, net


    33,478


    14,203


    Goodwill


    7,672


    6,588


    Other assets


    253


    152



    Total Assets


    $


    156,673


    $


    59,011



    LIABILITIES AND STOCKHOLDERS’ EQUITY



    Current Liabilities


    Accounts payable


    $


    2,414


    $


    908


    Accrued liabilities


    10,665


    2,739


    Operating lease obligation, current


    643


    647


    Deferred revenue


    4,805


    1,922


    Short-term debt


    3,490


    5,401


    Acquisition liability


    5,114


    500



    Total Current Liabilities


    27,131


    12,117



    Long Term Liabilities


    Operating lease obligations, noncurrent


    1,108


    1,457


    Other liabilities, noncurrent


    28


    7


    Acquisition liability, noncurrent


    220


    750



    Total Liabilities


    28,487


    14,331



    Commitments and Contingencies



    Mezzanine Equity


    Series 7 Convertible Preferred Stock – 58,750 shares authorized; 49,250 and

    – issued and outstanding as of December 31, 2021 and December 31, 2020,

    respectively. (Liquidation preference of $49,250,000)


    44,695


    —



    Stockholders’ Equity


    Preferred Stock – $0.001 par value; 5,000,000 shares authorized;


    Series 4 Convertible Preferred Stock – 10,415 shares authorized; 1 issued, and 1

    outstanding as of December 31, 2021 and December 31, 2020, respectively;


    —


    —


    Series 5 Convertible Preferred Stock – 12,000 shares authorized; 126 issued, and

    126 outstanding as of December 31, 2021 and December 31, 2020, respectively.


    —


    —


    Common Stock – $0.001 par value; 2,000,000,000 and 250,000,000 shares authorized;

    124,440,924 and 53,178,462 issued and 124,440,923 and 53,178,462

    outstanding as of December 31, 2021 and December 31, 2020, respectively.


    124


    53


    Additional paid-in capital


    332,639


    225,613


    Treasury stock, at cost, 1 share


    (695)


    (695)


    Accumulated other comprehensive income


    44


    660


    Accumulated deficit


    (250,309)


    (180,992)


    Stockholders’ Equity Attributable to Inpixon


    81,803


    44,639


    Non-controlling interest


    1,688


    41



    Total Stockholders’ Equity


    83,491


    44,680



    Total Liabilities, Mezzanine Equity and Stockholders’ Equity


    $


    156,673


    $


    59,011



    INPIXON AND SUBSIDIARIES



    CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS



    (In thousands, except per share data)


    For the Years Ended


    December 31,


    2021


    2020



    Revenues


    $


    15,995


    $


    9,297



    Cost of Revenues


    4,374


    2,613



    Gross Profit


    11,621


    6,684



    Operating Expenses


    Research and development


    14,121


    6,523


    Sales and marketing


    8,261


    5,331


    General and administrative


    41,352


    15,261


    Acquisition related costs


    1,248


    1,057


    Impairment of goodwill


    14,789


    —


    Amortization of intangibles


    4,467


    2,306



    Total Operating Expenses


    84,238


    30,478



    Loss from Operations


    (72,617)


    (23,794)



    Other Income (Expense)


    Interest expense, net


    1,183


    (2,426)


    Loss on exchange of debt for equity


    (30)


    (210)


    Benefit (provision) for valuation allowance on related

    party loan – held for sale


    7,345


    (2,370)


    Other income (expense)


    (173)


    (470)


    Gain on related party loan – held for sale


    49,817


    —


    Unrealized loss on equity securities


    (57,067)


    —



    Total Other Income (Expense)


    1,075


    (5,476)



    Net Loss, before tax


    (71,542)


    (29,270)


    Income tax benefit


    1,412


    56



    Net Loss


    (70,130)


    (29,214)



    Net Income (Expense) Attributable to Non-

    controlling Interest


    (975)


    15



    Net Loss Attributable to Stockholders of Inpixon


    (69,155)


    (29,229)


    Accretion of Series 7 preferred stock


    (8,161)


    —



    Net Loss Attributable to Common Stockholders


    $


    (77,316)


    $


    (29,229)



    Net Loss Per Share – Basic and Diluted


    $


    (0.72)


    $


    (1.01)



    Weighted Average Shares Outstanding


    Basic and Diluted


    107,981,441


    28,800,493



    Comprehensive Loss


    Net Loss


    $


    (70,130)


    $


    (29,214)


    Unrealized foreign exchange (loss) gain from

    cumulative translation adjustments


    (617)


    566



    Comprehensive Loss


    $


    (70,747)


    $


    (28,648)



    INPIXON AND SUBSIDIARIES



    CONSOLIDATED STATEMENTS OF CASH FLOWS



    (In thousands)


    For the Years Ended


    December 31,


    2021


    2020



    Cash Flows Used In Operating Activities


    Net loss


    $


    (70,130)


    $


    (29,214)


    Adjustments to reconcile net loss to net cash used in operating activities:


    Depreciation and amortization


    1,344


    826


    Amortization of intangible assets


    5,107


    2,545


    Amortization of right of use asset


    677


    490


    Stock based compensation


    10,879


    1,194


    Earnout payment expense


    6,524


    —


    Loss on exchange of debt for equity


    30


    210


    Amortization of debt discount


    224


    2,594


    Accrued interest income, related party


    (1,627)


    (32)


    Provision for doubtful accounts


    121


    956


    Unrealized gain/loss on note


    (92)


    —


    Provision for inventory obsolescense


    300


    138


    (Recovery) provision for the valuation allowance for held for sale loan


    (7,345)


    2,370


    Provision for the valuation allowance for related party receivable


    —


    648


    Gain on settlement of related party promissory note


    (49,817)


    —


    Deferred income tax


    (2,593)


    (87)


    Unrealized loss on equity securities


    57,067


    —


    Impairment of goodwill


    14,789


    —


    Loss on disposal of property and equipment


    24


    —


    Other


    235


    (6)


    Changes in operating assets and liabilities:


    Accounts receivable and other receivables


    (313)


    (964)


    Inventory


    (112)


    (117)


    Prepaid expenses and other current assets


    (4,006)


    (563)


    Other assets


    199


    (248)


    Accounts payable


    391


    (1,815)


    Accrued liabilities


    490


    269


    Income tax liabilities


    16


    —


    Deferred revenue


    817


    242


    Operating lease obligation


    (658)


    (490)


    Other liabilities


    328


    453



    Net Cash Used in Operating Activities


    $


    (37,131)


    $


    (20,601)



    Cash Flows Used in Investing Activities


    Purchase of property and equipment


    (346)


    (972)


    Investment in capitalized software


    (1,019)


    (862)


    Purchases of short term investments


    (2,000)


    (7,998)


    Sales of short term investments


    2,000


    —


    Purchases of treasury bills


    (63,362)


    —


    Sales of treasury bills


    28,000


    —


    Investment in Systat licensing agreement


    (900)


    (2,200)


    Purchase of intangibles assets


    (4)


    —


    Acquisition of the Ten Degrees


    —


    (1,500)


    Acquisition of Nanotron


    —


    (7,786)


    Acquisition of Intranav


    (1,023)


    —


    Acquisition of Game Your Game


    184


    —


    Acquisition of CXApp


    (14,977)


    —


    Acquisition of Visualix


    (61)


    —


    Investment in long term investment


    —


    (2,500)


    Cash acquired in the Nanotron acquisition


    —


    311



    Net Cash Used in Investing Activities


    $


    (53,508)


    $


    (23,507)



    Cash From Financing Activities


    Net repayments to bank facility


    $


    —


    $


    (150)


    Net proceeds from issuance of preferred stock and warrants


    50,585


    —


    Net proceeds from issuance of common stock and warrants


    77,852


    55,352


    Taxes paid related to net share settlement of restricted stock units


    (1,855)


    —


    Net repayment of notes payable


    —


    (74)


    Loans to related party


    (117)


    (2,569)


    Repayments from related party


    —


    200


    Net proceeds from promissory notes


    —


    5,000


    Repayment of CXApp acquisition liability


    (461)


    —


    Repayment of acquisition liability to Nanotron shareholders


    (467)


    —


    Repayment of acquisition liability to Locality shareholders


    (500)


    (500)



    Net Cash Provided By Financing Activities


    $


    125,037


    $


    57,259



    Effect of Foreign Exchange Rate on Changes on Cash


    86


    (4)



    Net Increase in Cash and Cash Equivalents


    34,484


    13,147


    Cash and Cash Equivalents – Beginning of year


    17,996


    4,849


    Cash and Cash Equivalents – End of year


    $


    52,480


    $


    17,996



    Reconciliation of Non-GAAP Financial Measures:



    For the Years Ended


    (In thousands)



    December 31,



    2021



    2020


    Net loss attributable to common stockholders


    $          (77,316)


    $         (29,229)


    Adjustments:


    Non-recurring one-time charges:


    Loss on exchange of debt for equity


    30


    210


    (Recovery) provision for valuation allowance on held for sale loan


    (7,345)


    2,370


    Provision for the valuation allowance related party receivable


    –


    648


    Gain on related party loan held for sale


    (49,817)


    –


    Unrealized loss on equity securities


    57,067


    –


    Acquisition transaction/financing costs


    1,248


    1,057


    Earnout compensation expense


    6,524


    –


    Professional service fees


    1,366


    –


    Accretion of series 7 preferred stock


    8,161


    –


    Impairment of goodwill


    14,789


    –


    Unrealized gains on notes, loans, investments


    241


    –


    Bad debts expense/provision


    121


    956


    Reserve for inventory obsolescence


    300


    –


    Stock-based compensation – compensation and related benefits


    10,879


    1,194


    Severance costs


    294


    –


    Interest expense, net


    (1,183)


    2,426


    Income tax benefit


    (1,412)


    (87)


    Depreciation and amortization


    6,451


    3,371


    Adjusted EBITDA


    $          (29,602)


    $         (17,084)



    For the Years Ended


    (In thousands, except share data)



    December 31,



    2021



    2020


    Net loss attributable to common stockholders


    $          (77,316)


    $         (29,229)


    Adjustments:


    Non-recurring one-time charges:


    Loss on exchange of debt for equity


    30


    210


    (Recovery) provision for valuation allowance on held for sale loan


    (7,345)


    2,370


    Provision for the valuation allowance related party receivable


    –


    648


    Gain on related party loan held for sale


    (49,817)


    –


    Unrealized loss on equity securities


    57,067


    –


    Acquisition transaction/financing costs


    1,248


    1,057


    Earnout compensation expense


    6,524


    –


    Professional service fees


    1,366


    –


    Accretion of series 7 preferred stock


    8,161


    –


    Impairment of goodwill


    14,789


    –


    Unrealized gains on notes, loans, investments


    241


    –


    Bad debts expense/provision


    121


    956


    Reserve for inventory obsolescence


    300


    –


    Stock-based compensation – compensation and related benefits


    10,879


    1,194


    Severance costs


    294


    –


    Amortization of intangibles


    5,107


    2,306


    Proforma non-GAAP net loss


    $          (28,351)


    $         (20,488)


    Proforma non-GAAP net loss per basic and diluted common share


    $              (0.26)


    $            (0.71)


    Weighted average basic and diluted common shares outstanding


    107,981,441


    28,800,493

    Cision
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    SOURCE Inpixon

    PR Newswire
    March 11, 2022 – 6:25 AM PST