Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 09, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | INPIXON | |
Entity Central Index Key | 1,529,113 | |
Trading Symbol | INPX | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 43,842,968 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 8,336 | $ 141 |
Accounts receivable, net | 1,364 | 2,310 |
Notes and other receivables | 167 | 183 |
Inventory | 852 | 790 |
Prepaid licenses and maintenance contracts | 12 | 4,638 |
Assets held for sale | 23 | |
Prepaid assets and other current assets | 1,044 | 1,123 |
Total Current Assets | 11,775 | 9,208 |
Prepaid licenses and maintenance contracts, non-current | 2,264 | |
Property and equipment, net | 331 | 520 |
Software development costs, net | 1,567 | 2,017 |
Intangible assets, net | 10,208 | 12,678 |
Goodwill | 636 | 636 |
Other assets | 375 | 368 |
Total Assets | 24,892 | 27,691 |
Current Liabilities | ||
Accounts payable | 18,637 | 25,834 |
Accrued liabilities | 1,434 | 5,421 |
Deferred revenue | 109 | 5,611 |
Short-term debt | 1,815 | 3,058 |
Derivative liabilities | 48 | |
Liabilities held for sale | 2,059 | |
Total Current Liabilities | 21,995 | 42,031 |
Long Term Liabilities | ||
Deferred revenue, non-current | 2,636 | |
Long-term debt | 142 | 767 |
Other liabilities | 75 | 113 |
Acquisition liability - Integrio | 62 | 997 |
Total Liabilities | 22,274 | 46,544 |
Stockholders' (Deficit) Equity | ||
Preferred Stock - $0.001 par value; 5,000,000 shares authorized, 0 issued and outstanding as of June 30, 2018 and December 31, 2017 | ||
Series 4 Convertible Preferred Stock - $1,000 stated value; 10,185 shares authorized; 2,318.2933 and 0 issued and 2,318.2933 and 0 outstanding at June 30, 2018 and December 31, 2017. Liquidation preference of $0 at June 30, 2018 and December 31, 2017. | ||
Common Stock - $0.001 par value; 250,000,000 shares authorized; 38,252,920 and 962,200 issued and 38,252,389 and 961,669 outstanding at June 30, 2018 and December 31, 2017, respectively. | 38 | 1 |
Additional paid-in capital | 108,539 | 78,302 |
Treasury stock, at cost, 531 shares | (695) | (695) |
Accumulated other comprehensive income | 26 | 31 |
Accumulated deficit (excluding $2,442 reclassified to additional paid in capital in quasi-reorganization) | (105,299) | (94,486) |
Stockholders' (Deficit) Equity Attributable to Inpixon | 2,609 | (16,847) |
Non-controlling Interest | 9 | (2,006) |
Total Stockholders' (Deficit) Equity | 2,618 | (18,853) |
Total Liabilities and Stockholders' (Deficit) Equity | $ 24,892 | $ 27,691 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 38,252,920 | 962,200 |
Common stock, shares outstanding | 38,252,389 | 961,669 |
Treasury stock, shares | 531 | 531 |
Accumulated deficit reclassified to additional paid in capital in quasi-reorganization | $ 2,442 | $ 2,442 |
Series 4 Convertible Preferred Stock | ||
Preferred stock, par value | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 10,185 | 10,185 |
Preferred stock, shares issued | 2,318.2933 | 0 |
Preferred stock, shares outstanding | 2,318.2933 | 0 |
Preferred stock, liquidation preference | $ 0 | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |||
Revenues | ||||||
Products | $ 707 | [1] | $ 12,210 | $ 1,182 | [1] | $ 21,659 |
Services | 1,121 | 2,886 | 2,740 | 6,919 | ||
Total Revenues | 1,828 | 15,096 | 3,922 | 28,578 | ||
Cost of Revenues | ||||||
Products | 343 | [1] | 10,231 | 598 | [1] | 18,285 |
Services | 474 | 1,481 | 1,078 | 3,620 | ||
Total Cost of Revenues | 817 | 11,712 | 1,676 | 21,905 | ||
Gross Profit | 1,011 | 3,384 | 2,246 | 6,673 | ||
Operating Expenses | ||||||
Research and development | 321 | 454 | 681 | 1,012 | ||
Sales and marketing | 975 | 2,181 | 1,944 | 4,221 | ||
General and administrative | 4,841 | 4,595 | 9,017 | 9,255 | ||
Acquisition related costs | 2 | 16 | 5 | |||
Amortization of intangibles | 1,323 | 1,382 | 2,645 | 2,767 | ||
Total Operating Expenses | 7,460 | 8,614 | 14,303 | 17,260 | ||
Loss from Operations | (6,449) | (5,230) | (12,057) | (10,587) | ||
Other Income (Expense) | ||||||
Interest expense | (356) | (1,344) | (1,638) | (2,027) | ||
Change in fair value of derivative liability | 152 | 48 | 208 | |||
Gain on the sale of Sysorex Arabia | 23 | |||||
Gain on the settlement of obligations | 1 | 1 | ||||
Other income/(expense) | 949 | 1,524 | (65) | |||
Total Other Income (Expense) | 594 | (1,192) | (42) | (1,884) | ||
Net Loss from Continuing Operations | (5,855) | (6,422) | (12,099) | (12,471) | ||
Loss from Discontinued Operations, Net of Tax | (9) | (17) | ||||
Net Loss | (5,855) | (6,431) | (12,099) | (12,488) | ||
Net Gain (Loss) Attributable to Non-controlling Interest | 3 | (4) | 2 | (9) | ||
Net Loss Attributable to Stockholders of Inpixon | (5,858) | (6,427) | (12,101) | (12,479) | ||
Deemed dividend to preferred stockholders | (9,727) | (11,235) | ||||
Net Loss Attributable to Common Stockholders | $ (15,585) | $ (6,427) | $ (23,336) | $ (12,479) | ||
Net Loss Per Basic and Diluted Common Share | ||||||
Loss from continuing operations | $ (1.08) | $ (81.2) | $ (3.44) | $ (164.63) | ||
Loss from discontinued operations | (0.11) | (0.22) | ||||
Net Loss Per Share - Basic and Diluted | $ (1.08) | $ (81.26) | $ (3.44) | $ (164.74) | ||
Weighted Average Shares Outstanding | ||||||
Basic and Diluted | 14,482,423 | 79,088 | 6,782,169 | 75,750 | ||
[1] | Product revenues and cost of revenues include maintenance/licenses contracts that are sold by the company but performed by third parties. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Loss | $ (5,855) | $ (6,431) | $ (12,099) | $ (12,488) |
Unrealized foreign exchange gain/(loss) from cumulative translation adjustments | 2 | (21) | (5) | (11) |
Comprehensive Loss | $ (5,853) | $ (6,452) | $ (12,104) | $ (12,499) |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Changes in Stockholders' (Deficit) Equity (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands | Total | Series 3 Convertible Preferred Stock | Series 4 Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Non-Controlling Interest |
Balance at Dec. 31, 2017 | $ (18,853) | $ 1 | $ 78,302 | $ (695) | $ 31 | $ (94,485) | $ (2,006) | ||
Balance, shares at Dec. 31, 2017 | 962,200 | (531) | |||||||
Common shares issued for services | 80 | 80 | |||||||
Common shares issued for services, shares | 7,838 | ||||||||
Stock options granted to employees for services | 777 | 777 | |||||||
Stock options granted to employees for services, shares | |||||||||
Fractional shares issued for stock split | |||||||||
Fractional shares issued for stock split, shares | 9,718 | ||||||||
Common and preferred shares issued in public offering, net | 27,963 | $ 6 | 27,957 | ||||||
Common and preferred shares issued in public offering, net, shares | 10,185 | 10,115 | 3,925,780 | ||||||
Redemption of convertible series 3 preferred stock | (2) | $ 2 | (4) | ||||||
Redemption of convertible series 3 preferred stock, shares | (10,185) | 4,334,032 | |||||||
Redemption of convertible series 4 preferred stock | $ 29 | (29) | |||||||
Redemption of convertible series 4 preferred stock, shares | (7,796.7067) | 28,738,093 | |||||||
Common shares issued for extinguishment of debenture liability | 1,456 | 1,456 | |||||||
Common shares issued for extinguishment of debenture liability, shares | 275,259 | ||||||||
Sale of Sysorex Arabia | 2,013 | 2,013 | |||||||
Cumulative Translation Adjustment | (5) | (5) | |||||||
Net loss | (12,099) | (12,101) | 2 | ||||||
Adoption of accounting standards (Note 2) | 1,287 | 1,287 | |||||||
Balance at Jun. 30, 2018 | $ 2,618 | $ 38 | $ 108,539 | $ (695) | $ 26 | $ (105,299) | $ 9 | ||
Balance, shares at Jun. 30, 2018 | 2,318.2933 | 38,252,920 | (531) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flows from Operating Activities | ||
Net loss | $ (12,099) | $ (12,488) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,040 | 834 |
Amortization of intangible assets | 2,645 | 2,767 |
Stock based compensation | 857 | 993 |
Amortization of technology | 33 | 33 |
Change in fair value of derivative liability | (48) | (208) |
Amortization of debt discount | 417 | 1,251 |
Amortization of deferred financing costs | 102 | |
Provision for doubtful accounts | 221 | |
Gain on the settlement of liabilities | (262) | |
Gain on the sale of Sysorex Arabia | (23) | |
Other | 2 | 41 |
Changes in operating assets and liabilities: | ||
Accounts receivable and other receivables | 741 | 5,691 |
Inventory | (62) | 267 |
Other current assets | 78 | 523 |
Prepaid licenses and maintenance contracts | (12) | 5,644 |
Other assets | (41) | (106) |
Accounts payable | (6,934) | 2,839 |
Accrued liabilities | (3,561) | (515) |
Deferred revenue | 52 | (6,024) |
Other liabilities | (973) | (101) |
Total Adjustments | (5,830) | 14,031 |
Net Cash (Used in) Provided by Operating Activities | (17,929) | 1,543 |
Cash Flows Used in Investing Activities | ||
Purchase of property and equipment | (39) | (86) |
Investment in capitalized software | (364) | (718) |
Investment in technology | (175) | |
Net Cash Flows Used in Investing Activities | (578) | (804) |
Cash Flows from Financing Activities | ||
Repayments to bank facility | (1,141) | (4,345) |
Net proceeds from issuance of common stock, preferred stock and warrants | 27,961 | 5,570 |
Repayment of notes payable | (113) | (20) |
Repayment of debenture | (3,050) | |
Net proceeds from convertible promissory notes | 2,000 | |
Repayment of convertible promissory notes | (2,662) | |
Net Cash Provided by (Used In) Financing Activities | 26,707 | (2,507) |
Effect of Foreign Exchange Rate on Changes on Cash | (5) | (11) |
Net Increase (Decrease) in Cash and Cash Equivalents | 8,195 | (1,779) |
Cash and Cash Equivalents - Beginning of period | 141 | 1,821 |
Cash and Cash Equivalents - End of period | 8,336 | 42 |
Cash paid for: | ||
Interest | 695 | 468 |
Income Taxes | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Reclassification of warrants to derivative liabilities | 3,773 | |
Issuance of shares for acquisition | 567 | |
Issuance of shares for settlement of accrued interest | 316 | |
Common shares issued for extinguishment of debenture liability | 1,456 | |
Adjustments to opening retained earnings for adoption of ASC 606 | $ 1,287 |
Organization and Nature of Busi
Organization and Nature of Business and Going Concern | 6 Months Ended |
Jun. 30, 2018 | |
Organization and Nature of Business and Going Concern [Abstract] | |
Organization and Nature of Business and Going Concern | Note 1 - Organization and Nature of Business and Going Concern Inpixon, through its wholly-owned subsidiaries, Sysorex, Inc., formerly known as (f/k/a) Inpixon USA (“Sysorex”), Sysorex Government Services, Inc., f/k/a Inpixon Federal, Inc. (“SGS”), Inpixon Canada, Inc. (“Inpixon Canada”), and its majority-owned subsidiary Sysorex India Limited (“Sysorex India”) (unless otherwise stated or the context otherwise requires, the terms “Inpixon” “we,” “us,” “our” and the “Company” refer collectively to Inpixon and the above subsidiaries), provides Big Data analytics and location based products and related services for the cyber-security and Internet of Things markets. The Company is headquartered in California, and has sales and subsidiary offices in Virginia, California, Hyderabad, India and Vancouver, Canada. On December 31, 2017, and as more fully described in Note 4, the Company acquired approximately 82.5% of the outstanding equity securities of Sysorex India which is in the business of IT Services including software application and development, quality assurance (“QA”) and testing and graphical user interface (“GUI”) development. On May 18, 2018 Inpixon Federal, Inc. formerly changed its name with the State of Virginia to Sysorex Government Services, Inc. On July 26, 2018, and as more fully described in Note 17, Inpixon USA was part of a reorganization whereby the surviving entity was named Sysorex, Inc. Going Concern and Management’s Plans As of June 30, 2018, the Company has a working capital deficiency of approximately $10.2 million. For the six months ended June 30, 2018, the Company incurred a net loss of approximately $12.1 million. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern within one year after the date the financial statements are issued. On January 5, 2018, the Company entered into a securities purchase agreement with certain investors pursuant to which it sold an aggregate of 599,812 shares of the Company’s common stock and warrants to purchase up to 599,812 shares of common stock at a purchase price of $5.31 per share of common stock for aggregate gross proceeds of approximately $3.2 million. On February 20, 2018, the Company completed a public offering consisting of an aggregate of 3,325,968 Class A units, at a price to the public of $2.35 per Class A unit, and 10,184.9752 Class B units, at a price to the public of $1,000 per Class B unit for aggregate gross proceeds of approximately $18 million. On April 24, 2018, the Company completed a public offering consisting of 10,115 units at a price to the public of $1,000 per unit for aggregate net proceeds after expenses of approximately $9.2 million. The Company expects its capital resources as of June 30, 2018, availability on the Payplant Facility to finance purchase orders and invoices in an amount equal to 80% of the face value of purchase orders received (as described in Note 8), funds from higher margin business line expansion and credit limitation improvements should be sufficient to fund planned operations during the year ending December 31, 2018. However, the Company is pursuing strategic transactions and if the Company pursues acquisitions, other expansion plans or changes its business plan it may need to raise additional capital. The Company may raise the additional capital, if needed, through the issuance of equity, equity-linked or debt securities. The Company’s board of directors has approved the separation of the Company’s infrastructure business segment, sometimes referred to as the Value Added Reseller (“VAR”) business from the indoor positioning analytics business, pursuant to a Separation and Distribution Agreement, dated August 7, 2018 which is anticipated to reduce operating expenses and eliminate substantially all of the Company’s trade debt. In connection with such a transaction, the Company has agreed to contribute an amount equal to $2 million to Sysorex from Inpixon’s cash and cash equivalents on Inpixon’s balance sheet at the effective time of the spin-off which amount shall be reduced by the aggregate amount of certain operating and other expenses of Sysorex that have been or will be satisfied by Inpixon from June 30, 2018 through the distribution date which |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Basis of Presentation/Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Note 2 - Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information, which are the accounting principles that are generally accepted in the United States of America. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of the Company’s operations for the six month period ended June 30, 2018 is not necessarily indicative of the results to be expected for the year ending December 31, 2018. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the years ended December 31, 2017 and 2016 included in the Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 27, 2018. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Basis of Presentation/Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3 - Summary of Significant Accounting Policies The Company’s complete accounting policies are described in Note 2 to the Company’s audited consolidated financial statements and notes for the years ended December 31, 2017 and 2016. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during each of the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates consist of: ● the valuation of stock-based compensation; ● the allowance for doubtful accounts; ● the valuation allowance for the deferred tax asset; and ● impairment of long-lived assets and goodwill. Revenue Recognition Hardware and Software Revenue Recognition In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-08, “Revenue from Contracts with Customers - Principal versus Agent Considerations”, in April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing” and in May 9, 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606)”, or ASU 2016-12. This update provides clarifying guidance regarding the application of ASU No. 2014-09 - Revenue From Contracts with Customers which is not yet effective. These new standards provide for a single, principles-based model for revenue recognition that replaces the existing revenue recognition guidance. In July 2015, the FASB deferred the effective date of ASU 2014-09 until annual and interim periods beginning on or after December 15, 2017. It has replaced most existing revenue recognition guidance under GAAP. The ASU may be applied retrospectively to historical periods presented or as a cumulative-effect adjustment as of the date of adoption. We have adopted Topic 606 using a modified retrospective approach and will be applied prospectively in our financial statements from January 1, 2018 forward. Revenues under Topic 606 are required to be recognized either at a “point in time” or “over time”, depending on the facts and circumstances of the arrangement, and will be evaluated using a five-step model. The adoption of Topic 606 did not have a material impact on our financial statements, either at initial implementation nor will it have a material impact on an ongoing basis. For sales of hardware and software products, the Company’s performance obligation is satisfied at a point in time when they are shipped to the customer. This is when the customer has title to the product and the risks and rewards of ownership. The delivery of products to our customers occurs in a variety of ways, including (i) as a physical product shipped from the Company’s warehouse, (ii) via drop-shipment by a third-party vendor, or (iii) via electronic delivery with respect to software licenses. The Company leverages drop-ship arrangements with many of its vendors and suppliers to deliver products to customers without having to physically hold the inventory at its warehouse. In such arrangements, the Company negotiates the sale price with the customer, pays the supplier directly for the product shipped, bears credit risk of collecting payment from its customers and is ultimately responsible for the acceptability of the product and ensuring that such product meets the standards and requirements of the customer. Accordingly, the Company is the principal in the transaction with the customer and records revenue on a gross basis. The Company receives fixed consideration for sales of hardware and software products. The Company’s customers generally pay within 30 to 60 days from the receipt of a customer approved invoice. The Company has elected the practical expedient to expense the costs of obtaining a contract when they are incurred because the amortization period of the asset that otherwise would have been recognized is less than a year. Software As A Service Revenue Recognition With respect to sales of our maintenance, consulting and other service agreements including our digital advertising and electronic services, customers pay fixed monthly fees in exchange for the Company’s service. The Company’s performance obligation is satisfied over time as the digital advertising and electronic services are provided continuously throughout the service period. The Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous access to its service. License and Maintenance Services Revenue Recognition Typically, the Company sells maintenance contracts between the manufacturer and the customer for a separate fee with initial contractual periods ranging from one to five years with renewal for additional periods thereafter. The Company’s performance obligation is to work with customers to identify the computer maintenance and warranty services that best suit the customer’s needs and sell them those products and services however the maintenance is provided to the customer by the manufacturer. While a third party is responsible for actually performing the services for the customer, historically, in accordance with its policies and historical business practices, the Company has assumed responsibility for ensuring that the recommended services that are provided as part of the overall solution meets client expectations and therefore the Company assumes control of the services to be provided before they are performed for the benefit of the customer. In addition, the Company has full discretion in establishing the sale price to the customer which is determined based on the entire customized solution of products and services offered to the customer and bears the credit risk by paying the supplier for purchased services and collecting payment from the customer and therefore recognizes revenue from maintenance services on a gross basis, For these contracts the customer is invoiced one time and pays up front for the full term of the warranty and maintenance contract. Prior to the adoption of ASC 606 as of January 1, 2018, revenue from these contracts was recognized ratably over the contract period with the unearned revenue recorded as deferred revenue and amortized over the contract period. Adoption of Topic 606 has changed the recognition of our license and maintenance revenue as it was previously recognized over time however under the new policy it is recognized at a point in time and therefore the Company’s accumulated deferred revenue was accelerated as of January 1, 2018. Professional Services Revenue Recognition The Company’s professional services include fixed fee and time and materials contracts. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. The Company’s time and materials contracts are paid weekly or monthly based on hours worked. Revenue on time and material contracts is recognized based on a fixed hourly rate as direct labor hours are expended. Materials, or other specified direct costs, are reimbursed as actual costs and may include markup. The Company has elected the practical expedient to recognize revenue for the right to invoice because the Company’s right to consideration corresponds directly with the value to the customer of the performance completed to date. For fixed fee contracts, the Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous service. Because the Company’s contracts have an expected duration of one year or less, the Company has elected the practical expedient in Accounting Standards Codification (“ASC”) 606-10-50-14(a) to not disclose information about its remaining performance obligations. Anticipated losses are recognized as soon as they become known. For the three and six months ended June 30, 2018 and 2017, the Company did not incur any such losses. These amounts are based on known and estimated factors. Revenues from time and material or firm fixed price long-term and short-term contracts are derived principally with various United States government agencies and commercial customers. Contract Balances The timing of our revenue recognition may differ from the timing of payment by our customers. We record a receivable when revenue is recognized prior to payment and we have an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, we record deferred revenue until the performance obligations are satisfied. The Company had deferred revenue of approximately $109,000 as of June 30, 2018 related to cash received in advance for product maintenance services provided by the Company’s technical staff. The Company expects to satisfy its remaining performance obligations for these maintenance services and recognize the deferred revenue over the next twelve months. Stock-Based Compensation The Company accounts for options granted to employees by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as an expense over the period during which the recipient is required to provide services in exchange for that award. Options and warrants granted to consultants and other non-employees are recorded at fair value as of the grant date and subsequently adjusted to fair value at the end of each reporting period until such options and warrants vest, and the fair value of such instruments, as adjusted, is expensed over the related vesting period. The Company incurred stock-based compensation charges, net of estimated forfeitures, of $571,000 and $710,000 for the three months ended June 30, 2018 and 2017, and $857,000 and $993,000 for the six months ended June 30, 2018 and 2017, respectively, which are included in general and administrative expenses. The following table summarizes the nature of such charges for the periods then ended (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Compensation and related benefits $ 571 $ 250 $ 777 $ 512 Professional and legal fees -- 145 80 159 Acquisition transaction costs -- -- -- 7 Interest expense -- 315 -- 315 Totals $ 571 $ 710 $ 857 $ 993 Net Loss Per Share The Company computes basic and diluted earnings per share by dividing net loss by the weighted average number of common shares outstanding during the period. Basic and diluted net loss per common share were the same since the inclusion of common shares issuable pursuant to the exercise of options and warrants in the calculation of diluted net loss per common shares would have been anti-dilutive. The following table summarizes the number of common shares and common share equivalents excluded from the calculation of diluted net loss per common share for the six months ended June 30, 2018 and 2017: For the Six Months Ended 2018 2017 Options 2,722,309 12,228 Warrants 64,918,852 9,581 Convertible preferred stock 32,110,791 -- Convertible note 630,139 -- Convertible debenture -- 3,927 Reserved for service providers 44,000 -- Totals 100,426,091 25,736 Preferred Stock The Company applies the accounting standards for distinguishing liabilities from equity under GAAP when determining the classification and measurement of its convertible preferred stock. Preferred shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, preferred shares are classified as permanent equity. Reclassification Certain accounts in the prior year’s financial statements have been reclassified for comparative purposes to conform to the presentation in the current year’s financial statements. These reclassifications have no effect on previously reported earnings. Derivative Liabilities During the year ended December 31, 2016, the Company issued a convertible debenture that included reset provisions considered to be down-round protection. In addition, the Company issued warrants that include a fundamental transaction clause which provide for the warrant holders to be paid in cash the fair value of the warrants as computed under a Black Scholes valuation model. The Company determined that the conversion feature and warrants are derivative instruments pursuant to ASC 815 “Derivatives and Hedging” issued by the FASB. The accounting treatment of derivative financial instruments requires that the Company bifurcate the conversion feature and record it as a liability at fair value and the fair value of the warrants were computed as defined in the agreement. The instruments are marked-to-market at fair value as of each balance sheet date. Any change in fair value is recorded as a change in the fair value of derivative liabilities for each reporting period. The fair value of the conversion feature was determined using the Binomial Lattice model. The Company reassesses the classification at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As of June 30, 2018, the fair value of the derivative liability was $0. Software Development Costs The Company develops and utilizes internal software for the processing of data provided by its customers. Costs incurred in this effort are accounted for under the provisions of FASB ASC 350-40, Internal Use Software and ASC 985-20, Software – Cost of Software to be Sold, Leased or Marketed, whereby direct costs related to development and enhancement of internal use software is capitalized, and costs related to maintenance are expensed as incurred. The Company capitalizes its direct internal costs of labor and associated employee benefits that qualify as development or enhancement. These software development costs are amortized over the estimated useful life which management has determined ranges from one to five years. Impairment of Long-Lived Assets The Company assesses the recoverability of its long-lived assets, including property and equipment and intangible assets, when there are indications that the assets might be impaired. When evaluating assets for potential impairment, the Company compares the carrying value of the asset to its estimated undiscounted future cash flows. If an asset’s carrying value exceeds such estimated cash flows (undiscounted and with interest charges), the Company records an impairment charge for the difference. Based on its assessments, the Company did not record any impairment charges for the six months ended June 30, 2018 and 2017. Recent Accounting Standards In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The FASB issued ASU 2015-17 as part of its ongoing Simplification Initiative, with the objective of reducing complexity in accounting standards. The amendments in ASU 2015-17 require entities that present a classified balance sheet to classify all deferred tax liabilities and assets as a noncurrent amount. This guidance does not change the offsetting requirements for deferred tax liabilities and assets, which results in the presentation of one amount on the balance sheet. Additionally, the amendments in ASU 2015-17 align the deferred income tax presentation with the requirements in International Accounting Standards (IAS) 1, Presentation of Financial Statements. The amendments in ASU 2015-17 are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The adoption of ASU 2015-17 did not have a material impact on its financial statements. In September 2017, the FASB issued ASU No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments” that enhances the guidance surrounding sale leaseback transactions, accounting for taxes on leveraged leases and leases with third party value. The related amendments to the Topics described above become effective on the same schedule as Topics 605, 606, 840 and 842. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC 605 - Revenue Recognition (“ASC 605”) and most industry-specific guidance throughout ASC 605. The FASB has issued numerous updates that provide clarification on a number of specific issues as well as requiring additional disclosures. The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 effective January 1, 2018 using the modified retrospective method which was applied to all contracts at the date of initial application. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09, Revenue - Revenue from Contracts with Customers Balance at December 31, 2017 Adjustments due to ASU 2014-09 Balance at January 1, 2018 Balance Sheet: Assets Prepaid licenses & maintenance contracts, current $ 4,638 $ (4,638 ) $ -- Prepaid licenses & maintenance contracts, non-current $ 2,264 $ (2,264 ) $ -- Liabilities $ 5,611 $ (5,553 ) $ 58 Deferred revenue, current $ 2,636 $ (2,636 ) $ -- Deferred revenue, non-current Equity Accumulated deficit $ (94,486 ) $ 1,287 $ (93,199 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our condensed consolidated income statement and balance sheet was as follows (in millions): For the Three Months Ended June 30, 2018 As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 707 2,345 (1,638 ) Services 1,121 1,121 -- Cost and expenses Cost of Revenues Products (A) 343 1,728 (1,385 ) Services 474 474 -- Gross Profit 1,011 1,264 (253 ) Income/Loss from Operations (6,449 ) (6,196 ) (253 ) Net Income (Loss) (5,855 ) (5,602 ) (253 ) For the Six Months Ended June 30, 2018 As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 1,182 4,852 (3,670 ) Services 2,740 2,740 -- Cost and expenses Cost of Revenues Products (A) 598 3,700 (3,102 ) Services 1,078 1,078 -- Gross Profit 2,246 2,814 (568 ) Income/Loss from Operations (12,057 ) (11,489 ) (568 ) Net Income (Loss) (12,099 ) (11,531 ) (568 ) As of June 30, 2018 As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Balance Sheet Assets Prepaid Licenses & Maintenance Contracts, current 12 1,548 (1,536 ) Prepaid Licenses & Maintenance Contracts, non-Current -- 2,264 (2,264 ) Liabilities Deferred Revenue , current 109 1,994 (1,885 ) Deferred Revenue, non-current -- 2,636 (2,636 ) Equity Accumulated Deficit (105,299 ) (106,019 ) 720 (A) Product revenues and cost of revenues include maintenance/licenses contracts that are sold by the company but performed by third parties. Reverse Stock Split On March 1, 2017, the Company effectuated a 1-for-15 reverse stock split of its outstanding common stock. In addition, on February 6, 2018, the Company effectuated a 1-for-30 reverse stock split of its outstanding common stock. The financial statements and accompanying notes give effect to both of the reverse stock splits as if they occurred at the beginning of the first period presented. Subsequent Events The Company evaluates events and/or transactions occurring after the balance sheet date and before the issue date of the condensed consolidated financial statements to determine if any of those events and/or transactions requires adjustment to or disclosure in the consolidated financial statements. |
Sysorex India Acquisition
Sysorex India Acquisition | 6 Months Ended |
Jun. 30, 2018 | |
Sysorex India Acquisition [Abstract] | |
Sysorex India Acquisition | Note 4 - Sysorex India Acquisition Effective as of December 31, 2017, the Company acquired approximately 82.5% of the outstanding equity securities of Sysorex India from Sysorex Consulting, Inc. (“SCI”) pursuant to that certain Stock Purchase Agreement, dated as of December 31, 2017, by and among the Company, SCI and Sysorex India, in exchange for the assignment by the Company of $37,000 of outstanding receivables. The Company acquired Sysorex India to pursue sales and business development opportunities in India. In addition, the Company is looking to potentially expand its engineering and development teams in India. Sysorex India is in the business of IT Services including software application and development, QA and testing and GUI development. The purchase price is allocated as follows (in thousands): Assets Acquired: Cash $ 1 Fixed assets 14 Other assets 32 Total Assets Acquired 47 Liabilities Assumed: Other current liabilities 10 Total Liabilities Assumed 10 Total Purchase Price $ 37 |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2018 | |
Inventory [Abstract] | |
Inventory | Note 5 - Inventory Inventory as of June 30, 2018 and December 31, 2017 consisted of the following (in thousands): As of June 30, 2018 As of December 31, 2017 Raw materials $ 220 $ 220 Work in process -- 7 Finished goods 632 563 Total Inventory $ 852 $ 790 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill [Abstract] | |
Goodwill | Note 6 - Goodwill The Company has recorded goodwill and other indefinite-lived assets in connection with its acquisitions of Lilien LLC, including all of the outstanding capital stock of Lilien Systems (collectively, “Lilien”), Shoom Inc. (“Shoom”), AirPatrol Corporation (“Airpatrol”), LightMiner Systems, Inc. (“Lightminer”) and Integrio, LLC (“Integrio”). Goodwill, which represents the excess of acquisition cost over the fair value of the net tangible and intangible assets of the acquired company, is not amortized. Indefinite-lived intangible assets are stated at fair value as of the date acquired in a business combination. The Company’s goodwill balance and other assets with indefinite lives were evaluated for potential impairment during the six months ended June 30, 2018 and 2017 and it was determined that there was no impairment. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2018 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note 7 - Discontinued Operations As of December 31, 2015, the Company’s management decided to close its Saudi Arabia legal entity as business activities and operations have been strategically shifted according to the business plan of the Company. On January 18, 2018, the Company sold its 50.2% interest in Sysorex Arabia to SCI in consideration for SCI’s assumption of 50.2% of the assets and liabilities of Sysorex Arabia, totaling approximately $11,500 and $1 million, respectively. In accordance with ASC topic 360 “Property, Plant and Equipment”, the Company had classified the assets and liabilities as available for sale assets and liabilities as of December 31, 2017 in the accompanying condensed consolidated financial statements. The major categories of assets and liabilities held for sale in the condensed consolidated balance sheets as of December 31, 2017 (in thousands): As of December 31, Assets: Accounts receivable, net $ 1 Notes and other receivables 8 Other assets 14 Total Current Assets 23 Other assets -- Total Assets $ 23 Liabilities: Current Liabilities: Accounts payable $ 178 Accrued liabilities 918 Deferred revenue 236 Due to related party 5 Short term debt 722 Total Current Liabilities 2,059 Long Term Liabilities -- Total Liabilities $ 2,059 The Company has entered into surety bonds with a financial institution in Saudi Arabia which guaranteed performance on certain contracts. Deposits for surety bonds amounted to $0 as of December 31, 2017, as a reserve was placed against the deposit balance during the year ended December 31, 2016 due to the uncertainty of when the bond will be released. The Company did not recognize any depreciation or amortization expense related to discontinued operations during the six months ended June 30, 2018 or 2017. There were no significant capital expenditures or non-cash operating or investing activities of discontinued operations during the periods presented. The operations of Sysorex Arabia were insignificant for the year ended December 31, 2017. On January 18, 2018, the Company sold its 50.2% interest in Sysorex Arabia to SCI in consideration for SCI’s assumption of 50.2% of the assets and liabilities of Sysorex Arabia. End of Service Indemnity Provision In accordance with local labor laws, Sysorex Arabia is required to accrue benefits payable to its employees at the end of their services with Sysorex Arabia. For the six months ended June 30, 2018 and 2017, no amounts were required to be accrued under this provision. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt [Abstract] | |
Debt | Note 8 - Debt Debt as of June 30, 2018 and December 31, 2017 consisted of the following (in thousands): As of June 30, 2018 As of December 31, 2017 Short-Term Debt Notes payable (A) $ 1,815 $ 1,917 Revolving line of credit (B) -- 1,141 Total Short-Term Debt $ 1,815 $ 3,058 Long-Term Debt Notes payable $ 142 $ 175 Senior secured convertible debenture, less debt discount of $417 (C) -- 592 Total Long-Term Debt $ 142 $ 767 (A) Convertible Notes Payable On November 17, 2017, the Company issued a $1.745 million principal face amount convertible promissory note (the “November Note”) to an accredited investor (the “November Noteholder”) which yielded net proceeds of $1.5 million to the Company pursuant to that certain Securities Purchase Agreement, dated as of November 17, 2017, by and between the Company and the November Noteholder (the “November Note SPA” and together with the November Note, the “November Transaction Documents”). On January 5, 2018, the November Transaction Documents were amended pursuant to a Waiver and First Amendment Agreement (the “Waiver and Amendment Agreement”). The November Note, as amended, bears interest at the rate of 10% per year and is due 10 months after the date of issuance. In accordance with the Waiver and Amendment Agreement, the Conversion Price (as defined in the November Note) was amended to be equal to 70% of the closing bid price reported by the Nasdaq Stock Market as of the date immediately prior to each applicable conversion, subject to a floor of $3.00 (subject to adjustment). The approval of the issuance of the shares of common stock pursuant to the Waiver and Amendment Agreement was obtained at a meeting of stockholders held on February 2, 2018. Redemptions may occur at any time after the 6 month anniversary of the date of issuance of the November Note with a minimum redemption price equal to the Conversion Price. If the conversion rate is less than the market price, then the redemptions must be made in cash. The November Note contains standard events of default and a schedule of redemption premiums and a most favored nations provision which allows for adjustments upon dilutive issuances which is subject to a floor of $3.00. On May 23, 2018, the Company and the November Noteholder entered into a Standstill Agreement whereby the November Noteholder agreed to delay for a period of nine months following the Purchase Price Date its right to make redemptions under the November Note. In exchange for the agreement and for reimbursement of the fees incurred by the November Noteholder in having the Standstill Agreement prepared, the Company paid the November Noteholder $68,000 upon execution of the agreement which is included as a part of interest expense in the statement of operations. (B) Revolving Lines of Credit Payplant Accounts Receivable Bank Line Pursuant to the terms of that certain Commercial Loan Purchase Agreement, dated as of August 14, 2017 (the “Purchase Agreement”), Gemcap Lending I, LLC (“GemCap”) sold and assigned to Payplant LLC, as agent for Payplant Alternatives Fund LLC (“Payplant” or “Lender”), all of its right, title and interest to that certain revolving Secured Promissory Note in an aggregate principal amount of up to $10,000,000 (the “GemCap Note”) issued in accordance with that certain Loan and Security Agreement, dated as of November 14, 2016 (the “GemCap Loan”), by and among Gemcap and the Company and its wholly-owned subsidiaries, Sysorex and SGS for an aggregate purchase price of $1,402,770.16. In connection with the purchase and assignment of the Gemcap Loan in accordance with the Purchase Agreement, the GemCap Loan was amended and restated in accordance with the terms and conditions of the Payplant Loan and Security Agreement, dated as of August 14, 2017, between the Company and Payplant (the “Loan Agreement”). The Loan Agreement allows the Company to request loans (each a “Loan” and collectively the “Loans”) from the Lender (in the manner provided therein) with a term of no greater than 360 days in amounts that are equivalent to 80% of the face value of purchase orders received (“Aggregate Loan Amount”). The Lender is not obligated to make the requested loan, however, if the Lender agrees to make the requested loan, before the loan is made, the Company must provide Lender with (i) one or more promissory notes (“Notes”) for the amount being loaned in favor of Lender, (ii) one or more guaranties executed in favor of Lender and (iii) other documents and evidence of the completion of such other matters as Lender may request. The principal amount of each Loan shall accrue interest at a 30 day rate of 2% (the “Interest Rate”), calculated per day on the basis of a year of 360 days and, when combined with all fees that may be characterized as interest will not exceed the maximum rate allowed by law Upon the occurrence and during the continuance of any event of default, interest shall accrue at a rate equal to the Interest Rate plus 0.42% per 30 days. All computations of interest shall be made on the basis of a year of 360 days. The promissory note is subject to the interest rates described in the Loan Agreement and is secured by the assets of the Company pursuant to the Loan Agreement and will be satisfied in accordance with the terms of the Payplant Client Agreement. (C) Senior Secured Debenture Debenture Amendment On January 5, 2018, the then holder of that certain 8% Original Issue Discount Note (the “Debenture”) of which an aggregate principal amount of $1,004,719 plus interest and the Company agreed to amend the Debenture to: (i) cause an event of default in the event of the failure by the Company to amend its Articles of Incorporation in order to increase its authorized shares (the “Authorized Share Amendment”) or otherwise reserve a sufficient number of shares of common stock for issuance upon conversion of the Debenture on or prior to February 15, 2018; and (ii) require a reserve of at least 150% of the number of shares into which the Debenture is convertible upon the effectiveness of the Authorized Share Amendment. On February 5, 2018, the holder of the Debenture delivered a conversion notice to the Company pursuant to which it converted $300,000 of principal of the Debenture into 50,143 shares of the Company’s common stock. Such shares of common stock were issued on February 6, 2018. On February 7, 2018, the holder of the Debenture delivered a conversion notice to the Company pursuant to which it converted $400,000 of principal of the Debenture into 119,296 shares of the Company’s common stock. On February 9, 2018, the holder of the Debenture delivered a final conversion notice to the Company pursuant to which it converted $317,000 of principal of the Debenture into 105,820 shares of the Company’s common stock, which satisfied the debenture in full. The Company analyzed the conversions of the Debenture and determined there was a beneficial conversion feature which has a value of $439,000. The Company recorded this amount as interest expense-debt discount on the condensed consolidated statement of operations and as an increase to additional paid in capital on the condensed consolidated balance sheet. |
Capital Raise
Capital Raise | 6 Months Ended |
Jun. 30, 2018 | |
Capital Raise [Abstract] | |
Capital Raise | Note 9 - Capital Raise January 2018 Capital Raise On January 5, 2018, the Company entered into that certain Securities Purchase Agreement (the “January 2018 SPA”) with certain investors (the “January 2018 Investors”) pursuant to which the Company agreed to sell an aggregate of 599,812 shares (the “January 2018 Shares”) of the Company’s common stock, at a purchase price of $5.31 per share (the “January 2018 Offering”) and warrants to purchase up to 599,812 shares (the “January 2018 Warrant Shares”) of common stock (the “January 2018 Warrants”). The aggregate gross proceeds for the sale of the January 2018 Shares and January 2018 Warrants was approximately $3.2 million. The January 2018 Warrants were initially exercisable at an exercise price per share equal to $6.60, subject to certain adjustments, and will expire on the five year anniversary of the initial exercise date. Following the February offering described below, the exercise price of the January 2018 Warrants was reduced to $3.00 per share. February 2018 Public Offering On February 20, 2018, the Company completed a public offering for approximately $18 million in securities, consisting of an aggregate of 3,325,968 Class A units, at a price to the public of $2.35 per Class A unit, each consisting of one share of the Company’s common stock and a five-year warrant to purchase one share of common stock at an exercise price of $3.50 per share (“February 2018 Warrants”), and 10,184.9752 Class B units, at a price to the public of $1,000 per Class B unit, each consisting of one share of the Company’s newly designated Series 3 convertible preferred stock (“Series 3 Preferred”) with a stated value of $1,000 and initially convertible into approximately 426 shares of our common stock at a conversion price of $2.35 per share for up to an aggregate of 4,334,032 shares of common stock and February 2018 Warrants exercisable for the number of shares of common stock into which the shares of Series 3 Preferred were initially convertible. The Company received approximately $18 million in gross proceeds from the offering, including $1 million in amounts payable to service providers that participated in the offering, and before placement agent fees and offering expenses payable by the Company. After satisfying the amounts due to service providers and deducting placement agent fees, the net proceeds from the offering were approximately $15.4 million. The embedded conversion option associated with the Series 3 Preferred shares has a beneficial conversion feature which has a value of $1,508,000. The Company recorded this amount as a deemed dividend on the condensed consolidated statement of operations for these beneficial conversion features. April 2018 Public Offering On April 24, 2018, the Company completed a public offering consisting of 10,115 units at a price to the public of $1,000 per unit, each consisting of (i) one share of our newly designated Series 4 convertible preferred stock (the “Series 4 Preferred”) with a stated value of $1,000 and initially convertible into approximately 2,174 shares of common stock, at a conversion price of $0.46 per share (subject to adjustment) and (ii) one warrant to purchase such number of shares of common stock as each share of Series 4 Preferred is convertible into. The warrants are immediately exercisable at an exercise price of $0.67 per share (subject to adjustment). The Company received approximately $10.1 million in gross proceeds from this offering, before deducting placement agent fees and offering expenses payable by the Company. After deducting placement agent fees and expenses, the net proceeds from this offering were approximately $9.2 million. The embedded conversion option associated with the Series 4 Preferred shares has a beneficial conversion feature which has a value of $673,000. Additionally, the embedded conversion option had a price reset feature which resulted in the reduction of the conversion price from $0.46 to $0.1779 on June 25, 2018 which has a value of $4,226,000. The Company recorded $4,899,000 as a deemed dividend on the condensed consolidated statement of operations for these beneficial conversion features. The April 2018 capital raise reset the price of the February 2018 Warrants to the floor price of $0.634 and increased the number of shares issuable upon exercise of such warrants to 42,287,102 shares of common stock. The Company has presented a deemed dividend of $4,828,000 on the condensed consolidated statement of operations for this price reset. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2018 | |
Common Stock [Abstract] | |
Common Stock | Note 10 - Common Stock On January 5, 2018 the Company issued 7,838 shares of common stock pursuant to a subscription agreement with a service provider at a purchase price of $10.20 per share, in satisfaction of $80,000 payable to the provider. On January 5, 2018, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company agreed to sell an aggregate of 599,812 shares of the Company’s common stock, at a purchase price of $5.31 per share (see Note 9). On February 5, 2018, the holder of the Debenture delivered a conversion notice to the Company pursuant to which it converted $300,000 of principal of the Debenture into 50,143 shares of the Company’s common stock. Such shares of common stock were issued on February 6, 2018. On February 7, 2018, the holder of the Debenture delivered a conversion notice to the Company pursuant to which it converted $400,000 of principal of the Debenture into 119,296 shares of the Company’s common stock. On February 9, 2018, the holder of the Debenture delivered a final conversion notice to the Company pursuant to which it converted $317,000 of principal of the Debenture into 105,820 shares of the Company’s common stock, which paid the Debenture in full. On February 20, 2018, the Company completed a public offering including an aggregate of 3,325,968 Class A units, at a price to the public of $2.35 per Class A unit, each consisting of one share of the Company’s common stock and a five-year warrant to purchase one share of common stock (see Note 9). During the three months ended March 31, 2018, 9773.7252 shares of Series 3 Preferred were converted into 4,159,032 shares of the Company’s common stock. During the three months ended March 31, 2018, the Company issued 9,718 shares of common stock for fractional shares due to the reverse stock split effective February 6, 2018. During the three months ended June 30, 2018, 411.25 shares of Series 3 Preferred were converted into 175,000 shares of the Company’s common stock. During the three months ended June 30, 2018, 7,796.7067 shares of Series 4 Preferred were converted into 28,738,093 shares of the Company’s common stock. |
Preferred Stock
Preferred Stock | 6 Months Ended |
Jun. 30, 2018 | |
Preferred Stock [Abstract] | |
Preferred Stock | Note 11 - Preferred Stock Series 3 Preferred On February 15, 2018, the Company filed with the Secretary of State of the State of Nevada the Certificate of Designation that created the Series 3 Preferred, authorized 10,184.9752 shares of Series 3 Preferred and designated the preferences, rights and limitations of the Series 3 Preferred. The Series 3 Preferred is non-voting (except to the extent required by law). The Series 3 Preferred is convertible into the number of shares of Common Stock, determined by dividing the aggregate stated value of the Series 3 Preferred of $1,000 per share to be converted by $2.35. On February 20, 2018, the Company completed a public offering including an aggregate of 10,184.9752 Class B units, at a price to the public of $1,000 per Class B unit, each consisting of one share of the Company’s newly designated Series 3 Preferred with a stated value of $1,000 and initially convertible into approximately 426 shares of our common stock at a conversion price of $2.35 per share (see Note 9). During the three months ended March 31, 2018, 9773.7252 shares of Series 3 Preferred were converted into 4,159,032 shares of the Company’s common stock. During the three months ended June 30, 2018, 411.25 shares of Series 3 Preferred were converted into 175,000 shares of the Company’s common stock. As of June 30, 2018 there are no Series 3 Preferred shares outstanding. Series 4 Preferred On April 20, 2018, the Company filed with the Secretary of State of the State of Nevada the Certificate of Designation that created the Series 4 Preferred, authorized 10,415 shares of Series 4 Preferred and designated the preferences, rights and limitations of the Series 4 Preferred. The Series 4 Preferred is non-voting (except to the extent required by law) and was convertible into the number of shares of common stock, determined by dividing the aggregate stated value of the Series 4 Preferred of $1,000 per share to be converted by $0.46 (the “Conversion Price”). On June 25, 2018, in accordance with the terms of the price reset provisions described in the Certificate of Designations the Conversion Price of the Series 4 Preferred was adjusted to $0.1779. On April 24, 2018, the Company completed a public offering consisting of 10,115 units at a price to the public of $1,000 per unit, each consisting of (i) one share of our newly designated Series 4 Preferred and (ii) one warrant to purchase such number of shares of common stock as each share of Series 4 Preferred is convertible into (see Note 9). During the three months ended June 30, 2018, 7,796.7067 shares of Series 4 Preferred were converted into 28,738,093 shares of the Company’s common stock. As of June 30, 2018 there were 2,318.2933 of Series 4 Preferred shares outstanding. |
Authorized Share Increase and R
Authorized Share Increase and Reverse Stock Split | 6 Months Ended |
Jun. 30, 2018 | |
Authorized Share Increase And Reverse Stock Split [Abstract] | |
Authorized Share Increase and Reverse Stock Split | Note 12 - Authorized Share Increase and Reverse Stock Split On February 2, 2018, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada to increase the total number of authorized shares of common stock from 50,000,000 to 250,000,000, as approved by the Company’s stockholders at a special meeting held on February 2, 2018. On February 2, 2018, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada to effect a 1-for-30 reverse stock split of the Company’s issued and outstanding shares of common stock, effective as of February 6, 2018. The financial statements and accompanying notes give effect to the 1-for-30 reverse stock split and increase in authorized shares as if they occurred at the first period presented. |
Stock Options
Stock Options | 6 Months Ended |
Jun. 30, 2018 | |
Stock Options [Abstract] | |
Stock Options | Note 13 - Stock Options In September 2011, the Company adopted the 2011 Employee Stock Incentive Plan (the “2011 Plan”) which provides for the granting of incentive and non-statutory common stock options and stock based incentive awards to employees, non-employee directors, consultants and independent contractors. The plan was amended and restated in May 2014. Unless terminated sooner by the Board of Directors, this plan will terminate on August 31, 2021. In February 2018, the Company adopted the 2018 Employee Stock Incentive Plan (the “2018 Plan”) and in conjunction with the 2011 Plan, the “Option Plans”, which will be utilized with the 2011 Plan for employees, corporate officers, directors, consultants and other key persons employed. The 2018 Plan will provide for the granting of incentive stock options, NQSOs, stock grants and other stock-based awards, including Restricted Stock and Restricted Stock Units (as defined in the 2018 Plan). Incentive stock options granted under the Option Plans are granted at exercise prices not less than 100% of the estimated fair market value of the underlying common stock at date of grant. The exercise price per share for incentive stock options may not be less than 110% of the estimated fair value of the underlying common stock on the grant date for any individual possessing more that 10% of the total outstanding common stock of the Company. Options granted under the Option Plans vest over periods ranging from immediately to four years and are exercisable over periods not exceeding ten years. The aggregate number of shares that may be awarded under the 2011 Plan as of December 31, 2017 is 16,629 and awarded under the 2018 Plan is 4,000,000. As of June 30, 2018, 2,722,309 of options were granted to employees, directors and consultants of the Company (including 1,389 shares outside of our plan) and 295,709 options were available for future grant under the Option Plans. During the six months ended June 30, 2018, the Company granted options under the 2018 Plan for the purchase of 2,714,500 shares of common stock to employees and consultants of the Company. These options are 100% vested or vest pro-rata over 48 months, have a life of ten years and an exercise price between $0.18 and $0.36 per share. The Company valued the stock options using the Black-Scholes option valuation model and the fair value of the awards was determined to be $428,000. The fair value of the common stock as of the grant date was determined to be between $0.18 and $0.36 per share. The Company recorded a stock-based compensation charge of $571,000 and $710,000 for the three months ended June 30, 2018 and 2017, and $857,000 and $993,000 for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, the fair value of non-vested options totaled $418,245 which will be amortized to expense over the weighted average remaining term of 0.76 years. The fair value of each employee option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. Key weighted-average assumptions used to apply this pricing model during the six months ended June 30, 2018 and 2017 were as follows: For the Six Months Ended 2018 2017 Risk-free interest rate 2.79-3.01% 2.27% Expected life of option grants 5-6 years 7 years Expected volatility of underlying stock 45.64-46.18% 47.34% Dividends assumption $-- $-- The expected stock price volatility for the Company’s stock options was determined by the historical volatilities for industry peers and used an average of those volatilities. The Company attributes the value of stock-based compensation to operations on the straight-line single option method. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. The dividends assumptions was $0 as the Company historically has not declared any dividends and does not expect to. |
Credit Risk and Concentrations
Credit Risk and Concentrations | 6 Months Ended |
Jun. 30, 2018 | |
Credit Risk and Concentrations [Abstract] | |
Credit Risk and Concentrations | Note 14 - Credit Risk and Concentrations Financial instruments that subject the Company to credit risk consist principally of trade accounts receivable and cash and cash equivalents. The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk. The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for uncollectible accounts and, consequently, believes that its accounts receivable credit risk exposure beyond such allowances is limited. The Company maintains cash deposits with financial institutions, which, from time to time, may exceed federally insured limits. Cash is also maintained at foreign financial institutions for its Canadian subsidiary and its majority-owned Saudi Arabia subsidiary. Cash in foreign financial institutions as of June 30, 2018 and December 31, 2017 was immaterial. The Company has not experienced any losses and believes it is not exposed to any significant credit risk from cash. The following table sets forth the percentages of revenue derived by the Company from those customers which accounted for at least 10% of revenues during the six months ended June 30, 2018 and 2017 (in thousands): For the Six Months Ended For the Six Months Ended June 30, 2017 $ % $ % Customer A 644 16% -- -- Customer B 512 13% -- -- Customer C 422 11% -- -- Customer D -- -- 5,264 18% The following table sets forth the percentages of revenue derived by the Company from those customers which accounted for at least 10% of revenues during the three months ended June 30, 2018 and 2017 (in thousands): For the Three Months Ended For the Three Months Ended $ % $ % Customer A 319 17% -- -- Customer B 211 12% -- -- Customer C 195 11% -- -- Customer D -- -- 3,648 24% As of June 30, 2018, Customer A represented approximately 22%, Customer B represented approximately 17%, and Customer C represented approximately 15% of total accounts receivable. As of June 30, 2017, there were no customer concentrations greater than 10% of total accounts receivable. As of June 30, 2018, two vendors represented approximately 36% and 20% of total gross accounts payable. There were no purchases from these vendors during the three and six months ended June 30, 2018. As of June 30, 2017, one vendor represented approximately 40% of total gross accounts payable. Purchases from this vendor during the three months ended June 30, 2017 were $4.1 million. Purchases from this vendor during the six months ended June 30, 2017 were $5.8 million. |
Segment Reporting and Foreign O
Segment Reporting and Foreign Operations | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting and Foreign Operations [Abstract] | |
Segment Reporting and Foreign Operations | Note 15 - Segment Reporting and Foreign Operations Effective January 1, 2017 the Company has changed the way it analyzes and assesses divisional performance of the Company. The Company has therefore re-aligned its operating segments along those division business lines and has created the following operating segments. The Company has retroactively applied these new segment categories to the prior periods presented below for comparative purposes. ● Indoor Positioning Analytics: This segment includes Inpixon’s proprietary products and services delivered on premise or in the Cloud as well as our hosted Software-as-a-Service (SaaS) based solutions. Our Indoor Positioning Analytics product is based on a unique and patented sensor technology that detects and locates accessible cellular, Wi-Fi and Bluetooth devices and then uses a lightning fast data-analytics engine to deliver actionable insights and intelligent reports for security, marketing, asset management, etc. ● Infrastructure: This segment includes third party hardware, software and related maintenance/warranty products and services that Inpixon resells to commercial and government customers. It includes but is not limited to products for enterprise computing; storage; virtualization; networking; etc. as well as services including custom application/software design; architecture and development; staff augmentation and project management. The following tables present key financial information of the Company’s reportable segments before unallocated corporate expenses (in thousands): Indoor Positioning Analytics Infrastructure Consolidated For the Three Months Ended June 30, 2018: Net revenues $ 1,274 $ 554 $ 1,828 Cost of net revenues $ (369 ) $ (448 ) $ (817 ) Gross profit $ 905 $ 106 $ 1,011 Gross margin % 71 % 19 % 55 % Depreciation and amortization $ 120 $ 406 $ 526 Amortization of intangibles $ 804 $ 519 $ 1,323 For the Three Months Ended June 30, 2017: Net revenues $ 1,156 $ 13,940 $ 15,096 Cost of net revenues $ (380 ) $ (11,332 ) $ (11,712 ) Gross profit $ 776 $ 2,608 $ 3,384 Gross margin % 67 % 19 % 22 % Depreciation and amortization $ 93 $ 340 $ 433 Amortization of intangibles $ 863 $ 519 $ 1,382 For the Six Months Ended June 30, 2018: Net revenues $ 2,121 $ 1,801 $ 3,922 Cost of net revenues $ (604 ) $ (1,072 ) $ (1,676 ) Gross profit $ 1,517 $ 729 $ 2,246 Gross margin % 72 % 40 % 57 % Depreciation and amortization $ 279 $ 761 $ 1,040 Amortization of intangibles $ 1,607 $ 1,038 $ 2,645 For the Six Months Ended June 30, 2017: Net revenues $ 2,137 $ 26,441 $ 28,578 Cost of net revenues $ (723 ) $ (21,182 ) $ (21,905 ) Gross profit $ 1,414 $ 5,259 $ 6,673 Gross margin % 66 % 20 % 23 % Depreciation and amortization $ 168 $ 665 $ 833 Amortization of intangibles $ 1,729 $ 1,038 $ 2,767 Reconciliation of reportable segments’ combined income from operations to the consolidated loss before income taxes is as follows (in thousands): For the Three Months Ended For the Six Months Ended 2018 2017 2018 2017 Income from operations of reportable segments $ 1,011 $ 3,384 $ 2,246 $ 6,673 Unallocated operating expenses (7,460 ) (8,614 ) (14,303 ) (17,260 ) Interest expense (356 ) (1,344 ) (1,638 ) (2,027 ) Other income (expense) 950 152 1,596 143 Loss from discontinued operations -- (9 ) -- (17 ) Consolidated loss before income taxes $ (5,855 ) $ (6,431 ) $ (12,099 ) $ (12,488 ) The Company’s operations are located primarily in the United States, Canada and Saudi Arabia. Revenues by geographic area are attributed by country of domicile of our subsidiaries. The financial data by geographic area are as follows (in thousands): United Saudi States Canada Arabia India Eliminations Total For the Three Months Ended June 30, 2018: Revenues by geographic area $ 1,823 $ 5 $ -- $ 74 $ (74 ) $ 1,828 Operating income (loss) by geographic area $ (6,078 ) $ (387 ) $ -- $ 16 $ -- $ (6,449 ) Net income (loss) by geographic area $ (5,484 ) $ (387 ) $ -- $ 16 $ -- $ (5,855 ) For the Three Months Ended June 30, 2017: Revenues by geographic area $ 15,025 $ 70 $ -- $ -- $ -- $ 15,096 Operating loss by geographic area $ (4,784 ) $ (447 ) $ -- $ -- $ -- $ (5,230 ) Net loss by geographic area $ (5,975 ) $ (447 ) $ (9 ) $ -- $ -- $ (6,431 ) For the Six Months Ended June 30, 2018: Revenues by geographic area $ 3,911 $ 11 $ -- $ 126 $ (126 ) $ 3,922 Operating income (loss) by geographic area $ (11,195 ) $ (876 ) $ -- $ 14 $ -- $ (12,057 ) Net income (loss) by geographic area $ (11,233 ) $ (880 ) $ -- $ 14 $ -- $ (12,099 ) For the Six Months Ended June 30, 2017: Revenues by geographic area $ 28,452 $ 126 $ -- $ -- $ -- $ 28,578 Operating loss by geographic area $ (9,739 ) $ (848 ) $ -- $ -- $ -- $ (10,587 ) Net loss by geographic area $ (11,623 ) $ (848 ) $ (17 ) $ -- $ -- $ (12,488 ) As of June 30, 2018: Identifiable assets by geographic area $ 24,557 $ 269 $ -- $ 66 $ -- $ 24,892 Long lived assets by geographic area $ 11,964 $ 133 $ -- $ 9 $ -- $ 12,106 As of December 31, 2017: Identifiable assets by geographic area $ 27,189 $ 432 $ 23 $ 47 $ -- $ 27,691 Long lived assets by geographic area $ 14,883 $ 318 $ -- $ 14 $ -- $ 15,215 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 16 - Commitments and Contingencies Litigation Certain conditions may exist as of the date the condensed consolidated financial statements are issued which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed, unless they involve guarantees, in which case the guarantees would be disclosed. There can be no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. On August 10, 2017, Embarcadero Technologies, Inc. (“Embarcadero”) and Idera, Inc. (“Idera”) filed a complaint in the U.S. Federal District Court for the Western District of Texas against SGS and Integrio for failure to pay for purchased software and services pursuant to certain reseller agreements. The complaint alleges that SGS entered into an agreement with Integrio to acquire certain assets and assume certain liabilities of Integrio and are therefore responsible for any amounts due. In the complaint, Embarcadero and Idera demand that SGS and Integrio pay $1,100,000.00 in damages. On April 26, 2018, the parties filed a stipulation of dismissal to dismiss this case with prejudice following entry into a settlement agreement pursuant to which the Company agreed to satisfy the outstanding payables. On April 28, 2018, the court rendered the final judgment to approve this stipulation. The liability has been accrued and is included as a component of accounts payable as of June 30, 2018 in the condensed consolidated balance sheets. On August 11, 2017, Micro Focus (US) Inc. (“Micro Focus”), filed a complaint in the Circuit Court of Fairfax County, Virginia against SGS for failure to pay a debt settlement entered into on March 13, 2017 for a principal amount of approximately $246,000 plus accrued interest. The complaint demands full payment of the principal amount of approximately $246,000 plus accrued interest. On October 31, 2017, Micro Focus filed a motion for summary judgment against SGS. The Company consented to the court entering summary judgment in favor of Micro Focus in the amount of approximately $246,000, with interest accruing at 10% per annum from June 13, 2017 until payment is completed. On April 19, 2018, the Company signed a settlement agreement with Microfocus for $200,000 which has been paid as of the date of this filing. On December 7, 2017, the principal of Objective Equity filed a claim in Superior Court of California, County of Santa Clara for $7,500 against Sysorex, claiming non-payment under a settlement agreement. The hearing was held on January 31, 2018 and the case was dismissed in favor of Sysorex. On March 1, 2017, VersionOne, Inc. filed a complaint in the United States District Court, Eastern District of Virginia, against Inpixon, Sysorex and SGS (collectively, “Defendants”). The complaint alleges that VersionOne provided services to Integrio having a value of approximately $486,000, that in settlement of this amount Integrio and VersionOne entered into an agreement (the “Settlement Agreement”) whereby Integrio agreed to pay, and VersionOne agreed to accept as full payment, approximately $243,000 (the “Settlement Amount”), and that as a result of the Defendants’ acquisition of the assets of Integrio, Defendants assumed the Settlement Amount but failed to pay amounts owed to VersionOne. The complaint also alleges that, subsequent to closing of the acquisition, VersionOne provided additional services to Defendants having a value of approximately $145,000, for which it has not been paid. VersionOne alleges that, Defendants have an obligation to pay both the Settlement Amount and the cost of the additional services. On Dec. 8, 2017, the court entered judgment against Inpixon, SGS, and Sysorex, jointly and severally, in the amount of approximately $334,000. The liability has been accrued and is included as a component of accounts payable as of June 30, 2018 in the condensed consolidated balance sheets. On September 5, 2017 Dell Marketing threatened legal action against Sysorex and demanded approximately $1.8 million for payment of unpaid invoices. On or about January 29, 2018 the parties executed a settlement agreement resolving the matter. No court action was filed. The liability has been accrued and is included as a component of accounts payable as of June 30, 2018 in the condensed consolidated balance sheets. On December 28, 2017, Virtual Imaging, Inc. (“Virtual Imaging”) filed a complaint in the United States District Court, Eastern District of Virginia, against Sysorex, and SGS (collectively, the “Defendants”). The complaint alleges that Virtual Imaging provided products to the Defendants having an aggregate value of approximately $3,938,000, of which approximately $3,688,000 remains outstanding and overdue. Virtual Imaging has demanded compensation for the unpaid amount of approximately $3,688,000. The parties have settled this matter and agreed to a settlement payment schedule. The liability has been accrued and is included as a component of accounts payable as of June 30, 2018 in the condensed consolidated balance sheets. On January 2, 2018 VMS, Inc. sent a demand letter claiming Sysorex owes approximately $1.2 million in unpaid invoices. The parties have settled this matter and agreed to a settlement payment schedule. The liability has been accrued and is included as a component of accounts payable as of June 30, 2018 in the condensed consolidated balance sheets. On January 22, 2018, Deque Systems, Inc. filed a motion for entry of default judgment (the “Motion”) against SGS in the Circuit Court of Fairfax County, Virginia. The Motion alleges that SGS failed to respond to a complaint served on November 22, 2017. The Motion requests a default judgment in the amount of $336,000 plus $20,000 in legal fees. A trial is currently scheduled for September 12, 2018, however, the parties are currently finalizing a settlement agreement. The liability has been accrued and is included as a component of accounts payable as of June 30, 2018 in the condensed consolidated balance sheets. On February 16, 2018 the Versata Companies submitted a notice of mediation to the WIPO Arbitration and Mediation Center claiming that SGS owes approximately $421,000 in unpaid invoices and late fees. Approximately $176,000 of that amount is under dispute by SGS. The parties are currently negotiating a settlement agreement and payment plan to pay the outstanding liability. The liability has been accrued and is included as a component of accounts payable as of June 30, 2018 in the condensed consolidated balance sheets. On April 6, 2018, AVT Technology Solutions, LLC, filed a complaint in the United States District Court Middle District of Florida Tamp Division against Inpixon and Sysorex alleging breach of contract, breach of corporate guaranty and unjust enrichment in connection with non-payment for goods received and requesting a judgment in an amount of not less than $9,152,698.71. The Company has filed a motion to dismiss this complaint and is currently finalizing a settlement agreement with AVT. The liability has been accrued and is included as a component of accounts payable as of June 30, 2018 in the condensed consolidated balance sheets. On March 19, 2018, Inpixon was notified by a consultant for advisory services (the “Consultant”) that it believes the Company is required to pay a minimum project fee in an amount equal to $1 million less certain amounts previously paid as a result of the Company’s completion of certain financing transactions. On April 18, 2018, the Consultant filed a demand for arbitration with the American Arbitration Association. The Company disputes such claims and intends to defend these matters vigorously and no amounts have been accrued. Investment in Technology On May 29, 2018 the Company acquired $175,000 of technology which was capitalized in intangible assets and has an estimated life of three to five years. Compliance with Nasdaq Continued Listing Requirement On May 19, 2017, the Company received written notice from the Listing Qualifications Staff of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it no longer complied with Nasdaq Listing Rule 5550(b)(1) due to our failure to maintain a minimum of $2,500,000 in stockholders’ equity or to demonstrate compliance with any alternative to such requirement. On October 24, 2017, the Company received notification from Nasdaq that the Company had not regained compliance with the Minimum Stockholders’ Equity Requirement. The Company appealed the Staff Delisting Determination and requested a hearing that was held on December 7, 2017. As a result, the suspension and delisting was stayed pending the issuance of a written decision by the Nasdaq Hearings Panel. By decision dated December 14, 2017, the Panel granted the Company’s request for a further extension, through April 23, 2018, to evidence compliance with the $2,500,000 stockholders’ equity requirement. Following the closing of a public offering on April 24, 2018, on May 2, 2018, the Company received a letter from Nasdaq notifying the Company that it has regained compliance with the $2.5 million minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(b)(1). On May 17, 2018, a letter from the Listing Qualifications Staff of Nasdaq indicating that, based upon the closing bid price of the Company’s common stock for the last 30 consecutive business days beginning on April 5, 2018 and ending on May 16, 2018, the Company no longer meets the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided a period of 180 calendar days, or until November 13, 2018, in which to regain compliance. In order to regain compliance with the minimum bid price requirement, the closing bid price of the Company’s common stock must be at least $1 per share for a minimum of ten consecutive business days during this 180-day period. In the event that the Company does not regain compliance within this 180-day period, the Company may be eligible to seek an additional compliance period of 180 calendar days if it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and provides written notice to Nasdaq of its intent to cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary. However, if it appears to the Nasdaq staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq will provide notice to the Company that its common stock will be subject to delisting. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17 - Subsequent Events Series 4 Preferred Share Conversions Subsequent to June 30, 2018, 994.5624 shares of Series 4 Preferred were converted into 5,590,570 shares of the Company’s common stock. Inpixon USA Reorganization and Name Change On July 26, 2018, solely for the purpose of reincorporating the Company into the State of Nevada, Inpixon formed a wholly owned subsidiary in the State of Nevada named “Sysorex, Inc.” which was merged with Inpixon USA and resulted in the Company being reincorporated in the State of Nevada under the name “Sysorex, Inc.” (“Reincorporation”). At the effective time of the Reincorporation, all of the 3,950,000 issued and outstanding shares of common stock, no par value per share, of Inpixon USA were converted into and exchanged for an aggregate of 39,999,000 fully-paid and non-assessable shares of common stock, par value $0.00001 per share, of Sysorex. Separation Agreement On August 7, 2018, the Company entered into a Separation and Distribution Agreement (the “Separation Agreement”) with its wholly-owned subsidiary, Sysorex, governing the proposed separation (the “Spin-off”) of the Company’s IT consulting and value-added reseller business (the “VAR business”). The Separation Agreement incorporates a step plan which provides for the transfer of entities, assets and liabilities at the effective time on the date of the Spin-off pursuant to which (i) the Company will contribute to Sysorex all of the outstanding equity interests of the Sysorex subsidiary entities, (ii) the Company will contribute to Sysorex the “Contributed Cash”, as such term is defined in the Separation Agreement, which includes $2 million in cash held by the Company that will be contributed to Sysorex before the Spin-off (which amount shall be reduced by the aggregate amount of certain operating and other expenses of Sysorex that have been or will be satisfied by the Company from June 30, 2018 through the date of the Spin-off), (iii) the Company will transfer certain assets to Sysorex and Sysorex will assume certain of the Company’s liabilities and (iv) Sysorex will contribute to the Company certain assets and liabilities related to the Company’s indoor positioning analytics business. One share of Sysorex common stock for every three shares of the Company’s common stock outstanding or issuable upon complete conversion of the preferred stock or exercise of certain warrants outstanding as of the record date will be distributed as a stock dividend to holders of the Company’s common stock, preferred stock and certain warrants of record as of August 21, 2018. Holders of stock options and other awards under the Company’s equity plans will participate in the Spin-off in accordance with an employee matters agreement and the terms of such securities. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Basis of Presentation/Summary of Significant Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during each of the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates consist of: ● the valuation of stock-based compensation; ● the allowance for doubtful accounts; ● the valuation allowance for the deferred tax asset; and ● impairment of long-lived assets and goodwill. |
Revenue Recognition | Revenue Recognition Hardware and Software Revenue Recognition In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-08, “Revenue from Contracts with Customers - Principal versus Agent Considerations”, in April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing” and in May 9, 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606)”, or ASU 2016-12. This update provides clarifying guidance regarding the application of ASU No. 2014-09 - Revenue From Contracts with Customers which is not yet effective. These new standards provide for a single, principles-based model for revenue recognition that replaces the existing revenue recognition guidance. In July 2015, the FASB deferred the effective date of ASU 2014-09 until annual and interim periods beginning on or after December 15, 2017. It has replaced most existing revenue recognition guidance under GAAP. The ASU may be applied retrospectively to historical periods presented or as a cumulative-effect adjustment as of the date of adoption. We have adopted Topic 606 using a modified retrospective approach and will be applied prospectively in our financial statements from January 1, 2018 forward. Revenues under Topic 606 are required to be recognized either at a “point in time” or “over time”, depending on the facts and circumstances of the arrangement, and will be evaluated using a five-step model. The adoption of Topic 606 did not have a material impact on our financial statements, either at initial implementation nor will it have a material impact on an ongoing basis. For sales of hardware and software products, the Company’s performance obligation is satisfied at a point in time when they are shipped to the customer. This is when the customer has title to the product and the risks and rewards of ownership. The delivery of products to our customers occurs in a variety of ways, including (i) as a physical product shipped from the Company’s warehouse, (ii) via drop-shipment by a third-party vendor, or (iii) via electronic delivery with respect to software licenses. The Company leverages drop-ship arrangements with many of its vendors and suppliers to deliver products to customers without having to physically hold the inventory at its warehouse. In such arrangements, the Company negotiates the sale price with the customer, pays the supplier directly for the product shipped, bears credit risk of collecting payment from its customers and is ultimately responsible for the acceptability of the product and ensuring that such product meets the standards and requirements of the customer. Accordingly, the Company is the principal in the transaction with the customer and records revenue on a gross basis. The Company receives fixed consideration for sales of hardware and software products. The Company’s customers generally pay within 30 to 60 days from the receipt of a customer approved invoice. The Company has elected the practical expedient to expense the costs of obtaining a contract when they are incurred because the amortization period of the asset that otherwise would have been recognized is less than a year. Software As A Service Revenue Recognition With respect to sales of our maintenance, consulting and other service agreements including our digital advertising and electronic services, customers pay fixed monthly fees in exchange for the Company’s service. The Company’s performance obligation is satisfied over time as the digital advertising and electronic services are provided continuously throughout the service period. The Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous access to its service. License and Maintenance Services Revenue Recognition Typically, the Company sells maintenance contracts between the manufacturer and the customer for a separate fee with initial contractual periods ranging from one to five years with renewal for additional periods thereafter. The Company’s performance obligation is to work with customers to identify the computer maintenance and warranty services that best suit the customer’s needs and sell them those products and services however the maintenance is provided to the customer by the manufacturer. While a third party is responsible for actually performing the services for the customer, historically, in accordance with its policies and historical business practices, the Company has assumed responsibility for ensuring that the recommended services that are provided as part of the overall solution meets client expectations and therefore the Company assumes control of the services to be provided before they are performed for the benefit of the customer. In addition, the Company has full discretion in establishing the sale price to the customer which is determined based on the entire customized solution of products and services offered to the customer and bears the credit risk by paying the supplier for purchased services and collecting payment from the customer and therefore recognizes revenue from maintenance services on a gross basis, For these contracts the customer is invoiced one time and pays up front for the full term of the warranty and maintenance contract. Prior to the adoption of ASC 606 as of January 1, 2018, revenue from these contracts was recognized ratably over the contract period with the unearned revenue recorded as deferred revenue and amortized over the contract period. Adoption of Topic 606 has changed the recognition of our license and maintenance revenue as it was previously recognized over time however under the new policy it is recognized at a point in time and therefore the Company’s accumulated deferred revenue was accelerated as of January 1, 2018. Professional Services Revenue Recognition The Company’s professional services include fixed fee and time and materials contracts. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. The Company’s time and materials contracts are paid weekly or monthly based on hours worked. Revenue on time and material contracts is recognized based on a fixed hourly rate as direct labor hours are expended. Materials, or other specified direct costs, are reimbursed as actual costs and may include markup. The Company has elected the practical expedient to recognize revenue for the right to invoice because the Company’s right to consideration corresponds directly with the value to the customer of the performance completed to date. For fixed fee contracts, the Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous service. Because the Company’s contracts have an expected duration of one year or less, the Company has elected the practical expedient in Accounting Standards Codification (“ASC”) 606-10-50-14(a) to not disclose information about its remaining performance obligations. Anticipated losses are recognized as soon as they become known. For the three and six months ended June 30, 2018 and 2017, the Company did not incur any such losses. These amounts are based on known and estimated factors. Revenues from time and material or firm fixed price long-term and short-term contracts are derived principally with various United States government agencies and commercial customers. Contract Balances The timing of our revenue recognition may differ from the timing of payment by our customers. We record a receivable when revenue is recognized prior to payment and we have an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, we record deferred revenue until the performance obligations are satisfied. The Company had deferred revenue of approximately $109,000 as of June 30, 2018 related to cash received in advance for product maintenance services provided by the Company’s technical staff. The Company expects to satisfy its remaining performance obligations for these maintenance services and recognize the deferred revenue over the next twelve months. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for options granted to employees by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as an expense over the period during which the recipient is required to provide services in exchange for that award. Options and warrants granted to consultants and other non-employees are recorded at fair value as of the grant date and subsequently adjusted to fair value at the end of each reporting period until such options and warrants vest, and the fair value of such instruments, as adjusted, is expensed over the related vesting period. The Company incurred stock-based compensation charges, net of estimated forfeitures, of $571,000 and $710,000 for the three months ended June 30, 2018 and 2017, and $857,000 and $993,000 for the six months ended June 30, 2018 and 2017, respectively, which are included in general and administrative expenses. The following table summarizes the nature of such charges for the periods then ended (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Compensation and related benefits $ 571 $ 250 $ 777 $ 512 Professional and legal fees -- 145 80 159 Acquisition transaction costs -- -- -- 7 Interest expense -- 315 -- 315 Totals $ 571 $ 710 $ 857 $ 993 |
Net Loss Per Share | Net Loss Per Share The Company computes basic and diluted earnings per share by dividing net loss by the weighted average number of common shares outstanding during the period. Basic and diluted net loss per common share were the same since the inclusion of common shares issuable pursuant to the exercise of options and warrants in the calculation of diluted net loss per common shares would have been anti-dilutive. The following table summarizes the number of common shares and common share equivalents excluded from the calculation of diluted net loss per common share for the six months ended June 30, 2018 and 2017: For the Six Months Ended 2018 2017 Options 2,722,309 12,228 Warrants 64,918,852 9,581 Convertible preferred stock 32,110,791 -- Convertible note 630,139 -- Convertible debenture -- 3,927 Reserved for service providers 44,000 -- Totals 100,426,091 25,736 |
Preferred Stock | Preferred Stock The Company applies the accounting standards for distinguishing liabilities from equity under GAAP when determining the classification and measurement of its convertible preferred stock. Preferred shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, preferred shares are classified as permanent equity. |
Reclassification | Reclassification Certain accounts in the prior year’s financial statements have been reclassified for comparative purposes to conform to the presentation in the current year’s financial statements. These reclassifications have no effect on previously reported earnings. |
Derivative Liabilities | Derivative Liabilities During the year ended December 31, 2016, the Company issued a convertible debenture that included reset provisions considered to be down-round protection. In addition, the Company issued warrants that include a fundamental transaction clause which provide for the warrant holders to be paid in cash the fair value of the warrants as computed under a Black Scholes valuation model. The Company determined that the conversion feature and warrants are derivative instruments pursuant to ASC 815 “Derivatives and Hedging” issued by the FASB. The accounting treatment of derivative financial instruments requires that the Company bifurcate the conversion feature and record it as a liability at fair value and the fair value of the warrants were computed as defined in the agreement. The instruments are marked-to-market at fair value as of each balance sheet date. Any change in fair value is recorded as a change in the fair value of derivative liabilities for each reporting period. The fair value of the conversion feature was determined using the Binomial Lattice model. The Company reassesses the classification at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As of June 30, 2018, the fair value of the derivative liability was $0. |
Software Development Costs | Software Development Costs The Company develops and utilizes internal software for the processing of data provided by its customers. Costs incurred in this effort are accounted for under the provisions of FASB ASC 350-40, Internal Use Software and ASC 985-20, Software – Cost of Software to be Sold, Leased or Marketed, whereby direct costs related to development and enhancement of internal use software is capitalized, and costs related to maintenance are expensed as incurred. The Company capitalizes its direct internal costs of labor and associated employee benefits that qualify as development or enhancement. These software development costs are amortized over the estimated useful life which management has determined ranges from one to five years. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company assesses the recoverability of its long-lived assets, including property and equipment and intangible assets, when there are indications that the assets might be impaired. When evaluating assets for potential impairment, the Company compares the carrying value of the asset to its estimated undiscounted future cash flows. If an asset’s carrying value exceeds such estimated cash flows (undiscounted and with interest charges), the Company records an impairment charge for the difference. Based on its assessments, the Company did not record any impairment charges for the six months ended June 30, 2018 and 2017. |
Recent Accounting Standards | Recent Accounting Standards In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The FASB issued ASU 2015-17 as part of its ongoing Simplification Initiative, with the objective of reducing complexity in accounting standards. The amendments in ASU 2015-17 require entities that present a classified balance sheet to classify all deferred tax liabilities and assets as a noncurrent amount. This guidance does not change the offsetting requirements for deferred tax liabilities and assets, which results in the presentation of one amount on the balance sheet. Additionally, the amendments in ASU 2015-17 align the deferred income tax presentation with the requirements in International Accounting Standards (IAS) 1, Presentation of Financial Statements. The amendments in ASU 2015-17 are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The adoption of ASU 2015-17 did not have a material impact on its financial statements. In September 2017, the FASB issued ASU No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments” that enhances the guidance surrounding sale leaseback transactions, accounting for taxes on leveraged leases and leases with third party value. The related amendments to the Topics described above become effective on the same schedule as Topics 605, 606, 840 and 842. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC 605 - Revenue Recognition (“ASC 605”) and most industry-specific guidance throughout ASC 605. The FASB has issued numerous updates that provide clarification on a number of specific issues as well as requiring additional disclosures. The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 effective January 1, 2018 using the modified retrospective method which was applied to all contracts at the date of initial application. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09, Revenue - Revenue from Contracts with Customers Balance at December 31, 2017 Adjustments due to ASU 2014-09 Balance at January 1, 2018 Balance Sheet: Assets Prepaid licenses & maintenance contracts, current $ 4,638 $ (4,638 ) $ -- Prepaid licenses & maintenance contracts, non-current $ 2,264 $ (2,264 ) $ -- Liabilities $ 5,611 $ (5,553 ) $ 58 Deferred revenue, current $ 2,636 $ (2,636 ) $ -- Deferred revenue, non-current Equity Accumulated deficit $ (94,486 ) $ 1,287 $ (93,199 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our condensed consolidated income statement and balance sheet was as follows (in millions): For the Three Months Ended June 30, 2018 As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 707 2,345 (1,638 ) Services 1,121 1,121 -- Cost and expenses Cost of Revenues Products (A) 343 1,728 (1,385 ) Services 474 474 -- Gross Profit 1,011 1,264 (253 ) Income/Loss from Operations (6,449 ) (6,196 ) (253 ) Net Income (Loss) (5,855 ) (5,602 ) (253 ) For the Six Months Ended June 30, 2018 As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 1,182 4,852 (3,670 ) Services 2,740 2,740 -- Cost and expenses Cost of Revenues Products (A) 598 3,700 (3,102 ) Services 1,078 1,078 -- Gross Profit 2,246 2,814 (568 ) Income/Loss from Operations (12,057 ) (11,489 ) (568 ) Net Income (Loss) (12,099 ) (11,531 ) (568 ) As of June 30, 2018 As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Balance Sheet Assets Prepaid Licenses & Maintenance Contracts, current 12 1,548 (1,536 ) Prepaid Licenses & Maintenance Contracts, non-Current -- 2,264 (2,264 ) Liabilities Deferred Revenue , current 109 1,994 (1,885 ) Deferred Revenue, non-current -- 2,636 (2,636 ) Equity Accumulated Deficit (105,299 ) (106,019 ) 720 (A) Product revenues and cost of revenues include maintenance/licenses contracts that are sold by the company but performed by third parties. |
Reverse Stock Split | Reverse Stock Split On March 1, 2017, the Company effectuated a 1-for-15 reverse stock split of its outstanding common stock. In addition, on February 6, 2018, the Company effectuated a 1-for-30 reverse stock split of its outstanding common stock. The financial statements and accompanying notes give effect to both of the reverse stock splits as if they occurred at the beginning of the first period presented. |
Subsequent Events | Subsequent Events The Company evaluates events and/or transactions occurring after the balance sheet date and before the issue date of the condensed consolidated financial statements to determine if any of those events and/or transactions requires adjustment to or disclosure in the consolidated financial statements. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Basis of Presentation/Summary of Significant Accounting Policies [Abstract] | |
Schedule of stock-based compensation charges | For the Three Months Ended For the Six Months Ended 2018 2017 2018 2017 Compensation and related benefits $ 571 $ 250 $ 777 $ 512 Professional and legal fees -- 145 80 159 Acquisition transaction costs -- -- -- 7 Interest expense -- 315 -- 315 Totals $ 571 $ 710 $ 857 $ 993 |
Schedule of number of common shares and common share equivalents excluded from the calculation of diluted net loss per common share | For the Six Months Ended 2018 2017 Options 2,722,309 12,228 Warrants 64,918,852 9,581 Convertible preferred stock 32,110,791 -- Convertible note 630,139 -- Convertible debenture -- 3,927 Reserved for service providers 44,000 -- Totals 100,426,091 25,736 |
Schedule of the cumulative effect of the changes made to our consolidated income statement and balance sheet | Balance at December 31, 2017 Adjustments due to ASU 2014-09 Balance at January 1, 2018 Balance Sheet: Assets Prepaid licenses & maintenance contracts, current $ 4,638 $ (4,638 ) $ -- Prepaid licenses & maintenance contracts, non-current $ 2,264 $ (2,264 ) $ -- Liabilities $ 5,611 $ (5,553 ) $ 58 Deferred revenue, current $ 2,636 $ (2,636 ) $ -- Deferred revenue, non-current Equity Accumulated deficit $ (94,486 ) $ 1,287 $ (93,199 ) For the Three Months Ended June 30, 2018 As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 707 2,345 (1,638 ) Services 1,121 1,121 -- Cost and expenses Cost of Revenues Products (A) 343 1,728 (1,385 ) Services 474 474 -- Gross Profit 1,011 1,264 (253 ) Income/Loss from Operations (6,449 ) (6,196 ) (253 ) Net Income (Loss) (5,855 ) (5,602 ) (253 ) For the Six Months Ended June 30, 2018 As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 1,182 4,852 (3,670 ) Services 2,740 2,740 -- Cost and expenses Cost of Revenues Products (A) 598 3,700 (3,102 ) Services 1,078 1,078 -- Gross Profit 2,246 2,814 (568 ) Income/Loss from Operations (12,057 ) (11,489 ) (568 ) Net Income (Loss) (12,099 ) (11,531 ) (568 ) As of June 30, 2018 As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Balance Sheet Assets Prepaid Licenses & Maintenance Contracts, current 12 1,548 (1,536 ) Prepaid Licenses & Maintenance Contracts, non-Current -- 2,264 (2,264 ) Liabilities Deferred Revenue , current 109 1,994 (1,885 ) Deferred Revenue, non-current -- 2,636 (2,636 ) Equity Accumulated Deficit (105,299 ) (106,019 ) 720 (A) Product revenues and cost of revenues include maintenance/licenses contracts that are sold by the company but performed by third parties. |
Sysorex India Acquisition (Tabl
Sysorex India Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Sysorex India Acquisition [Abstract] | |
Schedule of purchase price allocation | Assets Acquired: Cash $ 1 Fixed assets 14 Other assets 32 Total Assets Acquired 47 Liabilities Assumed: Other current liabilities 10 Total Liabilities Assumed 10 Total Purchase Price $ 37 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory [Abstract] | |
Schedule of inventory | As of As of December 31, Raw materials $ 220 $ 220 Work in process -- 7 Finished goods 632 563 Total Inventory $ 852 $ 790 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Discontinued Operations [Abstract] | |
Schedule of major categories of assets and liabilities held for sale in the condensed consolidated balance sheets | As of December 31, Assets: Accounts receivable, net $ 1 Notes and other receivables 8 Other assets 14 Total Current Assets 23 Other assets -- Total Assets $ 23 Liabilities: Current Liabilities: Accounts payable $ 178 Accrued liabilities 918 Deferred revenue 236 Due to related party 5 Short term debt 722 Total Current Liabilities 2,059 Long Term Liabilities -- Total Liabilities $ 2,059 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt [Abstract] | |
Schedule of debt | As of As of December 31, 2017 Short-Term Debt Notes payable (A) $ 1,815 $ 1,917 Revolving line of credit (B) -- 1,141 Total Short-Term Debt $ 1,815 $ 3,058 Long-Term Debt Notes payable $ 142 $ 175 Senior secured convertible debenture, less debt discount of $417 (C) -- 592 Total Long-Term Debt $ 142 $ 767 (A) Convertible Notes Payable On November 17, 2017, the Company issued a $1.745 million principal face amount convertible promissory note (the “November Note”) to an accredited investor (the “November Noteholder”) which yielded net proceeds of $1.5 million to the Company pursuant to a Securities Purchase Agreement dated as of November 17, 2017 by and between the Company and the November Noteholder (the “November Note SPA” and together with the November Note, the “November Transaction Documents”). On January 5, 2018, the November Transaction Documents were amended pursuant to a Waiver and First Amendment Agreement (the “Waiver and Amendment Agreement”). The November Note, as amended, bears interest at the rate of 10% per year and is due 10 months after the date of issuance. In accordance with the Waiver and Amendment Agreement, the Conversion Price (as defined in the November Note) was amended to be equal to 70% of the closing bid price reported by the Nasdaq Stock Market as of the date immediately prior to each applicable conversion, subject to a floor of $3.00 (subject to adjustment). The issuance of the shares of common stock pursuant to the Waiver and Amendment Agreement was obtained at a meeting of stockholders held on February 2, 2018. Redemptions may occur at any time after the 6 month anniversary of the date of issuance of the November Note with a minimum redemption price equal to the Conversion Price. If the conversion rate is less than the market price, then the redemptions must be made in cash. The November Note contains standard events of default and a schedule of redemption premiums and a most favored nations clause and provision which allows for adjustments upon dilutive issuances which is subject to a floor of $3.00. On May 23, 2018, the Company and the November Noteholder entered into a Standstill Agreement whereby the November Noteholder agreed to delay for a period of nine months following the Purchase Price Date its right to make redemptions under the November Note. In exchange for the agreement and for reimbursement of the fees incurred by the November Noteholder in having the Standstill Agreement prepared, the Company paid the Lender $68,000 upon execution of the agreement which is included as a part of interest expense in the statement of operations. (B) Revolving Lines of Credit Payplant Accounts Receivable Bank Line Pursuant to the terms of a Commercial Loan Purchase Agreement, dated as of August 14, 2017 (the “Purchase Agreement”), Gemcap Lending I, LLC (“GemCap”) sold and assigned to Payplant LLC, as agent for Payplant Alternatives Fund LLC (“Payplant” or “Lender”), all of its right, title and interest to that certain revolving Secured Promissory Note in an aggregate principal amount of up to $10,000,000 (the “GemCap Note”) issued in accordance with that certain Loan and Security Agreement, dated as of November 14, 2016 (the “GemCap Loan”), by and among Gemcap and the Company and its wholly-owned subsidiaries, Inpixon USA and SGS for an aggregate purchase price of $1,402,770.16. In connection with the purchase and assignment of the Gemcap Loan in accordance with the Purchase Agreement, the GemCap Loan was amended and restated in accordance with the terms and conditions of the Payplant Loan and Security Agreement, dated as of August 14, 2017, between the Company and Payplant (the “Loan Agreement”). The Loan Agreement allows the Company to request loans (each a “Loan” and collectively the “Loans”) from the Lender (in the manner provided therein) with a term of no greater than 360 days in amounts that are equivalent to 80% of the face value of purchase orders received (“Aggregate Loan Amount”). The Lender is not obligated to make the requested loan, however, if the Lender agrees to make the requested loan, before the loan is made, the Company must provide Lender with (i) one or more promissory notes (“Notes”) for the amount being loaned in favor of Lender, (ii) one or more guaranties executed in favor of Lender and (iii) other documents and evidence of the completion of such other matters as Lender may request. The principal amount of each Loan shall accrue interest at a 30 day rate of 2% (the “Interest Rate”), calculated per day on the basis of a year of 360 days and, when combined with all fees that may be characterized as interest will not exceed the maximum rate allowed by law Upon the occurrence and during the continuance of any event of default, interest shall accrue at a rate equal to the Interest Rate plus 0.42% per 30 days. All computations of interest shall be made on the basis of a year of 360 days. The promissory note is subject to the interest rates described in the Loan Agreement and is secured by the assets of the Company pursuant to the Loan Agreement and will be satisfied in accordance with the terms of the Client Agreement. (C) Senior Secured Debenture Debenture Amendment On January 5, 2018, the then holder of that certain 8% Original Issue Discount Note (the “Debenture”) of which an aggregate principal amount of $1,004,719 plus interest and the Company agreed to amend the Debenture to: (i) cause an event of default in the event of the failure by the Company to amend its Articles of Incorporation in order to increase its authorized shares (the “Authorized Share Amendment”) or otherwise reserve a sufficient number of shares of common stock for issuance upon conversion of the Debenture on or prior to February 15, 2018; (ii) require a reserve of at least 150% of the number of shares into which the Debenture is convertible upon the effectiveness of the Authorized Share Amendment; On February 5, 2018, the holder of the Debenture delivered a conversion notice to the Company pursuant to which it converted $300,000 of principal of the Debenture into 50,143 shares of the Company’s common stock. Such shares of common stock were issued on February 6, 2018. On February 7, 2018, the holder of the Debenture delivered a conversion notice to the Company pursuant to which it converted $400,000 of principal of the Debenture into 119,296 shares of the Company’s common stock. On February 9, 2018, the holder of the Debenture delivered a final conversion notice to the Company pursuant to which it converted $317,000 of principal of the Debenture into 105,820 shares of the Company’s common stock, which satisfied the debenture in full. |
Stock Options (Tables)
Stock Options (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stock Options [Abstract] | |
Schedule of weighted-average assumptions using Black-Scholes option-pricing model | For the Six Months Ended 2018 2017 Risk-free interest rate 2.79-3.01% 2.27% Expected life of option grants 5-6 years 7 years Expected volatility of underlying stock 45.64-46.18% 47.34% Dividends assumption $-- $-- |
Credit Risk and Concentrations
Credit Risk and Concentrations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Credit Risk and Concentrations [Abstract] | |
Schedule of risk percentage of revenue from customers | For the Six Months Ended For the Six Months Ended June 30, 2017 $ % $ % Customer A 644 16% -- -- Customer B 512 13% -- -- Customer C 422 11% -- -- Customer D -- -- 5,264 18% For the Three Months Ended For the Three Months Ended $ % $ % Customer A 319 17% -- -- Customer B 211 12% -- -- Customer C 195 11% -- -- Customer D -- -- 3,648 24% |
Segment Reporting and Foreign33
Segment Reporting and Foreign Operations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting and Foreign Operations [Abstract] | |
Schedule of company's reportable segments before unallocated corporate expenses | Indoor Positioning Analytics Infrastructure Consolidated For the Three Months Ended June 30, 2018: Net revenues $ 1,274 $ 554 $ 1,828 Cost of net revenues $ (369 ) $ (448 ) $ (817 ) Gross profit $ 905 $ 106 $ 1,011 Gross margin % 71 % 19 % 55 % Depreciation and amortization $ 120 $ 406 $ 526 Amortization of intangibles $ 804 $ 519 $ 1,323 For the Three Months Ended June 30, 2017: Net revenues $ 1,156 $ 13,940 $ 15,096 Cost of net revenues $ (380 ) $ (11,332 ) $ (11,712 ) Gross profit $ 776 $ 2,608 $ 3,384 Gross margin % 67 % 19 % 22 % Depreciation and amortization $ 93 $ 340 $ 433 Amortization of intangibles $ 863 $ 519 $ 1,382 For the Six Months Ended June 30, 2018: Net revenues $ 2,121 $ 1,801 $ 3,922 Cost of net revenues $ (604 ) $ (1,072 ) $ (1,676 ) Gross profit $ 1,517 $ 729 $ 2,246 Gross margin % 72 % 40 % 57 % Depreciation and amortization $ 279 $ 761 $ 1,040 Amortization of intangibles $ 1,607 $ 1,038 $ 2,645 For the Six Months Ended June 30, 2017: Net revenues $ 2,137 $ 26,441 $ 28,578 Cost of net revenues $ (723 ) $ (21,182 ) $ (21,905 ) Gross profit $ 1,414 $ 5,259 $ 6,673 Gross margin % 66 % 20 % 23 % Depreciation and amortization $ 168 $ 665 $ 833 Amortization of intangibles $ 1,729 $ 1,038 $ 2,767 |
Schedule of reconciliation of reportable segments' combined income from operations to the consolidated loss before income taxes | For the Three Months Ended For the Six Months Ended 2018 2017 2018 2017 Income from operations of reportable segments $ 1,011 $ 3,384 $ 2,246 $ 6,673 Unallocated operating expenses (7,460 ) (8,614 ) (14,303 ) (17,260 ) Interest expense (356 ) (1,344 ) (1,638 ) (2,027 ) Other income (expense) 950 152 1,596 143 Loss from discontinued operations -- (9 ) -- (17 ) Consolidated loss before income taxes $ (5,855 ) $ (6,431 ) $ (12,099 ) $ (12,488 ) |
Schedule of financial data by geographic area | United Saudi States Canada Arabia India Eliminations Total For the Three Months Ended June 30, 2018: Revenues by geographic area $ 1,823 $ 5 $ -- $ 74 $ (74 ) $ 1,828 Operating income (loss) by geographic area $ (6,078 ) $ (387 ) $ -- $ 16 $ -- $ (6,449 ) Net income (loss) by geographic area $ (5,484 ) $ (387 ) $ -- $ 16 $ -- $ (5,855 ) For the Three Months Ended June 30, 2017: Revenues by geographic area $ 15,025 $ 70 $ -- $ -- $ -- $ 15,096 Operating loss by geographic area $ (4,784 ) $ (447 ) $ -- $ -- $ -- $ (5,230 ) Net loss by geographic area $ (5,975 ) $ (447 ) $ (9 ) $ -- $ -- $ (6,431 ) For the Six Months Ended June 30, 2018: Revenues by geographic area $ 3,911 $ 11 $ -- $ 126 $ (126 ) $ 3,922 Operating income (loss) by geographic area $ (11,195 ) $ (876 ) $ -- $ 14 $ -- $ (12,057 ) Net income (loss) by geographic area $ (11,233 ) $ (880 ) $ -- $ 14 $ -- $ (12,099 ) For the Six Months Ended June 30, 2017: Revenues by geographic area $ 28,452 $ 126 $ -- $ -- $ -- $ 28,578 Operating loss by geographic area $ (9,739 ) $ (848 ) $ -- $ -- $ -- $ (10,587 ) Net loss by geographic area $ (11,623 ) $ (848 ) $ (17 ) $ -- $ -- $ (12,488 ) As of June 30, 2018: Identifiable assets by geographic area $ 24,557 $ 269 $ -- $ 66 $ -- $ 24,892 Long lived assets by geographic area $ 11,964 $ 133 $ -- $ 9 $ -- $ 12,106 As of December 31, 2017: Identifiable assets by geographic area $ 27,189 $ 432 $ 23 $ 47 $ -- $ 27,691 Long lived assets by geographic area $ 14,883 $ 318 $ -- $ 14 $ -- $ 15,215 |
Organization and Nature of Bu34
Organization and Nature of Business and Going Concern (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 20, 2018 | Jan. 05, 2018 | Apr. 24, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Organization and Nature of Business and Going Concern (Textual) | ||||||||||
Working capital deficiency | $ 10,200 | $ 10,200 | ||||||||
Net loss | (5,855) | $ (6,431) | $ (12,099) | $ (12,488) | ||||||
Capital resources, description | The Company expects its capital resources as of June 30, 2018, availability on the Payplant Facility to finance purchase orders and invoices in an amount equal to 80% of the face value of purchase orders received (as described in Note 8), funds from higher margin business line expansion and credit limitation improvements should be sufficient to fund planned operations during the year ending December 31, 2018. | |||||||||
Common shares issued from a public offering | 10,115 | |||||||||
Net gross proceeds from public offering | $ 9,200 | |||||||||
Cash and cash equivalents | 8,336 | $ 42 | $ 8,336 | $ 42 | $ 141 | $ 738 | $ 1,821 | |||
Capital Unit, Class A [Member] | ||||||||||
Organization and Nature of Business and Going Concern (Textual) | ||||||||||
Common stock price per share | $ 2.35 | |||||||||
Common shares issued from a public offering | 3,325,968 | |||||||||
Capital Unit, Class B [Member] | ||||||||||
Organization and Nature of Business and Going Concern (Textual) | ||||||||||
Common stock price per share | $ 1,000 | |||||||||
Gross proceeds from public offering | $ 18,000 | |||||||||
Preferred shares issued from a public offering | 10,184.9752 | |||||||||
Sysorex India [Member] | ||||||||||
Organization and Nature of Business and Going Concern (Textual) | ||||||||||
Subsidiary ownership, percentage | 82.50% | |||||||||
Cash and cash equivalents | $ 2,000 | $ 2,000 | ||||||||
Securities Purchase Agreement [Member] | ||||||||||
Organization and Nature of Business and Going Concern (Textual) | ||||||||||
Sale of common stock, shares | 599,812 | |||||||||
Sale of common stock, price per share | $ 5.31 | |||||||||
Gross proceeds from sale of common stock | $ 3,200 | |||||||||
Warrants to purchase shares of common stock | 599,812 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock-based compensation charges | ||||
Compensation and related benefits | $ 571 | $ 250 | $ 777 | $ 512 |
Professional and legal fees | 145 | 80 | 159 | |
Acquisition transaction costs | 7 | |||
Interest expense | 315 | 315 | ||
Totals | $ 571 | $ 710 | $ 857 | $ 993 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details 1) - shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 100,426,091 | 25,736 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 2,722,309 | 12,228 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 64,918,852 | 9,581 |
Convertible preferred stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 32,110,791 | |
Reserved for service providers [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 44,000 | |
Convertible note [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 630,139 | |
Convertible debenture [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 3,927 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Prepaid licenses & maintenance contracts, current | $ 12 | $ 4,638 |
Prepaid licenses & maintenance contracts, non-current | 2,264 | |
Liabilities | ||
Deferred Revenue , current | 109 | 5,611 |
Deferred Revenue, non-current | 2,636 | |
Equity | ||
Accumulated Deficit | (105,299) | $ (94,486) |
01/01/2018 [Member] | Adjustments due to ASU 2014-09 [Member] | ||
Assets | ||
Prepaid licenses & maintenance contracts, current | (4,638) | |
Prepaid licenses & maintenance contracts, non-current | (2,264) | |
Liabilities | ||
Deferred Revenue , current | (5,553) | |
Deferred Revenue, non-current | (2,636) | |
Equity | ||
Accumulated Deficit | 1,287 | |
01/01/2018 [Member] | Balance at January 1, 2018 [Member] | ||
Assets | ||
Prepaid licenses & maintenance contracts, current | ||
Prepaid licenses & maintenance contracts, non-current | ||
Liabilities | ||
Deferred Revenue , current | 58 | |
Deferred Revenue, non-current | ||
Equity | ||
Accumulated Deficit | $ (93,199) |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||||
Revenues | |||||||
Products | $ 707 | [1] | $ 12,210 | $ 1,182 | [1] | $ 21,659 | |
Services | 1,121 | 2,740 | |||||
Cost of Revenues | |||||||
Products | 343 | [1] | 10,231 | 598 | [1] | 18,285 | |
Services | 474 | 1,481 | 1,078 | 3,620 | |||
Gross Profit | 1,011 | 3,384 | 2,246 | 6,673 | |||
Income/Loss from Operations | (6,449) | (5,230) | (12,057) | (10,587) | |||
Net Income (Loss) | (5,855) | $ (6,431) | (12,099) | $ (12,488) | |||
Balances Without Adoption of ASC 606 [Member] | |||||||
Revenues | |||||||
Products | [1] | 2,345 | 4,852 | ||||
Services | 1,121 | 2,740 | |||||
Cost of Revenues | |||||||
Products | [1] | 1,728 | 3,700 | ||||
Services | 474 | 1,078 | |||||
Gross Profit | 1,264 | 2,814 | |||||
Income/Loss from Operations | (6,196) | (11,489) | |||||
Net Income (Loss) | (5,602) | (11,531) | |||||
Effect of Change Higher/(Lower) [Member] | |||||||
Revenues | |||||||
Products | [1] | (1,638) | (3,670) | ||||
Services | |||||||
Cost of Revenues | |||||||
Products | [1] | (1,385) | (3,102) | ||||
Services | |||||||
Gross Profit | (253) | (568) | |||||
Income/Loss from Operations | (253) | (568) | |||||
Net Income (Loss) | $ (253) | $ (568) | |||||
[1] | Product revenues and cost of revenues include maintenance/licenses contracts that are sold by the company but performed by third parties. |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Prepaid Licenses & Maintenance Contracts, current | $ 12 | $ 4,638 |
Prepaid Licenses & Maintenance Contracts, non-Current | 2,264 | |
Liabilities | ||
Deferred Revenue , current | 109 | 5,611 |
Deferred Revenue, non-current | 2,636 | |
Equity | ||
Accumulated Deficit | (105,299) | $ (94,486) |
Balances Without Adoption of ASC 606 [Member] | ||
Assets | ||
Prepaid Licenses & Maintenance Contracts, current | 1,548 | |
Prepaid Licenses & Maintenance Contracts, non-Current | 2,264 | |
Liabilities | ||
Deferred Revenue , current | 1,994 | |
Deferred Revenue, non-current | 2,636 | |
Equity | ||
Accumulated Deficit | (106,019) | |
Effect of Change Higher/(Lower) [Member] | ||
Assets | ||
Prepaid Licenses & Maintenance Contracts, current | (1,536) | |
Prepaid Licenses & Maintenance Contracts, non-Current | (2,264) | |
Liabilities | ||
Deferred Revenue , current | (1,885) | |
Deferred Revenue, non-current | (2,636) | |
Equity | ||
Accumulated Deficit | $ 720 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Summary of Significant Accounting Policies (Textual) | ||||
Stock-based compensation | $ 571 | $ 710 | $ 857 | $ 993 |
Fair value of the derivative liability | 0 | 0 | ||
Approximate deferred revenue | $ 109 | $ 109 | ||
Board of directors [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Reverse stock split, description | The Company effectuated a 1-for-15 reverse stock split of its outstanding common stock. In addition, on February 6, 2018, the Company effectuated a 1-for-30 reverse stock split of its outstanding common stock. | |||
Maximum [Member] | Software Development Costs [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Estimated useful life | 5 years | |||
Minimum [Member] | Software Development Costs [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Estimated useful life | 1 year |
Sysorex India Acquisition (Deta
Sysorex India Acquisition (Details) - Sysorex India [Member] $ in Thousands | Dec. 31, 2017USD ($) |
Assets Acquired: | |
Cash | $ 1 |
Fixed assets | 14 |
Other assets | 32 |
Total Assets Acquired | 47 |
Liabilities Assumed: | |
Other current liabilities | 10 |
Total Liabilities Assumed | 10 |
Total Purchase Price | $ 37 |
Sysorex India Acquisition (De42
Sysorex India Acquisition (Details Textual) | Dec. 31, 2017USD ($) |
Sysorex India Acquisition (Textual) | |
Outstanding receivables | $ 37,000 |
Sysorex Consulting, Inc. [Member] | |
Sysorex India Acquisition (Textual) | |
Percentage of acquired outstanding equity securities | 82.50% |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory [Abstract] | ||
Raw materials | $ 220 | $ 220 |
Work in process | 7 | |
Finished goods | 632 | 563 |
Total Inventory | $ 852 | $ 790 |
Discontinued Operations (Detail
Discontinued Operations (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Assets: | |
Accounts receivable, net | $ 1 |
Notes and other receivables | 8 |
Other assets | 14 |
Total Current Assets | 23 |
Other assets | |
Total Assets | 23 |
Current Liabilities: | |
Accounts payable | 178 |
Accrued liabilities | 918 |
Deferred revenue | 236 |
Due to related party | 5 |
Short term debt | 722 |
Total Current Liabilities | 2,059 |
Long Term Liabilities | |
Total Liabilities | $ 2,059 |
Discontinued Operations (Deta45
Discontinued Operations (Details Textual) - USD ($) | Jan. 18, 2018 | Dec. 31, 2017 |
Discontinued Operations (Textual) | ||
Deposits for surety bonds | $ 0 | |
Subsidiary of Common Parent [Member] | ||
Discontinued Operations (Textual) | ||
Value of assets owned by seller | $ 11,500 | |
Value of liabilities owned by seller | $ 1,000,000 | |
Percentage of Sysorex Arabia | 50.20% | |
Sysorex Consulting, Inc. [Member] | ||
Discontinued Operations (Textual) | ||
Percentage of Sysorex Arabia | 50.20% |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Short-Term Debt | |||
Notes payable | [1] | $ 1,815 | $ 1,917 |
Revolving line of credit | [2] | 1,141 | |
Total Short-Term Debt | 1,815 | 3,058 | |
Long-Term Debt | |||
Notes payable | 142 | 175 | |
Senior secured convertible debenture, less debt discount of $417 | [3] | 592 | |
Total Long-Term Debt | $ 142 | $ 767 | |
[1] | Convertible Notes Payable On November 17, 2017, the Company issued a $1.745 million principal face amount convertible promissory note (the "November Note") to an accredited investor (the "November Noteholder") which yielded net proceeds of $1.5 million to the Company pursuant to a Securities Purchase Agreement dated as of November 17, 2017 by and between the Company and the November Noteholder (the "November Note SPA" and together with the November Note, the "November Transaction Documents"). On January 5, 2018, the November Transaction Documents were amended pursuant to a Waiver and First Amendment Agreement (the "Waiver and Amendment Agreement"). The November Note, as amended, bears interest at the rate of 10% per year and is due 10 months after the date of issuance. In accordance with the Waiver and Amendment Agreement, the Conversion Price (as defined in the November Note) was amended to be equal to 70% of the closing bid price reported by the Nasdaq Stock Market as of the date immediately prior to each applicable conversion, subject to a floor of $3.00 (subject to adjustment). The issuance of the shares of common stock pursuant to the Waiver and Amendment Agreement was obtained at a meeting of stockholders held on February 2, 2018. Redemptions may occur at any time after the 6 month anniversary of the date of issuance of the November Note with a minimum redemption price equal to the Conversion Price. If the conversion rate is less than the market price, then the redemptions must be made in cash. The November Note contains standard events of default and a schedule of redemption premiums and a most favored nations clause and provision which allows for adjustments upon dilutive issuances which is subject to a floor of $3.00. On May 23, 2018, the Company and the November Noteholder entered into a Standstill Agreement whereby the November Noteholder agreed to delay for a period of nine months following the Purchase Price Date its right to make redemptions under the November Note. In exchange for the agreement and for reimbursement of the fees incurred by the November Noteholder in having the Standstill Agreement prepared, the Company paid the Lender $68,000 upon execution of the agreement which is included as a part of interest expense in the statement of operations. | ||
[2] | Revolving Lines of Credit Payplant Accounts Receivable Bank Line Pursuant to the terms of a Commercial Loan Purchase Agreement, dated as of August 14, 2017 (the "Purchase Agreement"), Gemcap Lending I, LLC ("GemCap") sold and assigned to Payplant LLC, as agent for Payplant Alternatives Fund LLC ("Payplant" or "Lender"), all of its right, title and interest to that certain revolving Secured Promissory Note in an aggregate principal amount of up to $10,000,000 (the "GemCap Note") issued in accordance with that certain Loan and Security Agreement, dated as of November 14, 2016 (the "GemCap Loan"), by and among Gemcap and the Company and its wholly-owned subsidiaries, Inpixon USA and SGS for an aggregate purchase price of $1,402,770.16. In connection with the purchase and assignment of the Gemcap Loan in accordance with the Purchase Agreement, the GemCap Loan was amended and restated in accordance with the terms and conditions of the Payplant Loan and Security Agreement, dated as of August 14, 2017, between the Company and Payplant (the "Loan Agreement"). The Loan Agreement allows the Company to request loans (each a "Loan" and collectively the "Loans") from the Lender (in the manner provided therein) with a term of no greater than 360 days in amounts that are equivalent to 80% of the face value of purchase orders received ("Aggregate Loan Amount"). The Lender is not obligated to make the requested loan, however, if the Lender agrees to make the requested loan, before the loan is made, the Company must provide Lender with (i) one or more promissory notes ("Notes") for the amount being loaned in favor of Lender, (ii) one or more guaranties executed in favor of Lender and (iii) other documents and evidence of the completion of such other matters as Lender may request. The principal amount of each Loan shall accrue interest at a 30 day rate of 2% (the "Interest Rate"), calculated per day on the basis of a year of 360 days and, when combined with all fees that may be characterized as interest will not exceed the maximum rate allowed by law Upon the occurrence and during the continuance of any event of default, interest shall accrue at a rate equal to the Interest Rate plus 0.42% per 30 days. All computations of interest shall be made on the basis of a year of 360 days. The promissory note is subject to the interest rates described in the Loan Agreement and is secured by the assets of the Company pursuant to the Loan Agreement and will be satisfied in accordance with the terms of the Client Agreement. | ||
[3] | Senior Secured Debenture Debenture Amendment On January 5, 2018, the then holder of that certain 8% Original Issue Discount Note (the "Debenture") of which an aggregate principal amount of $1,004,719 plus interest and the Company agreed to amend the Debenture to: (i) cause an event of default in the event of the failure by the Company to amend its Articles of Incorporation in order to increase its authorized shares (the "Authorized Share Amendment") or otherwise reserve a sufficient number of shares of common stock for issuance upon conversion of the Debenture on or prior to February 15, 2018; (ii) require a reserve of at least 150% of the number of shares into which the Debenture is convertible upon the effectiveness of the Authorized Share Amendment; On February 5, 2018, the holder of the Debenture delivered a conversion notice to the Company pursuant to which it converted $300,000 of principal of the Debenture into 50,143 shares of the Company's common stock. Such shares of common stock were issued on February 6, 2018. On February 7, 2018, the holder of the Debenture delivered a conversion notice to the Company pursuant to which it converted $400,000 of principal of the Debenture into 119,296 shares of the Company's common stock. On February 9, 2018, the holder of the Debenture delivered a final conversion notice to the Company pursuant to which it converted $317,000 of principal of the Debenture into 105,820 shares of the Company's common stock, which satisfied the debenture in full. |
Debt (Details Textual)
Debt (Details Textual) - USD ($) | Feb. 09, 2018 | Feb. 07, 2018 | Feb. 05, 2018 | Jan. 05, 2018 | May 23, 2018 | Nov. 17, 2017 | Aug. 14, 2017 | Jun. 30, 2018 |
Debt (Textual) | ||||||||
Value of debenture converted to common stock | $ 317,000 | $ 400,000 | $ 300,000 | |||||
Common shares issued for debenture | 105,820 | 119,296 | 50,143 | |||||
Convertible Notes Payable [Member] | ||||||||
Debt (Textual) | ||||||||
Convertible notes payable redemption, description | Redemptions may occur at any time after the 6 month anniversary of the date of issuance of the November Note with a minimum redemption price equal to the Conversion Price. | |||||||
Conversion price per share floor | $ 3 | |||||||
Convertible Senior Secured Debenture [Member] | ||||||||
Debt (Textual) | ||||||||
Beneficial conversion feature value | $ 439,000 | |||||||
Payplant Accounts Receivable Bank Line [Member] | ||||||||
Debt (Textual) | ||||||||
Aggregate purchase price | $ 1,402,770.16 | |||||||
Term of loan | 360 days | |||||||
Bank line advance rate | 80.00% | |||||||
Revolving lines of credit, description | The Company must provide Lender with (i) one or more promissory notes ("Notes") for the amount being loaned in favor of Lender, (ii) one or more guaranties executed in favor of Lender and (iii) other documents and evidence of the completion of such other matters as Lender may request. The principal amount of each Loan shall accrue interest at a 30 day rate of 2% (the "Interest Rate"), calculated per day on the basis of a year of 360 days and, when combined with all fees that may be characterized as interest will not exceed the maximum rate allowed by law Upon the occurrence and during the continuance of any event of default, interest shall accrue at a rate equal to the Interest Rate plus 0.42% per 30 days. All computations of interest shall be made on the basis of a year of 360 days. | |||||||
November Note [Member] | Convertible Notes Payable [Member] | ||||||||
Debt (Textual) | ||||||||
Aggregate principal amount | $ 1,745,000 | |||||||
Net proceeds from notes payable | $ 1,500,000 | |||||||
Convertible notes payable redemption, description | The November Note, as amended, bears interest at the rate of 10% per year and is due 10 months after the date of issuance. | |||||||
Conversion price per share floor | $ 3 | |||||||
Conversion price as percentage of closing trading price | 70.00% | |||||||
Debenture Amendment [Member] | ||||||||
Debt (Textual) | ||||||||
Aggregate principal amount | $ 1,004,719 | |||||||
Common share reserve requirement to satisfy debenture, percentage | 150.00% | |||||||
Original issue discount note, percentage | 8.00% | |||||||
November Noteholder [Member] | Standstill Agreement [Member] | ||||||||
Debt (Textual) | ||||||||
Interest expense | $ 68,000 | |||||||
GemCap Note [Member] | ||||||||
Debt (Textual) | ||||||||
Aggregate principal amount | $ 10,000,000 |
Capital Raise (Details)
Capital Raise (Details) - USD ($) | Feb. 20, 2018 | Jan. 05, 2018 | Jun. 25, 2018 | Apr. 24, 2018 |
January 2018 Capital Raise [Member] | ||||
Capital Raise (Textual) | ||||
Purchase price per share | $ 5.31 | |||
Warrants granted | 599,812 | |||
Gross proceeds from capital raise | $ 3,200,000 | |||
Exercise price of warrants | $ 6.60 | |||
Warrant exercise price per share after adjustment | $ 3 | |||
Warrants to purchase shares of common stock | 599,812 | |||
February 2018 Public Offering [Member] | ||||
Capital Raise (Textual) | ||||
Public offering, description | The Company completed a public offering for approximately $18 million in securities, consisting of an aggregate of 3,325,968 Class A units, at a price to the public of $2.35 per Class A unit, each consisting of one share of the Company's common stock and a five-year warrant to purchase one share of common stock at an exercise price of $3.50 per share ("February 2018 Warrants"), and 10,184.9752 Class B units, at a price to the public of $1,000 per Class B unit, each consisting of one share of the Company's newly designated Series 3 convertible preferred stock ("Series 3 Preferred") with a stated value of $1,000 and initially convertible into approximately 426 shares of our common stock at a conversion price of $2.35 per share for up to an aggregate of 4,334,032 shares of common stock and February 2018 Warrants exercisable for the number of shares of common stock into which the shares of Series 3 Preferred were initially convertible. | |||
Warrant exercise price per share after adjustment | $ 3.50 | |||
Net proceeds from this offering | $ 15,400,000 | |||
Gross proceeds from offering | 18,000,000 | |||
Amounts payable to service providers | 1,000,000 | |||
Beneficial conversion feature value | $ 1,508,000 | |||
April 2018 Public Offering [Member] | ||||
Capital Raise (Textual) | ||||
Exercise price of warrants | $ 0.67 | |||
Public offering, description | Each consisting of (i) one share of our newly designated Series 4 convertible preferred stock (the “Series 4 Preferred”) with a stated value of $1,000 and initially convertible into approximately 2,174 shares of common stock, at a conversion price of $0.46 per share (subject to adjustment) and (ii) one warrant to purchase such number of shares of common stock as each share of Series 4 Preferred is convertible into. | |||
Net proceeds from this offering | $ 9,200,000 | |||
Public offering price, per unit | $ 1,000 | |||
Gross proceeds from offering | $ 10,100,000 | |||
Public offering units sold | 10,115 | |||
Beneficial conversion feature value | $ 4,226,000 | $ 673,000 | ||
Preferred share conversion price | $ 0.46 | |||
Preferred share conversion price after adjustment | $ 0.1779 | |||
Deemed dividend | $ 4,899,000 | |||
April 2018 Capital Raise [Member] | ||||
Capital Raise (Textual) | ||||
Warrants to purchase shares of common stock | 42,287,102 | |||
Deemed dividend | $ 4,828,000 | |||
Warrant exercise price after adjustment | $ 0.634 |
Common Stock (Details)
Common Stock (Details) - USD ($) | Feb. 20, 2018 | Feb. 09, 2018 | Feb. 07, 2018 | Feb. 05, 2018 | Jan. 05, 2018 | Jun. 30, 2018 | Mar. 31, 2018 |
Common Stock (Textual) | |||||||
Fractional shares issued due to reverse stock split | 9,718 | ||||||
Value of debenture converted to common stock | $ 317,000 | $ 400,000 | $ 300,000 | ||||
Number of common shares issues for conversion of debenture | 105,820 | 119,296 | 50,143 | ||||
Fractional shares issued, description | Stock for fractional shares due to the reverse stock split effective February 6, 2018. | ||||||
Class A [Member] | Public offering [Member] | |||||||
Common Stock (Textual) | |||||||
Common shares issued for satisfaction of a payable | 3,325,968 | ||||||
Purchase price per share | $ 2.35 | ||||||
Exercise term of warrant | 5 years | ||||||
Series 3 preferred stock [Member] | |||||||
Common Stock (Textual) | |||||||
Number of common shares issued for converted preferred stock | 175,000 | 4,159,032 | |||||
Number of preferred shares converted to common shares | 411.25 | 9,773.7252 | |||||
Series 4 preferred stock [Member] | |||||||
Common Stock (Textual) | |||||||
Number of common shares issued for converted preferred stock | 28,738,093 | ||||||
Number of preferred shares converted to common shares | 7,796.7067 | ||||||
Subscription Agreement [Member] | |||||||
Common Stock (Textual) | |||||||
Common shares issued for satisfaction of a payable | 7,838 | ||||||
Purchase price per share | $ 10.20 | ||||||
Value of common stock issued to service provider | $ 80,000 | ||||||
Securities Purchase Agreement [Member] | |||||||
Common Stock (Textual) | |||||||
Common shares issued for satisfaction of a payable | 599,812 | ||||||
Purchase price per share | $ 5.31 |
Preferred Stock (Details)
Preferred Stock (Details) - USD ($) | Feb. 20, 2018 | Jun. 25, 2018 | Apr. 24, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Apr. 20, 2018 | Feb. 15, 2018 | Dec. 31, 2017 |
Preferred Stock (Textual) | ||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||||||
Aggregate stated value | ||||||||
Public offering, units | 10,115 | |||||||
Series 3 Preferred Stock [Member] | ||||||||
Preferred Stock (Textual) | ||||||||
Preferred stock, shares authorized | 10,184.9752 | |||||||
Aggregate stated value | $ 1,000 | |||||||
Series preferred stock conversion value | $ 2.35 | |||||||
Preferred shares converted to common shares | 411.25 | 9,773.7252 | ||||||
Common shares issued from converted preferred shares | 175,000 | 4,159,032 | ||||||
Public offering, description | The Company completed a public offering including an aggregate of 10,184.9752 Class B units, at a price to the public of $1,000 per Class B unit, each consisting of one share of the Company's newly designated Series 3 Preferred with a stated value of $1,000 and initially convertible into approximately 426 shares of our common stock at a conversion price of $2.35 per share. | |||||||
Preferred shares outstanding | ||||||||
Series 4 Preferred Stock [Member] | ||||||||
Preferred Stock (Textual) | ||||||||
Preferred stock, shares authorized | 10,185 | 10,415 | 10,185 | |||||
Aggregate stated value | $ 1,000 | |||||||
Series preferred stock conversion value | $ 0.46 | |||||||
Preferred shares converted to common shares | 796.7067 | |||||||
Common shares issued from converted preferred shares | 28,738,093 | |||||||
Public offering, description | The terms of the price reset provisions described in the Certificate of Designations the Conversion Price of the Series 4 Preferred was adjusted to $0.1779. | Each consisting of (i) one share of our newly designated Series 4 convertible preferred stock (the "Series 4 Preferred") with a stated value of $1,000 and initially convertible into approximately 2,174 shares of common stock, at a conversion price of $0.46 per share (subject to adjustment) and (ii) one warrant to purchase such number of shares of common stock as each share of Series 4 Preferred is convertible into. | ||||||
Preferred shares outstanding | 2,318.2933 |
Authorized Share Increase and51
Authorized Share Increase and Reverse Stock Split (Details) - Common Stock [Member] | 1 Months Ended |
Feb. 02, 2018shares | |
Authorized Share Increase and Reverse Stock Split (Textual) | |
Reverse stock split, description | The Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada to effect a 1-for-30 reverse stock split of the Company's issued and outstanding shares of common stock, effective as of February 6, 2018. |
Minimum [Member] | |
Authorized Share Increase and Reverse Stock Split (Textual) | |
Common Stock, shares authorized, original amount | 50,000,000 |
Maximum [Member] | |
Authorized Share Increase and Reverse Stock Split (Textual) | |
Common Stock, shares authorized, original amount | 250,000,000 |
Stock Options (Details)
Stock Options (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.27% | |
Expected life of option grants | 7 years | |
Expected volatility of underlying stock | 47.34% | |
Dividends assumption | ||
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.79% | |
Expected life of option grants | 5 years | |
Expected volatility of underlying stock | 45.64% | |
Dividends assumption | ||
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 3.01% | |
Expected life of option grants | 6 years | |
Expected volatility of underlying stock | 46.18% | |
Dividends assumption |
Stock Options (Details Textual)
Stock Options (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate number of shares available for future grant under stock option plan | 295,709 | 295,709 | |||
Stock-based compensation | $ 571,000 | $ 710,000 | $ 857,000 | $ 993,000 | |
Dividends assumption | |||||
Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Dividends assumption | |||||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Dividends assumption | |||||
2011 Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate number of shares authorized | 16,629 | ||||
2018 Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate number of shares authorized | 4,000,000 | 4,000,000 | |||
Options grants under the option plans | 2,714,500 | ||||
Percentage of option vested | 100.00% | ||||
Option vest pro-rata terms | 48 months | ||||
Option life under the plan | 10 years | ||||
2018 Plan [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option exercise price | $ 0.18 | ||||
2018 Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option exercise price | $ 0.36 | ||||
Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Incentive stock options granted, description | Incentive stock options granted under the Option Plans are granted at exercise prices not less than 100% of the estimated fair market value of the underlying common stock at date of grant. The exercise price per share for incentive stock options may not be less than 110% of the estimated fair value of the underlying common stock on the grant date for any individual possessing more that 10% of the total outstanding common stock of the Company. | ||||
Options granted under the option plans vest over periods | 4 years | ||||
Options granted under the option plans vest over periods exceeding | 10 years | ||||
Non plan options granted | 1,389 | 1,389 | |||
Stock option awards fair value | $ 428,000 | ||||
Fair value of non-vested options | $ 418,245 | 418,245 | |||
Dividends assumption | $ 0 | ||||
Weighted average remaining term of non-vested options | 9 months 3 days | ||||
Stock Options [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option exercise price | $ 0.18 | ||||
Stock Options [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option exercise price | $ 0.36 | ||||
Employees, Directors and Consultants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of stock options granted | 2,722,309 | 2,722,309 |
Credit Risk and Concentration54
Credit Risk and Concentrations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Concentration Risk [Line Items] | ||||
Net revenues | $ 1,828 | $ 15,096 | $ 3,922 | $ 28,578 |
Customer concentration risk [Member] | Customer A [Member] | ||||
Concentration Risk [Line Items] | ||||
Net revenues | $ 319 | $ 644 | ||
Concentration risk, percentage | 17.00% | 16.00% | ||
Customer concentration risk [Member] | Customer B [Member] | ||||
Concentration Risk [Line Items] | ||||
Net revenues | $ 211 | $ 512 | ||
Concentration risk, percentage | 12.00% | 13.00% | ||
Customer concentration risk [Member] | Customer C [Member] | ||||
Concentration Risk [Line Items] | ||||
Net revenues | $ 195 | $ 422 | ||
Concentration risk, percentage | 11.00% | 11.00% | ||
Customer concentration risk [Member] | Customer D [Member] | ||||
Concentration Risk [Line Items] | ||||
Net revenues | $ 3,648 | $ 5,264 | ||
Concentration risk, percentage | 24.00% | 18.00% |
Credit Risk and Concentration55
Credit Risk and Concentrations (Details Textual) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017USD ($) | Jun. 30, 2018Vendor | Jun. 30, 2017USD ($)Vendor | |
Accounts payable [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Number of vendors | Vendor | 2 | 1 | ||
Accounts payable [Member] | One vendors [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Concentration risk, percentage | 36.00% | 40.00% | ||
Purchases from vendors | $ | $ 4.1 | $ 5.8 | ||
Accounts payable [Member] | Two vendors [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Concentration risk, percentage | 20.00% | |||
Accounts Receivable [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Concentration risk, percentage | 10.00% | |||
Accounts Receivable [Member] | Customer A [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Concentration risk, percentage | 22.00% | |||
Accounts Receivable [Member] | Customer B [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Concentration risk, percentage | 17.00% | |||
Accounts Receivable [Member] | Customer C [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Concentration risk, percentage | 15.00% | |||
Revenue [Member] | Customers [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% |
Segment Reporting and Foreign56
Segment Reporting and Foreign Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 1,828 | $ 15,096 | $ 3,922 | $ 28,578 |
Cost of net revenues | (817) | (11,712) | (1,676) | (21,905) |
Gross profit | $ 1,011 | $ 3,384 | $ 2,246 | $ 6,673 |
Gross margin % | 55.00% | 22.00% | 57.00% | 23.00% |
Depreciation and amortization | $ 526 | $ 433 | $ 1,040 | $ 833 |
Amortization of intangibles | 1,323 | 1,382 | 2,645 | 2,767 |
Indoor Positioning Analytics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 1,274 | 1,156 | 2,121 | 2,137 |
Cost of net revenues | (369) | (380) | (604) | (723) |
Gross profit | $ 905 | $ 776 | $ 1,517 | $ 1,414 |
Gross margin % | 71.00% | 67.00% | 72.00% | 66.00% |
Depreciation and amortization | $ 120 | $ 93 | $ 279 | $ 168 |
Amortization of intangibles | 804 | 863 | 1,607 | 1,729 |
Infrastructure [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 554 | 13,940 | 1,801 | 26,441 |
Cost of net revenues | (448) | (11,332) | (1,072) | (21,182) |
Gross profit | $ 106 | $ 2,608 | $ 729 | $ 5,259 |
Gross margin % | 19.00% | 19.00% | 40.00% | 20.00% |
Depreciation and amortization | $ 406 | $ 340 | $ 761 | $ 665 |
Amortization of intangibles | $ 519 | $ 519 | $ 1,038 | $ 1,038 |
Segment Reporting and Foreign57
Segment Reporting and Foreign Operations (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting and Foreign Operations [Abstract] | ||||
Income from operations of reportable segments | $ 1,011 | $ 3,384 | $ 2,246 | $ 6,673 |
Unallocated operating expenses | (7,460) | (8,614) | (14,303) | (17,260) |
Interest expense | (356) | (1,344) | (1,638) | (2,027) |
Other income (expense) | 950 | 152 | 1,596 | 143 |
Loss from discontinued operations | (9) | (17) | ||
Consolidated loss before income taxes | $ (5,855) | $ (6,431) | $ (12,099) | $ (12,488) |
Segment Reporting and Foreign58
Segment Reporting and Foreign Operations (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues by geographic area | $ 1,828 | $ 15,096 | $ 3,922 | $ 28,578 | |
Operating income (loss) by geographic area | (6,449) | (5,230) | (12,057) | (10,587) | |
Net income (loss) by geographic area | (5,855) | (6,431) | (12,099) | (12,488) | |
Identifiable assets by geographic area | 24,892 | 24,892 | $ 27,691 | ||
Long lived assets by geographic area | 12,106 | 12,106 | 15,215 | ||
United States [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues by geographic area | 1,823 | 15,025 | 3,911 | 28,452 | |
Operating income (loss) by geographic area | (6,078) | (4,784) | (11,195) | (9,739) | |
Net income (loss) by geographic area | (5,484) | (5,975) | (11,233) | (11,623) | |
Identifiable assets by geographic area | 24,557 | 24,557 | 27,189 | ||
Long lived assets by geographic area | 11,964 | 11,964 | 14,883 | ||
Canada [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues by geographic area | 5 | 70 | 11 | 126 | |
Operating income (loss) by geographic area | (387) | (447) | (876) | (848) | |
Net income (loss) by geographic area | (387) | (447) | (880) | (848) | |
Identifiable assets by geographic area | 269 | 269 | 432 | ||
Long lived assets by geographic area | 133 | 133 | 318 | ||
Saudi Arabia [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues by geographic area | |||||
Operating income (loss) by geographic area | |||||
Net income (loss) by geographic area | (9) | (17) | |||
Identifiable assets by geographic area | 23 | ||||
Long lived assets by geographic area | |||||
India [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues by geographic area | 74 | 126 | |||
Operating income (loss) by geographic area | 16 | 14 | |||
Net income (loss) by geographic area | 16 | 14 | |||
Identifiable assets by geographic area | 66 | 66 | 47 | ||
Long lived assets by geographic area | 9 | 9 | 14 | ||
Eliminations [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues by geographic area | (74) | (126) | |||
Operating income (loss) by geographic area | |||||
Net income (loss) by geographic area | |||||
Identifiable assets by geographic area | |||||
Long lived assets by geographic area |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Apr. 06, 2018 | Jan. 22, 2018 | Dec. 08, 2017 | Dec. 07, 2017 | Sep. 05, 2017 | Aug. 10, 2017 | May 29, 2018 | May 17, 2018 | Apr. 23, 2018 | Apr. 19, 2018 | Mar. 19, 2018 | Feb. 16, 2018 | Jan. 02, 2018 | Dec. 28, 2017 | May 19, 2017 | Mar. 01, 2017 | Aug. 11, 2017 | Jun. 13, 2017 | Mar. 13, 2017 |
Commitments and Contingencies (Textual) | |||||||||||||||||||
Claiming non-payment under a settlement agreement | $ 7,500 | ||||||||||||||||||
Default judgment amount requested by vendor | $ 336,000 | ||||||||||||||||||
Legal fees | $ 20,000 | ||||||||||||||||||
Amount claimed as owed for unpaid vendor invoices | $ 1,800,000 | $ 421,000 | $ 1,200,000 | ||||||||||||||||
Amount of vendor invoices under dispute | $ 176,000 | ||||||||||||||||||
Amount of project fees claimed as owed | $ 1,000,000 | ||||||||||||||||||
Nasdaq minimum stockholders equity requirement | $ 2,500,000 | $ 2,500,000 | |||||||||||||||||
Intangible assets technology acquired | $ 175,000 | ||||||||||||||||||
Intangible assets estimated life | 5 years | ||||||||||||||||||
Integrio Technologies, LLC [Member] | |||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||
Original liability amount | $ 486,000 | ||||||||||||||||||
Vendor settlement agreement amount | 243,000 | ||||||||||||||||||
Additional vendor services provided | $ 145,000 | ||||||||||||||||||
Vendor judgment value | $ 334,000 | ||||||||||||||||||
Nasdaq [Member] | |||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||
Nasdaq continued listing requirement status, description | A letter from the Listing Qualifications Staff of Nasdaq indicating that, based upon the closing bid price of the Company's common stock for the last 30 consecutive business days beginning on April 5, 2018 and ending on May 16, 2018, the Company no longer meets the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2). | ||||||||||||||||||
Nasdaq compliance requirement | In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided a period of 180 calendar days, or until November 13, 2018, in which to regain compliance. In order to regain compliance with the minimum bid price requirement, the closing bid price of the Company's common stock must be at least $1 per share for a minimum of ten consecutive business days during this 180-day period. In the event that the Company does not regain compliance within this 180-day period, the Company may be eligible to seek an additional compliance period of 180 calendar days if it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and provides written notice to Nasdaq of its intent to cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary. | ||||||||||||||||||
Embarcadero Technologies, Inc. / Idera, Inc. [Member] | |||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||
Amount of damages requested under legal complaint | $ 1,100,000 | ||||||||||||||||||
Virtual Imaging, Inc [Member] | |||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||
Value of products provided to defendant | $ 3,938,000 | ||||||||||||||||||
Aggregate value remains outstanding and overdue | 3,688,000 | ||||||||||||||||||
Unpaid value of products demanded by vendor | $ 3,688,000 | ||||||||||||||||||
Micro Focus (US) Inc. [Member] | |||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||
Settlement agreement, description | The Company signed a settlement agreement with Microfocus for $200,000 which has been paid as of the date of this filing. | ||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||
Principal amount owed to vendor | $ 246,000 | $ 246,000 | $ 246,000 | ||||||||||||||||
AVT Technology Solutions, LLC [Member] | |||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||
Value of judgment for non-payment of goods received | $ 9,152,698.71 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Aug. 07, 2018 | Jun. 30, 2018 | Jul. 26, 2018 | Dec. 31, 2017 |
Subsequent Events (Textual) | ||||
Common stock, par value | $ 0.001 | $ 0.001 | ||
Series 4 preferred stock [Member] | ||||
Subsequent Events (Textual) | ||||
Number of Preferred Shares converted to Common stock | 994.5624 | |||
Number of Common Shares issued for converted Preferred stock | 5,590,570 | |||
Subsequent Events [Member] | ||||
Subsequent Events (Textual) | ||||
Separation agreement, description | (i) the Company will contribute to Sysorex all of the outstanding equity interests of the Sysorex subsidiary entities, (ii) the Company will contribute to Sysorex the "Contributed Cash", as such term is defined in the Separation Agreement, which includes $2 million in cash held by the Company that will be contributed to Sysorex before the Spin-off (which amount shall be reduced by the aggregate amount of certain operating and other expenses of Sysorex that have been or will be satisfied by the Company from June 30, 2018 through the date of the Spin-off), (iii) the Company will transfer certain assets to Sysorex and Sysorex will assume certain of the Company's liabilities and (iv) Sysorex will contribute to the Company certain assets and liabilities related to the Company's indoor positioning analytics business. | |||
Issued and outstanding shares of common stock | 3,950,000 | |||
Exchange for agreegate common stock issued and outstanding | 39,999,000 | |||
Common stock, par value | $ 0.00001 |