Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 02, 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 | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 1,554,227 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 1,461 | $ 119 |
Accounts receivable, net | 878 | 429 |
Notes and other receivables | 64 | 13 |
Inventory | 810 | 783 |
Assets held for sale | 23 | |
Related party receivable | 750 | |
Current assets of deconsolidated operations | 6,983 | |
Prepaid assets and other current assets | 923 | 859 |
Total Current Assets | 4,886 | 9,209 |
Property and equipment, net | 219 | 348 |
Software development costs, net | 1,680 | 2,017 |
Intangible assets, net | 5,321 | 7,566 |
Goodwill | 636 | 636 |
Non-current assets of deconsoldiated operations | 7,558 | |
Other assets | 249 | 357 |
Total Assets | 12,991 | 27,691 |
Current Liabilities | ||
Accounts payable | 777 | 1,562 |
Accrued liabilities | 1,149 | 2,206 |
Deferred revenue | 52 | 58 |
Short-term debt | 1,815 | 3,058 |
Derivative liabilities | 48 | |
Current liabilities of deconsolidated operations | 33,040 | |
Liabilities held for sale | 2,059 | |
Total Current Liabilities | 3,793 | 42,031 |
Long Term Liabilities | ||
Long-term debt | 142 | 767 |
Other liabilities | 29 | 73 |
Non-current liabilities of deconsolidated operations | 3,673 | |
Total Liabilities | 3,964 | 46,544 |
Commitments and Contingencies | ||
Stockholders' (Deficit) Equity | ||
Preferred Stock - $0.001 par value; 5,000,000 shares authorized, 0 issued and outstanding as of September 30, 2018 and December 31, 2017 | ||
Series 4 Convertible Preferred Stock - $1,000 stated value; 10,185 shares authorized; 7 and 0 issued and 7 and 0 outstanding at September 30, 2018 and December 31, 2017. Liquidation preference of $0 at September 30, 2018 and December 31, 2017. | ||
Common Stock - $0.001 par value; 250,000,000 shares authorized; 1,281,126 and 24,055 issued and 1,281,113 and 24,042 outstanding at September 30, 2018 and December 31, 2017, respectively. | 51 | 1 |
Additional paid-in capital | 120,124 | 78,302 |
Treasury stock, at cost, 13 shares | (695) | (695) |
Accumulated other comprehensive income | 16 | 31 |
Accumulated deficit (excluding $2,442 reclassified to additional paid in capital in quasi-reorganization) | (110,482) | (94,486) |
Stockholders' (Deficit) Equity Attributable to Inpixon | 9,014 | (16,847) |
Non-controlling Interest | 13 | (2,006) |
Total Stockholders' (Deficit) Equity | 9,027 | (18,853) |
Total Liabilities and Stockholders' (Deficit) Equity | $ 12,991 | $ 27,691 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 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 | 1,281,126 | 24,055 |
Common stock, shares outstanding | 1,281,113 | 24,042 |
Treasury stock, shares | 13 | 13 |
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 | 7 | 0 |
Preferred stock, shares outstanding | 7 | 0 |
Preferred stock, liquidation preference | $ 0 | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Products | $ 271 | $ 52 | $ 554 | $ 476 |
Services | 669 | 819 | 2,073 | 2,531 |
Total Revenues | 940 | 871 | 2,627 | 3,007 |
Cost of Revenues | ||||
Products | 107 | 94 | 259 | 410 |
Services | 191 | 173 | 559 | 580 |
Total Cost of Revenues | 298 | 267 | 818 | 990 |
Gross Profit | 642 | 604 | 1,809 | 2,017 |
Operating Expenses | ||||
Research and development | 296 | 224 | 820 | 713 |
Sales and marketing | 447 | 441 | 1,259 | 1,917 |
General and administrative | 2,326 | 3,239 | 8,796 | 8,325 |
Acquisition related costs | 78 | 94 | 5 | |
Impairment of goodwill | 587 | 587 | ||
Amortization of intangibles | 812 | 808 | 2,419 | 2,536 |
Total Operating Expenses | 3,959 | 5,299 | 13,388 | 14,083 |
Loss from Operations | (3,317) | (4,695) | (11,579) | (12,066) |
Other Income (Expense) | ||||
Interest expense | (78) | (252) | (981) | (1,317) |
Change in fair value of derivative liability | 46 | 48 | 254 | |
Gain on the sale of Sysorex Arabia | 23 | |||
Other income/(expense) | 14 | (11) | (54) | |
Total Other Income (Expense) | (78) | (192) | (921) | (1,117) |
Net Loss from Continuing Operations | (3,395) | (4,887) | (12,500) | (13,183) |
Loss from Discontinued Operations, Net of Tax | (1,785) | (9,754) | (4,778) | (13,946) |
Net Loss | (5,180) | (14,641) | (17,278) | (27,129) |
Net Loss Attributable to Non-controlling Interest | 4 | (4) | 6 | (13) |
Net Loss Attributable to Stockholders of Inpixon | (5,184) | (14,637) | (17,284) | (27,116) |
Deemed dividend to preferred stockholders | (11,235) | |||
Net Loss Attributable to Common Stockholders | $ (5,184) | $ (14,637) | $ (28,519) | $ (27,116) |
Net Loss Per Basic and Diluted Common Share | ||||
Loss from continuing operations | $ (3.17) | $ (620.65) | $ (45.97) | $ (3,372.47) |
Loss from discontinued operations | (1.67) | (1,238.76) | (9.25) | (3,567.66) |
Net Loss Per Share - Basic and Diluted | $ (4.84) | $ (1,858.90) | $ (55.24) | $ (6,936.81) |
Weighted Average Shares Outstanding | ||||
Basic and Diluted | 1,071,310 | 7,874 | 516,302 | 3,909 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Loss | $ (5,180) | $ (14,641) | $ (17,278) | $ (27,129) |
Unrealized foreign exchange gain/(loss) from cumulative translation adjustments | (10) | (5) | (15) | (15) |
Comprehensive Loss | $ (5,190) | $ (14,646) | $ (17,293) | $ (27,144) |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Changes in Stockholders' (Deficit) Equity (Unaudited) - 9 months ended Sep. 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 | 24,055 | (13) | |||||||
Common shares issued for services | 80 | 80 | |||||||
Common shares issued for services, shares | 196 | ||||||||
Stock options granted to employees for services | 899 | 899 | |||||||
Stock options granted to employees for services, shares | |||||||||
Fractional shares issued for stock split | |||||||||
Fractional shares issued for stock split, shares | 243 | ||||||||
Common and preferred shares issued for net cash proceeds from a public offering | 27,961 | $ 4 | 27,957 | ||||||
Common and preferred shares issued for net cash proceeds from a public offering, shares | 10,184.9752 | 10,115 | 98,145 | ||||||
Redemption of convertible series 3 preferred stock | $ 4 | (4) | |||||||
Redemption of convertible series 3 preferred stock, shares | (10,184.9752) | 108,351 | |||||||
Redemption of convertible series 4 preferred stock | $ 42 | (42) | |||||||
Redemption of convertible series 4 preferred stock, shares | (10,108) | 1,043,255 | |||||||
Common shares issued for extinguishment of debenture liability | 1,456 | 1,456 | |||||||
Common shares issued for extinguishment of debenture liability, shares | 6,881 | ||||||||
Deconsolidation of Sysorex as a result of spin-off | 11,476 | 11,476 | |||||||
Sale of Sysorex Arabia | 2,013 | 2,013 | |||||||
Adoption of accounting standards (Note 2) | 1,287 | 1,287 | |||||||
Cumulative Translation Adjustment | (15) | (15) | |||||||
Net loss | (17,278) | (17,284) | 6 | ||||||
Balance at Sep. 30, 2018 | $ 9,027 | $ 51 | $ 120,124 | $ (695) | $ 16 | $ (110,482) | $ 13 | ||
Balance, shares at Sep. 30, 2018 | 7 | 1,281,126 | (13) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows from Operating Activities | ||
Net loss | $ (17,278) | $ (27,129) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,334 | 1,324 |
Amortization of intangible assets | 3,804 | 4,094 |
Impairment of goodwill | 8,392 | |
Stock based compensation | 979 | 1,282 |
Amortization of technology | 50 | 50 |
Change in fair value of derivative liability | (48) | (254) |
Amortization of debt discount | 417 | 1,545 |
Amortization of deferred financing costs | 167 | |
Provision for doubtful accounts | 221 | 773 |
Gain on the settlement of liabilities | (307) | |
Gain on the sale of Sysorex Arabia | (23) | |
Other | (37) | 129 |
Changes in operating assets and liabilities: | ||
Accounts receivable and other receivables | 207 | 5,223 |
Inventory | (19) | 270 |
Other current assets | 54 | 455 |
Prepaid licenses and maintenance contracts | (5) | 9,787 |
Other assets | 34 | 46 |
Accounts payable | (8,797) | 4,751 |
Accrued liabilities | (3,057) | 455 |
Deferred revenue | 64 | (10,704) |
Other liabilities | (978) | (438) |
Total Adjustments | (6,107) | 27,347 |
Net Cash (Used in) Provided by Operating Activities | (23,385) | 218 |
Cash Flows Used in Investing Activities | ||
Purchase of property and equipment | (39) | (91) |
Investment in capitalized software | (661) | (1,063) |
Investment in technology | (175) | |
Cash spun off a result of de-consolidation | (362) | |
Net Cash Flows Used in Investing Activities | (1,237) | (1,154) |
Cash Flows from Financing Activities | ||
Repayments to bank facility | (1,141) | (3,348) |
Net proceeds from issuance of common stock, preferred stock and warrants | 27,961 | 6,117 |
Repayment of notes payable | (113) | (20) |
Advances to related party | (774) | |
Repayments from related party | 24 | |
Repayment of debenture | (2,850) | |
Net proceeds from convertible promissory notes | 2,000 | |
Repayment of convertible promissory notes | (2,662) | |
Net Cash Provided by (Used In) Financing Activities | 25,957 | (763) |
Effect of Foreign Exchange Rate on Changes on Cash | (15) | (15) |
Net Increase (Decrease) in Cash and Cash Equivalents | 1,320 | (1,714) |
Cash and Cash Equivalents - Beginning of period | 119 | 1,821 |
Cash and Cash Equivalents - End of period | 1,461 | 107 |
Cash paid for: | ||
Interest | 798 | 545 |
Income Taxes | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Common shares issued for extinguishment of debenture liability | 1,456 | |
Adjustment to opening retained earnings for the adoption of ASC 606 | 1,287 | |
Deconsolidation of Sysorex net liabilities as a result of Spin-off | $ 11,838 |
Organization and Nature of Busi
Organization and Nature of Business and Going Concern | 9 Months Ended |
Sep. 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, 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. The Company is headquartered in California, and has subsidiary offices in 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 August 31, 2018, and as more fully described in Note 7, we completed the spin-off of our value added reseller business from our indoor positioning analytics business by way of a distribution of all the shares of common stock of our wholly-owned subsidiary, Sysorex, Inc. to our stockholders of record as of August 21, 2018 and certain warrant holders. Going Concern and Management’s Plans As of September 30, 2018, the Company has net working capital of approximately $1.1 million. For the nine months ended September 30, 2018, the Company incurred a net loss of approximately $17.3 million which includes the losses generated by Sysorex, Inc. through August 31, 2018, the date the entity and its wholly owned subsidiary were spun off as more fully described in Note 7. 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 14,996 shares of the Company’s common stock and warrants to purchase up to 14,996 shares of common stock at a purchase price of $212.40 per share of common stock for aggregate net proceeds of approximately $2.8 million. On February 20, 2018, the Company completed a public offering consisting of an aggregate of 83,149 Class A units, at a price to the public of $94.00 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 net proceeds of approximately $15.4 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. On October 12, 2018, the Company raised approximately $2 million in net proceeds from a one-year promissory note. The Company expects its capital resources as of September 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 will need additional funds to support its operations for the next twelve months. In addition, the Company is pursuing possible strategic transactions and if the Company pursues any such opportunities, other expansion plans or changes its business plan it may need to raise additional capital. The Company may raise such additional capital as needed, through the issuance of equity, equity-linked or debt securities. The Company’s condensed consolidated financial statements as of September 30, 2018 have been prepared under the assumption that we will continue as a going concern for the next twelve months from the date the financial statements are issued. Management’s plans and assessment of the probability that such plans will mitigate and alleviate any substantial doubt about the Company’s ability to continue as a going concern, is dependent upon the ability to attain further operating efficiency, reduce expenditures, and, ultimately, to generate sufficient levels of revenue, which together represent the principal conditions that raise substantial doubt about our ability to continue as a going concern. The Company’s condensed consolidated financial statements as of September 30, 2018 do not include any adjustments that might result from the outcome of this uncertainty. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 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 nine month period ended September 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 | 9 Months Ended |
Sep. 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, neither at initial implementation nor will it have a material impact on an ongoing basis. 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. 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 including maintenance service provided by in house personnel, 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 nine months ended September 30, 2018 and 2017, the Company did not incur any such losses. These amounts are based on known and estimated factors. 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 $52,000 as of September 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 of $122,000 and $288,000 for the three months ended September 30, 2018 and 2017, and $979,000 and $1,282,000 for the nine months ended September 30, 2018 and 2017, respectively, which are included in general and administrative expenses. The Company has elected to recognize forfeitures as they occur, rather than calculate an estimated forfeiture rate using a modified retrospective transition approach. The following table summarizes the nature of such charges for the periods then ended (in thousands): For the Three Months Ended For the Nine Months Ended 2018 2017 2018 2017 Compensation and related benefits $ 122 $ 201 $ 899 $ 713 Professional and legal fees -- 87 80 246 Acquisition transaction costs -- -- -- 7 Interest expense -- -- -- 316 Totals $ 122 $ 288 $ 979 $ 1,282 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 nine months ended September 30, 2018 and 2017: For the Nine Months Ended 2018 2017 Options 67,454 258 Warrants 1,622,971 3,177 Convertible preferred stock 984 -- Convertible note 15,881 -- Convertible debenture -- 337 Reserved for service providers 1,100 -- Totals 1,708,390 3,772 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 September 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 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 nine months ended September 30, 2018 and 2017. Recently Issued and Adopted 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 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 Topic 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 did not have a material effect on the post-spin off financial statements of the Company. Reverse Stock Split On March 1, 2017, the Company effectuated a 1-for-15 reverse stock split of its outstanding common stock, on February 6, 2018, the Company effectuated a 1-for-30 reverse stock split of its outstanding common stock and on November 2, 2018, the Company effectuated a 1-for-40 reverse stock split of its outstanding common stock. The financial statements and accompanying notes give effect to each of these 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 | 9 Months Ended |
Sep. 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 | 9 Months Ended |
Sep. 30, 2018 | |
Inventory [Abstract] | |
Inventory | Note 5 - Inventory Inventory as of September 30, 2018 and December 31, 2017 consisted of the following (in thousands): As of As of December 31, Raw materials $ 220 $ 220 Finished goods 590 563 Total Inventory $ 810 $ 783 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill [Abstract] | |
Goodwill | Note 6 - Goodwill The Company has recorded goodwill and other indefinite-lived assets in connection with its acquisition of Shoom, Inc. (“Shoom”) in September 2013. 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 nine months ended September 30, 2018 and 2017 by doing a quantitative test which confirmed that the fair value of the reporting unit was in excess of the carrying value of the stock so it was determined that there was no impairment. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note 7 - Discontinued Operations Sale of Sysorex Arabia 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 nine months ended September 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 nine months ended September 30, 2018 and 2017, no amounts were required to be accrued under this provision. S pin- Off of Sysorex, Inc. and its wholly owned subsidiary, Sysorex Government Services, Inc. On August 31, 2018, the Company completed the spin-off (the “Spin-off”) of its value added reseller business from its indoor positioning analytics business by way of a distribution of all the shares of common stock of the Company’s wholly-owned subsidiary, Sysorex, Inc. (“Sysorex”), to the Company’s stockholders of record as of August 21, 2018 (the “Record Date”) and certain warrant holders. The distribution occurred by way of a pro rata stock distribution to such common stock, preferred stock and warrant holders, each of whom received one share of Sysorex’s common stock for every 0.075 shares of the Company’s common stock held on the Record Date or such number of shares of common stock issuable upon complete conversion of the preferred stock or exercise of the warrants. The Spin-off was governed by a Separation and Distribution Agreement as well as other related agreements between the Company and Sysorex (collectively, the “Spin-off Agreements”). As a result of the Spin-off, the Company’s common stock continues trading on the Nasdaq Stock Market (“Nasdaq”), and Sysorex is an independent public company with common stock that is quoted on the OTC Markets. In accordance with Accounting Standards Codification (“ASC”) 205-20, “ Discontinued Operations The major categories of assets and liabilities held for sale in the condensed consolidated balance sheets as of December 31, 2017 (in thousands): (In thousands) As of December 31, Assets: Cash and cash equivalents $ 22 Accounts receivable, net 1,882 Notes and other receivables 171 Inventory 7 Prepaid licenses and maintenance contracts 4,638 Other current assets 263 Total Current Assets $ 6,983 Prepaid licenses and maintenance, non-current $ 2,264 Property and equipment, net 172 Intangible assets, net 5,112 Other assets 10 Total Non-Current Assets $ 7,558 Liabilities: Current Liabilities: Accounts payable $ 24,271 Accrued liabilities 3,215 Deferred revenue 5,554 Total Current Liabilities $ 33,040 Deferred revenue, non-current $ 2,636 Other liabilities 40 Acquisition liability - Integrio 997 Total Non-Current Liabilities $ 3,673 The assets and liabilities that were divested as part of the Spin-off completed on August 31, 2018 were as follows: (In thousands) Assets: Accounts receivable, net $ 651 Notes and other receivables 473 Prepaid licenses and maintenance contracts 5 Other current assets 146 Property and equipment, net 41 Intangible assets, net 3,728 Other assets 34 Total Assets $ 5,078 Liabilities: Accounts payable $ (15,952 ) Accrued liabilities (792 ) Deferred revenue (70 ) Other liabilities (40 ) Acquisition liability - Integrio (62 ) Total Liabilities $ (16,916 ) Total Net Assets Deconsolidated as Result of Spin-off $ (11,838 ) |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt [Abstract] | |
Debt | Note 8 - Debt Debt as of September 30, 2018 and December 31, 2017 consisted of the following (in thousands): 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 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. On August 30, 2018, the Company entered into a Standstill Agreement with the November Noteholder. Pursuant to the Standstill Agreement, the November Noteholder agreed that its right to redeem all or any portion of the November Note will not commence until the date that is the earlier of (i) 12 months after the purchase price date, and (b) five trading days following receipt of approval from Inpixon’s stockholders, as may be required in accordance with applicable Nasdaq Listing Rules, to amend the terms of the November Note to modify the Conversion Price and the Minimum Redemption Price, as those terms are defined in the November Note, on terms that are acceptable to the November Noteholder. The Standstill Agreement also extends the maturity date of the November Note to December 31, 2018. Inpixon paid the November Noteholder $75,000 as consideration for the November Noteholder’s consent to enter into the Standstill Agreement and accordingly expensed the $75,000 to interest expense on the date paid. (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 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. On August 31, 2018 Inpixon, together with Sysorex and SGS, and Payplant executed Amendment 1 to Payplant Client Agreement (the “Amendment”). Pursuant to the Amendment, Sysorex and SGS are no longer parties to the Payplant Client Agreement, originally entered into on August 14, 2017, and have been released from any and all obligations and liabilities arising under the Payplant Client Agreement, whether such obligations and liabilities were in existence prior to or on the date of the Amendment or arise after the date of the Amendment. (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 1,254 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 2,982 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 2,646 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 had 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 | 9 Months Ended |
Sep. 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 14,996 shares (the “January 2018 Shares”) of the Company’s common stock, at a purchase price of $212.40 per share (the “January 2018 Offering”) and warrants to purchase up to 14,996 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. After deducting placement agent fees and other expenses, the net proceeds from the offering was approximately $2.8 million. The January 2018 Warrants were initially exercisable at an exercise price per share equal to $264.00, 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 $120.00 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 83,149 Class A units, at a price to the public of $94.00 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 $140.00 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 11 shares of our common stock at a conversion price of $94.00 per share for up to an aggregate of 108,351 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 54 shares of common stock, at a conversion price of $18.40 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 $26.80 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 $18.40 to $7.12 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 $25.36 and increased the number of shares issuable upon exercise of such warrants to 1,057,178 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 | 9 Months Ended |
Sep. 30, 2018 | |
Common Stock [Abstract] | |
Common Stock | Note 10 - Common Stock On January 5, 2018, the Company issued 196 shares of common stock pursuant to a subscription agreement with a service provider at a purchase price of $408.00 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 14,996 shares of the Company’s common stock, at a purchase price of $212.40 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 1,254 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 2,982 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 2,646 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 83,149 Class A units, at a price to the public of $94.00 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 103,976 shares of the Company’s common stock. During the three months ended March 31, 2018, the Company issued 243 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 4,375 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 718,452 shares of the Company’s common stock. During the three months ended September 30, 2018, 2,311.2933 shares of Series 4 Preferred were converted into 324,803 shares of the Company’s common stock. |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 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 $94.00. 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 11 shares of our common stock at a conversion price of $94.00 per share (see Note 9). During the three months ended March 31, 2018, 9773.7252 shares of Series 3 Preferred were converted into 103,976 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 4,375 shares of the Company’s common stock. As of September 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 $18.40 (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 $7.12. 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 718,452 shares of the Company’s common stock. During the three months ended September 30, 2018, 2,311.2933 shares of Series 4 Preferred were converted into 324,803 shares of the Company’s common stock. As of September 30, 2018, there were 7 shares of Series 4 Preferred shares outstanding. |
Authorized Share Increase and R
Authorized Share Increase and Reverse Stock Split | 9 Months Ended |
Sep. 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 27, 2017, 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-15 reverse stock split of the Company’s issued and outstanding shares of common stock, effective as of March 1, 2017. 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. On October 31, 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-40 reverse stock split of the Company’s issued and outstanding shares of common stock, effective as of November 2, 2018. The financial statements and accompanying notes give effect to the 1-for-15, 1-for-30 and 1-for-40 reverse stock splits and increase in authorized shares as if they occurred at the first period presented. |
Stock Options
Stock Options | 9 Months Ended |
Sep. 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 together 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 416 and awarded under the 2018 Plan as of September 30, 2018 is 4,000,000. As of September 30, 2018, 67,454 of options were granted to employees, directors and consultants of the Company (including 35 shares outside of our plan) and 3,932,997 options were available for future grant under the Option Plans. During the nine months ended September 30, 2018, the Company granted options under the 2018 Plan for the purchase of 67,863 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 $7.20 and $14.40 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 $7.20 and $14.40 per share. The Company recorded a stock-based compensation charge of $122,000 and $288,000 for the three months ended September 30, 2018 and 2017, respectively, and $979,000 and $1,282,000 for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, the fair value of non-vested options totaled $266,820 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 nine months ended September 30, 2018 and 2017 were as follows: For the Nine 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 | 9 Months Ended |
Sep. 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 India subsidiary. Cash in foreign financial institutions as of September 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 nine months ended September 30, 2018 and 2017 (in thousands): For the Nine Months Ended For the Nine Months Ended September 30, $ % $ % Customer A 956 36 % 937 31 % Customer B 280 11 % -- -- 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 September 30, 2018 and 2017 (in thousands): For the Three Months Ended For the Three Months Ended $ % $ % Customer A 312 33 % 316 36 % As of September 30, 2018, Customer A represented approximately 5% and Customer B represented approximately 24% of total accounts receivable. As of September 30, 2017, Customer A represented less than 1% of total accounts receivable. As of September 30, 2018, one vendor represented approximately 60% of total gross accounts payable. There were no purchases from this vendor during the three and nine months ended September 30, 2018. As of September 30, 2017, one vendor represented approximately 31% of total gross accounts payable. There were no purchases from this vendor during the three and nine months ended September 30, 2017. |
Foreign Operations
Foreign Operations | 9 Months Ended |
Sep. 30, 2018 | |
Foreign Operations [Abstract] | |
Foreign Operations | Note 15 - Foreign Operations The Company’s operations are located primarily in the United States, Canada, India and prior to the sale of Sysorex Arabia in 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 September 30, 2018: Revenues by geographic area $ 930 $ 10 $ -- $ 76 $ (76 ) $ 940 Operating income (loss) by geographic area $ (3,022 ) $ (317 ) $ -- $ 22 $ -- $ (3,317 ) Net income (loss) by geographic area $ (4,885 ) $ (317 ) $ -- $ 22 $ -- $ (5,180 ) For the Three Months Ended September 30, 2017: Revenues by geographic area $ 864 $ 7 $ -- $ -- $ -- $ 871 Operating loss by geographic area $ (4,197 ) $ (498 ) $ -- $ -- $ -- $ (4,695 ) Net loss by geographic area $ (14,134 ) $ (498 ) $ (9 ) $ -- $ -- $ (14,641 ) For the Nine Months Ended September 30, 2018: Revenues by geographic area $ 2,606 $ 21 $ -- $ 202 $ (202 ) $ 2,627 Operating income (loss) by geographic area $ (10,422 ) $ (1,192 ) $ -- $ 35 $ -- $ (11,579 ) Net income (loss) by geographic area $ (16,117 ) $ (1,196 ) $ -- $ 35 $ -- $ (17,278 ) For the Nine Months Ended September 30, 2017: Revenues by geographic area $ 2,874 $ 133 $ -- $ -- $ -- $ 3,007 Operating loss by geographic area $ (10,720 ) $ (1,346 ) $ -- $ -- $ -- $ (12,066 ) Net loss by geographic area $ (25,757 ) $ (1,346 ) $ (26 ) $ -- $ -- $ (27,129 ) As of September 30, 2018: Identifiable assets by geographic area $ 12,644 $ 244 $ -- $ 103 $ -- $ 12,991 Long lived assets by geographic area $ 7,056 $ 144 $ -- $ 20 $ -- $ 7,220 As of December 31, 2017: Identifiable assets by geographic area $ 27,212 $ 432 $ $ 47 $ -- $ 27,691 Long lived assets by geographic area $ 9,599 $ 318 $ -- $ 14 $ -- $ 9,931 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 16 – Related Party Transactions Nadir Ali is the CEO of Inpixon as well as the Chairman of the Board of Sysorex, Inc. Pursuant to the terms of those certain employee transition agreements entered into between the Company and Sysorex, effective as of August 31, 2018 (collectively, the “Transition Agreements”), Sysorex agreed to furnish to the Company, on a transitional basis, the services of certain of its employees and keep such employees’ on its payroll and benefits plans from August 31, 2018 through and including December 31, 2018 (the “Transitional Period”). The Company agreed to reimburse Sysorex for all costs and expenses incurred by Sysorex with respect to such employees’ employment during the Transitional Period. Sysorex agreed to invoice the Company upon the calculation of amounts owed for the foregoing costs, and the Company agreed to reimburse Sysorex for all such costs within 3 days of its receipt of each such invoice, plus an administrative service fee of 2% of the gross amount of each respective invoice; provided, however, that Sysorex agreed waive such fee for so long as any Company employees are providing any necessary administrative services on behalf of and for the benefit of Sysorex, including any employees that are furnished to the Company in accordance with the Transition Agreements. The total amount of payroll and benefits reimbursed to Sysorex during the month ended September 30, 2018 was $543,000. In addition, Sysorex owes the Company approximately $750,000 resulting from transactions between the companies during this transition period. The Company anticipates this balance to be repaid by the end of the Transitional Period December 31, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 17 - 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 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 alleged that SGS failed to respond to a complaint served on November 22, 2017. The Motion requested a default judgment in the amount of $336,000. On August 10, 2018, the parties agreed to a settlement payment schedule. In connection with the Spin-off, Sysorex agreed to indemnify, defend and hold harmless the Company from and against any damages in connection with Sysorex liabilities, including this matter. 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, formerly Inpixon USA, 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. On August 15, 2018, the parties entered into a settlement agreement pursuant to which Sysorex agreed to a settlement payment schedule in connection with this matter. Pursuant to the terms of the settlement agreement, the Company is not liable for any payments to be made by Sysorex or any damages that may arise under such agreement. 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 is contesting such demand and a hearing has been scheduled for December 4-6, 2018. 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 had 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 $1.00 per share for a minimum of ten consecutive business days, but generally no more than twenty consecutive business days during this 180-day period. As of the date of this Form 10-Q, the closing bid price of the common stock has not been equal to or greater than $1.00 per share for a minimum of ten consecutive business days. As a result, the Company does not expect to be able to regain compliance within this 180-day period; however, the Company will 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 provide written notice to Nasdaq of the Company’s 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 we are otherwise not eligible, Nasdaq will provide notice to the Company that the common stock will be subject to delisting. On October 31, 2018, the Company received stockholder approval for a reverse stock split at its 2018 annual meeting of stockholders and implemented a 1-for-40 reverse stock split effective as of November 2, 2018, which it believes will cause the Company to comply with the minimum bid price requirement. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18 - Subsequent Events On October 8, 2018, the Company issued 37,500 shares of common stock for services which were fully vested upon the date of grant. The Company recorded an expense of $465,000 for the fair value of those shares. Subsequent to September 30, 2018, the Company issued 92,489 shares of common stock in connection with the exercise of 92,489 warrants at $10.80 per share. Subsequent to September 30, 2018, 6 shares of Series 4 Preferred were converted into 843 shares of the Company’s common stock. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 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, neither at initial implementation nor will it have a material impact on an ongoing basis. 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. 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 including maintenance service provided by in house personnel, 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 nine months ended September 30, 2018 and 2017, the Company did not incur any such losses. These amounts are based on known and estimated factors. 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 $52,000 as of September 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 of $122,000 and $288,000 for the three months ended September 30, 2018 and 2017, and $979,000 and $1,282,000 for the nine months ended September 30, 2018 and 2017, respectively, which are included in general and administrative expenses. The Company has elected to recognize forfeitures as they occur, rather than calculate an estimated forfeiture rate using a modified retrospective transition approach. The following table summarizes the nature of such charges for the periods then ended (in thousands): For the Three Months Ended For the Nine Months Ended 2018 2017 2018 2017 Compensation and related benefits $ 122 $ 201 $ 899 $ 713 Professional and legal fees -- 87 80 246 Acquisition transaction costs -- -- -- 7 Interest expense -- -- -- 316 Totals $ 122 $ 288 $ 979 $ 1,282 |
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 nine months ended September 30, 2018 and 2017: For the Nine Months Ended 2018 2017 Options 67,454 258 Warrants 1,622,971 3,177 Convertible preferred stock 984 -- Convertible note 15,881 -- Convertible debenture -- 337 Reserved for service providers 1,100 -- Totals 1,708,390 3,772 |
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 September 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 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 nine months ended September 30, 2018 and 2017. |
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted 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 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 Topic 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 did not have a material effect on the post-spin off financial statements of the Company. |
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, on February 6, 2018, the Company effectuated a 1-for-30 reverse stock split of its outstanding common stock and on November 2, 2018, the Company effectuated a 1-for-40 reverse stock split of its outstanding common stock. The financial statements and accompanying notes give effect to each of these 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 Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation/Summary of Significant Accounting Policies [Abstract] | |
Schedule of stock-based compensation charges | For the Three Months Ended For the Nine Months Ended 2018 2017 2018 2017 Compensation and related benefits $ 122 $ 201 $ 899 $ 713 Professional and legal fees -- 87 80 246 Acquisition transaction costs -- -- -- 7 Interest expense -- -- -- 316 Totals $ 122 $ 288 $ 979 $ 1,282 |
Schedule of number of common shares and common share equivalents excluded from the calculation of diluted net loss per common share | For the Nine Months Ended 2018 2017 Options 67,454 258 Warrants 1,622,971 3,177 Convertible preferred stock 984 -- Convertible note 15,881 -- Convertible debenture -- 337 Reserved for service providers 1,100 -- Totals 1,708,390 3,772 |
Sysorex India Acquisition (Tabl
Sysorex India Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Sysorex India Acquisition [Abstract] | |
Schedule of purchase price allocation | 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) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory [Abstract] | |
Schedule of inventory | As of As of December 31, Raw materials $ 220 $ 220 Finished goods 590 563 Total Inventory $ 810 $ 783 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Sale of Sysorex Arabia [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of major categories of assets and liabilities held for sale in the condensed consolidated balance sheets | (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 |
Spin- Off of Sysorex, Inc. and its wholly owned subsidiary Sysorex Government Services, Inc. [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of major categories of assets and liabilities held for sale in the condensed consolidated balance sheets | (In thousands) As of December 31, Assets: Cash and cash equivalents $ 22 Accounts receivable, net 1,882 Notes and other receivables 171 Inventory 7 Prepaid licenses and maintenance contracts 4,638 Other current assets 263 Total Current Assets $ 6,983 Prepaid licenses and maintenance, non-current $ 2,264 Property and equipment, net 172 Intangible assets, net 5,112 Other assets 10 Total Non-Current Assets $ 7,558 Liabilities: Current Liabilities: Accounts payable $ 24,271 Accrued liabilities 3,215 Deferred revenue 5,554 Total Current Liabilities $ 33,040 Deferred revenue, non-current $ 2,636 Other liabilities 40 Acquisition liability - Integrio 997 Total Non-Current Liabilities $ 3,673 |
Deconsolidated as Result of Spin off [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of major categories of assets and liabilities held for sale in the condensed consolidated balance sheets | (In thousands) Assets: Accounts receivable, net $ 651 Notes and other receivables 473 Prepaid licenses and maintenance contracts 5 Other current assets 146 Property and equipment, net 41 Intangible assets, net 3,728 Other assets 34 Total Assets $ 5,078 Liabilities: Accounts payable $ (15,952 ) Accrued liabilities (792 ) Deferred revenue (70 ) Other liabilities (40 ) Acquisition liability - Integrio (62 ) Total Liabilities $ (16,916 ) Total Net Assets Deconsolidated as Result of Spin-off $ (11,838 ) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 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 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. On August 30, 2018, the Company entered into a Standstill Agreement with the November Noteholder. Pursuant to the Standstill Agreement, the November Noteholder agreed that its right to redeem all or any portion of the November Note will not commence until the date that is the earlier of (i) 12 months after the purchase price date, and (b) five trading days following receipt of approval from Inpixon’s stockholders, as may be required in accordance with applicable Nasdaq Listing Rules, to amend the terms of the November Note to modify the Conversion Price and the Minimum Redemption Price, as those terms are defined in the November Note, on terms that are acceptable to the November Noteholder. The Standstill Agreement also extends the maturity date of the November Note to December 31, 2018. Inpixon paid the November Noteholder $75,000 as consideration for the November Noteholder’s consent to enter into the Standstill Agreement and accordingly expensed the $75,000 to interest expense on the date paid. (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 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. On August 31, 2018 Inpixon, together with Sysorex and SGS, and Payplant executed Amendment 1 to Payplant Client Agreement (the “Amendment”). Pursuant to the Amendment, Sysorex and SGS are no longer parties to the Payplant Client Agreement, originally entered into on August 14, 2017, and have been released from any and all obligations and liabilities arising under the Payplant Client Agreement, whether such obligations and liabilities were in existence prior to or on the date of the Amendment or arise after the date of the Amendment. (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 1,254 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 2,982 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 2,646 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 had 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. |
Stock Options (Tables)
Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stock Options [Abstract] | |
Schedule of weighted-average assumptions using Black-Scholes option-pricing model | For the Nine 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) | 9 Months Ended |
Sep. 30, 2018 | |
Credit Risk and Concentrations [Abstract] | |
Schedule of risk percentage of revenue from customers | For the Nine Months Ended For the Nine Months Ended September 30, $ % $ % Customer A 956 36 % 937 31 % Customer B 280 11 % -- -- For the Three Months Ended For the Three Months Ended $ % $ % Customer A 312 33 % 316 36 % |
Foreign Operations (Tables)
Foreign Operations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Foreign Operations [Abstract] | |
Schedule of financial data by geographic area | United Saudi States Canada Arabia India Eliminations Total For the Three Months Ended September 30, 2018: Revenues by geographic area $ 930 $ 10 $ -- $ 76 $ (76 ) $ 940 Operating income (loss) by geographic area $ (3,022 ) $ (317 ) $ -- $ 22 $ -- $ (3,317 ) Net income (loss) by geographic area $ (4,885 ) $ (317 ) $ -- $ 22 $ -- $ (5,180 ) For the Three Months Ended September 30, 2017: Revenues by geographic area $ 864 $ 7 $ -- $ -- $ -- $ 871 Operating loss by geographic area $ (4,197 ) $ (498 ) $ -- $ -- $ -- $ (4,695 ) Net loss by geographic area $ (14,134 ) $ (498 ) $ (9 ) $ -- $ -- $ (14,641 ) For the Nine Months Ended September 30, 2018: Revenues by geographic area $ 2,606 $ 21 $ -- $ 202 $ (202 ) $ 2,627 Operating income (loss) by geographic area $ (10,422 ) $ (1,192 ) $ -- $ 35 $ -- $ (11,579 ) Net income (loss) by geographic area $ (16,117 ) $ (1,196 ) $ -- $ 35 $ -- $ (17,278 ) For the Nine Months Ended September 30, 2017: Revenues by geographic area $ 2,874 $ 133 $ -- $ -- $ -- $ 3,007 Operating loss by geographic area $ (10,720 ) $ (1,346 ) $ -- $ -- $ -- $ (12,066 ) Net loss by geographic area $ (25,757 ) $ (1,346 ) $ (26 ) $ -- $ -- $ (27,129 ) As of September 30, 2018: Identifiable assets by geographic area $ 12,644 $ 244 $ -- $ 103 $ -- $ 12,991 Long lived assets by geographic area $ 7,056 $ 144 $ -- $ 20 $ -- $ 7,220 As of December 31, 2017: Identifiable assets by geographic area $ 27,212 $ 432 $ $ 47 $ -- $ 27,691 Long lived assets by geographic area $ 9,599 $ 318 $ -- $ 14 $ -- $ 9,931 |
Organization and Nature of Bu_2
Organization and Nature of Business and Going Concern (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 12, 2018 | Feb. 20, 2018 | Jan. 05, 2018 | Apr. 24, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Organization and Nature of Business and Going Concern (Textual) | |||||||||
Net working capital | $ 1,100 | $ 1,100 | |||||||
Net loss | $ (5,180) | $ (14,641) | $ (17,278) | $ (27,129) | |||||
Capital resources, description | The Company expects its capital resources as of September 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 | ||||||||
Gross proceeds from a 1-year promissory note | $ 9,200 | ||||||||
Public offering price per share | $ 1,000 | ||||||||
Subsequent Events [Member] | |||||||||
Organization and Nature of Business and Going Concern (Textual) | |||||||||
Gross proceeds from a 1-year promissory note | $ 2,000 | ||||||||
Capital Unit, Class A [Member] | |||||||||
Organization and Nature of Business and Going Concern (Textual) | |||||||||
Common stock price per share | $ 94 | ||||||||
Common shares issued from a public offering | 83,149 | ||||||||
Capital Unit, Class B [Member] | |||||||||
Organization and Nature of Business and Going Concern (Textual) | |||||||||
Common stock price per share | $ 1,000 | ||||||||
Net proceeds from public offering | $ 15,400 | ||||||||
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% | ||||||||
Securities Purchase Agreement [Member] | |||||||||
Organization and Nature of Business and Going Concern (Textual) | |||||||||
Sale of common stock, shares | 14,996 | ||||||||
Sale of common stock, price per share | $ 212.40 | ||||||||
Net proceeds from sale of common stock | $ 2,800 | ||||||||
Warrants to purchase shares of common stock | 14,996 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-based compensation charges | ||||
Compensation and related benefits | $ 122 | $ 201 | $ 899 | $ 713 |
Professional and legal fees | 87 | 80 | 246 | |
Acquisition transaction costs | 7 | |||
Interest expense | 316 | |||
Totals | $ 122 | $ 288 | $ 979 | $ 1,282 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 1,708,390 | 3,772 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 67,454 | 258 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 1,622,971 | 3,177 |
Convertible preferred stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 984 | |
Reserved for service providers [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 1,100 | |
Convertible note [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 15,881 | |
Convertible debenture [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Totals | 337 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Summary of Significant Accounting Policies (Textual) | ||||
Stock-based compensation | $ 122 | $ 288 | $ 979 | $ 1,282 |
Fair value of the derivative liability | 0 | 0 | ||
Approximate deferred revenue | $ 52 | $ 52 | ||
Minimum [Member] | Software Development [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Estimated useful life | 1 year | |||
Maximum [Member] | Software Development [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Estimated useful life | 5 years | |||
Board of Directors Chairman [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Reverse stock split, description | On March 1, 2017, the Company effectuated a 1-for-15 reverse stock split of its outstanding common stock, on February 6, 2018, the Company effectuated a 1-for-30 reverse stock split of its outstanding common stock and on November 2, 2018, the Company effectuated a 1-for-40 reverse stock split of its outstanding common stock. |
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 (De_2
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 | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory [Abstract] | ||
Raw materials | $ 220 | $ 220 |
Finished goods | 590 | 563 |
Total Inventory | $ 810 | $ 783 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Aug. 31, 2018 | Dec. 31, 2017 |
Assets: | |||
Total Current Assets | $ 23 | ||
Current Liabilities: | |||
Total Current Liabilities | 2,059 | ||
Sale of Sysorex Arabia [Member] | |||
Assets: | |||
Accounts receivable, net | 1 | ||
Notes and other receivables | 8 | ||
Other current 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 | ||
Long Term Liabilities | |||
Total Current Liabilities | 2,059 | ||
Total Liabilities | 2,059 | ||
Spin- Off of Sysorex, Inc. and its wholly owned subsidiary Sysorex Government Services, Inc. [Member] | |||
Assets: | |||
Cash and cash equivalents | 22 | ||
Accounts receivable, net | 1,882 | ||
Notes and other receivables | 171 | ||
Inventory | 7 | ||
Prepaid licenses and maintenance contracts | 4,638 | ||
Other current assets | 263 | ||
Total Current Assets | 6,983 | ||
Prepaid licenses and maintenance, non-current | 2,264 | ||
Property and equipment, net | 172 | ||
Intangible assets, net | 5,112 | ||
Other assets | 10 | ||
Total Non-Current Assets | 7,558 | ||
Current Liabilities: | |||
Accounts payable | 24,271 | ||
Accrued liabilities | 3,215 | ||
Deferred revenue | 5,554 | ||
Total Current Liabilities | 33,040 | ||
Deferred revenue, non-current | 2,636 | ||
Other liabilities | 40 | ||
Acquisition liability - Integrio | 997 | ||
Total Non-Current Liabilities | $ 3,673 | ||
Deconsolidated as Result of Spin off [Member] | |||
Assets: | |||
Accounts receivable, net | $ 651 | ||
Notes and other receivables | 473 | ||
Prepaid licenses and maintenance contracts | 5 | ||
Other current assets | 146 | ||
Property and equipment, net | 41 | ||
Intangible assets, net | 3,728 | ||
Other assets | 34 | ||
Total Assets | 5,078 | ||
Current Liabilities: | |||
Accounts payable | (15,952) | ||
Accrued liabilities | (792) | ||
Deferred revenue | (70) | ||
Other liabilities | (40) | ||
Acquisition liability - Integrio | (62) | ||
Total Liabilities | (16,916) | ||
Total Net Assets Deconsolidated as Result of Spin-off | $ (11,838) |
Discontinued Operations (Deta_2
Discontinued Operations (Details Textual) - USD ($) | 1 Months Ended | ||
Aug. 31, 2018 | Jan. 18, 2018 | Dec. 31, 2017 | |
Discontinued Operations (Textual) | |||
Deposits for surety bonds | $ 0 | ||
Distribution of stock, description | The distribution occurred by way of a pro rata stock distribution to such common stock, preferred stock and warrant holders, each of whom received one share of Sysorex's common stock for every 0.075 shares of the Company's common stock held on the Record Date or such number of shares of common stock issuable upon complete conversion of the preferred stock or exercise of the warrants. | ||
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 | Sep. 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 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. On August 30, 2018, the Company entered into a Standstill Agreement with the November Noteholder. Pursuant to the Standstill Agreement, the November Noteholder agreed that its right to redeem all or any portion of the November Note will not commence until the date that is the earlier of (i) 12 months after the purchase price date, and (b) five trading days following receipt of approval from Inpixon's stockholders, as may be required in accordance with applicable Nasdaq Listing Rules, to amend the terms of the November Note to modify the Conversion Price and the Minimum Redemption Price, as those terms are defined in the November Note, on terms that are acceptable to the November Noteholder. The Standstill Agreement also extends the maturity date of the November Note to December 31, 2018. Inpixon paid the November Noteholder $75,000 as consideration for the November Noteholder's consent to enter into the Standstill Agreement and accordingly expensed the $75,000 to interest expense on the date paid. | ||
[2] | 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 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. On August 31, 2018 Inpixon, together with Sysorex and SGS, and Payplant executed Amendment 1 to Payplant Client Agreement (the "Amendment"). Pursuant to the Amendment, Sysorex and SGS are no longer parties to the Payplant Client Agreement, originally entered into on August 14, 2017, and have been released from any and all obligations and liabilities arising under the Payplant Client Agreement, whether such obligations and liabilities were in existence prior to or on the date of the Amendment or arise after the date of the Amendment. | ||
[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; 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 1,254 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 2,982 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 2,646 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 had a value of $439,000. The Company recorded this amount as interest expense-debt discount on the condensed consolidated statement of operations and as an increase to additional paid in capital on the condensed consolidated balance sheet. |
Debt (Details Textual)
Debt (Details Textual) - USD ($) | Feb. 09, 2018 | Feb. 07, 2018 | Feb. 05, 2018 | Jan. 05, 2018 | Aug. 30, 2018 | May 23, 2018 | Nov. 17, 2017 | Aug. 14, 2017 | Sep. 30, 2018 |
Debt (Textual) | |||||||||
Value of debenture converted to common stock | $ 317,000 | $ 400,000 | $ 300,000 | ||||||
Common shares issued for debenture | 2,646 | 2,982 | 1,254 | ||||||
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 | ||||||||
Bank line advance rate | 80.00% | ||||||||
Term of loan | 360 days | ||||||||
Revolving lines of credit, description | The Company must provide Lender with (i) one or more promissory 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% | ||||||||
Terms of Standstill Agreement | (i) 12 months after the purchase price date, and (b) five trading days following receipt of approval from Inpixon's stockholders, as may be required in accordance with applicable Nasdaq Listing Rules, to amend the terms of the November Note to modify the Conversion Price and the Minimum Redemption Price, as those terms are defined in the November Note, on terms that are acceptable to the November Noteholder. The Standstill Agreement also extends the maturity date of the November Note to December 31, 2018. | ||||||||
Convertible promissory note maturity date | Dec. 31, 2018 | ||||||||
Fee paid for Standstill Agreement | $ 75,000 | ||||||||
Interest expense | $ 75,000 | ||||||||
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 | $ 212.40 | |||
Warrants granted | 14,996 | |||
Gross proceeds from capital raise | $ 3,200,000 | |||
Exercise price of warrants | $ 264 | |||
Warrant exercise price per share after adjustment | $ 120 | |||
Net proceeds from this offering | $ 2,800,000 | |||
Warrants to purchase shares of common stock | 14,996 | |||
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 83,149 Class A units, at a price to the public of $94.00 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 $140.00 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 11 shares of our common stock at a conversion price of $94.00 per share for up to an aggregate of 108,351 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. | |||
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 | $ 26.80 | |||
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 54 shares of common stock, at a conversion price of $18.40 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 | $ 18.40 | |||
Preferred share conversion price after adjustment | $ 7.12 | |||
Deemed dividend | $ 4,899,000 | |||
April 2018 Capital Raise [Member] | ||||
Capital Raise (Textual) | ||||
Warrants to purchase shares of common stock | 1,057,178 | |||
Deemed dividend | $ 4,828,000 | |||
Warrant exercise price after adjustment | $ 25.36 |
Common Stock (Details)
Common Stock (Details) - USD ($) | Feb. 20, 2018 | Feb. 09, 2018 | Feb. 07, 2018 | Feb. 05, 2018 | Jan. 05, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 |
Common Stock (Textual) | ||||||||
Fractional shares issued due to reverse stock split | 243 | |||||||
Value of debenture converted to common stock | $ 317,000 | $ 400,000 | $ 300,000 | |||||
Number of common shares issues for conversion of debenture | 2,646 | 2,982 | 1,254 | |||||
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 | 83,149 | |||||||
Purchase price per share | $ 94 | |||||||
Exercise term of warrant | 5 years | |||||||
Series 3 preferred stock [Member] | ||||||||
Common Stock (Textual) | ||||||||
Number of common shares issued for converted preferred stock | 4,375 | 103,976 | ||||||
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 | 324,803 | 718,452 | ||||||
Number of preferred shares converted to common shares | 2,311.2933 | 7,796.7067 | ||||||
Subscription Agreement [Member] | ||||||||
Common Stock (Textual) | ||||||||
Common shares issued for satisfaction of a payable | 196 | |||||||
Purchase price per share | $ 408 | |||||||
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 | 14,996 | |||||||
Purchase price per share | $ 212.40 |
Preferred Stock (Details)
Preferred Stock (Details) - USD ($) | Feb. 20, 2018 | Jun. 25, 2018 | Apr. 24, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 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 | $ 94 | ||||||||
Preferred shares converted to common shares | 411.25 | 9,773.7252 | |||||||
Common shares issued from converted preferred shares | 4,375 | 103,976 | |||||||
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 11 shares of our common stock at a conversion price of $94.00 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 | $ 18.40 | ||||||||
Preferred shares converted to common shares | 7,796.7067 | ||||||||
Common shares issued from converted preferred shares | 718,452 | ||||||||
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 $7.12. | 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 | 7 | ||||||||
Convertible preferred stock [Member] | |||||||||
Preferred Stock (Textual) | |||||||||
Preferred shares outstanding | 2,311.2933 | ||||||||
Preferred stock converted into common stock | 324,803 |
Authorized Share Increase and_2
Authorized Share Increase and Reverse Stock Split (Details) - shares | 1 Months Ended | ||
Oct. 31, 2018 | Feb. 02, 2018 | Feb. 27, 2017 | |
Subsequent Event [Member] | |||
Authorized Share Increase and Reverse Stock Split (Textual) | |||
Reverse stock split, description | On October 31, 2018, the Company received stockholder approval for a reverse stock split at its 2018 annual meeting of stockholders and implemented a 1-for-40 reverse stock split effective as of November 2, 2018, which it believes will cause the Company to comply with the minimum bid price requirement. | ||
Common Stock [Member] | |||
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. | 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-15 reverse stock split of the Company's issued and outstanding shares of common stock, effective as of March 1, 2017. | |
Common Stock [Member] | Subsequent Event [Member] | |||
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-40 reverse stock split of the Company's issued and outstanding shares of common stock, effective as of November 2, 2018. | ||
Common Stock [Member] | Minimum [Member] | |||
Authorized Share Increase and Reverse Stock Split (Textual) | |||
Common Stock, shares authorized, original amount | 50,000,000 | ||
Common Stock [Member] | 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 ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 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% | |
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% |
Stock Options (Details Textual)
Stock Options (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 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 | 3,932,997 | 3,932,997 | |||
Stock-based compensation | $ 122,000 | $ 288,000 | $ 979,000 | $ 1,282,000 | |
Dividends assumption | |||||
2011 Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
2011 Plan aggregate number of shares authorized | 416 | ||||
2018 Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
2018 Plan aggregate number of shares authorized | 4,000,000 | 4,000,000 | |||
Options grants under the option plans | 67,863 | ||||
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 | $ 7.20 | ||||
2018 Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option exercise price | $ 14.40 | ||||
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 | ||||
Life of option plan grants | 10 years | ||||
Non plan options granted | 35 | 35 | |||
Stock option awards fair value | $ 428,000 | ||||
Fair value of non-vested options | $ 266,820 | 266,820 | |||
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 | $ 7.20 | ||||
Stock Options [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option exercise price | $ 14.40 | ||||
Employees, Directors and Consultants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of stock options granted | 67,454 | 67,454 |
Credit Risk and Concentration_2
Credit Risk and Concentrations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Concentration Risk [Line Items] | ||||
Net revenues | $ 940 | $ 871 | $ 2,627 | $ 3,007 |
Customer concentration risk [Member] | Customer A [Member] | ||||
Concentration Risk [Line Items] | ||||
Net revenues | $ 312 | $ 316 | $ 956 | $ 937 |
Concentration risk, percentage | 33.00% | 36.00% | 36.00% | 31.00% |
Customer concentration risk [Member] | Customer B [Member] | ||||
Concentration Risk [Line Items] | ||||
Net revenues | $ 280 | |||
Concentration risk, percentage | 11.00% |
Credit Risk and Concentration_3
Credit Risk and Concentrations (Details Textual) - Vendor | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accounts payable [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Number of vendors | 1 | 1 | ||
Accounts payable [Member] | One vendors [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Concentration risk, percentage | 60.00% | 31.00% | ||
Accounts Receivable [Member] | Customer A [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Concentration risk, percentage | 5.00% | 1.00% | ||
Accounts Receivable [Member] | Customer B [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Concentration risk, percentage | 24.00% | |||
Revenue [Member] | Customers [Member] | ||||
Credit Risk and Concentrations (Textual) | ||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% |
Foreign Operations (Details)
Foreign Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues by geographic area | $ 940 | $ 871 | $ 2,627 | $ 3,007 | |
Operating income (loss) by geographic area | (3,317) | (4,695) | (11,579) | (12,066) | |
Net income (loss) by geographic area | (5,180) | (14,641) | (17,278) | (27,129) | |
Identifiable assets by geographic area | 12,991 | 12,991 | $ 27,691 | ||
Long lived assets by geographic area | 7,220 | 7,220 | 9,931 | ||
United States [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues by geographic area | 930 | 864 | 2,606 | 2,874 | |
Operating income (loss) by geographic area | (3,022) | (4,197) | (10,422) | (10,720) | |
Net income (loss) by geographic area | (4,885) | (14,134) | (16,117) | (25,757) | |
Identifiable assets by geographic area | 12,644 | 12,644 | 27,212 | ||
Long lived assets by geographic area | 7,056 | 7,056 | 9,599 | ||
Canada [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues by geographic area | 10 | 7 | 21 | 133 | |
Operating income (loss) by geographic area | (317) | (498) | (1,192) | (1,346) | |
Net income (loss) by geographic area | (317) | (498) | (1,196) | (1,346) | |
Identifiable assets by geographic area | 244 | 244 | 432 | ||
Long lived assets by geographic area | 144 | 144 | 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) | (26) | |||
Identifiable assets by geographic area | |||||
Long lived assets by geographic area | |||||
India [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues by geographic area | 76 | 202 | |||
Operating income (loss) by geographic area | 22 | 35 | |||
Net income (loss) by geographic area | 22 | 35 | |||
Identifiable assets by geographic area | 103 | 103 | 47 | ||
Long lived assets by geographic area | 20 | 20 | 14 | ||
Eliminations [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues by geographic area | (76) | (202) | |||
Operating income (loss) by geographic area | |||||
Net income (loss) by geographic area | |||||
Identifiable assets by geographic area | |||||
Long lived assets by geographic area |
Related Party Transactions (Det
Related Party Transactions (Details) - Sysorex [Member] | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Related Party Transactions (Textual) | |
Related party agreement, description | Sysorex agreed to invoice the Company upon the calculation of amounts owed for the foregoing costs, and the Company agreed to reimburse Sysorex for all such costs within 3 days of its receipt of each such invoice, plus an administrative service fee of 2% of the gross amount of each respective invoice; provided, however, that Sysorex agreed waive such fee for so long as any Company employees are providing any necessary administrative services on behalf of and for the benefit of Sysorex, including any employees that are furnished to the Company in accordance with the Transition Agreements. |
Total reimbursed amount of payroll and benefits | $ 543,000 |
Additional related party transaction, amount | $ 750,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Apr. 06, 2018 | Oct. 31, 2018 | May 17, 2018 | Apr. 23, 2018 | Mar. 19, 2018 | Jan. 22, 2018 | May 19, 2017 |
Commitments and Contingencies (Textual) | |||||||
Default judgment amount requested by vendor | $ 336,000 | ||||||
Amount of project fees claimed as owed | $ 1,000,000 | ||||||
Nasdaq minimum stockholders equity requirement | $ 2,500,000 | $ 2,500,000 | |||||
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 $1.00 per share for a minimum of ten consecutive business days, but generally no more than twenty consecutive business days during this 180-day period. As of the date of this Form 10-Q, the closing bid price of the common stock has not been equal to or greater than $1.00 per share for a minimum of ten consecutive business days. As a result, the Company does not expect to be able to regain compliance within this 180-day period; however, the Company will 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 provide written notice to Nasdaq of the Company's intent to cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary. | ||||||
AVT Technology Solutions, LLC [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Value of judgment for non-payment of goods received | $ 9,152,698.71 | ||||||
Subsequent Event [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Reverse stock split, description | On October 31, 2018, the Company received stockholder approval for a reverse stock split at its 2018 annual meeting of stockholders and implemented a 1-for-40 reverse stock split effective as of November 2, 2018, which it believes will cause the Company to comply with the minimum bid price requirement. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Oct. 12, 2018 | Oct. 08, 2018 | Oct. 05, 2018 | Dec. 31, 2018 |
Forecast [Member] | ||||
Subsequent Events (Textual) | ||||
Common shares issued from exercise of warrants | 92,489 | |||
Number of warrants exchanged for common shares | 92,489 | |||
Warrants exercise price | $ 10.80 | |||
Number of Preferred Shares converted to Common stock | 6 | |||
Number of Common Shares issued for converted Preferred stock | 843 | |||
Subsequent Events [Member] | ||||
Subsequent Events (Textual) | ||||
Common shares issued for services, shares | 37,500 | |||
Value of services provided in exchange for common stock | $ 465,000 | |||
Subsequent Events [Member] | November Noteholder [Member] | ||||
Subsequent Events (Textual) | ||||
Description of Exchange Agreement | Pursuant to the Exchange Agreement, the Company and the November Noteholder agreed to (i) partition a new convertible promissory note in the form of the November Note (the "Partitioned Note") in the original principal amount of $1,536,649 (the "Exchange Amount") from the November Note and then cause the outstanding balance of the November Note to be reduced by the Exchange Amount; and (ii) exchange the Partitioned Note for the delivery of 142,282 shares of the Company's common stock (each, an "Exchange Share" and collectively, the "Exchange Shares") at an effective price per Exchange Share equal to $10.80. | |||
Subsequent Events [Member] | Note Purchase Agreement [Member] | ||||
Subsequent Events (Textual) | ||||
Description of Note Purchase Agreement | The Company entered into a Note Purchase Agreement with an institutional investor (the "Holder"), pursuant to which the Company agreed to issue and sell to the Holder an unsecured promissory note (the "Note") in an aggregate principal amount of $2,520,000.00 (the "Initial Principal Amount"), which is payable on or before the date that is 12 months from the issuance date. The Initial Principal Amount includes an original issue discount of $500,000.00 and $20,000.00 that the Company agreed to pay to the Holder to cover the Holder's legal fees, accounting costs, due diligence, monitoring and other transaction costs. In exchange for the Note, the Holder paid an aggregate purchase price of $2,000,000.00. Interest on the Note accrues at a rate of 10% per annum and is payable on the maturity date or otherwise in accordance with the Note. Beginning on the date that is 6 months from the issuance date and at the intervals indicated below until the Note is paid in full, the Holder shall have the right to redeem up to an aggregate of 1/3 of the initial principal balance of the Note each month (each monthly exercise, a "Monthly Redemption Amount") by providing written notice (each, a "Monthly Redemption Notice") delivered to the Company; provided, however, that if the Holder does not exercise any Monthly Redemption Amount in its corresponding month then such Monthly Redemption Amount shall be available for the Holder to redeem in any future month in addition to such future month's Monthly Redemption Amount. Upon receipt of any Monthly Redemption Notice, the Company shall pay the applicable Monthly Redemption Amount in cash to the Holder within 5 business days of the Company's receipt of such Monthly Redemption Notice. |