Good afternoon. Welcome to Inpixon's Business Update Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A telephone replay of the call will be available approximately 1 hour after the end of the call through May 22, 2023. I would now like to turn the call over to Alexandra Schilt, Vice President of Crescendo Communications, LLC, the company's investor relations firm. Please go ahead. Good afternoon, and thank you for joining today's conference call to discuss Inpixon's corporate development and financial results for its 2023 first quarter ending March 31st, 2023. With us today are Nadir Ali, the company's Chief Executive Officer, and Wendy Lunderman, the company's Chief Financial Officer. Today, Inpixon released financial results for its 2023 first quarter ending March 31st, 2023. If you have not received Inpixon's earnings release, please visit the company's investor relations page at ir.inpixon.com. During the course of this conference call, the company will be making forward-looking statements. The company cautions you that any statement that is not a statement of historical fact is a forward-looking statement. This includes any projections of earnings, revenues, cash, or other statements relating to the company's future financial results, any statements about plans, strategies, or objectives of management for future operations, any statements regarding completed or planned acquisition, acquisitions or strategic partnerships and the anticipated impact of those transactions on the company's business. Any statements concerning proposed new products or solutions, any statement regarding anticipated new customers, relationships or agreements, any statements regarding expectations for the success of the company's products in the U.S. and international markets, any statements regarding future economic conditions or performance, including but not limited to the impact of COVID-19 on the company's operations, any statements regarding the valuation attributed to any of our securities instruments, any statements of belief, and any statements of assumptions underlying any of the foregoing. These statements are based on expectations and assumptions as of the date of this conference call and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Some of these risks are described in the Safe Harbor section of today's press release and in the public periodic reports the company files with the Securities and Exchange Commission. Investors or potential investors should read all of these risks. Inpixon assumes no obligation to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so. To supplement the GAAP numbers, the company has provided non-GAAP adjusted net loss and net loss per share information in addition to non-GAAP adjusted EBITDA information. The company believes that these non-GAAP numbers provide meaningful supplemental information and are helpful in assessing our historical and future performance. A table reconciling the GAAP information to the non-GAAP information is included in the company's financial release. I will now turn the call over to Nadir Ali, Inpixon CEO. Please go ahead. Thanks, Alexandra, and good afternoon, everyone, and thank you for joining our 2023 first quarter conference call as we discuss our progress and corporate developments. I'll start by noting that our most significant accomplishment during the first quarter of 2023 was the sale of our Enterprise Apps Workplace Experience business on March 14, 2023. This transaction created a strategic opportunity that allowed our shareholders to benefit from the anticipated upside in two publicly traded companies, while also allowing Inpixon to retain its real-time location services or RTLS business line, along with other business lines, and refocus our resources accordingly for further growth. We believe this is a significant achievement for both Inpixon and CXApp, and we look forward to continuing to work with them as partners or resellers to offer comprehensive solution sets for our respective customers. In this call and going forward, when we discuss our financial results, please note that the results of operations from the Workplace Experience business have been excluded from our continuing operations, which is reflected for periods prior to the completion of the spin-off. You will still see a consolidated discontinued ops number below the line in the P&L for that business. With that, I'm pleased to say we continue to make meaningful progress in terms of growth, reporting a 17% increase in revenue to $3.1 million for the first quarter of 2023, while also maintaining a strong balance sheet with over $15 million in cash and cash equivalents. At the same time, we reduced our operating expenses for the first quarter of 2023 when compared to the same period in the prior year. This will help to enable us to pursue growth opportunities for our remaining business line and support our strategic objectives with the goal of maximizing value for our shareholders. While we grow revenue and streamline expenses to achieve positive cash flow faster, we are also focused on pursuing beneficial strategic opportunities that we believe will increase the company's total enterprise value for the benefit of our shareholders, similar to what was achieved with the CXApp transaction. In that regard, the due diligence and negotiation process with respect to a potential transaction involving our RTS line continues to advance. At the same time, we remain committed to the growth of our RTLS business. This is a huge market expected to reach $12.7 billion by 2026, according to MarketsandMarkets. RTLS enables customers to digitally track the real-time location and movements of physical things throughout large facilities and primarily leverages radio frequency technologies to continuously determine the position of people and objects in areas GPS is not able to reach. This delivers actionable location data that can be used to visualize the location of key personnel and assets live on a facility map, or integrated into systems such as IoT safety applications, asset and supply chain management solutions, and more for highly advanced automation of operations. These technologies allow customers to locate assets and track their real-time movement with utilization of our comprehensive lineup of location technologies and form factors. Few competitors can integrate the wide variety of technologies, including Ultra-Wideband, Chirp, Wi-Fi, BLE, GPS, LIDAR, and RFID like we can, which enables us to solve more use cases and provide greater accuracy than most competitors in the market. With the implementation of our technology, agnostic open platform, which integrates a complete technology stack and communicates with other third-party systems, our customers learn more about their facilities and workflows and obtain actionable intelligence. By leveraging this valuable data and intelligence, they can enable automation and data-driven decision-making to drive reduced costs, increase productivity, and streamline operations. Independent third-party market watchers validate our leadership position. For example, IoT Evolution World recently named us as a recipient of their Industrial IoT Product of the Year award. Even more significantly, earlier this year, Gartner named Inpixon the leader in the 2023 Gartner Magic Quadrant for indoor location services. This evaluation was based on specific criteria that analyze our overall completeness of vision and ability to execute. This marks our fifth consecutive year being acknowledged by Gartner in the Magic Quadrant, and the second time being named a leader in the space. The report also stated, "The location of people and critical assets is no longer optional, but required for safety, compliance, and cost optimization. Infrastructure and operation leaders should assess vendors based on their capability to meet multiple indoor location opportunities and address new use scenarios." We have been and remain committed to innovation and to providing a full stack RTLS solution that supports a multitude of use cases in a variety of industries. We believe our enhanced focus, streamlined business operations, and improved cost structure will result in an accelerated path to profitability. With that, Wendy, I'll turn it to you to discuss our financials. Thank you, Nadir. As Nadir previously mentioned, in accordance with applicable accounting guidance, the results of Enterprise Apps Workplace Experience businesses are presented as discontinued operations in the consolidated statements of income, as such, have been excluded from both continuing operations and segment results for all periods presented for the period prior to the completion of the CXApp spin-off. The consolidated statements of cash flows are presented on a consolidated basis for both continuing operations and discontinued operations. Please refer to the 10-Q for additional information. Revenues for the three months ended March 31, 2023, were $3.1 million compared to $2.6 million for the comparable period in the prior year, for an increase of approximately $0.5 million or approximately 17%. This increase is primarily attributable to the increase in Indoor Intelligence sales from the Aware and the RTLS component product lines. Gross profit for the three months ended March 31, 2023 was $2.3 million, compared to a gross profit of $1.9 million for the comparable period in the prior year, representing an increase of 25%. The gross profit margin for the three months ended March 31, 2023 was 75%, compared to 70% for the three months ended March 31, 2022. This increase in gross profit margin is due to the sales mix during the period. Operating expenses for the three months ended March 31, 2023 were $10.5 million and $11.1 million for the comparable period in the prior year. This decrease of $0.6 million is primarily attributable to lower compensation, professional fees, and legal expense in the three months ended March 31, 2023. Net loss from continuing operations for the three months ended March 31, 2023 was $12.3 million, compared to $10.8 million for the comparable period in the prior year. This increase in loss of approximately $1.5 million was primarily attributable to the deferred tax provision expense of approximately two and a half million dollars, offset by higher gross profits of approximately a half million dollars and lower operating expenses of approximately $0.6 million. Non-GAAP adjusted EBITDA for the three months ended March 31, 2023 was a loss of $7.7 million, compared to a loss of $8.8 million for the prior year period. Non-GAAP adjusted EBITDA is defined as net income or loss before interest, provision for income taxes, depreciation and amortization, plus adjustments for other income or expense items, non-recurring items and non-cash items including stock-based compensation. Pro forma non-GAAP net loss for basic and diluted common share for the three months ended March 31, 2023 was a loss of $1.01 per share, compared to a loss of $4.79 per share for the prior year period. Non-GAAP net loss per share is defined as net loss per basic and diluted share, adjusted for non-cash items, including stock-based compensation, amortization of intangibles, and one-time charges and other adjustments, including unrealized gain and losses from equity securities, transaction costs, and acquisition costs. As of March 31, 2023, we had approximately $15.3 million in cash and cash equivalents. This concludes my comments, and I would now like to turn the call back over to Nadir. All right. Thanks, Wendy. Alexandra, could you please lead us through the Q&A discussion? Yes. Thanks, Nadir. Like last quarter, in our conference call announcement press release, we suggested interested parties submit their questions in advance. We'd like to address those questions for you now. Some of them were duplicative, so we did our best to reconcile those where possible. If you have any further questions after the call, please feel free to follow up with investor relations, and we'll be sure to respond as quickly as possible. Our first question is, when can investors expect a material update on the non-binding LOI for the RTLS business? Yes. I did reference this a little bit on the call just now, but, as you know, the company's required to report material updates to its business, within a couple of days of a triggering event. As of now, we don't have a definitive agreement or timeline that we can discuss, but as soon as we do, updates will be provided as required. Thank you, Nadir. Our next question. The shares outstanding has increased by using the ATM. What are the proceeds used for? Yes. As the company works towards profitability, we wanna ensure that we have sufficient cash report resources to fund our operations and successfully execute on our strategic plans. You know, during what's been a particularly volatile economic market, the ATM facility allows us to flexibly raise capital at more favorable market prices in order to achieve our objectives. I think that's what I would say for that. Thank you. Our next question. With the stock price deflated, have you received notice from Nasdaq regarding compliance, and how do you intend on restoring value for shareholders? We have publicly disclosed the receipt of the bid price compliance notice, I think that was in mid-April. As mentioned, in addition to working on the growth of our RTLS business line, the company is actively pursuing other strategic opportunities that we believe can provide additional value for our shareholders. We believe the recent spin-off of our enterprise apps business is a good example of that, and we'll continue to progress on another opportunity that, if brought to fruition, we anticipate will also be beneficial for our shareholders. Thank you, Nadir. We have a few questions relating mostly to sales and marketing. We've grouped them together here. It starts with, what geographies are you targeting now and in the future? Do you have dedicated sales teams to handle specific industries to accelerate penetration? What is the typical contract size, and is it recurring revenue streams or mainly a single upfront payment? When can you share any details on current customers you are working with, and are there any big names? All right. Okay. Let me make sure I tried to cover all those and let me know if I missed something, but great questions. Currently, our top geographies, in no particular order, are North America, Europe, Asia, and South Africa. However, we receive, you know, a steady stream of inquiries from all around the world and pursue those opportunities that are most appropriate. We use both a direct sales force and indirect sales partners such as distributors and integrators. In terms of deal size, we don't disclose specifics due to competitive reasons, but you've seen in some of our previous announcements that some of our order sizes can be hundreds of thousand dollars, and others, you know, over $1 million. Wide range there. We're fortunate to have a mix of revenue types with contracts often including recurring revenue, hardware sales, and one-time services revenue. We are building more and more on, you know, and focusing more on the recurring revenue piece. As for our customers, yes, we absolutely have numerous notable brand name customers, and many of them are very large global customers and we are continuing to, you know, land and expand with. A portion of our clients are listed on our customers page on our corporate website, and other clients we're not at liberty to share without their consent. By the way, there's more information on this type of info in the company overview section in our recent 10-K filing. I think you covered them all. Thank you very much, Nadir. That does conclude the Q&A section. I'll turn it back to you for the close. All right. Thanks, Alexandra Schilt. Thank you all for joining us today. As always, we appreciate the support of our shareholders and look forward to providing you more updates as developments unfold. Thank you. Jenny, I think we're good with the call now. Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.
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