Inpixon launches offering convertible preferred units to regain Nasdaq compliance

By Abigail W. Adams

Portland Me., April 19 – Inpixon has launched an offering of units consisting of series 4 convertible preferred stock and warrants to regain compliance with the Nasdaq rule requiring companies to maintain $2.5 million in stockholder equity, according to a company release.

The units consist of one share of $1,000-par series 4 convertible preferred stock and a warrant to purchase the number of shares issuable upon conversion of the preferred stock.

The warrants will expire five years from the date of issuance, according to a 424B5 filing with the Securities and Exchange Commission.

Roth Capital Partners, LLC is acting as the placement agent for the registered offering, which is being sold on a best efforts basis.

The series 4 convertible preferred stock carry an anti-dilution protection. The conversion price will be reduced 60 days from issuance to the lesser of the adjusted conversion price or 80% of the volume weighted average of stock, provided that it is not less than a certain amount.

Holders will not be allowed to convert their notes if conversion will result in more than a 4.99% ownership of outstanding common stock. The warrants carry a full ratchet price protection feature.

The prospectus for the deal also includes the registration of up to 34,627,066 of common shares issuable upon the exercise of warrants issued on Feb. 20, 2018. Inpixon priced $18 million of class A and class B units on Feb. 15.

The class A units were composed of one share of common stock and one warrant to purchase one share of common stock.

The class B units were composed of one share of series 3 convertible preferred stock, convertible into 426 shares of common stock, and one warrant for 426 shares of common stock, Prospect News reported.

As a result of the new offering, the strike price of the February 2018 warrants will be reduced increasing the number of underlying shares to 42,287,066 from 7,660,000, according to a 424B5 filing.

Proceeds will be used for working capital, general corporate purposes and transaction expenses.

Inpixon is a Palo Alto, Calif.-based indoor positioning and data analytics company.

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