Understanding Inpixon’s Risk Factors

California-based Inpixon (INPX) utilizes mapping, positioning and analytics to deliver indoor intelligence and mobile app solutions to different industries. Recently, Inpixon announced a collaboration with Ostendo Technologies for launching new augmented reality (AR) solutions that utilize Ostendo’s AR smart glasses and Inpixon’s location, computer vision, and AR technologies.

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Further, Inpixon has also received an order for high-end, next-generation, multi-tech radio frequency (RF) sensors for a U.S. federal government customer. Amid these positives, let’s take a look at Inpixon’s recent Q2 results and understand what has changed in its key risk factors.

On the back of higher Indoor Intelligence sales and SAVES sales, Inpixon’s Q2 revenue jumped 221% year-over-year to $3.5 million.

The CEO of Inpixon, Nadir Ali, said, “As a result of our expanded Indoor Intelligence product offering, we are increasing our SaaS subscription sales, and we are beginning to see higher recurring revenue streams and increases in the average selling price for certain of our products.”

A combination of expanded gross margin, discounted net gain on Sysorex note (Associated with debt settlement) and a release of valuation allowance on the Sysorex note helped offset higher operating expenses. This, in turn, resulted in net income per share of $0.13, as compared to a net loss per share of $0.32 a year ago. (See Inpixon stock chart on TipRanks)

Looking ahead, Ali added, “With our strong financial position and increasing market awareness, we believe we are well-positioned to aggressively penetrate the Indoor Intelligence market with the ability to offer products and solutions to satisfy the range of Indoor Intelligence needs.”

Shares are down 14.9% over the past six months.

Now, let’s look at what’s changed in the company’s key risk factors.

According to the new Tipranks’ Risk Factors tool, Inpixon’s main risk category is Finance & Corporate, which accounts for 41% of the total 69 risks identified. Since June, the company has added one key risk factor.

Under the Finance & Corporate category, Inpixon acknowledges that approximately 17% of its assets represent the value of Sysorex Inc’s stock it owns. These are volatile shares, as a result of which, the value of Inpixon’s total assets and its common shares may see gyrations regardless of its operating performance.

Moreover, during quarters in which Inpixon records a charge to earnings to reflect the lower book value of Sysorex shares, its bottom line will suffer to reflect unrealized losses. Additionally, Inpixon has no control over the price it will finally receive on the disposition of such assets and may not be able to sell these assets at a favorable price or when desired.

The Finance & Corporate risk factor’s sector average is at 39%, compared to Inpixon’s 41%.