March 27, 2018 - INPIXON AND SUBSIDIARIES INTRODUCTION TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - 10-K: Annual report pursuant to Section 13 and 15(d)

Exhibit 99.1

INPIXON AND SUBSIDIARIES

INTRODUCTION TO PRO FORMA CONDENSED

COMBINED FINANCIAL STATEMENTS

The Company’s strategic business plans include a sale, spin-off or other possible divesture of its Infrastructure Segment, which would separate Inpixon USA and Inpixon Federal, the subsidiaries that have the commercial and federal VAR business. In connection with such a transaction it is anticipated that the employees, assets and liabilities associated with the VAR business and those subsidiaries would be retained by Inpixon USA as its own separate stand-alone publicly traded company. Inpixon Federal would be a wholly-owned subsidiary of Inpixon USA. Employees, assets and liabilities related to the Indoor Positioning Analytics business or product segment including AirPatrol, Shoom and Lightminer in Inpixon USA will be contributed up to the parent Inpixon. The following unaudited pro forma financial information presents the consolidated results of operations of the Company as if such a divesture had occurred as of January 1, 2016. The pro forma does not necessarily (1) reflect the results of operations that would have occurred had the entities been a stand-alone company during those periods, (2) the terms of any consideration that may be delivered to the Company in connection with a sale, (3) the impact of a dividend distribution in the event of a spin-off or (4) the contribution by Inpixon to Inpixon USA of any cash amounts to support its operations following the divesture. The unaudited proforma information is presented for illustration purposes only in accordance with the assumptions set forth above and below.

Pro Forma Condensed Combined Balance Sheet

December 31, 2017

(Rounded to 1,000's)

(UNAUDITED)

	(C)						(B)
	Inpixon Consol			(A)			Less: Sysorex			Proforma
	Balance Sheet			Less: Divestiture			Arabia			Balance Sheet
Assets
Current Assets
Cash and Cash Equivalents		141			(22	)		-			119
Accounts Receivable, net		2,310			(1,881	)		-			429
Notes and Other Receivables		183			(170	)		-			13
Inventory		790			(7	)		-			783
Prepaid Licenses & Maintenance Contracts		4,638			(4,638	)		-			-
Assets Held for Sale		23			-			(23	)		-
Prepaid Assets and Other Current Assets		1,122			(263	)		-			859
Total Current Assets		9,208			(6,983	)		(23	)		2,203

Prepaid Licenses & Maintenance Contracts, non-current		2,264			(2,264	)		-			-
Property and Equipment, net		520			(172	)		-			348
Software and Infrastructure Development Costs		2,017			-			-			2,017
Intangible Assets, net		12,678			(5,113	)		-			7,566
Goodwill		636			-			-			636
Other Assets		367			(10	)		-			357

Total Assets		27,691			(14,541	)		(23	)		13,127

Liabilities
Accounts Payable		25,834			(24,271	)		-			1,562
Accrued Liabilities		5,421			(3,215	)		-			2,206
Deferred Revenue		5,611			(5,554	)		-			58
Short-Term Debt		3,058			-			-			3,058
Derivative Liabilities		48			-			-			48
Liabilities Held for Sale		2,059			-			(2,058	)		1
Total Current Liabilities		42,031			(33,040	)		(2,058	)		6,933

Long Term Liabilities
Deferred Revenue, non-current		2,636			(2,636	)		-			-
Long-Term Debt		767			-			-			767
Acquisition Liability - Integrio		997			(997	)		-			-
Other Liabilities		113			(40	)		-			73
Total Liabilities		46,544			(36,713	)		(2,058	)		7,773

Stockholders' (Deficit) Equity
Common Stock		1			-			-			1
Additional Paid-in Capital		78,302			-			-			78,302
Treasury Stock, at cost, 15,922 shares		(695	)		-			-			(695	)
Due from Sysorex Consulting Inc.		-			-			-			-
Accumulated other comprehensive gain/(loss)		31			-			-			31
Accumulated Deficit		(94,485	)		22,172			23			(72,290	)

Stockholders' (Deficit) Equity Attributable to Inpixon		(16,846	)		22,172			23			5,349

Non-Controlling Interest		(2,007	)		-			2,013			6

Total Stockholders' (Deficit) Equity		(18,853	)		22,172			2,035			5,355

Total Liabilities and Stockholders' (Deficit) Equity		27,691			(14,541	)		(23	)		13,127

(A) Divestiture of Infrastructure Segment/divestiture of Inpixon USA and Inpixon Federal, the subsidiaries that have the commercial and federal VAR business

(B) The Company sold its 50.2% interest in Sysorex Arabia on January 18, 2018; proforma reflects the data as if the sale occurred on January 1, 2016

(C) Includes the assets and liabilities of Sysorex India as the Company acquired Sysorex India as of 12/31/17

Pro Forma Condensed Combined Statements of Operations

For the Year Ended December 31, 2017

(Rounded to 1,000's)

(UNAUDITED)

							(B)		(C)
				(A)			Less: Sysorex		Add: Inpixon		Proforma Stmt
	Inpixon Consol			Less: Divestiture			Arabia		India		of Operations
Revenues
Products		33,928			(33,392	)		-		-		536
Services		11,206			(7,806	)		-		269		3,670
Total Revenues		45,134			(41,198	)		-		269		4,205

Cost of Revenues
Products		28,804			(28,310	)		-		-		494
Services		5,508			(4,770	)				-		738
Total Cost of Revenues		34,312			(33,080	)		-		-		1,232

Gross Profit		10,822			(8,118	)		-		269		2,973

Operating Expenses
Research and development		1,813			(849	)		-		-		964
Sales and marketing		6,578			(4,211	)		-		-		2,367
General and administrative		18,506			(7,632	)		-		254		11,128
Acquisition related costs		5			--			-		-		5
Impairment of goodwill		8,392			(7,805	)		-		-		587
Amortization of intangibles		5,013			(2,077	)				-		2,936
Total Operating Expenses		40,307			(22,574	)		-		254		17,987

Income (Loss) from Operations		(29,485	)		14,456			-		15		(15,014	)

Other Income (Expense)
Interest expense		(3,821	)		1,937			-		-		(1,884	)
Other income (expense)		(721	)		(348	)		-		-		(1,069	)
Extinguishment loss for debt modification		(1,523	)		869					-		(654	)
Change in fair value of derivative liability		555			-			-		-		555
Total Other Income (Expense)		(5,510	)		2,458			-		-		(3,052	)

Net Income (Loss) before Provision for Income Taxes		(34,995	)		16,914			-		15		(18,066	)

Provision for Income Taxes		-			-			-				-
Net Income (Loss) from Continuing Operations		(34,995	)		16,914			-		15		(18,066	)

Income (Loss) from Discontinued Operations, Net of Tax		(35	)		-			35				-
Net Loss		(35,030	)		16,914			35		15		(18,066	)

Net Income (Loss) Attributable to Non-controlling Interest		(17	)		-			17				-
Net Income (Loss) Attributable to Stockholders of Inpixon		(35,013	)		16,914			17		15		(18,066	)

(A) Divestiture of Infrastructure Segment/divestiture of Inpixon USA and Inpixon Federal, the subsidiaries that have the commercial and federal VAR business

(B) The Company sold its 50.2% interest in Sysorex Arabia on January 18, 2018; proforma reflects the data as if the sale occurred on January 1, 2016

(C) The Company acquired approximately 82.5% of the outstanding equity securities of Sysorex India Limited on December 31, 2017; proforma reflects the data as if the acquisition occurred on January 1, 2016

Pro Forma Condensed Combined Balance Sheet

December 31, 2016

(Rounded to 1,000's)

(UNAUDITED)

							(B)			(C)
	Inpixon Consol			(A)			Less: Sysorex			Add: Inpixon		Proforma
	Balance Sheet			Less: Divestiture			Arabia			India		Balance Sheet
Assets
Current Assets
Cash and Cash Equivalents		1,821			(938	)		-			-		884
Accounts Receivable, net		11,788			(10,783	)		-			-		1,005
Notes and Other Receivables		362			(339	)		-			-		23
Inventory		1,061			(200	)		-			-		860
Prepaid Licenses & Maintenance Contracts		13,321			(13,321	)		-			-		-
Assets Held for Sale		23			-			(23	)		-		-
Prepaid Assets and Other Current Assets		1,767			(658	)		-			-		1,109
Total Current Assets		30,144			(26,240	)		(23	)		-		3,881

Prepaid Licenses & Maintenance Contracts, non-current		5,169			(5,169	)		-			-		-
Property and Equipment, net		1,385			(332	)		-			-		1,053
Software and Infrastructure Development Costs		2,058			0			-			-		2,058
Intangible Assets, net		17,691			(7,189	)		-			-		10,502
Goodwill		9,028			(7,805	)		-			-		1,223
Other Assets		998			(78	)		-			23		943

Total Assets		66,473			(46,813	)		(23	)		23		19,660

Liabilities
Accounts Payable		23,027			(22,325	)		-			-		701
Accrued Liabilities		4,168			(2,563	)		-			15		1,621
Deferred Revenue		15,043			(14,910	)		-			-		133
Short-Term Debt		6,887			-			-			-		6,887
Liabilities Held for Sale		2,041			-			(2,041	)		-		-
Total Current Liabilities		51,167			(39,798	)		(2,041	)		15		9,342

Long Term Liabilities
Deferred Revenue, non-current		5,960			(5,960	)		-			-		-
Acquisition Liability - LightMiner		567			-			-			-		567
Acquisition Liability - Integrio		1,648			(1,648	)		-			-		-
Long-Term Debt		4,047			-			-			-		4,047
Other Liabilities		371			(69	)		-			-		301
Total Liabilities		63,760			(47,475	)		(2,041	)		15		14,258

Stockholders' (Deficit) Equity
Preferred Stock		1,340			-			-			-		1,340
Common Stock		33			-			-			-		33
Additional Paid-in Capital		64,117			-			-			8		64,125
Treasury Stock		(695	)		-			-			-		(695	)
Due from Sysorex Consulting Inc.		(666	)		-			666			-		-
Accumulated other comprehensive gain/(loss)		52			-			-			-		52
Accumulated Deficit		(59,474	)		662			(642	)		-		(59,454	)

Stockholders' (Deficit) Equity Attributable to Inpixon		4,708			662			23			8		5,402

Non-Controlling Interest		(1,995	)		-			1,995			-		-

Total Stockholders' (Deficit) Equity		2,713			662			2,019			8		5,402

Total Liabilities and Stockholders' (Deficit) Equity		66,473			(46,813	)		(23	)		23		19,660

(A) Divestiture of Infrastructure Segment/divestiture of Inpixon USA and Inpixon Federal, the subsidiaries that have the commercial and federal VAR business

(B) The Company sold its 50.2% interest in Sysorex Arabia on January 18, 2018; proforma reflects the data as if the sale occurred on January 1, 2016

Pro Forma Condensed Combined Statements of Operations

For the Year Ended December 31, 2016

(ROUNDED TO 1,000'S)

(UNAUDITED)

							(B)			(C)
				(A)			Less: Sysorex			Add: Inpixon			Proforma Stmt
	Inpixon Consol			Less: Divestiture			Arabia			India			of Operations
Revenues
Products		37,510			(36,382	)		-			-			1,128
Services		15,657			(12,221	)		-			199			3,635
Total Revenues		53,167			(48,603	)		-			199			4,763

Cost of Revenues
Products		29,025			(28,710	)		-			-			315
Services		9,215			(8,277	)					-			938
Total Cost of Revenues		38,240			(36,987	)		-			-			1,253

Gross Profit		14,927			(11,616	)		-			199			3,510

Operating Expenses
Research and development		2,277			(611	)		-			-			1,666
Sales and marketing		8,500			(5,255	)		-			-			3,245
General and administrative		15,269			(5,602	)		(25	)		202			9,844
Acquisition related costs		876			(829	)		-			-			47
Impairment of goodwill		7,400			-			-			-			7,400
Amortization of intangibles		4,328			(871	)					-			3,457
Total Operating Expenses		38,650			(13,168	)		(25	)		202			25,659

Income (Loss) from Operations		(23,723	)		1,552			25			(3	)		(22,149	)

Other Income (Expense)
Interest expense		(1,743	)		659			-			-			(1,084	)
Other income (expense)		(266	)		(4	)		-			-			(270	)
Change in fair value of derivative liability		51			-			-			-			51
Change in fair value of shares to be issued		13			-			-			-			13
Reserve for the recoverability of note receivable		(1,077	)		-			-			-			(1,077	)

Total Other Income (Expense)		(3,023	)		655			-			-			(2,368	)
Net Income (Loss) before Provision for Income Taxes		(26,746	)		2,207			25			(3	)		(24,517	)

Provision for Income Taxes		-			-			-			-			-
Net Income (Loss) from Continuing Operations		(26,746	)		2,207			25			(3	)		(24,517	)

Income (Loss) from Discontinued Operations, Net of Tax		(758	)		-			758			-			-
Net Loss		(27,504	)		2,207			782			(3	)		(24,517	)

Net Income (Loss) Attributable to Non-controlling Interest		(390	)		-			390			-			-
Net Income (Loss) Attributable to Stockholders of Inpixon		(27,114	)		2,207			393			(3	)		(24,517	)

(A) Divestiture of Infrastructure Segment/divestiture of Inpixon USA and Inpixon Federal, the subsidiaries that have the commercial and federal VAR business

(B) The Company sold its 50.2% interest in Sysorex Arabia on January 18, 2018; proforma reflects the data as if the sale occurred on January 1, 2016

Form: 10-K

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