July 25, 2019 - EXHIBIT 99.3 - 8-K/A: Current report filing

Exhibit 99.3

Inpixon and Subsidiaries

Unaudited Pro Forma Condensed Combined Financial Information

The unaudited pro forma condensed combined balance sheet as of March 31, 2019 and the unaudited pro forma condensed combined statements of operations for each of the three months ended March 31, 2019 and for the year ended December 31, 2018 combine the financial statements of Inpixon and Subsidiaries (“Inpixon”) and Jibestream Inc. (“Jibestream”), giving effect to the acquisition of Jibestream as described in the Acquisition Agreement, plus the completion of a minimum capital raise as required by the Acquisition Agreement (collectively the “Transactions”), as if they had occurred on January 1, 2018 in respect of the unaudited pro forma condensed combined statements of operations and on March 31, 2019 in respect of the unaudited pro forma condensed combined balance sheet.

The unaudited pro forma condensed combined financial information should be read in conjunction with:

●

Inpixon’s audited consolidated financial statements and accompanying notes as of and for the year ending December 31, 2018, as contained in its Annual Report on Form 10-K filed on March 28, 2019 (the “2018 Annual Report”) with the United States Securities and Exchange Commission (the “SEC”).

●

Inpixon’s unaudited condensed consolidated financial statements and accompanying notes as of and for the three months ending March 31, 2019, as contained in its Quarterly Report on Form 10-Q (the “2019 Quarterly Report”) filed on filed on May 14, 2019 with the SEC.

●

Jibestream’s audited financial statements as of and for the years ended December 31, 2018 and 2017, contained elsewhere in this filing.

●

Jibestream’s unaudited condensed financial statements as of and for the three months ended March 31, 2019 and 2018, contained elsewhere in this filing.

●

the other information contained in or incorporated by reference into this filing.

The financial statements of Jibestream were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (” IASB”). The consolidated financial statements of Inpixon were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The unaudited pro forma condensed combined financial information includes adjustments to convert the financial information of Jibestream from IFRS to U.S. GAAP as issued by the Financial Accounting Standards Board (“FASB”), as well as reclassifications to conform Jibestream’s historical accounting presentation to Inpixon’s accounting presentation.

In addition, the consolidated financial statements of Inpixon are presented in US dollars (“USD”) whereas, the financial statements of Jibestream are presented in Canadian Dollars (“CAD”). Therefore, the unaudited pro forma condensed combined financial information includes adjustments to convert Jibestream’s financial information from CAD to USD.

The final purchase consideration and the allocation of the purchase consideration may materially differ from that reflected in the unaudited pro forma condensed combined financial information after final valuation procedures are performed and amounts are finalized following the completion of the acquisition.

The unaudited pro forma adjustments give effect to events that are directly attributable to the Transactions and are based on available data and certain assumptions that management believes are factually supportable. In addition, with respect to the unaudited condensed combined statements of operations, the unaudited pro forma adjustments are expected to have a continuing impact on the combined results.

The unaudited pro forma condensed combined financial information is presented for informational purposes only and to aid you in your analysis of the financial aspects of the Transactions. The unaudited pro forma condensed combined financial information described above has been derived from the historical financial statements of Inpixon and Jibestream and the related notes. The unaudited pro forma condensed combined financial information is based on Inpixon’s accounting policies. Further review may identify additional differences between the accounting policies of Jibestream and Inpixon. The unaudited pro forma adjustments and the pro forma condensed combined financial information don’t reflect the impact of synergies or post-transaction management actions and are not necessarily indicative of the financial position or results of operations that may have actually occurred had the Transactions taken place on the dates noted, or of Inpixon’s future financial position or operating results.

Inpixon and Subsidiaries

Unaudited Pro Forma Condensed Combined Balance Sheet

March 31, 2019

(USD 000’s)

	Inpixon			Jibestream			Capital Raise			Acquisition			Pro Forma Combined
		Note A			Note B			Note C			Note D
Assets
Current assets:
Cash and cash equivalents	$	3,830		$	-		$	13,800	(a)	$	(3,888	)(b),(d)	$	13,742
Accounts receivable, net		1,748			442			-			-			2,190
Notes and other receivables		68			64			-			-			132
Restricted short-term investments		-			247			-			(247	)(b)		-
Inventory		698			-			-			-			698
Prepaid assets and other current assets		436			47			-			-			483
Total current assets		6,780			801			13,800			(4,135	)		17,245

Non-current assets:
Property and equipment, net		133			14			-			-			147
Operating lease right-of-use asset, net		563			548			-			5	(d)		1,116
Software development costs, net		1,705			-			-			-			1,705
Intangible assets, net		3,697			-			-			4,976	(d)		8,673
Goodwill		-			-			-			3,281	(d)		3,281
Loan to related party		7,026			-			-			-			7,026
Other assets		218			-			-			-			218
Total non-current assets		13,342			562			-			8,262			22,166
Total assets	$	20,122		$	1,362		$	13,800		$	4,127		$	39,411
Liabilities, temporary equity and stockholders’ equity
Current liabilities:
Accounts payable and accrued liabilities	$	2,399		$	222		$	375	(a)	$	-		$	2,995
Operating lease obligation		331			247			-			-			578
Deferred lease inducement		-			69			-			(69	)(d)		-
Deferred revenue		173			1,373			-			(205	)(d)		1,341
Convertible promissory notes		-			277			-			(277	)(c)		-
Convertible debentures		-			482			-			(482	)(b)		-
Long-term debt, current portion		-			177			-			(177	)(b)		-
Other indebtedness		3,970			554			-			(554	)(b)		3,970
Total current liabilities		6,873			3,401			375			(1,764	)		8,884

Non-current liabilities:
Deferred tax liability		-			-			-			1,300	(d)		1,300
Promissory notes		-			258			-			(258	)(b)		-
Long-term debt		73			247			-			(247	)(b)		73
Operating lease obligation		268			306			-			-			574
Total non-current liabilities		341			811			-			795			1,947
Total liabilities		7,214			4,212			375			(969	)		10,831

Temporary equity:
Preferred stock		-			1,426			-			(1,426	)(b),(c)		-

Stockholders’ equity:
Preferred stock		-			-			-			-			-
Common stock		7			112			37	(a)		(107	)(b),(c),(d)		49
Additional paid-in capital		136,482			136			13,388	(a)		2,106	(b),(d)		152,112
Treasury stock		(695	)		-			-			-			(695	)
Accumulated other comprehensive income		18			-			-			-			18
Accumulated deficit		(122,917	)		(4,523	)		-			4,523	(d)		(122,917	)
Non-controlling interests		13			-			-			-			13
Total stockholders’ equity		12,908			(4,275	)		13,425			6,522			28,580
Total liabilities, temporary equity and stockholders’ equity	$	20,122		$	1,362		$	13,800		$	4,127		$	39,411

See notes to the unaudited pro forma condensed combined financial information

Inpixon and Subsidiaries

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Three Months Ended March 31, 2019

(USD 000’s except for shares and per share amounts)

	Inpixon			Jibestream			Pro Forma Adjustments			Pro Forma Combined
	Note A			Note B			Note C
Revenues	$	1,363		$	483		$	-		$	1,846
Cost of revenues		337			133			-			470
Gross profit		1,026			351			-			1,377

Operating expenses
Research and development		956			-			-			956
Sales and marketing		633			10			-			643
General and administrative		3,351			527			-			3,878
Acquisition related costs		137			-			-			137
Amortization of intangibles		812			3			59	(a)		874

Total operating expenses		5,889			541			59			6,488

Loss from operations		(4,863	)		(190	)		(59	)		(5,112	)

Other income/(expense)
Interest expense		(356	)		(34	)		34	(b)		(356	)
Other income		69			-			-			69

Total other expense		(287	)		(34	)		34			(287	)

Pre-tax loss		(5,150	)		(224	)		(25	)		(5,399	)
Income tax benefit		-			-			16	(a)		16
Net loss		(5,150	)		(224	)		(9	)		(5,383	)
Net loss attributable to non-controlling interest		(5	)		-			-			(5	)
Net loss attributable to stockholders of Inpixon		(5,145	)		(224	)		(9	)		(5,378	)
Deemed dividend for triggering of warrant down round feature		(1,250	)		-			-			(1,250	)
Net loss attributable to common stockholders	$	(6,395	)	$	(224	)	$	(9	)	$	(6,628	)

Loss per share:
- basic and diluted	$	(1.42	)							$	(0.14	)

Weighted average number of common shares outstanding:
- basic and diluted		4,495,536						41,242,916	(c)		45,738,452

See notes to the unaudited pro forma condensed combined financial information

Inpixon and Subsidiaries

Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 2018

(USD 000’s except for shares and per share amounts)

	Inpixon			Jibestream			Pro Forma Adjustments			Pro Forma Combined
	Note A			Note B			Note C
Revenues	$	3,756		$	2,441		$	-		$	6,197
Cost of revenues		1,076			671			-			1,747
Gross profit		2,680			1,770			-			4,450

Operating expenses
Research and development		1,231			-			-			1,231
Sales and marketing		1,726			97			-			1,823
General and administrative		14,149			2,546			-			16,695
Acquisition related costs		108			-			-			108
Impairment of goodwill		636			-			-			636
Amortization of intangibles		3,232			19			235	(a)		3,487

Total operating expenses		21,082			2,662			235			23,980

Loss from operations		(18,402	)		(893	)		(235	)		(19,530	)

Other income/(expense)
Interest expense		(1,241	)		(132	)		132	(b)		(1,241	)
Gain on sale of Sysorex Arabia		23			-			-			23
Change in fair value of derivative liabilities		48			-			-			48
Other expense		(211	)		-			-			(211	)

Total other expense		(1,381	)		(132	)		132			(1,381	)
Pre-tax loss from continuing operations		(19,783	)		(1,025	)		(103	)		(20,911	)
Income tax benefit		-			-			62	(a)		62
Net loss from continuing operations		(19,783	)		(1,025	)		(41	)		(20,848	)
Deemed dividend to preferred stockholders		(6,407	)		-			-			(6,407	)
Deemed dividend for triggering of warrant down round feature		(13,645	)		-			-			(13,645	)

Net loss from continuing operations attributable to common stockholders	$	(39,835	)	$	(1,025	)	$	(41	)	$	(40,900	)

Loss per share:
- basic and diluted	$	(51.62	)							$	(0.97	)

Weighted average number of common shares outstanding:
- basic and diluted		771,688						41,242,916	(c)		42,014,604

See notes to the unaudited pro forma condensed combined financial information

Inpixon and Subsidiaries

Notes to Unaudited Pro Forma Condensed Combined Financial Information

Basis of Presentation

The unaudited pro forma condensed combined financial information set forth herein is based upon the consolidated financial statements of Inpixon and Jibestream. The unaudited pro forma condensed combined financial information is presented as if the Transactions had been completed on January 1, 2018 with respect to the unaudited pro forma condensed combined statements of operations for each of the three months ended March 31, 2019 and for the year ended December 31, 2018 and on March 31, 2019 in respect of the unaudited pro forma condensed combined balance sheet.

The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not necessarily indicative of the combined financial position or results of operations had the Transactions occurred as of the dates indicated, nor is it meant to be indicative of any anticipated combined financial position or future results of operations that the combined company will experience after the completion of the Transactions.

We have accounted for the acquisition in this unaudited pro forma condensed combined financial information using the acquisition method of accounting, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805 “Business Combinations” (“ASC 805”). In accordance with ASC 805, we used our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired.

Inpixon’s consolidated financial information is prepared in accordance with U.S. GAAP as issued by the FASB and is presented in USD. Jibestream’s financial information has been historically prepared in accordance with IFRS as issued by the IASB and was presented in CAD and has been converted for the purpose of this unaudited pro forma condensed consolidated financial information to be consistent with the Inpixon presentation.

Pro forma adjustments reflected in the pro forma condensed combined statements of operations are based on items that are factually supportable, directly attributable to the Transactions and expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined financial information does not reflect the cost of any integration activities or benefits from the transaction, including potential synergies that may be generated in future periods.

All Monetary Amounts Other Than Per Share Information Are Presented in 000’s Unless Otherwise Indicated

Pro Forma Adjustments

The following pro forma adjustments give effect to the Transactions.

Unaudited Pro Forma Condensed Combined Balance Sheet – As of March 31, 2019

	Note A	Derived from the unaudited condensed consolidated balance sheet of Inpixon as of March 31, 2019 included in the 2019 Quarterly Report.

	Note B	Derived from the unaudited condensed U.S. GAAP balance sheet of Jibestream as of March 31, 2019 included on the next page and translated from CAD to USD. The indicated exchange rate used to translate CAD to USD at March 31, 2019 was the rate of 0.7489 as set out in the table below.

CAD to USD Translation:

	Jibestream GAAP			EXCHANGE RATE 0.7489	Jibestream GAAP
	(CAD)				(USD)
Assets
Current assets:
Cash and cash equivalents	$	-			$	-
Restricted short-term investments		330				247
Accounts receivable		590				442
Investment tax credits receivable		86				64
Prepaid expenses and deposits		63				47
Total current assets		1,069				801
Non-current assets:
Property and equipment		18				14
Right of use asset		732				548
Total non-current assets		750				562
Total assets	$	1,819			$	1,362
Liabilities, temporary equity and shareholders’ equity
Current liabilities:
Bank indebtedness	$	702			$	526
Accounts payable and accrued liabilities		297				222
Deferred lease inducement		92				69
Deferred revenue		1,834				1,373
Convertible promissory notes		370				277
Current portion of long-term debt		236				177
Current portion of convertible debentures		644				482
Current portion of promissory notes- shareholders		37				28
Current portion of lease obligation		329				247
Total current liabilities		4,541				3,401

Non-current liabilities:
Long-term debt		330				247
Lease obligation		408				306
Promissory notes- shareholders		345				258

Total non-current liabilities		1,083				811
Total liabilities		5,625				4,212

Temporary equity:
Preferred stock		1,904				1,426

Shareholders’ equity:
Share capital		150				112
Deficit		(6,040	)			(4,523	)
Contributed surplus		181				135
Total shareholders’ equity		(5,709	)			(4,275	)
Total liabilities, temporary equity and shareholders’ equity	$	1,819			$	1,362

The Jibestream U.S. GAAP balance sheet was derived from the unaudited condensed financial statements of Jibestream as of March 31, 2019, prepared in accordance with IFRS as issued by the IASB and adjusted to conform with U.S. GAAP, as issued by the FASB. The table below provides a reconciliation between the unaudited condensed IFRS balance sheet and the unaudited condensed U.S. GAAP balance sheet.

IFRS to U.S. GAAP Adjustments:

	Jibestream IFRS			GAAP Adjustments			Jibestream GAAP
	(CAD)			(CAD)			(CAD)
Assets
Current assets:
Cash and cash equivalents	$	-		$	-		$	-
Restricted short-term investments		330			-			330
Accounts receivable		590			-			590
Investment tax credits receivable		86			-			86
Prepaid expenses and deposits		63			-			63
Total current assets		1,069			-			1,069
Non-current assets:
Property and equipment		18			-			18
Right of use asset		732			-			732
Total non-current assets		750			-			750
Total assets	$	1,819		$	-		$	1,819
Liabilities, temporary equity and shareholders’ equity
Current liabilities:
Bank indebtedness	$	702		$	-		$	702
Accounts payable and accrued liabilities		297			-			297
Deferred lease inducement		92			-			92
Deferred revenue		1,834			-			1,834
Convertible promissory notes		1			369	(a)		370
Current portion of long-term debt		236			-			236
Current portion of convertible debentures		598			45	(b)		644
Current portion of promissory notes- shareholders		37			-			37
Current portion of lease obligation		329			-			329
Derivative liability-convertible debentures		127			(127	)(c)		-
Derivative liability-convertible promissory notes		741			(741	)(d)		-
Total current liabilities		4,996			(454	)		4,541

Non-current liabilities:
Long-term debt		330			-			330
Lease obligation		408			-			408
Promissory notes- shareholders		345			-			345
Preferred shares		1,904			(1,904	)(e)		-

Total non-current liabilities		2,987			(1,904	)		1,083
Total liabilities		7,983			(2,358	)		5,625
Temporary equity:
Preferred stock		-			1,904	(e)		1,904
Shareholders’ equity:
Share capital		150			-			150
Deficit		(6,494	)		454	(a)(b)(c)(d)		(6,040	)
Contributed surplus		181			-			181
Total shareholders’ equity		(6,163	)		454			(5,709	)
Total liabilities, temporary equity and shareholders’ equity	$	1,819		$	-		$	1,819

(a)

To reverse convertible promissory notes’ debt discount related to its bifurcated embedded conversion options under IFRS which pursuant to the terms of their respective agreement, does not require bifurcation under U.S. GAAP.

(b)

To reverse convertible debentures’ debt discount under IFRS which pursuant to the terms of their respective agreements, does not require bifurcation under U.S. GAAP.

(c)

To reverse convertible debentures’ bifurcated embedded conversion options under IFRS which pursuant to the terms of their respective agreements, does not require bifurcation under U.S. GAAP.

(d)

To reverse convertible promissory notes’ bifurcated embedded conversion options under IFRS which pursuant to the terms of their respective agreements, does not require bifurcation under U.S. GAAP.

(e)

To reclassify redeemable preferred stock accounted for as a liability under IFRS to temporary equity under U.S. GAAP.

Pro Forma Adjustments:

Note C – Capital Raise

(a)

To record the receipt of approximately $15,000 in gross proceeds in cash for the issuance of 36,585,366 shares of common stock and warrants in a public offering, based on the $0.41 per share closing price of Inpixon’s common stock on July 24, 2019. Note that each $0.05 per share increase or decrease in the final offering price of Inpixon’s equity securities results in a 3,976,670 decrease or increase in the shares issued, respectively.

The Acquisition Agreement requires the completion of a minimum of a $15,000,000 capital raise, although Inpixon and Jibestream could agree to accept a smaller capital raise and a larger capital raise is currently targeted. Note that each $3,000,000 increase or decrease in the final gross proceeds results in a 7,317,073 increase or decrease in the shares issued, respectively, based on the $0.41 per share closing price of Inpixon’s common stock on July 24, 2019.

Furthermore, due to the existence of a 4.99% beneficial ownership blocker, some of the pro forma issuances of common stock could be in the form of non-voting, convertible preferred stock. The portion issuable in convertible preferred stock is indeterminable at this time.

The placement agent fee is expected to be $1,200. This transaction also includes approximately $375 in deferred offering costs charged to additional paid in capital upon closing.

Note D – Acquisition

(b)

To record a portion of the cash purchase consideration used to pay down $1,471 of certain debt. $247 of restricted short term investments will also be used to pay down certain debt. The preferred stock will be converted into common stock prior to the closing of the acquisition.

(c)

To give effect to the convertible promissory notes that will be converted into redeemable preferred stock prior to closing.

(d)

The following table summarizes the purchase consideration and the preliminary allocation of the assets acquired and liabilities assumed, based on their fair values on the acquisition date. The purchase consideration constitutes the following: the payment of approximately $3,744 of cash (CAD 5,000,000), $144 of net cash adjustments to the purchase price and the issuance of 5,479,471 shares of Inpixon common stock (based on the $0.41 closing price per share of Inpixon common stock on July 24, 2019), plus warrants, with an aggregate value of approximately $2,247 (CAD 3,000,000)(collectively the “Purchase Consideration”). Note that each $0.05 per share increase or decrease in the final offering price of Inpixon’s equity securities results in a 595,705 decrease or increase in the shares issued to the Jibestream stockholders, respectively.

Jibestream Purchase Price Allocation

(000’s) USD

Cash	$	3,744
Working capital adjustment - cash		256
Deferred revenue cost adjustment - cash		(112	)
Common stock		2,247
Purchase Consideration	$	6,135

Less:

Net working capital deficit	$	(836	)
Deferred tax liabilities (4)		(1,300	)
Property and equipment		14
Proprietary technology (1)		3,887
Customer relationships (2)		784
Non-compete (3)		306
Fair value of net assets acquired	$	2,854
Goodwill value	$	3,281

(1)

The proprietary technology is currently presumed to have an indefinite useful life.

(2)

The customer relationships are currently presumed to have an estimated useful life of 9.5 years.

(3)	The non-compete agreements are currently presumed to have an estimated useful life of 2 years.

(4)	The deferred tax liabilities relate to the acquired intangible assets.

Unaudited Pro Forma Condensed Combined Statement of Operations

For The Three Months Ended March 31, 2019

Note A

Derived from the unaudited condensed statement of operations of Inpixon for the three months ended March 31, 2019 included elsewhere in the 2019 Quarterly Report.

Note B

Derived from the unaudited condensed U.S. GAAP statement of operations of Jibestream for the three months ended March 31, 2019 included on the next page and translated from CAD to USD. The average exchange rate used to translate CAD to USD for the three months ended March 31, 2019 was the rate of 0.7521 as set out in the table below.

CAD to USD Translation:

				EXCHANGE
	Jibestream			RATE	Jibestream

	GAAP			0.7521	GAAP
	(CAD)				(USD)

Revenues	$	643			$	483
Cost of revenues		177				133
Gross profit		466				351

Operating expenses
Salaries, wages and benefits		479				360
Office and general		59				44
Amortization		4				3
Travel and entertainment		47				35
Share-based compensation		8				6
Professional fees		26				20
Advertising and promotion		14				10
Bank charges		2				1
Occupancy		94				71
Foreign exchange loss		(5	)			(4	)
Bad debts		(8	)			(6	)
Total operating expenses		719				541
Loss from operations		(253	)			(190	)

Other (income)/expenses
Interest		45				34
Total other expense		45				34
Net loss	$	(298	)		$	(224	)

The Jibestream U.S. GAAP statement of operations were derived from the unaudited condensed statement of operations of Jibestream for the three months ended March 31, 2019, prepared in accordance with IFRS as issued by the IASB and have been adjusted to conform with U.S. GAAP as issued by the FASB. The table below provides a reconciliation between the unaudited condensed IFRS statement of operations and the unaudited condensed U.S. GAAP statement of operations.

IFRS to U.S. GAAP Adjustments:

	Jibestream IFRS			GAAP Adjustments			Jibestream GAAP
	(CAD)			(CAD)			(CAD)

Revenues	$	643		$	-		$	643
Cost of revenues		-			177	(f)		177
Gross profit		643			(177	)		466

Operating expenses
Salaries, wages and benefits		636			(157	)(f)		479
Office and general		79			(20	)(f)		59
Amortization		78			(74	)(a)		4
Travel and entertainment		47			-			47
Interest		45			(45	)(d)		-
Share-based compensation		-			8	(e)		8
Professional fees		26			-			26
Advertising and promotion		14			-			14
Bank charges		2			-			2
Occupancy		-			94	(a)		94
Foreign exchange loss		(5	)		-			(5	)
Bad debts		(8	)		-			(8	)
Total operating expenses		912			(194	)		719
Loss from operations		(270	)		17			(253	)

Other (income)/expenses
Accretion expense		62			(62	)(a)		-
Interest expense		-			45	(d)		45
Gain on derivative liability- convertible debenture		(15	)		15	(b)		-
Loss on derivative liability-convertible promissory notes		39			(39	)(c)		-
Share-based compensation		8			(8	)(e)		-

Total other expense		93			(48	)		45

Net loss	$	(363	)	$	65		$	(298	)

(a)

To reclassify amortization and accretion expense under IFRS 16 to lease expense under ASC 842.

(b)

To reverse the gain on change in fair value of convertible debenture’s bifurcated embedded conversion feature.

(c)

To reverse the loss on change in fair value of convertible promissory notes’ bifurcated embedded conversion option.

(d)

To reclassify interest expense from operating expenses into other expenses.

(e)

To reclassify share-based compensation from other expenses into operating expenses.

(f)

To reclassify certain operating expenses into cost of revenues.

Note C-Pro Forma Adjustments:

(a)

To record the amortization of the fair value of customer relationships with a useful life of 9.5 years plus the non-compete agreements with a useful life of 2 years. An income tax benefit related to that amortization was also recorded.

(b)

To eliminate interest expense associated with certain debt and other promissory notes as they were repaid or converted as a result of the Transactions.

(c)

To adjust weighted average shares outstanding used in earnings per share calculations for an additional 41,242,916 shares of Inpixon common stock issued as a result of the Transactions, based on the $0.41 per share closing price of Inpixon common stock as of July 24, 2019. The 41,242,916 shares is comprised of 36,585,366 shares issued in the equity offering, plus the 5,479,471 shares issued in the acquisition, less the 821,921 (15%) of the acquisition shares being withheld for potential indemnification claims. All potentially dilutive securities are anti-dilutive. See the balance sheet footnotes for the discussion regarding the sensitivity of the share quantities to the final offering price.

Unaudited Pro Forma Condensed Combined Statement of Operations

For The Year Ended December 31, 2018

Note A

Derived from the unaudited condensed statement of operations of Inpixon for the year ended December 31, 2018 included elsewhere in this filing.

Note B

Derived from the unaudited condensed U.S. GAAP statement of operations of Jibestream for the year ended December 31, 2018 included on the next page and translated from CAD to USD. The average exchange rate used to translate CAD to USD for the year ended December 31, 2018 was the rate of 0.7717 as set out in the table below.

CAD to USD Translation:

				EXCHANGE
	Jibestream			RATE	Jibestream

	GAAP			0.7717	GAAP
	(CAD)				(USD)

Revenues	$	3,163			$	2,441
Cost of revenues		870				671
Gross profit	$	2,293			$	1,770

Operating expenses
Salaries, wages and benefits		2,355				1,817
Office and general		337				260
Occupancy		345				266
Advertising and promotion		126				97
Travel and entertainment		119				92
Professional fees		111				86
Bad debts		58				45
Amortization		25				19
Share-based compensation		39				30
Sub-contracts		7				5
Foreign exchange gain		(71	)			(54	)
Total operating expenses		3,450				2,662
Loss from operations		(1,157	)			(893	)

Other (income)/expenses
Interest		171				132
Total other expense		171				132
Net loss	$	(1,328	)		$	(1,025	)

The Jibestream U.S. GAAP statement of operations was derived from the unaudited condensed statement of operations of Jibestream for the year ended December 31, 2018, prepared in accordance with IFRS as issued by the IASB and adjusted to conform with U.S. GAAP as issued by the FASB. The table below provides a reconciliation between the unaudited condensed IFRS statement of operations and the unaudited condensed U.S. GAAP statement of operations.

FRS to U.S. GAAP Adjustments:

	Jibestream IFRS			GAAP Adjustments			Jibestream GAAP
	(CAD)			(CAD)			(CAD)

Revenues	$	3,163		$	-		$	3,163
Cost of revenues		-			870	(g)		870
Gross profit	$	3,163		$	(870	)	$	2,293

Operating expenses
Salaries, wages and benefits		3,145			(790	)(g)		2,355
Office and general		417			(80	)(g)		337
Occupancy		345			-			345
Interest		171			(171	)(f)		-
Advertising and promotion		126			-			126
Travel and entertainment		119			-			119
Professional fees		111			-			111
Bad debts		58			-			58
Amortization		25			-			25
Share-based compensation		-			39	(e)		39
Sub-contracts		7			-			7
Foreign exchange gain		(71	)		-			(71	)
Total operating expenses		4,452			(1,002	)		3,450
Loss from operations		(1,289	)		132			(1,157	)

Other (income)/expenses
Accretion expense		216			(216	)(a)		-
Interest expense		-			171	(f)		171
Loss on derivative liability- convertible debenture		13			(13	)(b)		-
Gain on extinguishment of convertible debentures		(287	)		287	(c)		-
Loss on derivative liability-convertible promissory notes		332			(332	)(d)		-
Share-based compensation		39			(39	)(e)		-
Total other expense		312			(140	)		171
Net loss	$	(1,601	)	$	273		$	(1,328	)

(a)

To reverse the accretion of debt discount recognized for convertible debentures bifurcated embedded conversion feature.

(b)

To reverse the loss on change in fair value of convertible debentures’ bifurcated embedded conversion feature.

(c)

To reverse the gain on extinguishment of convertible debentures.

(d)

To reverse the loss on change in fair value of convertible promissory notes’ bifurcated embedded conversion feature.

(e)

To reclassify share-based compensation from other expenses into operating expenses.

(f)

To reclassify interest expense from operating expenses into other expenses.

(g)

To reclassify certain operating expenses into cost of revenues.

Note C - Pro Forma Adjustments:

(a)

(b)

To eliminate interest expense associated with certain debt, convertible, and other promissory notes as they were deemed to be repaid as a result of the transaction.

(c)

Form: 8-K/A

Documents