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Discontinued Operations

6 Months Ended

12 Months Ended

Jun. 30, 2023

Dec. 31, 2022

Discontinued Operations [Abstract]

Discontinued Operations

Note 24 — Discontinued Operations

On March 14, 2023, the Company completed the Business Combination which divested its Enterprise Apps Business and certain related assets and liabilities through a spin-off of CXApp Holding Corp., a Delaware corporation (“Legacy CXApp”) to Inpixon’s shareholders of record as of March 6, 2023 (the “Record Date”) on a pro rata basis. This Enterprise Apps Spin-off was considered a strategic shift that has a major impact on the Company, and therefore, the results of operations are recorded as a component of “Earnings (loss) from discontinued operations, net of income taxes” in the Condensed Consolidated Statements of Operations for all periods presented. The Company noted that Legacy CXApp was part of the Company’s Indoor Intelligence segment. The net assets distributed as a result of the Enterprise Apps Spin-off was $24.2 million. Included within the $24.2 million dividend recorded to Additional Paid in Capital as a result of the deconsolidation of CXApp through distribution to shareholders recorded during the three months ended March 31, 2023, is approximately $1.2 million in accumulated other comprehensive income that was recognized as a result of those distributed assets and liabilities included in the foreign operations of CXApp.

		Three Months Ended June 30, 2022				Six Months Ended June 30, 2023				Six Months Ended June 30, 2022
Revenues		$	2,149			$	1,620			$	4,731
Cost of Revenues			540				483				1,129
Gross Profit			1,609				1,137				3,602

Operating Expenses
Research and development			2,430				1,514				4,421
Sales and marketing			1,570				988				2,676
General and administrative			2,497				1,644				3,914
Earnout compensation benefit			—				—				(2,827	)
Acquisition related costs			10				—				16
Transaction costs			—				1,043				—
Impairment of goodwill			5,540				—				5,540
Amortization of intangibles			973				805				1,948
Total Operating Expenses			13,020				5,994				15,688

Loss from Operations			(11,411	)			(4,857	)			(12,086	)

Interest (expense)/income, net			8				1				9
Other income/(expense)			—				—				—
Total Other Income (Expense)			8				1				9

Loss from discontinued operations, before tax			(11,403	)			(4,856	)			(12,077	)
Income tax provision			38				—				(62	)
Loss from discontinued operations, net of tax		$	(11,365	)		$	(4,856	)		$	(12,139	)

Cash used in operating activities by the Enterprise Apps Business totaled approximately $0.8 million and $3.0 million for the three months ended March 31, 2023 and 2022, respectively. Cash provided by investing activities from the Enterprise Apps Business totaled approximately $0.1 million for the three months ended March 31, 2023 and cash used in investing activities by the Enterprise Apps Business totaled approximately $0.04 million for the three months ended March 31, 2022.

The following table summarizes certain assets and liabilities of discontinued operations:

		As of December 31, 2022
Current Assets of Discontinued Operations
Cash and cash equivalents		$	10,000
Accounts receivable			1,338
Prepaid expenses and other current assets			923
Current Assets of Discontinued Operations		$	12,261

Long Term Assets of Discontinued Operations
Property and equipment, net		$	202
Operating Lease Right-of-Use Asset, net			681
Software development costs, net			487
Intangible assets, net			19,289
Other Assets			52
Long Term Assets of Discontinued Operations		$	20,711
Current Liabilities of Discontinued Operations
Accounts payable		$	1,054
Accrued liabilities			1,736
Operating lease obligation, current			266
Deferred revenue			2,162
Current Liabilities of Discontinued Operations		$	5,218

Long Term Liabilities of Discontinued Operations
Operating lease obligation, noncurrent		$	444
Other Liabilities, noncurrent			28
Long Term Liabilities of Discontinued Operations		$	472

Note 33 — Discontinued Operations

On March 14, 2023, the Company completed the Business Combination which divested its Enterprise Apps Business and certain related assets and liabilities through a spin-off of CXApp Holding Corp., a Delaware corporation (“Legacy CXApp”) to Inpixon’s stockholders and certain other securityholders of record as of March 6, 2023 (the “Record Date”) on a pro rata basis. The operations related to CXApp met the criteria within ASC 205-20 to be reported as discontinued operations because the Enterprise Apps Spin-off and the Merger represented a strategic shift in business that had a major effect on the Company’s operations and financial results. Accordingly, CXApp has been presented as discontinued operations in our consolidated financial statements for the years ended December 31, 2022, and 2021.

The Company noted that Legacy CXApp was part of the Company’s Indoor Intelligence segment. The net assets distributed as a result of the Enterprise Apps Spin-off was $24.2 million. Included within the $24.2 million dividend recorded to Additional Paid in Capital as a result of the deconsolidation of CXApp through distribution to securityholders is approximately $1.2 million in accumulated other comprehensive income that was recognized as a result of those distributed assets and liabilities included in the foreign operations of CXApp.

The operations related to CXApp met the criteria within ASC 205-20 to be reported as discontinued operations because the Enterprise Apps Spin-off and the Merger represented a strategic shift in business that had a major effect on the Company’s operations and financial results. Accordingly, CXApp has been presented as discontinued operations in our consolidated financial statements for the years ended December 31, 2022 and 2021. The financial data of Inpixon Canada, Inc., Design Reactor, Inc., Inpixon Philippines, Inc., and certain financial data of Inpixon, including Visualix GmbH i.L, entities are included in discontinued operations.

The following table summarizes certain selected components of income from discontinued operations:

		Year Ended December 31, 2022				Year Ended December 31, 2021
Revenues		$	8,470			$	6,368
Cost of Revenues			2,064				1,646
Gross Profit			6,406				4,722

Operating Expenses
Research and development			9,323				6,704
Sales and marketing			4,996				4,763
General and administrative			10,540				20,607
Acquisition related costs			16				628
Impairment of goodwill and intangibles			5,540				11,896
Amortization of intangibles			3,885				3,046
Total Operating Expenses			34,300				47,644

Loss from Operations			(27,894	)			(42,922	)

Other Income (Expense)
Interest (expense)/income, net			4				1
Other income/(expense)			(1	)			—
Total Other Income (Expense)			3				1

Loss from discontinued operations, before tax			(27,891	)			(42,921	)
Income tax (expense)/benefit			(184	)			5,201
Loss from discontinued operations, net of tax		$	(28,075	)		$	(37,720	)

Cash used in operating activities from discontinued operations totaled approximately $17.8 million and $10.0 million for the years ended December 31, 2022 and 2021, respectively. Cash used in investing activities from discontinued operations totaled approximately $0.5 million and $0.4 million for the year ended December 31, 2022 and 2021, respectively. Cash provided by financing activities from discontinued operations totaled approximately $23.3 million and $20.4 million for the years ended December 31, 2022 and 2021, respectively.

The following table summarizes certain assets and liabilities of discontinued operations:

		As of December 31,
		2022			2021
Current Assets of Discontinued Operations
Cash and cash equivalents		$	10,000			10,000
Accounts receivable			1,338			1,764
Notes and other receivables			273			106
Inventory			—			11
Prepaid expenses and other current assets			650			889
Current Assets of Discontinued Operations		$	12,261		$	12,770

Long Term Assets of Discontinued Operations
Property and equipment, net		$	202		$	231
Operating Lease Right-of-Use Asset, net			681			723
Software development costs, net			487			648
Intangible assets, net			19,289			23,468
Goodwill			—			5,545
Other Assets			52			76
Long Term Assets of Discontinued Operations		$	20,711		$	30,691

Current Liabilities of Discontinued Operations
Accounts payable		$	1,054		$	661
Accrued liabilities			1,736			7,882
Operating lease obligation, current			266			213
Deferred revenue			2,162			3,145
Current Liabilities of Discontinued Operations		$	5,218		$	11,901

Long Term Liabilities of Discontinued Operations
Operating lease obligation, noncurrent		$	444		$	531
Other Liabilities, noncurrent			28			28
Long Term Liabilities of Discontinued Operations		$	472		$	559