Inpixon

Good morning and welcome to InPICtion's Business Update call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A telephone replay of the call will be available approximately one hour after the end of the call through March 15, 2022. I would now like to turn the call over to David Waldman, President and CEO of Crescendo Communications, LLC, the company's investor relations firm. Please go ahead, sir.

Good morning, and thank you for joining today's conference call to discuss InFiction's corporate developments and financial results for a 2021 fiscal year ended December 31, 2021. With us today are Nader Ali, the company's CEO, and Wendy Lunderman, the company's chief financial officer. Today, InPiction released financial results for the fiscal year ended December 31st, 2021. If you have not received InPiction's earnings release, please visit the company's investor relations page at ir.inpiction.com. During the course of this conference call, the company will be making forward-looking statements. The company cautions you that any statement that is not a statement of historical fact is a forward-looking statement. This includes any projections of earnings, revenues, cash, or other statements relating to the company's future financial results, any statements about planned strategies or objectives of management for future operations, any statements regarding completed or planned acquisitions or strategic partnerships, and the anticipated impact of those transactions on our business, any statements concerning proposed new products or solutions, any statements regarding anticipated new customers, relationships, or agreements, any statements regarding expectations for the success of the company's products in the U.S. and international markets, any statements regarding future economic conditions or performance, including but not limited to the impact of COVID-19 on our operations, any statements regarding the valuation attributed to any of our securities instruments, any statements of belief, and any statements of assumptions underlying any of the foregoing. These statements are based on expectations and assumptions as of the date of this conference call and are subject to numerous risks and uncertainties that cause actual results to differ materially from those described in the forward-looking statements. Some of these risks are described in the Safe Harbor section of today's press release, and the public periodic reports the company files with the Securities and Exchange Commission. Investors or potential investors should read these risks. Impiction assumes no obligation to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so. In addition, to supplement the GAAP numbers, the company has provided non-GAAP-adjusted net loss and net loss per share information in addition to non-GAAP-adjusted EBITDA information. The company believes that these non-GAAP numbers provide meaningful supplemental information and are helpful in assessing our historical and future performance. A table reconciling the gap information to the non-gap information is included in the company's financial release. I'll now turn the call over to Nadar Ali, Infection CEO. Please go ahead.

All right. Thanks, David. And good morning, everyone. Thank you for joining us today. So I want to jump right in and focus on three main topics I'd like to cover today. First, our 2021 revenues reached $16 million. That's a 72% increase over 2020. Tremendous growth. And in fact, if you look at the last four years, You'll see we grew this business from approximately $3 million to $6 million to $9 million and now to $16 million in revenue. I currently expect 22 revenue to continue at these growth rates, primarily coming from organic growth with existing product lines. During this time, we also maintained our gross margins above 70% and increased our annual recurring revenue in absolute dollars. More on that later. While total operating losses were higher as compared to the prior year, Over $21 million of that increase was primarily non-cash, non-recurring expenses that we don't currently anticipate for 22, with the remainder primarily related to depreciation and amortization, stock-based comp, and expenses related to recent acquisitions. We expect we'll see an improvement here in 22 as a result of the integration of the acquired entities and operational synergies becoming more fully realized as the year goes on. And as our revenue grows, we should see improved EBITDA and we're anticipating a lower burn for 2022. Second, I want to touch on the decline in our market cap and stock price. We believe what we are experiencing is not unique to InFiction and has more to do with the macroeconomic changes over the past several months, as well as the current political situation. As I speak to our IR folks, bankers, and other CEOs, it's clear that this has impacted many companies from micro cap to large cap, with micro and small caps disproportionately impacted by the current sell-off. Valuations have come down, whether you're public or private or in the crypto space. My team and I are focused and will continue to be focused on executing our business plan and controlling what we can. But we do believe our market cap doesn't reflect the value of our business. So for example, and depending on the source you look at, whether it's Blossom Street Ventures or ClickFoly or others, the median multiple for annual recurring revenue or ARR, is 13 to 17x, and with larger companies getting even higher multiples. We've been trading below the value of our cash on hand, which is, you know, before even taking into account any of our recurring revenue and our growth in the ARR. This is frustrating and difficult to explain, but however, as I said, we believe that much of this is due to the overall macro events, and so hopefully when the volatility and turmoil in the market settles down, I believe the market will recognize that we are executing on our business plan and we should see a recovery. The third topic I want to cover today is how our suite of products that have come together to deliver on the indoor intelligence experiences is more important now than ever before. And I can give you three reasons why our current offering is so right for today's market. First, because hybrid and remote workplaces and events are here to stay. Nothing is changing that back to the way it was, and we believe we can help companies better than anyone else to be successful in this new hybrid worker paradigm. We have an incredible roster of customers like Aruba, Adobe, WarnerMedia, Siemens, Lenovo, NVIDIA, Meta, and many more that you can find on our website, all using our solutions to help create the best experiences for their employees, customers, and partners. And we're continuing to add more Fortune 2000 type customers that are helping us build our recurring revenue stream for years to come. The second reason we have great product market fit is because we are at the right place at the right time. In fact, just last week, InPiction was identified by Gartner as a leader in the 2022 Magic Quadrant for indoor location services. The metaverse is here, and companies need our products, from our augmented reality technologies to our mapping and positioning sensors that help them create their digital twins and launch into the metaverse. If your company doesn't have a plan to use indoor intelligence to enter the metaverse, then you need to get in touch with us. Combining this with partners that have wearables like smart glasses or gesture technology, NFTs and the like is going to deliver significant opportunities for us to shape and create exciting new experiences for our customers. The third reason our offering is spot on is industry 4.0 or industrial IoT or whatever you want to call the massive digital transformation going on in the industrial sector. This space is exploding as manufacturing, warehouse, excuse me, and logistic companies are all looking to use UWB and other sensing technologies to track assets, automate workflows, reduce production times, and implement safety solutions. Combine that, again, with AR and smart glasses, and we change the factory worker experience, creating efficiencies and increasing productivity. All right, now I want to take a minute to explain how our tech helps companies create digital twins for the metaverse or for augmented reality, because that seems to be on top of mind for everyone these days. Our Visualix products including augmented reality and patent pending methodologies uses your smartphone's camera as well as onboard sensors to create 3D models of indoor spaces. It positions the user on a map with centimeter level accuracy and provides turn by turn visually guided navigation. Then we overlay virtual artifacts onto the live map displaying key information such as room name, amenities, photos or reviews, And then we display this on your phone or smart glasses using our CX app and make the navigating experience shareable with others. The team was just showing me a new feature that we added recently where people, you know, these days are going into the office to meet other people. So imagine being able to see on this map where your colleagues and friends are and being able to book a desk near them or at least know they are on site that day that you're planning to go in. Of course, there are privacy options built in so you can decide if you want to share when and where you are in the office. But this allows tremendous collaboration capabilities, and our customers love this functionality because it's the number one reason people want to go back to the office. They want to reconnect with their peers. And Piction is uniquely capable of providing this type of integrated solution because we can offer all of these key technologies, which is the result of our successfully executed acquisition strategy and our internal development initiatives. I'd love to go into more great detail about all our products and capabilities, but instead I want to share with you some third-party facts and figures that validate what I'm saying. about what we believe is a massive growth opportunity. So if you go to markets and markets, you can see lots of these numbers about the indoor location market being $7 billion and forecasted to grow at 23% compound annual growth. RTLS, or real-time location services, is a $3.9 billion market growing at 26%. Industry 4.0, $65 billion growing at 20%. The virtual event platform, 10.4 billion growing at 13, and augmented reality, $15 billion, growing at 31.5%. All these sectors we have solutions in are billion-dollar markets growing at double-digit compound annual growth rates. And our internal research supports the favorable situation, too. We recently released our State of Indoor Intelligence 2022 study, where approximately 52% of respondents indicated they are increasing the pace of indoor intelligence initiatives, with 92% reporting that indoor intelligence was key for their company to stay competitive, and 77% indicating they will be investing in indoor intelligence solutions this year. The huge opportunity noted in research is starting to be realized, and you can see that in the strong results we posted in 21. So let me share some stats around that. In 21, we closed hundreds of deals with customers. We increased our SAS annual recurring revenue bookings by 70%, or more than $4 million. Just in the last few months of the year alone, we built out more than 150 corporate campuses with tens of thousands of reservable debt and mapped more than 12 million square feet of office space. And importantly, our annual recurring revenue, or ARR, is approximately 45% of our revenues in 2021. That means we've got roughly $7 million in the bag to start this year from our current product line. And we believe this will only continue to grow as we move forward in 2022. In addition to our Smart Campus app, which is really about connecting people in the office, I'd like to highlight two of our other product lines where we think growth opportunity is just as exciting and that we haven't fully focused our sales and marketing on yet. That's hybrid events and industrial IoT. So let's start with hybrid events. With masking and indoor capacity regulations relaxing in many areas, events are shifting from purely virtual to hybrid. The hybrid virtual event space is taking off as it is only recently that in-person hybrid events are being held given the pandemic environment. More and more in-person or hybrid business activities and conferences are being announced today. In fact, we're about to host Aruba's Atmosphere event in Vegas with an anticipated 50,000 attendees. That's in-person and online, so in other words, hybrid. And our customers that are using our platform are winning awards. Our platform was recently selected by the Association of Briefing Program Managers as their exclusive event management solution. The ABPM membership includes top-tier enterprises, including more than 100 Fortune 500 companies, and we expect this relationship will lead to more sales opportunities for events with their Fortune 500 customers. And there's a huge metaverse play that we can take advantage of in the event space. Immersive experiences can allow remote attendees to visit a virtual trade show booth and chat with product experts, while onsite attendees can use augmented reality to navigate the show floor and view digital details on the product and companies they see physically in front of them. Every venue and event needs to have our app and maps and level up the experience that they're providing their attendees. We're looking to partner with folks in this space to make that happen in 22. Now let's move to industrial IoT or Industry 4.0. Some of the biggest spend with location technology is in this space using old school tech like RFID and handheld barcode scanners This is why Zebra and others show up in the Gartner Magic Quadrant as leaders. We plan to take them on with ultra-wideband and our proprietary CHIRP technology. This market segment was the primary driver for the internet acquisition we made in December. It completed our offering in the IoT space, so think smart factories, smart warehouses, and digital supply chains. And we believe this will allow us to take market share from the Zebra and Ubisenses of the world. Digitizing these facilities is top of mind for manufacturers, and we have a complete offering for them now, integrating the latest cutting-edge technologies, including augmented reality and wearables. You've heard me say this before, and I'll say it again. All these acquired and developed technologies have been pulled together for a reason. Our platform approach, our ability to offer a single platform which delivers multiple solutions and use cases, is working. The upsell and cross-sell potential is real, and it is being realized. Let me give you a couple of examples. So if we look at our smart office app deals in 21, for every $100,000 of contract value in an initial deal, we won another $89,000 on average in those customers or an 89% bookings expansion. This is a classic land and expand strategy. Get in and then upsell and sell them more of what they bought and cross-sell and sell them our complementary solutions. We've seen natural sales growth expansion with our customers because these large customers have so many offices and so many internal systems. So, for example, they might roll out our app to their U.S. offices and then they expand it to European offices or, you know, some customers start with a pilot and then expand. And they often buy more features and add more integrations to other internal systems along the way. These same large companies that need our smart office app also hold internal and external events that will no doubt be hybrid and they'll need our event solution. And they'll want to make these experiences even more immersive and rich And we use our augmented reality technologies to bring them into the metaverse. Another huge cross-sell opportunity is to pursue sales of our industrial IoT solutions for smart warehouses, smart factories into our corporate customers and vice versa. So you can imagine, you know, automakers and others that may be using our smart campus app, but also have a manufacturing side to their business, right? So we've got an ability to cross-sell the IoT solutions with those customers. So I hope with these examples and data that I've provided you that you can see the vast potential here and how we're realizing the benefits of our acquisition development strategy and bringing these technologies and solutions all under the in-picture route. So just to wrap up before I hand the call over to Wendy to go over the financials, let me summarize the current situation. We have a tremendous suite of products and IP that allow us to deliver the hottest in-demand markets today, right? The hybrid workforce, AR, metaverse, and industry 4.0. We're planning for continued organic-based growth at the levels that we've seen over the last year. We're landing and expanding in our footprint in customers and capturing more market share by increasing their stickiness. And we're continually presented with the cross-sell, up-sell opportunities that increase our ASP or average sales selling price. And lastly, we've got sufficient capital that we believe provides us over a year of runway based on existing operations while allowing us to execute on our growth strategy. So I'd like to turn the call over to Wendy now to discuss our financials, and I'll come back to answer some of the questions you all submitted to our investor relations room. Wendy?