Inpixon

Good afternoon and welcome to Impiction's Business Update presentation. Participants are advised that this presentation is being broadcast live over the internet and is also being recorded for playback purposes. A webcast will be available on the company's investor relations page of its website within approximately 24 hours after the end of the call. I would now like to turn the call over to Alexandra Schilt, Vice President of Crescendo Communications, LLC, and Piction's investor relations firm. Please go ahead.

Alexandra Schilt Good afternoon, everyone. Thank you for joining Piction's second quarter business update presentation, where management intends to discuss business developments during the quarter, as well as provide an update on the recent definitive merger agreement with XTI Aircraft. With us today are Nadir Ali, Impiction's Chief Executive Officer, Scott Pomeroy, XTI's Chief Financial Officer, and Mike Hindenberger, Chief Executive Officer of XTI Aircraft. Today, Impiction released financial results for its 2023 second quarter ended June 30, 2023. If you have not received Impiction's earnings release, please visit Impiction's investor relations page at ir.impiction.com. During the course of this conference call, the company will be making forward-looking statements regarding expectations for future performance and business prospects. Forward-looking information involves risks and uncertainties, and the stated expectations could differ materially from actual results or performance. The company advises you to read and contemplate the information and disclaimer comments within our news release and present it on the slides, which include details about forward-looking statements, risk factors, and where to find more information about the proposed transaction. I will now turn the call over to Nader Ali, Impiction's CEO. Nader, please go ahead.

Thank you, Alexandra. Good afternoon, everyone, and thank you for joining our business update presentation. This is a very exciting time for Impiction, and we'll be spending most of our time today on our recent merger announcement with XCI. But before that, I'd like to start by doing a quick recap on our industrial RTLS business. Our award-winning full-stack industrial RTLS or real-time location system leverages a network of connected hardware and software components that track the location and objects within a defined area to provide actionable intelligence that helps customers make data-driven decisions, resulting in smarter, more efficient operations. Enabling the precise positioning of people, assets, and objects, RTLS utilizes RF technologies such as ultra-wideband, Bluetooth, Wi-Fi, and our proprietary turf technology to wirelessly communicate and determine the location of the targeted object. Utilization of RTLS within a business allows customers to locate, learn, and leverage. With our complete lineup of location technologies, we can meet the needs of nearly any facility type and use case. Given that our platform is technology agnostic, it can integrate seamlessly with third-party systems like SAP and others, which enhances a customer's ability to learn from the information we deliver. Then by leveraging this valuable data, customers can enable automation and data-driven decision-making to drive reduced costs, increase productivity, and streamline their operations. RTLS is increasingly being utilized by Industry 4.0's smart factories, warehouses, mining operations, and digital supply chains to enhance their operations. Our customers include leading manufacturers in the automotive, aerospace, mining, energy, and industrial segments, including companies like Siemens Energy, BMW, Festo, and PERI. Our financial results for the quarter ending June 30th, 2023 were released today. These results no longer include the CX app business, which was separated with the Kinz transaction in March of this year. Revenues were flat for the six-month period. However, gross margins have expanded as we increased our recurring revenues, primarily based on the Intranav product line. We expect the industrial RTLS business to continue to expand its opportunities for increasing reoccurring revenue by providing our customers with a location-as-a-service business model instead of the one-time non-recurring revenue from hardware and software products since. We also reduced our operating expenses as reflected in our Q2 results, and our cash on hand at June 30th was approximately $15.7 million. As we've discussed before, we believe that Impiction isn't being adequately valued in the market. As a result, the board and I have been taking steps to explore and execute strategic alternatives that we believe will unlock value for our shareholders. This is why we did the CXF transaction and why we continue to explore additional strategic transactions. Towards this end, we recently entered into a merge agreement with XCI Aircraft. You're going to hear from the XCI management team shortly about the competitive advantage the XCI tri-fan design has compared to others in the business aircraft market. You'll hear how XTI's aircraft is unique, how it can potentially grow market share and revenue and scale faster because it can leverage existing infrastructure, has longer range than other vertical takeoff and landing or VTOL aircraft, and can meet existing regulatory requirements and so on. These are just some of the reasons that we felt XTI was the right opportunity for InPICTION and our shareholders, not to mention that they are building a very cool-looking aircraft. In addition, of course, we think it's fantastic that XTI already has tremendous interest and validation with more than 700 conditional pre-orders, which we expect could yield over $7 billion in gross revenue based on their current list price of $10 million per aircraft, assuming, of course, the company is able to execute on the development program for the tri-fan, secure FAA certification, and deliver these aircraft. We believe this should be able to continue to drive value for the combined company and for our shareholders as they deliver those aircraft. We're very excited to get into the details and show the potential of the combined companies, which will result in a NASDAQ-listed company with the name changing to XTI Aerospace, a new senior management team, and a new board of directors. We will be holding a shareholder meeting and vote on this transaction and any related proposals to ensure a successful closing. Shareholders of a soon to be scheduled record date will have the opportunity to participate in that shareholder meeting and vote. And we expect to close the merger during the fourth quarter of 2023. As I mentioned, there will be a new leadership team. It is expected that Wendy Lunderman, our current CFO, and I will be leaving the company after the transaction closes. The new CEO and chairman of the board is expected to be Scott Pomeroy, XCI's current CFO. And the CEO of the XCI Aircraft subsidiary will be Michael Hindenburger. Our current COO and Piction CEO, Soumya Das, will become the CEO of the subsidiary operating in Piction's RTLS business. We wanted to use today's call to help you understand more about the XTI business and meet some of the senior leadership team. We do plan to hold another call about this transaction, so stay tuned for that date and time for that event. All right, and with that, I'm pleased to introduce Scott Pomeroy, who is the current CFO of XCI and expected CEO of the new combined company, XCI Aerospace.