XTI Aerospace Inc (XTIA) 2020 Q3 法說會逐字稿

Good afternoon, and welcome to this Inpixon Business Update Call. (Operator Instructions) 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 this call will be available approximately 1 hour after the end of the call through November '19, 2020.

I would now like to turn the conference over to David Waldman, President and CEO of Crescendo Communications, LLC, the company's Investor Relations Firm. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining today's conference call to discuss Inpixon's corporate developments and financial results for the 3 and 9 months ended September 30, 2020. With us today are Nadir Ali, the company's CEO; and Wendy Loundermon, the company's Chief Financial Officer. Today Inpixon released financial results for the 3 months ended September 30, 2020. If you have not received Inpixon's earnings release, please visit the company's Investor Relations page at ir.inpixon.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 plans, strategies or objectives of management or 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 of belief and any statements of assumptions underlying any of the foregoing. The statements are based on expectations and assumptions as of the date of this conference call and are subject to numerous risks and uncertainties that could 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 in the public periodic reports the company files with the Securities and Exchange Commission. Investors or potential investors should read these risks. Inpixon 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 the 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 these non-GAAP numbers provide meaningful supplemental information and are helpful in assessing our historical and future performance. A table reconciling the GAAP information to the non-GAAP information is included in the company's financial release.

I will now turn the call over to Nadir Ali, Inpixon's CEO. Please go ahead.

Thanks, David. Hello, everyone, and welcome to our Q3 2020 business update call. Before we get started, I just want to say that I hope you're all staying safe and doing well as I know the pandemic is surging across many parts of the country.

Most of our people are still working remotely from home, and that continues to go well. I'd like to thank our amazing employees across the globe who have adjusted their work and home life to keep us moving forward despite these challenges. I believe we are now better positioned than any time in our company's history to deliver on our business objectives. The importance of indoor intelligence and understanding what is happening in your premises, to ensure the safety and security of your spaces and the people and things within them has never been more critical and urgent.

This is evidenced by the fact that our revenues increased 66% over the same period last year and we expect this growth trend to continue into Q4. For those of you who may be new to Inpixon today, let me provide a brief overview of where we were at the beginning of this year and how we got there. I think this will be helpful to provide the context for 2020 and our plans for 2021. And I am hopeful to answer some of the questions I get from some of you on business strategy and growth plans.

In 2019, we began down a path aimed at providing our customers with the most comprehensive indoor intelligence solution available in the market, to give them the visibility, security and understanding of their indoor spaces in ways they've never seen before. We also wanted to be a one-stop shop rather than selling parts of the solution, which creates friction, higher cost and challenges for our customers to then integrate products for multiple vendors on their own.

Having an integrated platform also provides us a higher average selling price and a stronger value proposition for our customers. We also believe having this integrated platform creates a blue ocean opportunity for Inpixon. There's no one else putting all the pieces together like we are. In fact, this industry is so highly fragmented with lots of small start-ups in maps or Wi-Fi analytics or wayfinding, but there's no 800-pound gorilla yet to lead it.

So there are some big names like Cisco and Aruba, who provide limited location data, but that's really a broad product of their WiFi access points. Not because they're truly focused on indoor data. So we went to work on putting together this integrated solution, which addresses a huge market. So let's talk about the TAM for a minute and where we fit into that.

We sit at the nexus of several large, rapidly growing, underserved and fragmented markets. And no matter which analysts or market research report you look at, they all are saying this is multibillion double-digit growth rate market. Indoor positioning and navigation is forecasted to grow to $56.6 billion by 2027. Another report says indoor location is projected to grow to $17 billion by 2025. Location-based services in RTLS or real-time location systems, is projected to grow to $39 billion by 2025, and Wi-Fi analytics is forecasted to be $16.8 billion by 2024. Then there's the overall IoT market, which is reported at $212 billion in 2018 and is expected to grow to $1.3 trillion in 2026.

Most of those IoT devices are being installed in everything from shopping carts to drinking fountains, and they all have a spatial component, and we can place all those devices on our interactive map, provide actionable insights, trigger workflows and add predictive analytics and more. So definitely a big addressable market. That's in check.

So now the question is what did we need for this one-stop shop to really capture this market opportunity? We already had our positioning sensors that we started with, and we had built an initial analytics platform. So let's take a look at what we acquired in 2019 to get that core integrated solution in place, and then I'll talk about 2020. The most important piece for us was getting an indoor map, which we acquired in 2019 with Jibestream. Maps are the most intuitive way to understand and think about location. That's what we do for the outdoors, right? You think about Google Maps or Apple Maps, so why not use that here? We picked up Jibestream because their mapping product provides 1 centralized map for the customer but with different profiles that can leverage across a variety of use cases.

So think, for example, like the security team is going to see the cameras and security views that they need to. Someone in marketing will be looking at a different profile of that same map because they want to see the heat map that shows where people are spending time, let's say, in the shopping mall. IT wants to see a different view or profile of where their equipment is laid out and where the cable lines are. And you and me as consumers in these various indoor spaces, whether it's an airport or an office building or a hospital, we want to know where we are and where we're going and how to get from point A to point B. So it's one set of truth in these maps that everyone can rely on instead of what typically we see with customers in multiple versions of maps in the company that are all usually out of date, right? So that was one of the key values that we saw with bringing on the Jibestream platform.

On top of that, it was the best mapping platform out there that we could find. And we've looked at a lot of them when we were looking for this acquisition. It's interactive, it's dynamic, it can be embedded into apps and websites and kiosks, et cetera. And it was a great way for us to really showcase our location data that we were capturing with our sensors. I'll confess, prior to this, we were using static PDF floor plans, and frankly, many of our competitors still use those today. So that was the reason why we bought Jibestream and really a critical component to this integrated platform that we are talking about. We also did a smaller acquisition in 2019 that provided us some capabilities around analytics and video integration. Specifically, they had great AI-powered predictive analytics including visitor analytics, like dwell time, visitor counts, correlation between the zones within the space, all which strengthened our existing analytics platform.

But what I found most interesting was really their ability to allow us to integrate video images from existing installed cameras that our customers had with our positioning data, the RF data that we capture with our sensors and provide that side-by-side, which creates a lot of additional value for our customers, especially from a security use case. And then finally, in 2019, we also acquired some technology to be able to do some basic indoor/outdoor locationing because we had customers that needed that. They had corporate campuses where folks or assets were going from the indoors, outdoors. And so we needed to be able to continue to be able to monitor and track those assets. So we added that capability as well. All of these efforts allowed us to build this one-stop shop. And that really impacted our operating results in 2019. We grew over 68% compared to the prior year. We expanded our gross margins from 71% to 74%. And that set us up nicely for 2020.

Our priority in 2020 has been to focus on growth and scale. And despite the pandemic, which impacted our second quarter, we've still been able to show growth for the 9 months in 2020 year-over-year. And we expect that to continue in the fourth quarter, as I mentioned. And despite the pandemic, because of our fantastic employees and the access to capital, we were fortunate enough to go on the offensive these past 6 months and make significant progress on our business plan. We acquired additional technology, patents and talent to build a stronger technical advantage and really create intelligent solutions. We're not just delivering indoor intelligence. We're really building the intelligence into our products, and I'll explain a little bit of that, but having that is a real important differentiator. And so the technology we've required in 2020 has contributed to that. We've also integrated our product offerings, improved product market fit and enhanced our operations to deliver a better customer experience.

Reference customers, as you know, are critical for growth. And so making sure our customer experience is a priority was essential for us to be able to grow the business. So we've spent a lot of time this year improving that process, and we'll continue to do so. We've also expanded our customer and partner base organically and through acquisitions, all of which has had a positive business impact in terms of our financial results. So we'll talk a little bit about that.

I want to drill down into these 3 areas in particular that I've touched on, the technical advantage, the customer experience and the business impact as we go forward. So on the technical advantage, the advances we've made in 2019 were focused on creating an integrated one-stop shop, combining, positioning, mapping and analytics to really leverage the available indoor data and provide critical intelligence about indoor spaces. We continue to build on these events in 2020 with a focus on improving our indoor intelligence offering even further to provide better, more precise locationing and ultimately more intelligent results for our customers. So what exactly is new this year?

Why don't we start with the Ten Degrees acquisition that we've issued press releases on earlier. Ten Degrees provides us what we call on-device or some people refer to as Blue Dot positioning. Prior to this transaction, our indoor position capabilities were concentrated around our sensors, right? We detect and position devices people and assets in our -- using our sensors really for the owner of the space. So it could be the owner of the office building, the owner of the mall, the airport, et cetera, for them to see what's happening in their space, for security use cases, for marketing, for asset tracking, et cetera. On device positioning is kind of the opposite of that. It allows us to really show you where you're positioned in that space that you may be operating in, right, or moving in. And so we acquired Ten Degrees along with related IP and patents and really to add that other component so that we could show -- we could provide wayfinding and navigation.

On-device position allows us to use your phone's onboard sensors such as a gyroscope, right, that tells you which direction you're facing even as you rotate, the accelerometer detects changes in speed, the compass, the barometer, right, for -- that helps us determine what floor you may be on as changes in air pressure are determined. So using the tools on or the technology on your phone and the sensors on your phone allows us to understand about where you are and provide that position to you. Think about it as really the ways for the indoors, right? Using this on device positioning with our maps, we can create that same concept of turn by turn navigation that you see outside when you're in your car driving around to the indoors, when you're trying to get from point A to point B.

Historically, we could only offer this through partnerships. We would partner with players in the space because that's what our customers needed. They wanted our maps, they wanted to be sensor positioned, but they also wanted to be able to have this on device position. Now we get to offer this directly on our own and also have it already integrated into our map, which makes it a lot easier for our customers. And it also makes us one of the only providers with the ability to offer both, the on-device positioning as well as sensor positioning.

Now let's move on to the Nanotron acquisition that we just did recently in October and what we picked up there. First of all, it gives us 2 way ranging capabilities. That allows us to take 2 tags and tell each tag how far apart it is from the other tag. This tag to tag ranging as possible without adding any additional infrastructure. You don't need any additional sensors or software or cable. And understanding the difference between 2 objects, allowed for capabilities that we at Inpixon couldn't offer previously, such as warning or triggering alerts when people or assets are getting too close to another. Think about that with social distancing now and the use case that, that creates, right? That's become a top priority. And so we'll talk more about that and other use cases in a minute here, but this is important technology that allows us to really create new offerings for our customers and it's patented. It's being used by industry giants like Decawave, et cetera.

Nanotron also provided us to technology referred to as Chirp. Just along the 2.4 gigahertz spectrum like Wi-Fi, and we're now one of the only vendors really offering this for a real-time locationing or RTLS system. The Chirp Spread Spectrum is great for long distance, low power, robust communications and applications that traverse both indoor and outdoor spaces, and we'll talk about some of the applications. And it provides it at a lower maintenance cost, has less battery replacements and really provides better results when you have challenging radio frequency environments.

And then finally, at Nanotron, we also picked up more ultra wideband capabilities. We certainly had some of our own. We've announced our own UWB sensors and certifications along with that. But the Nanotron acquisition really gives us best-in-class UWB technology, a great team and expands our UWB product line. The new capabilities are really distinguished from our own technology, not only as it relates to the types of tags and anchors, we're able to leverage across various use cases, but also the way or methods in which the positioning occurs. Remember, I was talking earlier about really getting our projects -- products to be more intelligent. One of the things that Nanotron brings is the approach that they use for positioning devices or tags or assets, et cetera, is different than the approach that Inpixon has been using. We've been using a methodology called RSSI, and I'm not going to get into the technical details here, but Nanotron uses some other approaches like Time Difference of Arrival or Time of Flight. We're looking at combining these methodologies and layering them on top of one or another to really create the most accurate, the most precise position for our customers. Because the better accuracy and precision that we offer, the better and higher value that creates for our customers. So we want our products to be truly intelligent and delivering value for our customers. And it will really help us differentiate ourselves amongst the competition.

Lots of our competition is really just based on Wi-Fi today. They're trying to add, whether it be Bluetooth or some ultra wide band capabilities. But we are, by far, going to have an opportunity to be leaps and bounds ahead of those folks. And if we want to be that 800-pound gorilla that I talked about in this space, then this is what we need to do, and that's why we've been making these acquisitions and moving forward with this business plan. The total impact of all these capabilities I've discussed really gives us a significant technical advantage. And as I said, I don't think any other provider in the market can do that today.

So let's move on to the customer experience. What do all these technical advances mean for them, right? So advanced wayfinding, we've touched a little bit about the Ten Degrees intelligent on device position piece. If you take that with our maps, we can offer wayfinding that's intelligent for offices, hospitals, casinos, resorts. Think about all the hallways and quarters you'll now be returning to that are one way but used to be two way, right? The best path from point A to point B may not be the shortest anymore. It may be a longer route, but it will be the safer route, right? So intelligent wayfinding is going to be or is a necessity now, and we're seeing that with our customers coming up again and again that we're going to have to implement, and we have those capabilities.

Asset tracking is another use case that we haven't spent a lot of effort in the past at Inpixon focusing on. With Nanotron, we bring additional capabilities to really be able to deliver on that as well as credentials. They have deployed millions of tags for tracking assets, people, livestock, et cetera. Whether it's pallets, products, machinery or equipment, there is a need in hospitals, manufacturing, warehouses. And Nanotron's Chirp and ultra-wideband technology strengthens our RTLS or asset tracking capabilities in this space. And we can also leverage the same capability into verticals that Nanotron has not been historically been in, for example, corporate offices, government agencies, hospitality, casinos.

In fact, one of our potential customers is evaluating our asset tracking tags to be used for tracking COVID-19 vaccine canisters. Another one is using our solution for tracking bikes and other assets on their corporate campus and really allowing us to leverage the indoor/outdoor functionality that the Nanotron Chirp technology can provide. So we're already starting to see not just how we can leverage those technologies, but cross-selling opportunities.

Proximity alerts is another one that I think is an important customer experience that we can now offer because of the technology that we picked up. I mentioned two-way ranging earlier, right? And talked about how that could create alerts for social distancing purposes. We have a solution called Workplace Readiness that's really targeted towards how to deal with COVID-19 and the consequences of this pandemic. So for social distancing, for contact tracing, understanding where your office or hotel or the areas that need to be given a deep cleaning, cetera are, are all part of Workplace Readiness. Now with two-way ranging, we can also add this individual alert capability that we couldn't deliver before. So now if you're walking in the office or in the hotel, or the casino and you're getting in close proximity to someone shorter than that 6-foot distance, you can have your tag or your app on your phone, be triggering an alert or buzzing or vibrating. So there are additional ways that we can use this technology, which was being used for other purposes before, but to address what we're facing today on a global scale.

In fact, some of this technology was being used for mining and transportation, worker safety, collision avoidance. So the Chirp piece in combination with ultra wideband here can be used for these sets of solutions. It also has been able to solve a problem that we were discussing with a cruise line customer -- potential cruise line customer for being able to do contract tracing on the ship and off the ship? Ultra-wideband is not going to be effective outdoors off ship, but Chirp can solve some of those problems. And so we're looking at how we may be able to leverage this for those reasons.

Ultimately, our customers are just like you and me, right? They want the most value for the least amount of effort. And they don't want multiple vendors offering different products, which result in inefficiencies, finger pointing and increased costs. That's why one integrated platform was the right decision for our customers and for our business. It allows us to grow and scale this business because we can also charge a higher ASP now that we're bundling all of these different products into one integrated solution. And it creates a stickiness factor, right? It increases customer retention.

So that leads into my third point about the business impact. So these things that we've been working on in terms of expanding our technical capabilities and improving the customer experience through these acquisitions and through the product capabilities that we've built in-house also improve our overall business and market presence in a number of key ways. We've seen revenue growth, again, both organically and through acquisition, as indicated in our financial results today. The Nanotron acquisition also opens up a new revenue opportunity for us in terms of selling components. We've typically sold end products, fully baked sensors, et cetera. The Nanotron also sells chips and modules that integrators and OEMs build into their products. So we're like the Intel inside to their device. So it's powered by Inpixon. And these kind of deals have the potential to grow sales pretty fast because you can sell one order that goes into thousands of their units. So we're excited about growing that business as well. The Nanotron and SYSTAT acquisitions have both been accretive transactions, helping us with our goals to work towards positive cash flow.

They're also diversifying the risk associated with our expanding business. We're not just focused on Workplace Readiness solutions, we're not just focused on corporate office spaces. We weren't in the past, but now we've got more diversification than ever, right? With the Nanotron acquisition, we are now in verticals like mining and livestock that I would not have guessed or planned to be in. We're in construction and manufacturing. And some of these are essential businesses that will continue despite sheltering in place. But they've also created good opportunities for our workplace readiness solutions and additional use cases, right? So the collision avoidance, RTLS, intelligent wayfinding that I've talked about.

We've also diversified and expanded our customer base, so diversified in terms of geographies, right? So we're in Europe, Middle East, South Africa, but also in terms of the types of customers that we're dealing with. We're end customers. We're dealing with OEMs and systems integrators that are our customers, and we're dealing with customers in a variety of industries. We've also been building on the channel partner distribution relationships, and now I'm trying to add on to that. So we, for example, we have been working with Lenovo with Nanotron and now we've added Arrow and DigiKey, and we look forward to marketing all of our products through their distribution channels. And being more vertically integrated reduces our overall costs. It increases our speed to market and the ability to innovate where others simply can't. We're a public company, but we're still nimble and we're still agile, and we're able to bring these products together and really get out to market quickly with integrated solutions that others are not able to offer.

So as you can see, we've made significant progress for the business as a whole. And I think that the results will continue to show as we move forward into Q4 and beyond. So with that, let me turn it over to Wendy Loundermon, our CFO, for the financial discussion, and then I'll come back with some concluding remarks. Wendy?

Thank you, Nadir. Revenues for the 3 months ended September 30, 2020, were $2.55 million compared to $1.53 million for the comparable period in the prior year, for an increase of a little over $1 million or approximately 66%. The increase in revenues in the third quarter of 2020 compared to the prior year period in 2019 was primarily attributable to the increase in sales of our Aware and Mapping product lines and the addition of sales from the recently acquired SYSTAT licensing product line.

Gross profit for the 3 months ended September 30, 2020, was $1.9 million compared to $1.2 million for the comparable period in the prior year for an increase of approximately 66%. The gross profit margin for both 3 months ended September 30, 2020, and for 2019 was 75%. The loss from operations for the 3 months ended September 30, 2020, was $6.2 million as compared to a loss of $5.7 million for the comparable period in the prior year. This increase in loss of approximately $500,000 was primarily attributable to higher operating expenses, offset by increase in gross profit for the quarter ended September 3, 2020.

Net loss attributable to stockholders of Inpixon for the 3 months ended September 30, 2020, was $7.5 million compared to a loss of $6.6 million for the comparable period in the prior year. A higher loss of approximately $900,000 was attributable to the higher operating expenses, valuation allowance adjustments, offset by the increased gross profit during the 3 months ended September 30, 2020. Non-GAAP adjusted EBITDA for the 3 months ended September 30, 2020, was a loss of $4.6 million compared to a loss of $2.4 million for the prior period in 2019. Non-GAAP adjusted EBITDA is defined as net income or loss before interest, provision for income taxes, depreciation and amortization, plus adjustments for other income or expense items, nonrecurring items and noncash items, including stock-based compensation.

Pro forma non-GAAP net loss per basic and diluted common share for the 3 months ended September 30, 2020, was a loss of $0.13 per share compared to a loss of $7.44 per share in the prior period in 2019. Non-GAAP net loss per share is defined as net loss per basic and diluted share adjusted for stock-based compensation, amortization of intangibles, provision for doubtful accounts, severance costs, acquisition costs, costs associated with public offerings and then onetime charges, including loss on exchange for debt for equity and valuation allowance adjustments.

A complete discussion of our 9-month results is available in our Form 10-Q that we'll be filing with the SEC. In terms of our balance sheet, cash on hand at September 30, 2020, was $31.4 million. We had positive working capital of approximately $23 million and a total shareholders' equity of $39.4 million compared to $6 million at the end of 2019. This concludes my comments, and I'd like to turn the call back over to Nadir.

Thanks, Wendy. So as we talked about today, Inpixon has transformed financially and operationally to position itself to become the leader in indoor intelligence. We have expanded our IP portfolio, our product offerings, and customer base in diverse geographies and verticals to drive growth and minimize risks. Our use cases range from safety and security to asset tracking to intelligent wayfinding. And while COVID has certainly created awareness around the value of indoor data, our customers are seeing the value beyond just contact tracing and reopening their offices. From provisioning assets for employees to visitor management, we're optimizing building management systems, indoor data will continue to add value for customers.

While our revenues were up 66% over the same period last year, we are still in the early innings of a massive addressable market. We're building a scalable business model with high gross margins, focused on increasing our annual recurring revenue, which will help us get to positive cash flow, and we believe create shareholder value. I'd like to thank all of our shareholders and investors for your continued support. We look forward to providing additional updates in the weeks and months ahead.

With that, I'll turn the call back to David Waldman, Investor Relations, who will read some questions that were submitted in advance. David?

Yes. Thank you, Nadir. So just to give everyone a heads up, some of the questions were duplicative. So we did our best to combine these questions where possible. If you have any questions after the call, feel free to follow-up with Investor Relations, and we'll be sure to respond as quickly as possible.

So our first question is congrats on a strong quarter given the weakness in the share price would management or board members consider buying stock?

So let me start by saying we share our investors' frustration over the share price. And we don't believe it reflects the fundamentals of value we've created. We're doing better than ever, and yet we've had significant erosion in the share price. While I'm not at liberty to comment on specific plans for myself or other members of the team or the Board, I can say this is something that we have looked at subject to certain blackout restrictions, and we'll provide further updates if and when appropriate.

Our next question, what is management doing to keep the stock above $1 and does Inpixon plan to do a reverse split?

We have no plans for a reverse split. I would say that our ability to continue to execute on our growth plans and increase our market share in all the ways we discussed today, which continues to result in strong revenue growth year-over-year even during such a challenging time is reflective of the efforts that management is really taking to increase the stock price. We expect continued strong financial performance and are fully focused on increasing shareholder value. We expect that the market will probably ultimately recognize the long-term value we are creating for our shareholders. And I hope to -- that will help mitigate any concerns around the share price.

Our next question, clearly, revenue is growing very fast, when do you expect the company to achieve profitability?

Good question. I mean so we haven't given any specific guidance. But as I mentioned earlier, we're focused on building a scalable business moving forward, and we're moving more and more towards a SaaS or annual recurring revenue business model. So as revenue continues to grow, we expect to generate high incremental margins. So we believe, like other high tech companies, it's important to invest in the business. We strongly believe that growing our revenue and capturing market share should be our #1 priority at this stage, given the size of the market, and as we do that, that will get us to profitability.

You mentioned you're working with Fortune 500 companies. Can you give a better sense of the types of companies and some examples of the work we're doing for them?

Yes. I mean, look, this is a question I get periodically. And most of our customers don't allow us to use their names. But I can certainly share types of companies. So for example, we're working with a multibillion-dollar technology company looking at managing employees and visitors. They started that initially for security purposes, but now we're also leveraging that for contact tracing as they reopen their offices. We're in discussions with or in a pilot with a pharmaceutical company for our mapping and asset tracking capabilities. We also have an international hardware manufacturer that's looking to use our mapping and wayfinding on their campus as they implement desk booking and hoteling for their office space. I'd also add that our pipeline is growing pretty significantly as companies look to come back and reopen their offices.

We're engaged in discussions with a variety of companies in technology, manufacturing, hospitality, government agencies and others. And I've been listening into some of these customer calls, and it's clear -- customers have some real pain points that we can solve for them as a reopening, such as contact tracing and social distancing. But also some that are more long-term with the wayfinding we've talked about or asset tracking and other security use cases. So I'm very optimistic about where we're headed and what I'm hearing from customers.

Next question, does the company plan to raise money again?

So look, we have a strong balance sheet. And while we have access to the ATM, it's been used on minimal occasions over the last few months. We may use it opportunistically or if needed in connection with our acquisition strategy, but we're really focused on executing our business plan and generating continued revenue growth. And as I mentioned earlier, we believe the shares are very undervalued, and we're hopeful that with continued strong financial performance and the upcoming milestones we have, we can unlock value for our shareholders.

Our next question, we see that you have continued to hire. Can you expand on if and how these hires are helping to generate additional revenue?

Yes. I mean that's -- the short answer is yes. And we are hiring primarily in sales, marketing, customer success, really focused on enterprise and government sales reps. And folks that can help drive growth and revenue and making sure our customer experience that I talked about earlier is on track. So we're focused on scaling this business, and that requires some upfront investment in these areas. We're also using an outsourced lead gen firm, which has been very effective in setting up meetings. And again, what we're hearing from them as priorities from these customer calls and conversations are around contact tracing, occupancy analytics and intelligent wayfinding. So as we make progress on the sales front, we also need to make sure we've got the folks here to be able to support those customers. That's why we continue to hire.

Our next question is Nanotron generating revenue right away and has Inpixon added to their projected revenue stream?

Yes. So they're not in our Q3 results since the Nanotron acquisition closed in October. But yes, absolutely, they have been generating revenue for years, and you'll see that reflected in our fourth quarter results. We're also seeing cross-selling opportunities already. So for example, I mentioned a cruise line company that wants to do some contact tracing on the ship and off the ship. So using Nanotron's Chirp technology could be a great fit there with our ultra-wideband solutions. We're also bringing some of the Nanotron capabilities into a construction project opportunity that was already in our pipeline. So there's definitely revenue impact that you'll see in Q4, and then we're also looking at the cross-selling, up selling opportunities.

Great. Our next question, have you reached out for any COVID related government funding to help your business?

So we did not receive any COVID-related government funding. We looked at it towards the beginning of the shelter in place directives and ultimately determined that we weren't eligible given our access to funding through other sources, as well as the fact that we didn't have any operational cuts, we were continuing to see growth, no layoffs, et cetera. So we did not receive any COVID-related government funding.

Our final question for the evening. Can you elaborate on specific efforts the company is undertaking in terms of contact tracing and to position Inpixon on the front lines in terms of COVID.

Yes. We definitely made significant sale and marketing efforts to create awareness around Inpixon and our Workplace Readiness solution, which we feel is really an enterprise level contact tracing solution. And it's critical for reopening businesses and governments. To me, that's how we're going to reopen. Companies will have to have something like this in place. It minimizes transmissions in the workplace among employees, which impacts their families, which then impacts communities. I mean that's why Taiwan has been so successful is because of their contact tracing program. And so to do it here in the U.S., at our scale, you need to use technology. And I think even with a vaccine, it will take time to deploy, and there will be flare-ups and mutations and things that we will have to deal with.

And so keeping that in mind, I think it's definitely been a way for us to engage with customers and help them think about contract tracing as they get back. But it also has given us an opportunity to talk to these customers about how our indoor data and indoor intelligence can be used for other use cases, right? And so whether it's the building management optimizations or asset tracking or intelligent wayfinding, there are other longer-term solutions that this platform offers and our customers are seeing that when we have these initial conversations around contact tracing. And remember with Nanotron, we also have a lot more products and new verticals that we're into, right? So we're in corporate offices, but we're also in mining and livestock and construction, just as a few examples. And so I think that diversifies our risk and reduces our dependencies on any one solution or a vertical.

Great. Well, thank you, Nadir, and that does conclude our Q&A. I'd like to thank everyone for joining us today.

Thank you, everyone. Stay safe.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.