Good afternoon and welcome to the Inpixon's Earnings Conference Call for the Third Quarter Ended September 30, 2018. All participants will be in listen-only mode. [Operator Instructions]. After today's call, there'll be an opportunity to ask questions. [Operator Instructions]. Participants on 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 replay of the call will be available approximately one-hour after the end of the call through December 1, 2018. I would now like to turn the call over to Scott Arnold, Senior Managing Director of CORE IR the Company's Investor Relations firm. Please go ahead, sir. Mr. Arnold, your line is live, sir.

Thank you, Rocco. Thank you for joining today's conference call to discuss Inpixon's corporate developments and financial results for the third quarter ended September 30, 2018. With us today are Nadir Ali, the Company's CEO; and Wendy Loundermon, VP, Finance. At 4:05 p.m. Eastern Time today, Inpixon released financial results for the third quarter ended September 30, 2018. If you have not received Inpixon's earnings release, please visit the Investors page at www.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 related to the Company's future financial results; any statements about plans, strategies or objectives of management for future operation; the impact of the spin-off on our business and our ability to execute our business strategy following the spin-off; any statements concerning proposed new products; any statements regarding anticipated new 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; 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 could cause actual results to differ materially from those described in the forward-looking statements. Some of these risks are described in the section of today's press release titled Cautionary Note on Forward-Looking Statements, 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 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 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.

Thanks, Scott. Good afternoon everyone and thank you for joining us. I would like to begin by stating that Inpixon has made significant progress in 2018 in a way that I believe positions the company to be at the forefront of a burgeoning multi-billion dollar industry and finally able to realize the true value of its innovative products and services. During the third quarter of 2018, we were able to successfully execute on the first part of our three part strategic plan which I will describe in more detail shortly. We're now completely focused on growing our indoor positioning analytics or IPA business which we believe will more effectively increase shareholder value. For those of you who are new to Inpixon, let me tell you about our IPA platform. Inpixon's indoor positioning analytics platform is redefining the indoor spaces where people conjugate and move by locating all accessible cellular Wi-Fi and Bluetooth signals using a rapid data mining engine to provide invaluable data, delivering greater visibility and intelligence, and allowing organizations to improve their decision making processes and increase productivity. Inpixon IPA offers government agencies and commercial entities the ability to see all connected devices that correlate to a single identity in one place along with an in-depth intelligent analytics. We offer SaaS or subscription and licensing based pricing options providing flexibility to our customers. The true value of our IPA technology is in the data that we collect from our sensors as well as our ability to integrate voice and in the near future video into our analytics platform enabling us to provide our customers with a critical and vital location context in order to deliver valuable intelligence, security, and ultimately ROI. We can extend this even further by incorporating data from other third-party sensors and data sources such…

Thank you, Nadir. Net revenues for the three months ended September 30, 2018, were $940,000 compared to $871,000 for the comparable period in the prior year. This $69,000 increase or approximately 8% is primarily associated with the increasing sales from our IPA product. The gross profit for the three months ended September 30, 2018, was $642,000 compared to $604,000 for the same period in 2017. This increase in gross profit is due to the higher margin IPA sales. The gross profit margin for the three months ended September 30, 2018, was 68% compared to 69% during the three months ended September 30, 2017. GAAP net loss attributable to common stockholders of Inpixon for the three months ended September 30, 2018, was $5.2 million compared to $14.6 million for the prior year period. This decrease in loss of about $9.4 million was primarily attributable to the decrease in compensation and occupancy costs due to the downsizing of staff and office locations and a $7.8 million impairment of goodwill charge included in the deconsolidated operations in 2017. GAAP net loss per share for the quarter ended September 30, 2018, was $4.84 compared to a net loss per share of $1,858.90 for the comparable period in 2017. Pro forma non-GAAP net loss per basic and diluted common share for the three months ended September 30, 2018, was $3.61 compared to $546.74 for the prior year period. Adjusted EBITDA for the three months ended September 30, 2018, was a loss of $3.4 million compared to the loss of $3.1 million for the prior year period. Non-GAAP adjusted EBITDA is defined as net income or loss before interest, provision, or benefit from income taxes and depreciation and amortization plus adjustments for other income or expense items, non-recurring items, and non-cash stock-based compensation. On the balance sheet, we ended the third quarter with cash and cash equivalents of $1.5 million and total current assets of $4.9 million. Our net cash used in operations was approximately $23.4 million for the nine months ended September 30, 2018. The company continues to identify areas where it can create operating efficiencies and realize operating cost savings in 2018. This concludes my comments and I now like to turn the call back over to Nadir.

Thanks, Wendy. As I said on our last call, our company has created and will continue to create innovative solutions to fulfill the need for location based analytics that are predicted demonstrate tremendous growth and demand. Using the Inpixon IPA derived data provides our customers the ability to create a competitive advantage and make better more actionable business decisions. We enable visualizing and analyzing the relationships between corporate data and location specific data. By delivering important facts and relevant information about movement in a facility, this data can be helpful to speed up logistics and operations and streamline key processes. Now we are realizing our strategy to execute and grow in this 21st century Greenfield opportunity. Inpixon is focused on going with the addition of domestic and global channel partners, closing new businesses, increasing our customer base, and finding strategic M&A opportunities. We know the path has been challenging but we thank our shareholders for their support and look forward to executing on our objectives in an effort to increase shareholder value. With that, Rocco, we are ready to open up the call to questions.

Thank you. At this time, we have allotted 15 minutes to address questions from equity analysts. [Operator Instructions]. And today's first question comes from Ross Silver of Sylva International. Please go ahead.

Thank you for taking the time. Excuse me thank you for the time for the question, Nadir and Wendy and congrats on the quarter and the successful spin-off. The first question I have for you is and I think I heard this in your comments was that purchase orders were increasing, is that -- I mean can I associate that with revenues increasing sort of on a go-forward basis and did I hear you correctly?

Yes, thanks Ross. Yes, absolutely increased POs will lead to increased revenue. We offer two different pricing models, a SaaS based model and license based. So the POs that we received are mix of both of those types of orders and so what we will see is a steady growing in our subscription revenue quarter-to-quarter as well as certain quarters we will have spikes in revenue based on the licenses that we may sell in a particular quarter especially to our government customers that like to own the hardware and software but absolutely there's a correlation there.

Okay. So this is not a one-time bump that you're seeing continued growth if I'm hearing you correctly as it relates to purchase orders?

Yes. We expect to continue building grow the revenue as we move forward and especially now that we are 100% focused on the IPA business.

Got it, okay. And then another question as it relates you talked a little bit about acquisitions on the call, are you in any way constrained as it relates to acquisition?

Well I mean I think what as I referred to the Proposal 3 in our proxy, the constraint could be the authorized shares and that's why that's important to us. But we certainly think that grabbing the land or market share as soon as possible is important. We think there are some attractive opportunities out there and consolidation opportunities in the IPA space. So having those shares available to make those transactions happen is definitely a plus.

So, okay, so hear you correctly. Okay, I guess it sounds like there might be some opportunities and it seems like some of these opportunities may be interested more so on, on the share side. Okay, all right, well that's very -- that's helpful.

We definitely want to use our stock, we will offer some cash and earn-outs, but stock is a big component and these are long-term potential shareholders that will support the company going forward, right. So I think it makes sense to use the stock to do these types of transactions.

Okay, that's helpful. Thank you. That's good to hear. And then the last question I have for you just more of on the administrative side is assuming that the reverse was due to maintain your NASDAQ compliance just because we haven't seen a capital raise in conjunction with that was that just fair to assume?

Yes, absolutely. We could not take a risk with our NASDAQ compliance issues. So we went ahead and implemented the reverse.

Okay, great. Well, thank you, that's all the questions I have and congrats on the quarter and look forward to continuing to following your progress.

Thanks Ross.

This concludes our question-and-answer session. I would like to turn the call back over to Nadir Ali for any closing remarks.

All right. Thank you again for your support and interest in Inpixon everyone. We look forward to updating you on our continued progress. Have a good day.