Q1 2021 Inpixon Earnings Call
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Good afternoon, and welcome to infections 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.
Of the call will be available approximately one hour after the end of the call through May 20th 2021.
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 afternoon, and thank you for joining today's conference call to discuss <unk> corporate developments and financial results for the three months ended March 31, 2021 with US today are not are all Li the company's CEO and when do you under amendment of the company's Chief Financial Officer.
Today and picks and released financial results for the three months ended March 31, 2021, if you have not received and pictures of their earnings release. Please visit the company's Investor Relations page at IR side of infection Dot Com. During the course of this conference call of the company will be making forward looking statements. The company cautions you that any statement that is not a statement of historical.
And the 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 for future operations any statements regarding completed the 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 and 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 on.
The operations any statements regarding the valuation attributed to any of our security of instruments any statements of belief and any statements of the 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.
And the forward looking statements. Some of these risks are described in the Safe Harbor section of today's press release and the public reports of the company files with the Securities and Exchange Commission investors or potential investors should read these risks and pitch and 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 these non-GAAP numbers provide meaningful supplemental information are helpful and assessing our historical and future performance of table reconciling the GAAP information and the non-GAAP information is <unk>.
And the company's financial release, I'll now turn the call over to non or all of the infection and CEO. Please go ahead.
Alright, Thanks, David and Hello, everyone. Thank you for joining us today to hear an update on our recent business activities and to discuss some of our financial results for the first quarter of 2021.
I'll start by saying, we're the very busy first quarter and we have a lot of exciting developments of covered here today that showcase the momentum we've been experiencing here and infection. So let's get started first.
First of our revenue continues to grow on a year over year basis revenue increased by 64 per cent to 3 million and the first quarter of 2021 compared to $1 8 million for the first quarter of last year.
And despite lingering effects of the pandemic, we continue to grow our topline as a result of strategic initiatives, we've put in place and 2020.
We also took advantage of the liquidity and the markets earlier this year and increased our working capital by raising approximately $78 million and net proceeds during the quarter. So we can invest in all of growth and do some fantastic M&A transactions that we believe will significantly increase our revenue velocity or a R. R as well as profitable.
All of them.
We're able to also leapfrog our product roadmap by acquired and some incredible technology from visual links and augmented reality or AR computer vision and three the maps that customers have already started asking for it.
The <unk> acquisition is also very timely for us because every company around the world is thinking about how they want and manage their return to the office and this new hybrid workforce paradigm, where employees will sometimes work remotely from home and other times from the office and welcome to the new normal because it is not going away and not only GAAP its acts.
Tolerating the digital transformation of the office.
Our virtual and physical worlds continue to converge and so many ways of this digital transformation and <unk> indoor intelligence products play a critical role and this <unk>.
<unk> is not only the right product at the right time and it also fulfills an important piece of fiction convictions product technology stack and our strategy to connect with the ultimate end user more on that and a few minutes.
I also want to note that CX app and attractive acquisition for us because it is experiencing significant growth and demand for its products from some of the largest most well known organizations and the world and its doubling its bookings and revenue over the last 12 month period, ending March 31 and 2021.
We expect that the same trend to continue over the next 12 months, which is the driving motivator behind the $8 $2 million revenue target provided in connection with the transaction.
And based on the pipeline, we are seeing today I wouldn't be surprised if we achieve that number.
For those of you who have been following us since the spin off of the seismic systems integration business and 2018.
I know that our M&A strategy has been focused on holding a dominant position and the indoor intelligence market and the only company with the ability to offer our customers of the full technology stack and both hardware and software that's required for capturing interpreting and visualizing indoor data.
A comprehensive one stop shop, if you will that includes positioning mapping analytics ultra wideband tags and now we can add to that list augmented reality and of course the half but.
But I won't explain to you why we have been doing what we've been doing.
And infection, we believe in the power of experiences we're.
Organizations that leverage our technologies and the actionable indoor intelligence, we provide can deliver better experiences to their customers with smarter safer and more secure environments.
And the explained how our products come together to deliver that experience and even more so now with the CX app and visual and transactions.
If you think about some of your best memory, the likely be grounded and and unforgettable experience on important life event or something personal the same applies for the products and services of the years, some stand out more than others because experience you would get from them or how they make you feel.
Personal lines experiences I'd say the barista. The greet you by name when you walk in and hazard drink range right on time every day or maybe it's the experienced some people feel and driving of Tesla.
And just help us market cap higher than the next top six car companies combine the all.
The offer electric vehicles now, it's because the experience and feeling.
Owning of Texel gives us the customers just like Apple and you're able to do with its products for its loyal customers.
Our goal is to create that kind of connection with our customers for infection. It's the way our indoor intelligence defines the indoor experience you have in the spaces that you visit.
What do I mean by this.
Some of you may have heard me say this before but I also think about how we can make our smartphones truly smart and connected device for that matter.
The bar Risa, who knows what you want when you want it our devices to be able to do the same thing, but even better which.
Shouldn't have to ask our devices to give us information to be truly smart devices, there should be able to recognize and interest with the information that we need when we need them.
And by relying on a combination of location data contextual information and AI are devices should be able to deliver a meaningful valuable content and services finally, as we move from one location to the next.
That's the experience we are looking to create with our products.
We need all of our indoor intelligence products working in concert to make that happen and that is what we've been working towards for the past two years.
The <unk> acquisition, just enhances the experience even more.
Fix app integrates with 75 other products like slack zoom and Microsoft exchange seasons et cetera, and more are being added every month.
These integrations and help us capture more contextual data to deliver and even better and faster and more personalized indoor intelligence experience, whether you are at work or on the airport the university or a hybrid event and Vegas with a 100000 of other people.
And picks and is these spaces to help our customers deliver smarter safer and secure experiences to their employees and visitors patients shoppers travelers et cetera.
And by the way those 75 integration partners are.
On a great selling point and competitive differentiator for us for.
For our customers and users and it creates a better experience and for US. It helps us win more business and increased revenue and not to mentioned the referral opportunities that come from this partner ecosystem.
This is a perfect example of why the experience drives financial size, just like Apple and Tesla, we're hoping to create that experience and capture the cult like following.
Now, let's go back to digital transformation and workplaces that I mentioned earlier because of the workplace is our primary market focus today and COVID-19 has accelerated digital transformation and the workplace, which is driving demand for our products.
When we talk about digital transformation for businesses, we are talking about how and organization using digital technologies to create or modify new business processes cultures and experiences to meet business requirements.
And Mckinsey report just mentioned that COVID-19 has pushed companies over the technology tipping point and transform businesses forever and they said funding for digital initiatives has increased more than anything else.
In fact, there are a lot of data points and expert analysis of supporting this idea of a massive permanent shift and the workplace and priorities and budgets, which in line within picks and strategy and our solutions.
For instance, the Harvard business review noted that we're experiencing a change at warp speed, They said and I quote organizations have reshaped the work force overturned the age old business models and embrace digital technologies and rapid response of the pandemic.
KPMG reported that as the organizations prepare locations for the return of office workers, 99% of employers are turning to technology to manage the complex and unprecedented challenges reopening during the pandemic 40 of those 43% of those specifically for facility readiness management.
On the.
The New York Times reported that more than 80% of companies are embracing of hybrid work model whereby employees will be in the office three days of week.
And Google of company, whose lead many others follow just a few days ago detailed there their plants.
And they said they expect of workforce were around 60% of Google and <unk> are coming together and the office a few days of week. Another 20% are working and new office locations and 20% are working from home and they stated.
And the future of work is flexibility.
So here at infection, we believe that organizations, just simply cant deliver the kind of flexible work environments that the workforce will demand and expect without leveraging the power of indoor intelligence and the range of technologies and infection can offer.
With this accelerated shift to a digital workplace a seamless employee experience is critical to the success of the hybrid office model and as we look at transitioning back to the office in person experiences will become the priority and the workplace once again, but there'll be completely different.
So what do people mean, when they talk about the employee experience why do we care about it and why is it so critical to the success of and organization and why are they willing to heavily invest in developing and exceptional employee experience.
When we talk about the employee experience, we are referring to all of the ways in which employees engage with the employer and the resulting perception that the employee has about their employer.
The employee experience is influenced by a variety of factors the environment in which the employee works and the tools and technology. The employer provides the employee.
And the employees' commitment to the health safety and success of inventory.
For a number of studies would show the company that value of the employee experience just as they as much of the value of the customer experience are more successful and more sustainable for the long term longer term.
Why is that because of on employees feel that the organization and investing in them and their happiness.
They're more productive retention increases and theyre more invested and the success of the organization as a whole and for the organization can actually deliver more successful results.
Today in order to deliver exceptional employee experiences organizations have to think well beyond the physical office environment today of the office is everywhere. It's hybrid it's dynamic and the technology is chosen by the organization have to be able to meet these needs in order to truly deliver an exceptional experience.
The return to office experience has to be impeccable.
And spend some time, explaining the importance of the return to office because parents here. Because this is our primary go to market focus right now and where we are seeing the most growth the.
The good news is that not only do we have the ability to deliver the technologies that can do this.
We can do it better than the other guys.
So now let's talk about those technologies, we've been building and are acquiring over the last couple of years debt that deliver this premier experience, we're seeking to deliver.
So it starts with location intelligence and <unk>.
Many of you have heard me say this for but today there is probably no need to explain the value of GPS is the location technology for the outdoors GPS services and technologies of dramatically changed the world as we know it with many examples of ways in which it helps our everyday lives.
Many of those same benefits can be leveraged indoors with indoor positioning technologies and.
Fiction and began its indoor intelligence offering with its radiofrequency sensors and positioning technologies.
Our device detection sensors have been leveraged by government agencies and corporations to enhance security measures and bridge the gap between physical and digital security.
Understanding where mobile devices are present within the facility allows organizations to make key decisions around security and risk mitigation and public safety. We have continued to enhance our positioning technologies with the manager on and taken to 10 degrees transactions last year.
This includes improvements made to our Tls solutions with both share and ultra wideband capabilities.
<unk> decreased latency and increased location accuracy of down two centimeters expanded our system scalability and offers of mature set of developer tools.
We've added ranging which of the measurement of distance between two tags and that's all without any additional infrastructure like sensors of our anchors.
And we've added on device positioning we tend degrees. So we can do the location calculation.
<unk> on your phone and many of our competitors require sensors to be installed on the ceiling and that the location engine and be running on a computer server or and the cloud, whereas we're able to deliver the blue dot to the app by calculating the location right on the phone using its gyroscope kilometer and other sensors.
Our non device position Teck is integrated into our marketing platform and is ideal for turn by turn navigation with low or no infrastructure requirements were now looking on integrating us with of our CX App product.
Underlying most of our deliverables are maps, so let's talk a moment about the importance of mapping.
We quickly recognize the critical role that indoor mapping technologies play for the user and providing and intuitive view to indoor data, that's what works and the outdoors, so why not indoors.
I don't know about you, but I use Google maps for the outdoors as the convenient context of view all kinds of data phone numbers business hours ratings and photos to name a few.
And that's what we're bringing to the indoor maps.
That's why we thought what I believe to be one of the best Enterprise class mapping platforms. When we acquired <unk> and 2019, we take of business is CAD files of their facility and then flat onto and interactive map digital twins of all of the facilities key places and things like entrances and exits valid pathways conference rooms restroom.
<unk> elevators Cup series et cetera.
And then we add indoor positioning for turn by turn navigation and we create integrations using <unk> for third party products. So customers can view room temperature air quality of sensor readings and more and it's all of their right on the map.
These integrations also enable automation triggering actions and other workflow system.
Automation can drive cost down employer and employee satisfaction scores up.
This information rich map is now actionable and can be made available to employees and visitors via smartphone app like the CX, app or even a kiosk and or website.
And now we're taking infection knobs to the next level with <unk> mapping computer vision technology, and <unk> that we've acquired from visual X.
Imagine the street view on Google maps, now coming and doors and then the overlay of virtual artifacts on to the live map displaying points of interest for our key information such as a room name or amenities photos of reviews or having the Avatar guide you turn by turn while providing relevant timely information three year journey.
We're picture of factory setting and wearing.
Glasses embedded with our augmented reality SDK to walk you through the next steps on the assembly of them.
Lots of applications and opportunities using the technology.
And as you may have heard or seen on the news.
And it's been gaining serious attention from both the research and industry communities and.
In fact, the research from markets and markets projects, the mobile air market to grow at a compounded annual growth rate of 31, 1% from $7 6 billion and 2020 to $29 $5 billion by 2025.
They also reported the increase interest of large technology companies and mobile apps as one of the driving factors of the growth of the mobile market and in fact, we are starting to see them, both existing and potential infection customers have already expressed their desire to look at these technologies from us.
The opportunities for AI and computer vision are nearly limitless, including everything from enhanced navigation and asset tracking and smart office applications.
The customer service marketing and gamification.
We feel our timing and excellent because Ah is moving rapidly into the mainstream you may have seen announcements by Apple and Samsung. The AAR features are now being built into the lineup of phones users will expect AI functionality, and we'll be able to offer and our maps and the pads.
And this brings us to the final piece of the puzzle.
And the mobile App. The App is the means by which the user can fully experience the benefits that indoor location technologies can bring.
Our mapping and otp or on device positioning technologies require and App in order to allow organizations to deliver a full solution to the user and we've been and search for the right App platform for some time.
Mobile apps are the only solution capable of two way communication from device. The device that is also available on the go.
And with the CX App, we are now directly connected to the user with the ability to deliver and employee experience from one app platform, which as you heard me talk about earlier.
Central to meeting the demands of today's hybrid workloads.
The CX App enables corporate enterprises to provide a custom branded location of where mobile first experience. The connects employees for the workplace, whether they are working on site or remotely.
Within that one app employees can reserve desks per day at the office order food and have the delivered or pick it up checking for the daily meeting search and reserve white for display monitors of projectors required for in person meetings for communicate with colleagues about of collaborative project browse and corporate news and announcements.
Spain and company events campaigns and plan their day on site in advance and be immediately navigated to available desks conference rooms parking spots and other hotspots across the workplace and even engage with potential clients and partners.
The capabilities of the CX app of impressive and we have way more features and functionality built in and.
Our competitors do.
But just as important as these features are the partner integrations and what those mean for the user experience.
As I mentioned earlier, we have over 75 prebuilt partner integrations with third party solutions, such as active Directory G suite zoom.
Zoom, our Caddo and slack.
Slack et cetera. These integrations allow us to provide our customers and users with access to the tools. They engage with every day and a single platform, making them easier and more accessible and of frictionless workplace ecosystem.
Prebuilt integrations and make our deployments faster and easier and of great and are of great differentiator in the market.
By the way of CX on leverage.
Leverages the strong ecosystem of partners with companies such as Aruba, one per workplace service now and Cisco among others all of which share of the division churn of the vision to deliver an exceptional experience. We believe partners are critical to our growth plans and look forward to adding these partners to our existing ecosystem of partners.
I want to switch gears, a little bit and talk about another piece of the CX App and we havent touched on yet and that's on the hybrid event market.
They will take us into the hybrid of events market, which is exploding and before I explain the CX App solutions there, let's take a look at what's going on and whether that's prior to the pandemic almost all events were in person.
And enjoying the pandemic all of them went virtual over zoom or teams or other streaming platforms.
Where the market is going now as hybrid events. There are multiple reasons for this as you can imagine some people just have apprehension about intending and and person event due to safety concerns and so they will opt to do it online certain jurisdictions may impose occupancy limits, forcing organizers to limit the number of in person and attendees.
So they'll have to bring the rest of the attendees on and line.
And third.
Cost, it's a lot cheaper to have folks attend online and traveling and person. So many companies will look to reduce their budgets on the types of events are having some people attend virtually so youll see simultaneously.
Having summit attendees and be there in person and while others are remote that's of hybrid event, you might even have a scenario where and attendees starts and person and then decides to attend the rest of remote or vice versa.
Need to seamlessly transition between modes and have the support from multiple device types.
Let's take a look at what the headlines are set and Forbes put out of quote saying the future of events as hybrid while switching up your entire event model is never an easy decision the cost of waiting is much greater.
Venturebeat said virtual events came of age and 2020, but the future is hybrid.
And and Martech today road events of the future will be hybrid and always on and personal and will return, but the virtual genie can't be put back on the bottle.
The views of industry pundits and the discussions we're already having with our customers and pipeline make us quite bullish on our prospects to capture and meaningful share of the trillion dollar of dense market.
To execute of hybrid event organizers need and event platform optimized for hybrid events and omni device experiences and that's exactly what we have brought into the infection family of products with the <unk> acquisition.
This capability is one of the reasons, we pursued them because we see of big long term market opportunity here and the other two as reflected by some of the huge valuations for the company's lately like visibility and Hoffman.
The CX App actually started as and events and meeting platform corporate event organizers have been using it to host their customer conferences employee events and executive briefings for many years, it's a very mature product and and integrates with the <unk> registration systems like <unk> and others. It helps the use of understand travel logistics and nearby accommodation.
And let some customized the agenda.
Monitor recessions and speaker bias and of course offers knobs with navigation to key destinations like conference rooms, and breakout rooms and of private venue or a large convention center.
And over the last year, the CX App is optimized to support virtual events as well to meet the demand for and exploding market segment.
Live or recorded events video stream can be piped into the <unk> platform and viewed on a desktop tablet for the mobile app, maybe making it very convenient convenient and accessible for all types of users.
And when the attendees are unable to attend in person and they can still get the event experience by visiting virtual boots, and viewing <unk> trade show force product demos or even virtual offices.
Perhaps most importantly, the mobile app creates and attendee engagement experience that can be fulfilled anywhere through live streaming and social feeds polls surveys and electronic content on.
Our maps and our on device positioning products are integrating on the CX app already today, and we look forward to integrate the individual links.
And for augmented reality into this to create and even more powerful experience for our customers.
And do you want to touch on a few other benefits of the <unk> acquisition.
The <unk> product line increases our average selling price of our A&P potentially tenex with customers that were just previously buying infection maps for on device positioning and it also increases our annual recurring revenue on our customers do pay some upfront fees and deployment, but after that it's all <unk>.
We also get increased stickiness and higher customer retention rates because of the strong value proposition based on its features and functionality and of course, the 75 plus partner integrations.
Combined with an infection. We also offer customers of lower total cost of ownership since the get to work with the single partner.
And in terms of the growth momentum I can tell you we have approximately 25, plus new customer deployments and process now, including many fortune 500 type companies and I expect that growth to continue so much. So that we have reallocated our teams that conviction to support the overwhelming demand as companies look to reopen their offices.
If I think about infection as expected organic growth and add to that the phenomenal growth CX App is experiencing which also had the ability and pull through additional sales of our existing maps and otp products immediately followed by future up sell and opportunities for our.
Employee of asset tags, and our analytics and our products I just don't see how we can't be the 800 pound gorilla in the space and in the near future.
So for those of you folks out there shorting our stock take the surge of warning we're here to win.
Speaking of winning and before I pass it to Wendy to cover the Q1 financial results.
I'd like to address the recent note receivable settlement agreement with the size of Rx in April <unk> announced the closing of a reverse triangular merger with TTM digital assets and technologies of data center owned and operator owner and operator, primarily engaged in the business of mining of cerium and additional crypto currencies as a result of the transaction side.
<unk> adopted ttm's business and operations, while also continuing to operate the existing business through its wholly owned subsidiary size of Rx Government Services, Inc.
In connection with this transaction, we settled and note receivable plus certain other amounts payable to infection by size of Rx relating to the spinoff of size of Rx in 2018, and an aggregate amount of approximately $9 $1 million with approximately 13 million shares of its common stock and rights and acquire another three.
3 million shares of its common stock.
Prior to this transaction, we have recorded a full valuation allowance against the note due to the uncertainty of repayment.
Because it is a second quarter event the impact of this transaction on our balance sheet is not currently reflected in our financial statements and we are working with our accounting advisers to assess how the transaction and shares will ultimately be valued and recorded.
However, based on yesterday's closing price the.
Shares, including the shares underlying the rights agreement are valued at approximately $100 million.
That's just about equal to our current market cap.
And as I'm sure you know several mainstream companies have started transacting and crypto currencies, we're investing and cryptic.
Companies and benefiting highly from it has mentioned and our press release. We currently have no plans to enter the crypto mining business, but we do intend to capitalize on what we believe is an attractive opportunity at the right time to maximize value for our shareholders.
They're already mentioned the results of the transaction and the valuation of attributed to the shares will be reflected and our financial statements and Q2, but from my perspective. This is an amazing outcome for our shareholders that I don't believe the market is quite yet realized.
Given that we own approximately.
16 million shares or just under 10% of the company that has value close to $1 billion today.
So and a bit I'll answer some of the questions submitted to our Investor relations firm, but first I'd like to turn it over to Wendy our CFO to discuss discuss our first quarter of 2021 financial results.
Thank you and on there.
Revenue for the three months ended March 31, 2021 were $3 million compared the one $8 million for the comparable period and the prior year for an increase of approximately $1 million or 64 per cent.
This increase is primarily attributed to the sales related to this is that and our pls product line.
Gross profit for the three months ended March 31, 2020, one with $2 $1 million compared to one $3 million for the comparable period and the prior year for an increase of 60 per cent.
Gross profit margin for the three months ended March 31, 'twenty one with.
It was <unk> 70 per cent compared to 72 per cent for the three months ended March 31, and 2020 the.
This decrease in margin is primarily due to lower gross profit margin from the <unk> product line.
Net loss attributable to stockholders of infection credit. The three months ended March 31, 'twenty, one with $12 $6 million.
They're just $6 million for the comparable period and the prior year.
This increase and lot of aircraft of approximately $6 $4 million was primarily attributable to the increased operating expenses, which include $2.2 million from this is that licensing agreement and manage the on acquisition and approximately $4 $7 million of stock based compensation expense, which was offset by higher gross profit.
During the first quarter of 2021.
Non-GAAP adjusted EBITDA for the three months ended March 31, 2021, and with a loss of $5 $6 million compared to a loss of $3 $9 million for the prior year period.
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 non cash items, including stock based compensation.
Pro forma non-GAAP net loss per basic and diluted common share for the three months ended March 31, 21 was the loss of eight cents.
Per share compared to the loss of 92 cents per share for the prior year period.
Non-GAAP net loss per share is defined as net income or loss per basic and diluted share adjusted for non cash items, including stock based compensation amortization of intangibles and one time charges and other adjustments, including lots of the exchange of debt for equity provision for valuation allowance on.
Notes and acquisition costs.
As of March 31, 2020, one we had an aggregate of $96 3 million.
And cash on hand, and short term investments, which primarily include the treasury the treasury net.
This concludes my comments and now I'd like to turn the call back over to Jack.
Alright, Thanks Wendy.
David would you please lead us through the Q&A discussion.
Yes, Thanks, Nadir and like last quarter and our earnings announcement press release, we suggest and interested parties submit questions in advance and we'd like to address those questions for you know some of them where to put it as we do our best to reconcile those where possible. If you of any further questions. After the call. Please feel free to follow up with Investor Relations and will be.
And we'll be sure to respond as quickly as possible.
First question is infection recently acquired visual of X for indoor augmented reality around the same time, the Google maps launch their indoor augmented reality tool live you can you provide color on the similarities and differences between these two offerings.
Sure. So <unk> is really hot right now Google like Apple Samsung and many other have major plays and the ER space and.
We believe this will help drive user demand Google's lie view is similar to ours and that digital artifacts such as errors of day labels can be presented on the user of screen overlaying. The live camera view, the googles live views primarily for public spaces and picture.
On the other hand is primarily for corporate indoor spaces, and while Google is likely going to offer of standardized version served from their platform and pension can offer unique experiences for our customers by deeply integrating with customers other devices and systems imagine going to Google and asking them to change their app for you that's just not their business model.
We are quite different in that respect for you.
We don't really look at the major players as competitors per se them on.
All of this activity is stimulating marketing demand and our technology supports both the core from Google as well as the AAR kept from Apple for customers that requested.
You also asked about our plans and we haven't announced anything specific yet, but I'll share this much.
And are already working to integrate <unk> into our mapping platform. This will enable unique capabilities such as navigation.
And then helpful of digital artifacts to guide the way sharing of that and navigation experience with others and.
And presenting digital overlays of information onto the physical World for instance of warehouse worker can point their tablet and a box and for your list of the box its contents.
We will also be exploring the on.
And exploring offering the ability to create a map of the space using nothing but the phone's camera with our computer vision technology.
Computer vision of the type of artificial intelligence and has numerous potential applications for our customers and of course, we are now exploring integration opportunities with the CX and product line. So there are a number of leading edge technologies that came in to infection with the visual X transaction and we're looking forward to sharing more information about them and the future.
And I would just add the one of the most notable differences north.
And is that its fully customizable organizations can create their own three of the representation of their building campus of events space and apply branded content.
It's on allowing employees and visitors who interact with the premises.
Great. Thank you.
Our next question is can you provide additional color on the size of the X transaction. For example was the size of Rex note receivable previously written down to zero and infections balance sheet, what's the approximate value of the size of our shareholding today and will that value gain to be recorded as income in Q2, what is the companys plan to monetize this holding.
Alright, so there's a lot there I think I've covered most of that on the call.
But just to kind of summarize it we did set all of the note receivable plus certain other amounts payable to infection by size of Rx relating to that spin off and 2018.
<unk> totaled approximately $9 million.
We received approximately $12 9 million shares of common stock and the rights to acquire 3 million additional shares of its common stock prior to this transaction, we did record a full valuation allowance against that note due to the uncertainty of repayment.
Because of its a second quarter event. This transaction happened in April the impact of the transaction on our balance sheet is not reflected and our current financial statements and we're working with our accounting and advisors.
To assess how the transaction and shares will ultimately valued and recorded however, based on the closing price of the size of Rx of shares on May 12 the.
The shares have a market value of approximately of 105 million today.
Regarding our plans to monetize we've not made any decisions at this time in terms of monetizing the note and the board is considering all of its options. So I'll leave it on that.
Great. Thank you. Our next question over the past year of the company has completed several acquisitions, which nicely fills out the overall product suite do you now foresee additional acquisitions or will the main focus beat and outlined the various product teams to now go and dominate and your market.
[laughter] yeah. It looks right now our primary focus is aggressively penetrating the market with our solutions and driving organic growth. We have a lot of momentum with the <unk> product and want to invest and support for the six App and go after the the hybrid events market that I talked about it pretty aggressively so we'll be looking to do that.
And as well as grow.
Our existing product lines organically.
I mean of course, however, we will always be open to exploring strategic transactions opportunistically.
And that we believe will create long term shareholder value. So.
But the primary focus is going to be on the organic growth.
Thank you. Our next question CX App appears to be a growing company and represents the largest acquisition of infection has done and why did see except for years to align with infection instead of pursuing and alternate path like private equity or of spec.
Yeah, I mean, that's a fair question and it's a good question. They certainly did have some other options. They are of fast growing company and Thats exactly why they chose to move forward with infection and instead of some of the other options they have.
I'll paraphrase really on top of the founder and CEO of SPX out here a bit but you know what he said to me during our negotiations is that he sees that infection can help them immediately scale of this business to meet the overwhelming demand that they are experiencing.
Yeah, we bring the capital to the table like the other parties to do as well, but we already have the people and processes organizational structure and the partners to put to work immediately and he saw value and not.
And the other options, such as private equity or Pcs or even its back the capital returns and the resources may have been available, but all of these other things I mentioned would take time to find.
Recruiting takes a long time and you've got to build all of these engine on and.
And you don't always get it right the first time so.
We had at all and place to help them execute right away and also remember we have been working with the <unk> team on several.
The customer engagements using our maps or now are on device positioning products. So our teams know each other work well together and we understand each other's products and the market.
So I think it just made a lot more sense for them to partner with somebody like us.
Great. Thank you. Our next question can you provide color on the growth outlook of CX App and the ability to meet the revenue performance achievements as laid out and the transaction.
Yeah, and I touched on this earlier, but.
As I said on the call.
The tremendous growth CX app is experiencing.
<unk> is pretty incredible and I've mentioned that the bookings and revenue or about doubling over the last 12 month period, ending March 31, and we see that trend continuing.
This is the right product at the right time as companies around the world looks to get back into the office. This demand is what drove their need to find the strategic and financial partner like us.
And we're confident that we can accelerate the growth with the additional resources, we have and we've turned on some of those levers of already from lead Gen to customer delivery to support the growth that they're experiencing we also plan to invest and the hybrid events business as I mentioned, so that's a huge fast growing market as the <unk>.
Pundits are all pointing out and so were created that that's going to create additional revenue opportunities for infection. So both of the solutions from CX App, whether it's the campus app or the events piece.
Leverage infections other products significantly and.
And help us really improve the intelligence experience, we're trying to deliver to our customers.
I should also just mentioned that and you probably saw the press release. This week that <unk> was just awarded the best Smart building solution for return to work.
And the connected real estate Tech Awards program and they stated on a combined solution with CX App delivers and exceptional technology solution and contributing to the improvement of the return to work transition.
That's the range and focus right now and you know across the globe and definitely here and the U S and.
And and we've got the right products to help companies be really successful and deliver that that wonderful experience the best employee experience.
Thank you. Our next question can you comment on your customer activity and revenue potential and out of the businesses are reopening following COVID-19 and people are going back to the office is there no more need for tracking and tracing and the office or the company now need these solutions more than ever as they prepare a new hybrid office environment.
This model.
Yes, it's definitely the latter companies need CX App maps, ODP ODP solutions now more than ever which started with contact tracing and social distancing has transitioned to managing employees and this new hybrid workforce model and.
And the event business is also a growth opportunity and as we've.
We've said repeatedly and so some of our hardware solutions may take more time as they require on site installations and and need people Doc and the office first before those can be deployed whereas the other solutions like our CX app of the maps and and on device positioning are needed now before the employees come back into the office.
And I mentioned this on the call earlier, but I feel really confident about our revenue growth potential I believe the time is now and I believe we have the technology to deliver what the markets want and need and a way that others can't.
Alright, well, thank you and out of that concludes the Q&A. So I'll turn it back over to you for the close.
Okay. Thanks, Dave Alright.
Alright, so before we close I just want to reiterate how important and the last few months and weeks have been for US we continue to differentiate ourselves from other players with the ability to deliver full stock indoor intelligence technologies with the.
Believe that our competitors can't true, we deliver the unique experience customers desire without being in control of all of the critical technology components, including the App.
Maps <unk> on device positioning real time location services and all of the API Thats, the case and developer tools as well as our analytics, we've been pursuing this path over the last two years and we've achieved the milestones we've set out to accomplish.
And of all the pieces in place as I just mentioned so when you think the time is now I'm confident about our prospects and based on the opportunities. We are pursuing I believe we are on a significant growth trajectory.
With that I'd like to thank all of our shareholders customers partners and our fantastic employees across the globe for your continued support also want to give a warm welcome to our new employees from visual <unk> and the <unk> app to the infection team I couldn't be more excited about what we're going to accomplish together. Thank you everyone stay safe and take care.
Okay.
Thank you ladies and gentlemen, this does conclude todays event you may disconnect. Your lines at this time and have a wonderful day. Thank you for your participation.
Okay.