Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | May 23, 2022 | Jun. 30, 2021 | |
Document Information Line Items | |||
Entity Registrant Name | SYSOREX, INC. | ||
Document Type | 10-K/A | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 494,443,611 | ||
Entity Public Float | $ 567,989,027 | ||
Amendment Flag | true | ||
Amendment Description | Sysorex, Inc. (“the Company”) filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, with the U.S. Securities and Exchange Commission (“SEC”) on April 14, 2022 (the “Original Form 10-K”). This Amendment No. 1 on Form 10-K (this “Amendment” or “Form 10-K/A”) is being filed to restate the Company’s previously issued consolidated financial statements and financial information as of and for the fiscal year ended December 31, 2021, as well as to provide restated interim financial information as of September 30, 2021 and for the three and nine months then ended (collectively, the “Affected Periods”), contained in the Original Form 10-K and the Company’s Form 10-Q for the quarterly period ended September 30, 2021 (the “Form 10-Q”). | ||
Entity Central Index Key | 0001737372 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-55924 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 68-0319458 | ||
Entity Address, Address Line One | 13880 Dulles Corner Lane | ||
Entity Address, Address Line Two | Suite 120 | ||
Entity Address, City or Town | Herndon | ||
Entity Address, State or Province | VA | ||
Entity Address, Postal Zip Code | 20171 | ||
City Area Code | (800) | ||
Local Phone Number | 680-7412 | ||
Title of 12(g) Security | Common Stock, $0.00001 par value per share | ||
Entity Interactive Data Current | Yes | ||
Auditor Name | Friedman LLP | ||
Auditor Location | New York, New York | ||
Auditor Firm ID | 711 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 659 | $ 67 |
Digital assets | 5,202 | 24 |
Accounts receivable, net | 3,023 | |
Prepaid expenses and other current assets | 1,402 | |
Assets held for sale | 6,071 | |
Current assets – discontinued operations | 17 | |
Total Current Assets | 16,357 | 108 |
Mining Equipment, net | 4,077 | |
Intangible assets, net | 2,553 | |
Goodwill | 1,634 | |
Operating lease right-of-use asset, net | 558 | |
Other assets | 103 | |
Noncurrent assets - discontinued operations | 1,916 | |
Total Assets | 25,282 | 2,024 |
Current Liabilities | ||
Accounts payable | 6,724 | |
Accrued liabilities | 2,382 | |
Short Term Debt | 19,439 | |
Conversion feature derivative liability | 8,355 | |
Operating lease obligation, current | 49 | |
Deferred Revenue | 932 | |
Current liabilities - discontinued operations | 199 | |
Total Current Liabilities | 37,881 | 199 |
Operating lease obligation - noncurrent | 509 | |
Total Liabilities | 38,390 | 199 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Common stock, par value $0.00001 per share, 499,560,659 shares authorized; 145,713,591 shares issued as of December 31, 2021, and 66,431,920 shares issued as of December 31, 2020, 145,638,212 shares outstanding as of December 31, 2021, and 66,431,920 shares outstanding as of December 31, 2020 | 1 | |
Treasury stock, at cost, 75,379 shares as of December 31, 2021, and 0 shares as of December 31, 2020 | ||
Subscription receivables | (100) | |
Additional paid-in-capital | 36,156 | 2,060 |
Accumulated Deficit | (49,265) | (135) |
Total Stockholders’ (Deficit) Equity | (13,108) | 1,825 |
Total Liabilities and Stockholders’ Equity | $ 25,282 | $ 2,024 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 499,560,659 | 499,560,659 |
Common stock, shares issued | 145,713,591 | 66,431,920 |
Common stock, shares outstanding | 145,638,212 | 66,431,920 |
Treasury stock, shares | 75,379 | 0 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | ||
Mining income | $ 4,394 | |
Product revenue | 6,516 | |
Services revenue | 1,756 | |
Total Revenues | 12,666 | |
Operating costs and expenses | ||
Mining cost | 457 | |
Product cost | 6,036 | |
Services cost | 868 | |
Sales and marketing | 954 | |
General and administrative | 9,672 | |
Management fee | 321 | 145 |
Depreciation | 2,510 | |
Impairment of fixed assets | 3,276 | |
Impairment of digital assets | 704 | |
Amortization of intangibles | 407 | |
Total Operating Costs and Expenses | 25,205 | 145 |
Loss from Continuing Operations | (12,539) | (145) |
Other Income (Expense) | ||
Merger charges | (22,004) | |
Restructuring fee | (2,000) | |
Interest expense | (3,841) | |
Loss contingency on debt default | (7,821) | |
Revaluation of conversion feature derivative liability | (6,278) | |
Gain on sale of digital assets | 106 | 44 |
Other income, net | 11 | |
Total Other Income (Expense) | (41,827) | 44 |
Loss from continuing operations before Income taxes | (54,366) | (101) |
Income tax benefit | ||
Loss from continuing operations | (54,366) | (101) |
Gain from discontinued operations, net of tax | 5,236 | 553 |
Net (Loss) Income | $ (49,130) | $ 452 |
Net Loss per share - basic and diluted - continuing operations (in Dollars per share) | $ (0.39) | $ (0.001) |
Net Income per share - basic and diluted - discontinued operations (in Dollars per share) | $ 0.04 | $ 0.007 |
Weighted Average Shares Outstanding - basic and diluted (in Shares) | 139,061,084 | 75,540,013 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-In Capital | Subscription Receivables | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 2,671 | $ (100) | $ (587) | $ 1,984 | ||
Balance (in Shares) at Dec. 31, 2019 | 55,776,240 | |||||
Issuance of members’ equity | 600 | 600 | ||||
Issuance of members’ equity (in Shares) | 10,655,680 | |||||
Distributions to shareholders | (1,211) | (1,211) | ||||
Net income (Loss) | 452 | 452 | ||||
Balance at Dec. 31, 2020 | 2,060 | (100) | (135) | 1,825 | ||
Balance (in Shares) at Dec. 31, 2020 | 66,431,920 | |||||
Payment of subscription receivable | 100 | 100 | ||||
Distributions to shareholders | (1,521) | (1,521) | ||||
Exercise of Moon warrants | ||||||
Exercise of Moon warrants (in Shares) | 14,607,980 | |||||
Mining equipment | 12,000 | $ 12,000 | ||||
Mining equipment (in Shares) | 35,588,548 | |||||
Sysorex Recapitalization | 19,401 | 19,401 | ||||
Sysorex Recapitalization (in Shares) | 25,985,633 | |||||
TTM digital/Sysorex merger | $ 1 | 280 | 281 | |||
TTM digital/Sysorex merger (in Shares) | 494,311 | 75,379 | ||||
Professional services | 2,577 | 2,577 | ||||
Professional services (in Shares) | 1,529,820 | |||||
Up North/Bitworks transaction | 400 | 400 | ||||
Up North/Bitworks transaction (in Shares) | 1,000,000 | |||||
Convertible debt warrants | 896 | 896 | ||||
Stock based compensation | 63 | 63 | ||||
Net income (Loss) | (49,130) | (49,130) | ||||
Balance at Dec. 31, 2021 | $ 1 | $ 36,156 | $ (49,265) | $ (13,108) | ||
Balance (in Shares) at Dec. 31, 2021 | 145,638,212 | 75,379 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net loss from continuing operations | $ (54,366) | $ (101) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 2,917 | |
Stock based compensation expense | 113 | |
Amortization of debt discount and debt issuance costs | 2,173 | |
Realized gain on sale of digital assets | (106) | (44) |
Gain on settlement of vendor liabilities | (145) | |
Impairment of data mining assets | 3,276 | |
Impairment of digital assets | 704 | |
Loss contingency on debt default | 7,821 | |
Change in fair value of debt conversion feature | 6,278 | |
Issuance of shares in exchange for services | 2,577 | |
Merger charges | 22,004 | |
Debt restructuring fee | 2,000 | |
Changes in assets and liabilities: | ||
Digital assets - mining net of pool fees and management fees | (18,153) | (966) |
Prepaid assets and other current assets | (173) | |
Accounts receivable and other receivables | 1,650 | 2 |
Accounts payable | 8,729 | |
Accrued liabilities and other current liabilities | 2,859 | |
Net cash used in operating activities- continuing operations | (9,842) | (1,109) |
Net cash provided by operating activities – discontinued operations | 1,369 | 595 |
Net cash used in operating activities | (8,473) | (514) |
Cash Flows from Investing Activities | ||
Proceeds from sale of digital assets | 3,670 | 555 |
Purchase of mining equipment | (50) | |
Reverse acquisition of Sysorex business | 28 | |
Up North business combination, net of cash received | (34) | |
Net cash provided by investing activities -continuing operations | 3,614 | 555 |
Net cash used in investing activities – discontinued operations | (1,436) | (582) |
Net cash provided by (used in) investing activities | 2,178 | (27) |
Cash Flows from Financing Activities | ||
Repayment of loans | (4,349) | |
Payments for convertible debt transaction costs | (1,279) | |
Issuance of Members Interest | 100 | 554 |
Proceeds received from issuance of convertible debt | 12,415 | |
Net cash provided by financing activities- continuing operations | 6,887 | 554 |
Net cash provided by financing activities – discontinued operations | 20 | |
Net cash provided by financing activities | 6,887 | 574 |
Net increase in cash and cash equivalents | 592 | 33 |
Cash and cash equivalents at beginning of period | 67 | 34 |
Cash and cash equivalents at end of period | 659 | 67 |
Cash paid for: | ||
Interest | 344 | |
Income taxes | ||
Supplemental disclosure of noncash investing and financing activities: | ||
Sysorex recapitalization | 19,401 | |
Debt discount attributed to the fair value of the warrants | 896 | |
Debt discount attributed to the fair value of the conversion option | 2,077 | |
Equipment exchanged for equity | 7,620 | |
Equipment acquired through lease purchase arrangement | 2,130 | |
Digital assets received for members interest | 46 | |
Distributions of digital assets to members | 1,521 | 1,211 |
Payments of short-term borrowing with digital assets | 1,091 | |
Right of use assets exchanged for lease obligation | $ 558 |
Nature and Description of Busin
Nature and Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Nature and description of Business | Note 1 — Nature and description of Business Description of Business Sysorex, Inc. is a technology company focused on Ethereum mining and the Ethereum blockchain and information technology solutions primarily in the public sector segments including federal, state and local governments. The Company has two wholly owned subsidiaries: TTM Digital Assets & Technologies, Inc. (“TTM Digital”) and Sysorex Government Services, Inc. (“SGS”). Following the Company’s Merger with TTM Digital in April 2021, the Company shifted its business focus to the mining of Ethereum and opportunities related to the Ethereum blockchain. In addition to the mining of Ethereum, the Company continues to operate its wholly owned subsidiary, SGS, a business that provides information technology products, solutions, and services to federal, state, and local government, including system integrators. SGS provides these services to enable its customers to manage, protect, and monetize their enterprise assets whether on-premises, in the cloud, or via mobile technology. The Company is headquartered in Virginia. TTM Digital was originally formed as a Delaware limited liability company on June 28, 2017, under the name of TTM Ventures LLC. Thereafter, on March 30, 2021, it filed a certificate of conversion to a non-Delaware entity with the Secretary of State of the State of Delaware together with Articles of Conversion and Articles of Incorporation with the Nevada Secretary of State filed on the same date. As a result, of such conversion, TTM Digital has become a Nevada corporation under the name of “TTM Digital Assets & Technologies, Inc |
Restatement of Consolidated Fin
Restatement of Consolidated Financial Statements | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Restatement of Consolidated Financial Statements | Note 1A — Restatement of Previously Issued Financial Statements Background Subsequent to the filing of the Original Form 10-K, on May 17, 2022, the Company’s management determined that its prior conclusion that the “conversion feature” of the Company’s 12.5% senior secured convertible debentures (the “Debentures”) qualified for equity classification and, therefore, qualified for the application of the guidance in the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Update (ASU) 2020-06 was incorrect. Management has determined that the conversion feature was a liability classified derivative under the FASB’s Accounting Standards Codification (ASC) 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity from the inception requiring recognition at fair value for each reporting period. The Company’s management and in agreement with the audit committee have determined that the previously issued financial statements for the year ended December 31, 2021, and the unaudited interim financial information for the three and nine month period ended September 30, 2021 “the Affected period should no longer be relied upon due to this error and require restatement. The correction of this error is included in the accompanying Consolidated Financial Statements in this Amended 10-K, the financial effect of this error from previously reported information for the year ended December 31, 2021, has resulted in an increase in net loss of $8.4 million, primarily as a result of a $6.3 million in fair value expense on the derivative conversion liability, interest expense increase of $0.9 million and an increase in the loss contingency on debt default of $1.2 million. The amendment also includes restated unaudited financial information as of September 30, 2021, and for the three and nine months ended. See Note 20. Restatement Adjustment The table below presents the impact of the restatement adjustments on the Company’s previously reported consolidated balance sheet as of December 31, 2021 (in thousands): December 31, 2021 As Adjustments As Restated Conversion Feature derivative liability $ - $ 8,355 $ 8,355 Total current liabilities 29,526 8,355 37,881 Accumulated deficit (40,910 ) (8,355 ) (49,265 ) Total stockholders’ deficit (4,753 ) (8,355 ) (13,108 ) The table below presents the impact of the restatement adjustments on the Company’s previously reported consolidated statements of operations for the year ended December 31, 2021 (in thousands): Year ended December 31, 2021 As Adjustments As Restated Other Income (Expense) Loss contingency on debt default $ (6,594 ) $ (1,227 ) $ (7,821 ) Revaluation of conversion feature derivative liability - (6,278 ) (6,278 ) Interest Expense (2,991 ) (850 ) (3,841 ) Net Loss – continuing operations (46,011 ) (8,355 ) (54,366 ) Net Loss per share - basic and diluted - continuing operations $ (0.33 ) (0.06 ) (0.39 ) Weighted Average Shares Outstanding - basic and diluted 139,061,084 - 139,061,084 The table below presents the impact of the restatement adjustments on the Company’s previously reported consolidated statement of cash flows for the year ended December 31, 2021 (in thousands): Year ended December 31, 2021 As Adjustments As Restated Net loss from continuing operations $ (46,011 ) $ (8,355 ) $ (54,366 ) Changes in adjustment to reconcile net loss to net cash used in operating activities Loss contingency on debt default 6,594 1,227 7,821 Change in fair value of derivative liability - 6,278 6,278 Amortization of debt discount and debt issuance costs 1,323 850 2,173 Net cash used in operating activities $ (8,473 ) - (8,473 ) |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2021 | |
Going Concern [Abstract] | |
Going Concern | Note 2 — Going Concern As of December 31, 2021, the Company had an approximate cash balance of $0.6 million, working capital deficit of approximately $(22.0) million, and an accumulated deficit of approximately $49.3 million. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the date of issuance of these financial statements. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern within one year after the date the consolidated financial statements are issued. The Company does not believe that its capital resources as of December 31, 2021, its ability to mine cryptocurrency, its expected sale of certain mining assets and data center, availability on the SGS SouthStar credit facility to finance purchase orders and invoices, reauthorization of key vendors and credit limitation improvements will be sufficient to fund planned operations. As a result, the Company will need additional funds to support its obligations for the next twelve months. The Company continues to explore a number of other possible solutions to its financing needs, including additional efforts to raise additional capital as needed, through the issuance of equity, equity-linked or debt securities, as well as possible transactions with other companies, strategic partnerships, and other mechanisms for addressing our financial condition. As such, on March 24, 2022, Company executed an agreement with a third party which includes certain binding and non-binding provisions. Pursuant to the agreement, the Company and the third party agreed to certain terms related to the Company’s sale of approximately 75% of its Ethereum mining assets and certain associated real property which is expected to close on May 24, 2022. The transaction is a sale of assets in exchange for stock. There can be no assurance that the Company will consummate the sale. If the Company is unable to raise additional capital on terms acceptable to the Company and on a timely basis, the Company will be required to downsize or wind down its operations through liquidation, bankruptcy, or sale of its assets. |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 3 — Basis of Presentation TTM Digital Reverse Merger and Sysorex Recapitalization On April 8, 2021, the Company, TTM Digital, and TTM Acquisition Corp., a Nevada corporation, a wholly owned subsidiary of Sysorex (“MergerSub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). Under the terms of the Merger Agreement, the parties agreed that Sysorex would acquire TTM Digital by way of a reverse triangular merger, subject to certain closing conditions (the “Merger”). On April 14, 2021 (the “Effective Time”), the closing conditions delineated in the Merger Agreement were satisfied and the Merger closed. At the Effective Time, the MergerSub was merged with and into TTM Digital with TTM Digital surviving the Merger. Under the terms of the Merger Agreement, the shareholders of TTM Digital received a right to receive an aggregate of 124,218,268 shares of Sysorex common stock, $0.00001 par value per share (the “Merger Shares”) in exchange for their shares of TTM Digital. Simultaneously, upon the issuance of the Merger Shares to the TTM Digital shareholders, Sysorex was issued all of the authorized capital of TTM Digital and TTM Digital became a wholly owned subsidiary of Sysorex (together, the “Combined Company”). The Merger resulted in a change of control, with the shareholders of TTM Digital receiving that number of Merger Shares equal to approximately eighty percent (80%) of the outstanding shares of capital stock of Sysorex including the effect of the Sysorex Recapitalization as discussed in TTM Digital Reverse Merger and Sysorex Recapitalization. Due to the TTM Digital shareholders acquiring a controlling interest in Sysorex after the merger, the transaction was accounted for as a reverse acquisition for accounting purposes, with TTM Digital being the accounting acquirer and reporting entity. Therefore, the historical amounts presented prior to the Merger are those of TTM Digital. The Merger is accounted for under the acquisition method of accounting applied to Sysorex as the accounting acquiree under the guidance of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 805 Business Combinations (“ASC 805”). In accordance with acquisition method guidance under ASC 805, the purchase consideration was $0.3 million. As discussed in Note 5 Segment Reporting after the completion of the Merger the Company reports two segments (“TTM Digital” and “Sysorex Government Services”) which are also defined as reporting units for impairment assessment purposes. See Note 5- Segment Reporting and Note 6, Discontinued Operations for additional information. In the purchase price allocation of the fair value of assets acquired and liabilities assumed, the Company has recognized an excess of net liabilities assumed over the determined fair value of the Sysorex Government Services Reporting Unit. The excess of the purchase price over the net liabilities assumed was allocated to goodwill in the amount of $1.6 million based upon the underlying value of the Sysorex Government Services Reporting Unit with any additional excess determined to be a separate transaction from the business combination attributable to acquisition-related costs for the benefit of the TTM Digital shareholders in achieving liquidity for their shares as publicly traded instruments. These costs were determined to not have future economic benefits or synergies to the Combined Company operations and were expensed as of the Effective Time under the caption “Merger Charges” in the accompanying consolidated statement of operations. Subsequent to the Merger Agreement the majority of the Sysorex debt, certain liabilities classified as current and a forward consulting contract with a former member Sysorex board of director’s (the “Debt Items”) aggregating $19.4 million were converted to 34,097,255 Sysorex shares when fully issued (the “Sysorex Recapitalization”). 25,985,633 shares were immediately issued, a prefunded warrant was issued for 5,111,622 shares and the right to receive 3,000,000 shares of Sysorex stock at a future date at the option of the holder subject to certain events. As a result of the Debt Items not having original contractual conversion features the holders of the Debt Items are not classified as owners of Sysorex in the Merger and the Sysorex Recapitalization is accounted for as a separate transaction occurring immediately following the Merger under the guidance of ASC 805. Under the Exchange Agreement executed with each debt holder, the Debt Items were converted at a contractual conversion rate of $0.569 per share (the “Conversion Price”). As a part of the Sysorex Recapitalization, the Company recognized $2.0 million in debt restructuring fees expense and consulting contract costs of $0.7 million in the consolidated statement of operations for the period ended December 31, 2021, respectively. The following table presents the fair value of the identified assets acquired and liabilities assumed at the Merger date, the effect of the Sysorex Recapitalization on the assets acquired and liabilities assumed, and the net assets acquired, and liabilities assumed for the aggregate of the reverse acquisition and Merger Charges and Sysorex Recapitalization separate transactions: Reverse Sysorex Aggregate Acquisition Recapitalization Fair (In thousands of dollars) Fair Value Fair Value Value Cash $ 28 $ - $ 28 Accounts receivable 4,673 - 4,673 Prepaid assets and other current assets 2,551 (1,289 ) 1,262 Property and equipment 7 - 7 Goodwill 1,634 - 1,634 Customer Relationships Intangible 1,900 - 1,900 Tradename Intangible 1,060 - 1,060 Other assets 29 - 29 Accounts payable (10,437 ) 519 (9,918 ) Accrued liabilities (2,722 ) 1,589 (1,133 ) Deferred revenue (590 ) - (590 ) Short term debt (7,136 ) 3,871 (3,265 ) Long term debt (12,711 ) 12,711 - Other liabilities (9 ) - (9 ) Fair value allocated to net assets / (liabilities) $ (21,723 ) $ 17,401 $ (4,322 ) Fair value of consideration and recapitalization equity $ 281 $ 19,401 $ 19,682 Merger charges (22,004 ) - (22,004 ) Debt restructuring fees - (2,000 ) (2,000 ) Net Sysorex equity and charges to income (loss) $ (21,723 ) $ 17,401 $ (4,322 ) For the year ended December 31, 2021, the Company incurred approximately $3.1 million of acquisition related costs that are included in general and administrative expenses in the accompanying consolidated statement of operations. From the acquisition date to December 31, 2021, revenues, and operating loss for the accounting acquiree Sysorex were approximately $ 8.3 million and $ (3.2) million (excluding the acquisition related costs, merger charges and debt restructuring fees described above), respectively. Pro Forma Financial Information The following proforma results of operations are presented for information purposes. The proforma results of operations are not intended to present actual results that would have been attained had the reverse merger and Sysorex Recapitalization been completed as of January 1, 2020, or to project potential operating results as of any future date or for any future periods. The revenue and net loss of the reverse merger accounting acquiree for the year ended December 31, 2021, included in the consolidated statement of operations amounted to approximately $8.3 million and $(27.4) million, respectively: December 31, 2021 2020 Total Revenues $ 26,519 $ 13,394 Net Loss (b) (24,160 ) (1,993 ) Net Loss per share - basic and diluted (0.174 ) (0.026 ) Weighted Average Shares Outstanding - basic and diluted 139,061,084 75,540,013 Supplemental Pro forma Information (a) Merger charges 22,004 - Restructuring fee 2,000 - Transaction costs - Accounting acquirer and acquiree 3,093 - Total Nonrecurring Pro forma Adjustments 27,097 - (a) Supplemental Pro forma Information consists of material, nonrecurring pro forma adjustments directly attributable to the reverse acquisition and Sysorex Recapitalization (b) Net Loss does not include supplemental pro forma information included in (a) above. Discontinued Operations As discussed in Note 6 – Discontinued Operation, in the fall of December 2021, the Company made the decision to divest certain mining equipment and the data center of the TTM Digital reporting unit (“TTM Assets”) and commenced discussions with a third party to execute an asset sale. As a result of the decision to divest certain operating assets of the TTM Digital reporting unit, the Company has determined that the subject assets met the definition of assets held for sale as defined by ASC 205-20 – Presentation of Financial Statements – Discontinued Operations. The Company determined the TTM Assets represented discontinued operations as it constituted a disposal of a significant component and a strategic shift that will have a material effect on the Company’s operations and financial results. As a result, the Company reclassified the balances and activities of the TTM Assets from their historical presentation to assets held for sale and assets and liabilities – discontinued operations on the consolidated balance sheets and to gain (loss) from discontinued operations on the consolidated statements of operations for the periods presented. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 4 — Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements have been prepared using the accounting records of Sysorex, TTM Digital and SGS. All inter-company balances and transactions have been eliminated in consolidation. Up until November 2, 2021, the Company’s wholly owned subsidiary, TTM Digital had a 50% interest in Up North Hosting, LLC (“UNH”) which was accounted for as an equity method investment. On November 2, 2021, the Company acquired the remaining 50% interest in UNH making it a wholly owned subsidiary of the Company. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during each of the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates consist of: ● Revenue recognition ● Fair value of digital assets for mining revenue ● Expected useful lives and impairment of mining equipment ● Fair value of derivative liabilities ● Business combinations and reverse merger accounting Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity from the date of purchase of years or less to be cash equivalents. Concentrations of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of cash. The Company’s cash is deposited with commercial banks in the United States but exceeds federally insured limits from time to time. The recorded carrying amount of cash and cash equivalents approximates their fair value. The Company uses a digital asset exchange to custody and liquidate its digital assets. If demand for digital assets decline the Exchange could be negatively impacted. The Company’s digital assets are not insured under the third-party custody provider or exchanges. Mining Equipment Mining Equipment is stated at cost. Depreciation is computed using the straight-line method regardless of the category of asset. The Company has determined that the useful life of graphics processing units (“GPUs”) is 3-years and remaining mining equipment (primarily chassis, power supply units, computer memory, motherboards, risers, and fans) is depreciated over the estimated useful life of 5-years. Expenditures for repairs and maintenance are charged to expense as incurred. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected in the statement of operations. The rate at which the Company generates digital assets and, therefore, consumes the economic benefits of its transaction verification servers are influenced by several factors including the following: - the complexity of the transaction verification process which is driven by the algorithms contained within the Ethereum open-source software; - the general availability of appropriate computer processing capacity on a global basis (commonly referred to in the industry as hashing capacity which is measured in Terahash units); and - technological obsolescence reflecting rapid development in the transaction verification server industry such that more recently developed hardware is more economically efficient to run in terms of digital assets generated as a function of operating costs, primarily power costs. i.e., the speed of hardware evolution in the industry is such that later hardware models generally have faster processing capacity combined with lower operating costs and on average a lower cost of purchase. The Company operates in an emerging industry for which limited data is available to make estimates of the useful economic lives of specialized equipment. Management will review this estimate quarterly and will revise such estimates as and when data comes available. To the extent that any of the assumptions underlying management’s estimate of useful life of its mining equipment are subject to revision in a future reporting period either because of changes in circumstances or through the availability of greater quantities of data then the estimated useful life could change and have a prospective impact on depreciation expense and the carrying amounts of these assets. Impairment of Long-lived Assets The Company reviews its long-lived assets, including mining equipment, for impairment whenever events or changes in circumstances indicate the carrying value of an asset or group of assets may not be recoverable. The carrying amount is considered not recoverable if the sum of the undiscounted cash flows to be generated from the use and eventual disposition of the asset group is less than the carrying amount of the asset group. If the carrying amount exceeds the undiscounted cash flows, then the carrying amount is compared to the fair value and an impairment loss is recorded for the difference between the fair value and the carrying amount. An impairment loss of $3.3 million was recorded for long-lived assets during the period ended December 31, 2021. No impairment charges were identified for long-lived assets during the period ended December 31, 2020. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: ● Identification of the contract, or contracts, with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, the Company satisfies a performance obligation. Mining Revenue TTM Digital has entered into a mining pool with the operator to provide computing power to the mining pool. The Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less transaction fees to the mining pool operator) for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of such computing power is the only performance obligation in the Company’s arrangement with mining pool operators The transaction consideration the Company receives, if any, is non-cash consideration. The transaction price of the Company’s share of the cryptocurrency award is measured at fair value on the date received, which is not materially different than the fair value at the time the Company has earned the award from the mining pool. The consideration is all variable under the definition within ASC 606. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the Company successfully places a block and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the digital asset award received is determined using the quoted price of the related digital asset at the time of receipt. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for digital assets recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could impact the Company’s consolidated financial position and results from operations. Hardware and Software Revenue Recognition SGS is a primary resale channel for a large group of vendors and suppliers, including original equipment manufacturers (“OEMs”), software publishers and wholesale distributors. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance and collectability of consideration is probable. The Company evaluates the following indicators amongst others when determining whether it is acting as a principal in the transaction and recording revenue on a gross basis: (i) the Company is primarily responsible for fulfilling the promise to provide the specified product or service, (ii) the Company has inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer and (iii) the Company has discretion in establishing the price for the specified good or service. If the terms of a transaction do not indicate the Company is acting as a principal in the transaction, then the Company is acting as an agent in the transaction and the associated revenues are recognized on a net basis. The Company recognizes revenue once control has passed to the customer. The following indicators are evaluated in determining when control has passed to the customer: (i) the Company has a right to payment for the product or service, (ii) the customer has legal title to the product, (iii) the Company has transferred physical possession of the product to the customer, (iv) the customer has the significant risk and rewards of ownership of the product and (v) the customer has accepted the product. The Company’s products can be delivered to customers in a variety of ways, including (i) as physical product shipped from the Company’s warehouse, (ii) via drop-shipment by the vendor or supplier or (iii) via electronic delivery of keys for software licenses. The Company’s shipping terms typically specify F.O.B. destination. The Company leverages drop-shipment arrangements with many of its vendors and suppliers to deliver products to its customers without having to physically hold the inventory at its warehouse. The Company is the principal in the transaction and recognizes revenue for drop-shipment arrangements on a gross basis. The Company may provide integration of products from multiple vendors as a solution it sells to the customer. In this arrangement, the Company provides direct warranty to the customer with the Company’s own personnel as the customer requires warranty on the solution and not individual vendor products. This type of warranty is sold integral to the overall solution quoted to the customer. The Company considers these service-type warranties to be performance obligations of the principal from the underlying products that make up a solution and therefore is acting as a principal in the transaction and records revenue on a gross basis over time. License and Maintenance Services Revenue Recognition SGS provides a customized design and configuration solution for its customers and in this capacity resells hardware, software and other IT equipment license and maintenance services in exchange for fixed fees. The Company selects the vendors and sells the products and services, including maintenance services, that best fit the customer’s needs. For sales of maintenance services and warranties, the customer obtains control at the point in time that the services to be provided by a third-party vendor are purchased by the customer and therefore the Company’s performance obligation to provide the overall systems solution is satisfied at that time. The Company’s customers generally pay within 30 to 60 days from the receipt of a customer-approved invoice. For resale of services, including maintenance services, warranties, and extended warranties, the Company is acting as an agent as the primary activity for those services are fulfilled by a third party. While the Company may facilitate and act as a first responder for these services, the third-party service providers perform the primary maintenance and warranty services for the customer. Therefore, the Company is not primarily responsible for performing these services and revenue is recorded on a net basis. SGS’s professional services include fixed fee contracts. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. For fixed fee contracts, the Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous service. Anticipated losses are recognized as soon as they become known. For the years ended December 31, 2021, SGS did not incur any such losses. These amounts are based on known and estimated factors. Revenues from time and material or firm fixed price long-term and short-term contracts are derived principally with various United States government agencies. Contract Balances The timing of revenue recognition may differ from the timing of payment by customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. The Company had deferred revenue of $0.9 million as of December 31, 2021. Accounts Receivable, net Account receivables are stated at the amount the Company expects to collect. The Company recognizes an allowance for doubtful accounts to ensure accounts receivables are not overstated due to un-collectability. Bad debt reserves are maintained for various customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligation, such as in the case of bankruptcy filings, or deterioration in the customer’s operating results or financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. The Company’s allowance for doubtful accounts was $0.05 million as of December 31, 2021. Equity Method Investments Equity method investments are equity securities in entities the Company does not control but over which it can exercise significant influence. These investments are accounted for under the equity method of accounting in accordance with ASC 323, Investments- Equity Method and Joint Ventures Investments The Company accounts for its investments that represent less than 20% ownership, and for which the Company does not have the ability to exercise significant influence, using the FASB’s Accounting Standards Update (“ASU”) 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities Digital Assets Digital assets (predominantly Ethereum) are included in current assets in the accompanying consolidated balance sheets. The classification of digital assets as a current asset has been made after the Company’s consideration of the consistent daily trading volume on cryptocurrency exchange markets, there are no limitations or restrictions on Company’s ability to sell Ethereum, and the pattern of actual sales of Ethereum by the Company. Digital assets purchased are recorded at cost and cryptocurrencies awarded to the Company through its mining activities are accounted for in connection with the Company’s revenue recognition policy disclosed above. Digital assets held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the digital asset at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. The Company recorded a $0.7 million impairment charge during the year ended December 31, 2021. No impairment was taken during the year ended December 31, 2020. Digital assets awarded to the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows. The sales of digital assets are included within investing activities in the accompanying consolidated statements of cash flows. The Company accounts for its gains or losses in accordance with the first in first out (FIFO) method of accounting. The Company recognized realized gains (losses) through the sale and disbursement of digital assets during the year ended December 31, 2021, and 2020 of $0.1 million and $0.04 million, respectively. Business Combinations The Company applies the provisions of ASC Topic 805, Business Combinations While the company uses its best estimates and assumptions to accurately apply preliminary values to assets acquired and liabilities assumed at the acquisition date, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. As of December 31, 2021, no adjustments have been made to the purchase price accounting under the Company’s transactions accounted for under ASC 805. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets. Although the Company believes the assumptions and estimates that have been made are reasonable and appropriate, they are based in part on historical experience and information obtained from the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets the Company has acquired include future expected cash flows, and discount rates. Goodwill and Other Intangible Assets The Company accounts for intangible assets under ASC 350-30, Intangibles-Goodwill and Other Intangible assets with finite lives are comprised of customer contracts, and trademarks that are amortized on a straight-line basis over their expected useful lives. The carrying value of finite-lived assets and the remaining useful lives are reviewed at least annually to determine if circumstances exist which may indicate a potential impairment or revision to the amortization period. Fair Value The Company follows the accounting guidance under FASB’s Accounting Standards Codification 820, Fair Value Measurements for its fair value measurements of financial assets and liabilities measured at fair value on a recurring basis. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and Level 3 — assets and liabilities whose significant value drivers are unobservable. Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment. Certain nonfinancial assets such as property and equipment, land and intangible assets are subject to nonrecurring fair value measurements if they are deemed to be impaired. The impairment models used for nonfinancial assets depend on the type of asset. For the year ended December 31, 2021, the Company recorded impairment charges related to assets measured on a non-recurring basis of $3.3 million for graphics processing units and $0.7 million for digital assets. The Company utilized a market approach as of December 31, 2021, to determine fair value. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, accrued liabilities, and accounts payable, approximate fair value due to the short-term nature of these instruments. Held for Sale and Discontinued Operations Classification The Company classifies a business as held for sale in the period in which management commits to a plan to sell the business, the business is available for immediate sale in its present condition, an active program to complete the plan to sell the business is initiated, the sale of the business within one year is probable and the business is being marketed at a reasonable price in relation to its fair value. Newly acquired businesses that meet the held-for-sale classification criteria upon acquisition are reported as discontinued operations. Upon a business’ classification as held for sale, net assets are measured for impairment. Goodwill impairment is measured in accordance with the method described in the accounting policy. An impairment loss is recorded for long-lived assets held for sale when the carrying amount of the asset exceeds its fair value less cost to sell. Other assets and liabilities are generally measured for impairment by comparing their carrying values to their respective fair values. A long-lived asset shall not be depreciated or amortized while it is classified as held for sale. Stock Based Compensation The Company accounts for its stock-based compensation awards to employees and directors in accordance with FASB ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based compensation to employees, including grants of employee stock options, and restricted stock, to be recognized in the consolidated statements of operations based on their grant date fair values. The fair value of stock options is estimated as of the date of grant using the Monte Carlo Simulation option pricing model. The fair value of restricted stock is calculated as the fair value of the Company’s common stock as of the date of grant. The expense is recognized on a straight-line basis over the requisite service period. Income Taxes The Company accounts for income taxes under the asset and liability method, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is required to the extent any deferred tax assets may not be realizable. ASC 740-10, Accounting for Uncertainty in Income Taxes, defines uncertainty in income taxes and the evaluation of a tax position as a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely than-not threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The Company had no uncertain tax positions as of December 31, 2021, and 2020. Convertible Debt The Company’s debt instruments contain a host liability, freestanding warrants, and an embedded conversion feature. The Company uses the guidance under FASB ASC Topic 815 Derivatives and Hedging (“ASC 815”) to determine if the embedded conversion feature must be bifurcated and separately accounted for as a derivative under ASC 815. It also determines whether any embedded conversion features requiring bifurcation and/or freestanding warrants qualify for any scope exceptions contained within ASC 815. Generally, contracts issued or held by a reporting entity that are both (i) indexed to its own stock, and (ii) classified in shareholders equity, would not be considered a derivative for the purposes of applying ASC 815. Any embedded conversion features and/or freestanding warrants that do not meet the scope exception noted above are classified as derivative liabilities, initially measured at fair value, and remeasured at fair value each reporting period with change in fair value recognized in the consolidated statements of operations. Any embedded conversion features and/or freestanding warrants that meet the scope exception under ASC 815 are initially recorded at their relative fair value in paid-in-capital and are not remeasured at fair value in future periods. The host debt instrument is initially recorded at its relative fair value in long-term debt. The host debt instrument is accounted for in accordance with guidance applicable to non-convertible debt under FASB ASC Topic 470 Debt (“ASC 470”) and is accreted to its face value over the term of the debt with accretion expense and periodic interest expense recorded in the consolidated statements of operations. Issuance costs are allocated to each instrument in the same proportion as the proceeds that are allocated to each instrument. Issuance costs allocated to the debt hosted instrument are netted against the proceeds allocated to the debt host. Issuance costs allocated to freestanding warrants classified in equity are recorded in paid-in-capital. Leases The right of use asset (“ROU”) on the Company’s consolidated balance sheet represents a lessee’s right to use an asset over the life of a lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term, plus any lease payments made to the lessor before the lease commencement date, plus any initial direct costs incurred, minus any lease incentives received. The amortization period for the right of use asset is from the lease commencement date to the earlier of the end of the lease term or the end of the useful life of the asset. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has elected to exclude all short-term leases (i.e., leases with a term of 12 months or less) from recognition on the balance sheet. The Company’s lease liabilities are determined by calculating the present value of all future lease payments using the rate implicit in the lease if it can be readily determined, or the lessee’s incremental borrowing rate. The Company uses its incremental borrowing rate at the inception of the lease to determine the present value of future lease payments as the rate implicit in its leases could not be readily determined. Net Loss per Share Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus potentially dilutive common shares. Convertible debt, restricted stock, stock options and warrants are excluded from the diluted net loss per share calculation when their impact is antidilutive. The Company reported a net loss for the year ended December 31, 2021, and as a result, all potentially dilutive common shares are considered antidilutive for this period. The Company includes potentially issuable shares in the Weighted-average common shares – basic that include warrants and other agreements that are exercisable for little or no consideration without substantive contingencies and others once any contingencies relative to the issuance of the shares is resolved. Computations of basic and diluted weighted average common shares outstanding were as follows for the periods reported: December 31, 2021 2020 Weighted-average common shares outstanding 128,603,982 60,365,892 Weighted-average potential common shares considered outstanding 10,457,102 15,174,121 Weighted-average common shares outstanding – basic 139,061,084 75,540,013 Dilutive effect of options, warrants and restricted stock - - Weighted-average common shares outstanding – diluted 139,061,084 75,540,013 Options, restricted stock, and warrants and convertible debt excluded from the computation of diluted loss per share because the effect of inclusion would be anti-dilutive 6,603,716 Recent Accounting Standards In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Any new accounting standards, not disclosed above, that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. Emerging Growth Company Sysorex is an “emerging growth comp |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 5 — Segment Reporting Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (CODM) for purposes of allocating resources and evaluating financial performance. The Company’s CODM is the chief financial officer who reviews financial information presented at the subsidiary level for purposes of allocating resources and evaluating financial performance. As such, the Company’s operations constitute two (2) operating segments and two (2) reportable segments. The following table reflects the results of continuing operations of the company’s segments consistent with the management and measurement system utilized within the company. Performance measurement is primarily based on revenue and gross profit. These results are used, in part, by the chief operating decision maker, both in evaluating the performance of, and in allocating resources to, each of the segments. The CODM does not evaluate performance or allocate resources based on segment asset data, and therefore such information is not included. The following table provides a summary of the revenues, and cost of revenues from continuing operations for our subsidiary segments for the year ended December 31, 2021 (in thousands): TTM Sysorex Consolidated Revenues Products Revenue $ - $ 6,516 $ 6,516 Services Revenue - 1,756 1,756 Mining Income 4,394 - 4,394 Total Revenues $ 4,394 $ 8,272 $ 12,666 Costs of Revenues Product Cost of Revenue $ - $ 6,036 $ 6,036 Services Cost of Revenue - 868 868 Mining Cost of Revenue 457 - 457 Other Operating Expenses 13,276 4,568 17,844 Operating Income (Loss) $ (9,339 ) $ (3,200 ) $ (12,539 ) Total Segment Assets $ 10,271 $ 8,940 $ 19,211 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 6 — Discontinued Operations In December 2021, the Company made the decision to divest certain mining equipment, graphic processing units and data center and its assets of TTM Digital reporting unit (“TTM Assets”) and commenced discussions with a third party to execute an asset sale. On March 24, 2022, the Company executed Heads of Terms agreement with a third party which includes certain binding and non-binding provisions. Pursuant to the Heads of Terms, the Company and the third party agreed to certain terms related to the Company’s sale of approximately 75% of its Ethereum mining assets and certain associated real property. The TTM Assets to be sold are those assets located in the facility in New York. The Company will continue to operate certain graphics processing units or associated assets at a co-located facility in North Carolina. See Note 18 – Subsequent Events for further discussion on the terms of the asset sale. As a result of the decision to divest certain operating assets of the TTM Digital reporting unit, the Company has determined that subject assets met the definition of assets held for sale as defined by ASC 205-20 – Presentation of Financial Statements – Discontinued Operations. The Company determined the TTM Assets represented discontinued operations as it constituted a disposal of a significant component and a strategic shift that will have a material effect on the Company’s operations and financial results. As a result, the Company reclassified the balances and activities of the TTM Assets from their historical presentation to assets held for sale and assets and liabilities – discontinued operations on the consolidated balance sheets and to loss from discontinued operations on the consolidated statements of operations for the periods presented. The carrying value of the TTM Digital asset disposal group was $6.07 million as of December 31, 2021. No adjustments were recorded to the carrying value of the assets held for sale as the estimated fair value less selling costs exceeded the carrying value. The following table details the assets and liabilities of the Company’s TTM Assets that were classified as assets held for sale and discontinued operations for the periods presented (in thousands): 2021 2020 Current Assets Related Party receivables $ - $ 17 Mining equipment and facilities, net 5,571 - Investment in Style Hunter 500 - Total Current Assets $ 6,071 $ 17 Noncurrent Assets Mining equipment and facilities, net - 1,272 Investment in Up North Hosting, LLC - 644 Total Noncurrent Assets - 1,916 Total Assets associated with discontinued operations $ 6,071 $ 1,933 Liabilities associated with discontinued operations Accounts payable $ - $ 7 Accrued liabilities - 117 Related party loan - 75 Total Current Liabilities - 199 Total Liabilities associated with discontinued operations $ - $ 199 The following table presents the TTM Digital assets statement of operations line items classified as discontinued operations included within loss from discontinued operations for the years ended December 31, 2021, and 2020 (in thousands): 2021 2020 Revenues Mining income $ 8,150 $ 1,868 Other revenue 29 - Total Revenues 8,179 1,868 Operating costs and expenses Mining cost 815 433 General and administrative 291 4 Depreciation 1,637 827 Total Operating Costs and Expenses 2,743 1,264 Gain from Discontinued Operations 5,436 604 Other Income (Expenses) Gain (loss) on sale of fixed assets (146 ) 17 Fair value loss on previously held equity interest (18 ) - Other income (expenses), net 58 (29 ) Total Other Income (106 ) 12 Income before net loss of equity method investee 5,330 592 Share of net loss of equity method investee (94 ) (39 ) Net income from discontinued operations $ 5,236 $ 553 The following table summarizes the net cash flows from discontinued operations of TTM Digital for years ended December 31,2021 and 2020 (in thousands): For the Year Ended 2021 2020 Net cash provided by operating activities – discontinued operations 1,369 595 Net cash used in investing activities – discontinued operations (1,436 ) (582 ) Net cash provided by financing activities – discontinued operations - 20 |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Note 7 Equity Method Investments As discussed in Note 8 - Up North Business Combination / Bitworks Asset Acquisition, the acquisition by TTM Digital occurred on November 2, 2021; the schedule values below are up through November 1, 2021, immediately prior to the acquisition. The Up North Hosting balance sheet is presented as of November 1, 2021, and December 31, 2020 (in thousands of dollars): November 1, December 31, 2021 2020 Current assets $ 260 $ 121 Non-current assets 1,183 1,247 Total assets $ 1,443 $ 1,368 Current liabilities 144 197 Total liabilities 144 197 Members’ equity 1,377 1,177 Retained Earnings (Deficit) (78 ) (6 ) Total Members’ Equity 1,299 1,171 Total Liabilities and Members’ Equity $ 1,443 $ 1,368 Fixed assets, net, which are owned by Up North Hosting, were comprised of the following (in thousands of dollars): November 1, December 31, 2021 2020 Building $ 513 $ 513 Electrical Infrastructure Assets 525 525 Machinery & Equipment Assets 34 30 Mechanical (HVAC) Assets 271 271 Server and Network Assets 50 50 Gross value 1,393 1,389 Accumulated depreciation (244 ) (177 ) Property, plant, and equipment, net $ 1,149 $ 1,212 The Up North Hosting statement of operations for the period ending November 1, 2021, and December 31, 2020 (in thousands of dollars): 2021 2020 Revenues $ 930 $ 898 Cost of revenues, excluding depreciation 776 725 Selling, general, and administrative 286 351 Other (Income)/Expense (60 ) (5 ) Net loss (72 ) (173 ) Net loss attributable to TTM $ (36 ) $ (87 ) The Company’s main cost of revenues relates to the hosting and electricity expenses used to power the datacenter and the hosted equipment. |
Up North Business Combination _
Up North Business Combination / Bitworks Asset Acquisition | 12 Months Ended |
Dec. 31, 2021 | |
Up North Business Combination / Bitworks Asset Acquisition [Abstract] | |
Up North Business Combination / Bitworks Asset Acquisition | Note 8 — Up North Business Combination / Bitworks Asset Acquisition On November 2, 2021, the Company through a wholly owned subsidiary of TTM Digital executed a Membership Interest Purchase Agreement (“Up North Agreement”) with BWP Holdings, LLC (“BWP”) whereby the Company acquired the remaining 50.0% membership interest (“Transferred Membership Interest”) in Up North Hosting LLC (“Up North”) that it did not already own to bring its ownership in Up North to 100.0% (“UNH Acquisition”). In addition to the Transferred membership Interest the Company acquired certain data mining equipment BWP (“Bitworks Equipment” and collectively the “Acquisition”) that was resident in the Up North data center facility. The BWP transaction was accounted for as an asset acquisition. Total transaction consideration paid for the acquired interests of Up North and the Bitworks Equipment were $1.0 million and the issuance of 1.0 million shares of restricted common stock, $0.00001 par value of the Company. The total transaction consideration paid for the Acquisition was valued at $1.4 million. The transaction consideration was allocated to the UNH Acquisition and the Bitworks Equipment in the amounts of $705,900 and $694,100, respectively. The UNH Acquisition was accounted for as a business combination using the acquisition method in accordance with Accounting Standards Codification 805, Business Combinations. In accounting for the UNH Acquisition the purchase consideration consisted of the fair value of the Up North membership interest previously owned by the Company and accounted for as an equity method investment of $631,500 and the transaction consideration allocated of $705,900 and reduced by the effective settlement of intercompany transactions of $104,285 for net purchase consideration of $1,233,115. The previous membership interest in Up North had a carrying value of $649,462 resulting in the recognition of a loss on the conversion of the equity method investment of $17,962. The following table summarizes the amounts of identified assets acquired and liabilities assumed relating to the Acquisition: (In thousands of dollars) UNH Acquisition Fair Value Bitworks Equipment Fair Value Aggregate Fair Value Cash $ 87 $ - $ 87 Accounts receivable 67 - 67 Prepaid assets and other current assets 1 - 1 Property and equipment 1,098 694 1,792 Property tax abatement intangible 90 - 90 Other assets 34 - 34 Accounts payable (90 ) - (90 ) Accrued liabilities (54 ) - (54 ) Fair value allocated to net assets / (liabilities) $ 1,233 $ 694 $ 1,927 Fair value of transaction consideration $ 706 $ 694 $ 1,400 Fair value of equity method investment exchanged 631 - 631 Effective settlement of intercompany transactions (104 ) - (104 ) Fair value of purchase consideration $ 1,233 $ 694 $ 1,927 Up North’s primary asset consists of a data center facility located in New York used for the hosting of cryptocurrency data mining operations. The value of the data center facility building, and improvements installed for the data center operations are approximately $1.1 million. The data center facility is located in an industrial redevelopment area which has a property tax abatement and pays certain fees in lieu of property taxes under an agreement with the Industrial Development Agency. Proforma financial information was not required as the acquisition was deemed not to have a material impact. |
Mining Equipment, Net
Mining Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Mining Equipment, net | Note 9 — Mining Equipment, net Mining equipment, net, was comprised of the following (in thousands of dollars): Balance as of December 31, December 31, 2021 2020 Gross Mining Equipment: Mining Equipment (non-GPUs) $ 493 $ - GPUs 6,033 - Accumulated Depreciation Mining Equipment (non-GPUs) (123 ) - GPUs (2,326 ) - Mining Equipment, net $ 4,077 $ - An Ethereum mining server consists of multiple commodity Graphics Processing Units (GPUs) and ancillary components such as chassis, CPU, motherboard, and power supply. The GPUs are solely responsible for the compute power to generate the cryptographic hashes for mining, while the other components act to support the system. Depreciation expense was approximately $2.5 million during the year ended December 31, 2021. The Company (TTM Digital) purchased approximately 4,500 GPUs with specialized Cryptocurrency Mining Processors through execution of an Asset Contribution and Exchange Agreement and a Purchase Order for a lease to buy financing arrangement which total $2.2 million over 180 days subject to acceleration based on the completion of certain corporate events. The lease to buy financing arrangement was fully paid as of December 31, 2021. The Company issued 35,588,548 shares of common stock at the merger. The assets and equity were exchanged in April 2021 prior to the reverse merger with Sysorex, Inc. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 10 — Intangible Assets Intangible assets as of December 31, 2021, consist of the following: Gross Net Carrying Accumulated Carrying Amount Amortization Amount Trade name $ 1,060 $ (74 ) $ 986 Customer Relationships 1,900 (333 ) 1,567 Total intangible assets $ 2,960 $ (407 ) $ 2,553 Calendar Years ending December 31, Amount 2022 573 2023 573 2024 573 2025 266 2026 105 Thereafter 463 Total $ 2,553 |
Credit Risk and Concentrations
Credit Risk and Concentrations | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Credit Risk and Concentrations | Note 11 — Credit Risk and Concentrations Financial instruments that subject the Company to credit risk consist principally of trade accounts receivable and cash. The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk. The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for uncollectible accounts and, consequently, believes that its accounts receivable credit risk exposure beyond such allowances is limited. The Company maintains cash deposits with financial institutions, which, from time to time, may exceed federally insured limits. The Company has not experienced any losses and believes it is not exposed to any significant credit risk from cash. The following table sets forth the percentages of sales derived by SGS from those customers that accounted for at least 10% of sales during the period April 15, 2021, through December 31, 2021 (in thousands of dollars): For the Period April 15, 2021, through December 31, 2021 $ % Customer A 4,826 44 % Customer B 2,946 27 % As of December 31, 2021, Customer A represented approximately 72% of total accounts receivable. One other customer represented approximately 11% of total accounts receivable. For the period April 15, 2021, through December 31, 2021, three vendors represented approximately 36%, 25%, and 25% of total purchases. Purchases from these vendors during the year ended December 31, 2021, were $3.8 million, $2.6 million, and, $2.6 million respectively. Mining equipment purchased from one TTM Digital vendor during the year ended December 31, 2021, was $14.2 million. Of the $14.2 million, in consideration exchanged $12 million was paid in Common Stock of the Company and the balance of $2.2 million was settled through payment of $1.1 million in digital assets and $1.1 million in cash. Geographic and Technology Concentration The Company had geographic concentration risk with mining operations being exclusively carried out within New York in the first Quarter of 2021 and throughout 2020, while the Company has added geographic diversity during April 2021 using a colocation datacenter in North Carolina. Any legislation that restricts or bans the mining of proof-of-work related digital asset mining in New York State would have a negative impact on the Company’s ability to operate and generate revenues. Further, the Company had concentrated exposure to the Ethereum blockchain infrastructure through its mining operations during the periods presented. There is a possibility of digital asset mining algorithms transitioning to proof-of-stake validation and other mining related risks, which could make us less competitive and ultimately adversely affect our business and our ability to generate revenues. When and if Ethereum switches to proof-of stake the Company’s GPUs will no longer be able to mine Ethereum. Additionally, on August 5, 2021, the London Hard Fork protocol went into effect which includes changes in Ethereum’s handling of transaction fees. These changes could have an impact on the Company’s future potential Ethereum revenue stream due to less Ethereum being distributed per mined block, if not offset by an increase in the value of ETH and/or additional transaction tipping, the process by which a user can pay an additional amount to ensure a transaction is processed very quickly. The Company saw a financial impact during the year ended December 31, 2021. While the Company doubled mining capacity in the first half of the year, the difficulty to mine increased. This resulted in a steady decrease of average mining rewards, along with the market price of Ethereum, particularly during the second half of the year. The Company has a mining pool optimized for the mining of ETH on the Ethereum blockchain. There are several factors taken into consideration when the Company elected to continue with exclusively mining ETH. |
Short Term Debt
Short Term Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Short Term Debt | Note 12 — Short Term Debt Short term debt as of December 31, 2021, consisted of the following (in thousands): December 31, 2021 Convertible Debentures & Warrants, including interest payable to the Convertible Debenture Holders $ 19,439 2021 Convertible Debentures & Warrants On July 7, 2021, the Company consummated the initial closing of a private placement offering (the “Offering”) pursuant to the terms and conditions of a Securities Purchase Agreement for up to $15.2 million in principal amount (“Original Principal Value”) Convertible Debentures. To manage the administration of the Offering the Company entered into a placement agency agreement with Joseph Gunner & Co. LLC, a U.S. registered broker-dealer (“Placement Agent”). At the initial closing, the Company sold the purchasers (i) 12.5% Original Issue Discount Convertible Debentures (“Debentures”) in an aggregate principal amount of $9,990,000 and (ii) warrants to purchase up to 3.5 million shares of common stock of the Company. The Company received total gross proceeds of $8.9 million taking into account the 12.5% discount before deducting placement agent fees and expenses of approximately $0.9 million. The Debentures mature on July 7, 2022, subject to a three-month extension upon mutual agreement of the Company and the holder. On August 13, 2021, the company consummated the second closing of the offering pursuant to the same terms and conditions of the Securities Purchase Agreement dated July 7, 2021. At the second closing, the Company sold the purchasers (i) 12.5% Original Issue Discount Senior Secured Convertible Debentures in an aggregate principal amount of $3.4 million and (ii) warrants to purchase up to 1,862,279 shares of common stock of the Company. The Company received a total of $3.5 million in gross proceeds following the second closing taking into account the 12 % discount before deducting placement agent fees and expenses of approximately $0.3 million. The Debentures mature on August 13, 2022, subject to a three-month extension upon mutual agreement of the Company and the holder. In conjunction with the Convertible Debentures, the Company entered into a Warrant Purchase Agreement (the “Agreement”) providing investors the right to purchase common stock of Sysorex. The exercise price will be either 1) the Qualified Offering Price, in the event of a Qualified Offering or 2) in the event of no Qualified Offering, the lower of a) $18.00 and b) an amount equal to 80% of the average of VWAP (as defined therein) for the common stock. The term of the warrant is five years. The warrants issued in connection with the debt were equity classified at issuance and were allocated a value of approximately $896,000 on a relative fair value basis. The Company recorded the debt net of the 12.5% discount, of which totaled $1.5 million, the placement agent fees and expenses of $1.3 million and the debt discounts attributed to the fair value of the warrants and conversion option derivative liability of approximately $0.8 million and $2.1 million, respectively. The Company expensed the entire debt discount and issuance costs as a result of the debenture default, as disclosed below. Under the conversion terms of the Debentures, the Debenture is convertible, in whole or in part, into shares of Common Stock at the option of the Holder at any time until the Debenture is no longer outstanding. The Holder executes a conversion by delivering to the Company a Notice of Conversion specifying the principal amount to be converted and the date on which the conversion is to be executed. The Conversion Price is set at the lower of (i) $18.00 and (ii) 80% of the average of the VWAP during the 5 Trading Day period immediately prior to the applicable Conversion Date. The number of Conversion Shares to be issued is determined by dividing the outstanding principal amount of the debenture to be converted by the Conversion Price. The Debentures are subject to mandatory conversion (“Mandatory Conversion”) in the event the Company closes a registered public offering of its Common Stock and receives gross proceeds of not less than $40 million and at the completion of which the Company’s securities are traded on a national exchange (“Qualified Offering”). The Company determined that the conversion feature associated with the convertible debentures should be bifurcated and treated as a separate derivative liability. An initial fair value of $2.1 million was assigned to the conversion option, The conversion option is marked to market at the end of each reporting period. The Company recorded a revaluation loss of approximately $6.3 million for the year ended December 31, 2021, for the change in the fair value of the conversion option. As of December 31, 2021, the derivative liability associated with the conversion option was $8.4 million. Debenture Default The Debentures provide that any monetary judgment filed against the Company for more than $50,000, and if such judgment remains unvacated for a period of 45 calendar days shall constitute an event of default. On December 14, 2021, the Company became aware that a Confession of Judgment (the “Confession of Judgment”) had been entered against the Company in the Superior Court of the State of California, County of Santa Clara by Tech Data on September 24, 2021. The Confession of Judgement is entered for a total sum of $5,942,559.05, which is comprised of the principal sum of $3,341,801.80 and prejudgment interest in the sum of $2,600,757.25. As a result, the Confession of Judgment was deemed to be an event of default under the Debentures although the Company only became aware of the Confession of Judgment on December 14, 2021. On January 7, 2022, the Company received a notice of default (the “Default Notice”) from the Placement Agent stating that the Company defaulted under the Purchase Agreement as a result of: (i) the Company failing to disclose certain material indebtedness of the Company outstanding as of the date of the Purchase Agreement; and (ii) the filing of a judgment relating to such material indebtedness. Due to such events of default, (i) the Debentures are now deemed to have begun bearing interest at the default interest rate of 18% per annum from the date of the issuance of the Debentures; and (ii) the holders of the Debentures are entitled to receive in satisfaction of the amounts owing under the Debentures an amount equal to 130% of the Original Principal Value of the Debentures (“Default Principal Increase”), in accordance with the terms of the Debentures. In addition, as a result of the events of default, the exercise price for the Warrant is the lower of: (A) $18.00 and (B) an amount equal to fifty percent (50%) of the average of volume-weighted average price for the common stock of the Company over the five (5) trading days preceding the date of the delivery of the applicable exercise notice or (C) the qualified offering price as defined in the Purchase Agreement. The Company has not made a formal determination of an event of default. However, as a result of the Default Notice, the Company has recorded a loss of approximately $7.8 million on the Consolidated Statement of Operations on the line captioned Loss contingency on debt default (“Contingent Loss”). The Contingent Loss consists of the unamortized debt issuance costs and original interest discount of approximately $3.3 million and the Default Principal increase of approximately $4.2 million, and approximately $0.3 of debt and issuance costs incurred. The Company recognized approximately $1.5 million of interest expense for the year ended December 31, 2021. Included in Convertible debt is $1.2 million of interest payable on December 31, 2021, to the Convertible Debenture Holders. Non-Recourse Factoring and Security Agreement Effective as June 19, 2020, prior to the merger, the Company and SouthStar Financial, LLC (“SouthStar”) entered into a Non-Recourse Factoring and Security Agreement (the “Agreement”) pursuant to which SouthStar may purchase receivables from the Company (the “Purchased Receivables”) for a price not to exceed 85% of the face value of the Purchased Receivables or a lesser percentage agreed upon between the Company and SouthStar. In consideration of SouthStar’s purchase of the Purchased Receivables, the Company will pay to SouthStar an amount equal to 0.8% of the face amount of the Purchased Receivables for the first 10-day period after payment for the Purchased Receivables is transmitted to SouthStar plus 0.9% for each additional 10-day period or part thereof, calculated from the date of purchase until payments received by SouthStar in collected funds on the Purchased Receivables equals the purchase price of the Purchased Receivables plus all charges due SouthStar from the Company at the time. An additional 1.0% per 10-day period will be charged for invoices exceeding 60 days from invoice date. As of December 31, 2021, the Company did not have any of its receivables financed. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 13 — Fair Value Measurements Fair value measurements are determined based on assumptions that a market participant would use in pricing an asset or a liability. A three-tiered hierarchy distinguishes between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3).The following table presents the placement in the fair value hierarchy measured at fair value on a recurring basis as of December 31, 2021 and 2020: Fair value measurement at reporting date using Balance Quoted prices in Significant Significant As of December 31, 2021 (in thousands) Recurring fair value measurements Derivative liabilities: Conversion feature derivative liability $ 8,355 $ — $ - $ 8,355 Total derivative liabilities 8,355 — - 8,355 Total recurring fair value measurements $ 8,355 $ — $ - $ 8,355 As of December 31, 2020: (in thousands) Recurring fair value measurements Derivative liabilities: Conversion feature derivative liability $ - $ — $ - $ — Total derivative liabilities - — - — Total recurring fair value measurements $ - $ — $ - $ — The conversion feature of the convertible Debentures was separately accounted for at fair value as a derivative liability under guidance in ASC 815 that is remeasured at fair value on a recurring basis using Level 3 inputs. The Company uses a probability weighted expected return model (“PWERM”) valuation technique to measure the fair value of the conversion feature with any changes in the fair value of the conversion feature liability recorded in earnings. Significant inputs to the model include estimated time to conversion events, estimated interest converted at the event, the implied yield, the discount rate for the conversion, and the probability of the conversion events. For the year ended December 31, 2021, the Company recorded a loss of $6,278,000 for the Change in fair value of debt conversion feature. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 14 — Income taxes The income tax provision (benefit) for the years ended December 31, 2021, consists of the following (in thousands of dollars): Net loss before income tax is as follows (in thousands): Year ended December 31, 2021 Net loss before income tax $ (49,130 ) Income tax expense (benefit) consists of the following: Year ended U.S. Federal Current $ - Deferred (4,512 ) State and Local Current - Deferred (807 ) (5,319 ) Change in Valuation Allowance 5,319 Total income tax provision (benefit) $ - The reconciliation between the U.S. statutory federal income tax rate and the Company’s effective rate for the years ended December 31, 2021, is as follows: Year ended Pretax Income 21.0 % State taxes, net of federal benefit 2.2 % Merger charges -8.5 % Other permanent items -1.2 % Derivative valuation -2.7 % Change in valuation allowance -10.8 % Effective income tax rate 0.0 % As of December 31, 2021, the Company’s deferred tax assets consisted of the effects of temporary differences attributable to the following (in thousands of dollars): Year ended Year ended Deferred tax assets: Net operating loss carry forwards $ 3,501 $ - Fixed assets 1,126 - Accrued compensation 40 - Reserves 504 - Intangible assets 3,053 - Business interest limitation 727 - Lease Liabilities 142 - Tax Credits 211 - Derivative adjustment 1,937 - Other 181 - Total deferred tax assets before valuation allowance 11,422 - Valuation allowance (11,280 ) - Total deferred tax assets after valuation allowance 142 - Deferred tax liabilities: Operating lease right of use assets (142 ) - Total deferred tax liabilities (142 ) Net deferred tax assets and liabilities $ - $ - Prior to the merger (as discussed in Note 1), the Company was a Partnership for US Income Tax purposes and therefore had no provision for income tax as of December 31, 2020. Subsequent to the merger the entity became a taxable entity. As of December 31, 2021, the Company had approximately $15.2 million of U.S. federal net operating loss (“NOL”) carryovers available to offset future taxable income. As of December 31, 2021, the Company had approximately $6.1 million of state NOL carryovers available to offset future taxable income. The U.S. federal NOLs generated in 2021 do not expire and have an indefinite life. State NOLs begin to expire at various dates beginning in 2038. The future utilization of federal net operating loss carryforwards generated after 2017 is limited to 80% of taxable income. An additional limitation applies to the use of federal net operating loss and credit carryforwards, under Section 382 of the Internal Revenue Code of 1986, as amended, that is applicable if the Company experiences an “ownership change.” The Company completed a 382 study and determined that there was a change in ownership on April 14, 2021, which limits their NOL and Section 163(j) carryforwards. The resulting Section 382 limitations are not expected to materially impact the Company’s ability to utilize carryforwards as NOLs and 163(j) should be available for utilization before expiration assuming sufficient future taxable income. Future changes in the ownership of the Company could further limit the Company’s ability to utilize its NOLs and credits. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realization of deferred tax assets, management considers, whether it is “more likely than not”, that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. ASC 740, “Income Taxes” requires that a valuation allowance be established when it is “more likely than not” that all, or a portion of, deferred tax assets will not be realized. A review of all available positive and negative evidence needs to be considered, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. After consideration of all the information available, management believes that uncertainty exists with respect to future realization of its deferred tax assets and has, therefore, established a full valuation allowance as of December 31, 2021. As of December 31, 2021, the net change in valuation allowance was $11.3 million, including $6.0 million established in acquisition accounting. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company is required to file federal and state income tax returns. Based on the Company’s evaluation, it has been concluded that there are no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements for the year ended December 31, 2021. The Company’s policy for recording interest and penalties associated with unrecognized tax benefits is to record such interest and penalties as interest expense and as a component of general and administrative expense, respectively. There were no amounts accrued for interest or penalties for the year ended December 31, 2021. Management does not expect any material changes in its unrecognized tax benefits in the next year. The Company operates in multiple tax jurisdictions, and, in the normal course of business, its tax returns are subject to examination by various taxing authorities. Such examinations may result in future assessments by these taxing authorities. The Company is subject to examination by U.S. tax authorities beginning with the year ended December 31, 2018. Currently, the Company is not subject to any examinations. |
Digital Assets
Digital Assets | 12 Months Ended |
Dec. 31, 2021 | |
Digital Assets [Abstract] | |
Digital Assets | Note 15 — Digital Assets The following table presents the roll forward of digital asset activity from continuing and discontinued operations during the periods ended: December 31, 2021 2020 Opening Balance $ 24 $ 25 Revenue from mining 12,534 * 1,868 * Received for membership interest - 46 Payment of Mining equipment under lease to buy arrangement (1,091 ) - Mining pool operating fees (129 ) (4 ) Management fees (321 ) (189 ) Transaction fees (26 ) - Owners’ distributions (1,521 ) (1,211 ) Digital asset impairment (704 ) - Proceeds from sale of digital assets (3,670 ) (555 ) Realized gain on sale of digital assets 106 44 Ending Balance $ 5,202 $ 24 * Of the $12.5 million revenue from mining, $4.4 million in continuing operations and $8.1 million in discontinued operations. The $1.8 million in 2020 is included in discontinued operations. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Equity | Note 16 — Equity As discussed in Note 3 Basis of Presentation the Company completed a reverse merger of Sysorex and TTM Digital with TTM Digital being the accounting acquirer and reporting entity. In a reverse merger, the capital accounts of the reporting entity (TTM Digital) are restated to reflect the legal capital structure of the legal acquirer (Sysorex). As a result, the share data of the reporting entity has been retroactively restated for all periods presented to the equivalent share values of Sysorex for the capital transaction activity of TTM Digital, as if the reverse merger occurred on January 1, 2020. The share data of the reporting entity has been retroactively stated for all periods presented to the equivalent share values of Sysorex. The Company is authorized to issue 499,560,659 shares of common stock, $0.00001 par value, and 10,000,000 shares of preferred stock, $0.00001 par value. The holders of the Company’s common stock are entitled to one vote per share. As of December 31, 2021, 499,560,659 common stock shares were authorized; 145,713,591 shares were issued, and 145,638,212 shares were outstanding. No preferred stock has been designated or issued. As of December 31, 2020, the Company had 66,431,920 shares outstanding. During the quarter ended March 31, 2021, the Company issued to Moon Manager LLC, 14,607,980 shares and issued the rights to an additional 2,000,000 shares which were subsequently issued on March 24, 2022. Effective on April 1, 2021, TTM Digital entered into an Asset Contribution and Exchange Agreement (Mining Equipment) to acquire approximately 4,500 GPUs with CoreWeave. In connection with the Contribution and Exchange Agreement, TTM Digital issued equity representing 28.65% of the pre-merger equity outstanding for TTM Digital. In settlement of the Contribution and Exchange Agreement the Company issued 35,588,548 shares valued at $12 million. On April 14, 2021, the reverse merger of Sysorex and TTM Digital closed. As a result of the reverse merger, the Company recognized the 494,311 shares outstanding of the existing Sysorex Shareholders and the 75,379 shares of Treasury stock of Sysorex that are part of the legal capital structure. The Company recorded $0.03 million as purchase consideration on the recognition of the existing Sysorex Shareholders share by the reporting entity. As discussed in Note 3, the majority of the Sysorex debt, certain liabilities classified as current and a forward consulting contract with a former Sysorex Board Member (the “Debt Items”) aggregating $19.4 million were converted to 34,097,255 Sysorex shares when fully issued (the “Sysorex Recapitalization”). 25,985,633 shares were immediately issued, prefunded rights were exchanged from an investor’s issued shares for 5,111,622 shares which were subsequently issued on March 24, 2022, and the right to receive 3,000,000 shares of Sysorex stock at a future date at the option of the holder subject to certain events. During the year ended December 31, 2021, the Company issued an aggregate of 1,529,820 shares for corporate advisory expertise and consulting services for a total value of approximately $2,577,000. On November 2, 2021, the Company entered into a Membership Interest Purchase Agreement with BWP Holdings LLC to purchase the remaining 50% interest in Up North Hosting LLC and asset acquisition of certain mining equipment of BWP Holdings LLC. The aggregate purchase price for the membership interest is $1.0 million in cash and 1 million shares of restricted common stock, $0.00001 par value of the Company at a value of $0.4 million. The restricted common stock was issued to an executive of BWP Holdings LLC who was hired by the Company on October 1, 2021, as the Company’s Chief Technology Officer (“CTO”). The Company issued the CTO a one-time sign-on bonus of One Hundred Thousand shares of restricted common stock of the Company at a value of $0.04 million. Equity Incentive Plan On July 30, 2018, the board of directors of the Company’s 2018 Equity Incentive Plan (the “2018 Plan”), which enables the Company to grant stock options, share appreciation rights, restricted stock, restricted stock units, share awards, performance unit awards, and cash awards to associates, directors, consultants, and advisors of the Company and its affiliates, and to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company. The 2018 Plan is to be administered by the Board, which shall have discretion over the awards and grants there under. The aggregate maximum number of shares of common stock for which stock options or awards may be granted pursuant to the 2018 Plan is 80,000, which number will be automatically increased on the first day of each quarter, beginning on January 1, 2019 and for each quarter thereafter, by a number of shares of common stock equal to the least of (i) 10,000 shares,(ii) 10% of the shares of common stock issued and outstanding on that date, or (iii) a lesser number of shares that may be determined by the board. No awards may be issued after July 30, 2028. Stock options granted under the 2018 Plan may be non-qualified stock options or incentive stock options, within the meaning of Section 422(b) of the Internal Revenue Code of 1986. Each option, or portion thereof, that is not an incentive stock option, shall be considered a non-qualified option. The option price must be at least 100% of the fair market value on the date of grant and if an Incentive Stock Option is issued to a 10% or greater shareholder the grant must be 110% of the fair market value on the date of the grant. On July 20, 2021, the Board of Directors of the Company approved an amendment (the “Plan Amendment”) of the Company’s 2018 Equity Incentive Plan (as so amended, the “Plan”) to increase the number of shares of the Company’s common stock reserved for issuance thereunder by 8,000,000 shares. The Plan Amendment became effective immediately. As of December 31, 2021, the awards outstanding under the plan consisted of the employee stock options granted on July 20, 2021, to purchase up to 1,656,000 shares of common stock. Stock Options A summary of stock option activity for the year-end period ended December 31, 2021, is as follows: Number of Weighted Average Options Exercise Outstanding, January 1, 2021 - - Granted 1,656,000 $ 2.00 Exercised - - Forfeited or cancelled - - Outstanding, December 31, 2021 1,656,000 $ 2.00 Exercisable, December 31, 2021 1,656,000 $ 2.00 The Company’s valued the stock options based on the Monte Carlo valuation methodology on July 20, 2021, the stock options grant date. The stock options were immediately vested and have a life of ten years. The value of the awards was determined to be approximately $0.4 million over the derived service period. The fair value of the common stock as of the grant date was determined to be $0.24 per share. The Company recognized approximately $0.06 million of stock-based compensation for the year ended December 31, 2021. The unrecognized stock-based compensation of $0.34 million will be recorded over the derived service period ending in the second quarter 2024. Warrants The following table represents the activity related to the Company’s convertible debentures and warrants, see Note 12, issued during the year ended December 31, 2021: Number of Warrants Weighted Average Exercise Outstanding, January 1, 2021 - - Granted 5,926,763 $ * Exercised - - Outstanding, December 31, 2021 5,926,763 $ - The weighted average contractual term at December 31, 2021 is 4.61 * The exercise price will be determined by a 5-day VWAP price calculation on the exercise date. Restricted Stock Units The following table represents the activity related to the Company’s restricted stock awards granted to employees and directors during the year ended December 31, 2021: Number of Restricted Stock Shares Weighted Average Exercise Price Outstanding, January 1, 2021 - - Granted 1,650,000 $ 0.40 Vested 650,000 - Unvested, December 31, 2021 1,000,000 $ 0.40 The unrecognized stock compensation at December 31,2021 is $0.2 million. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 17 — Commitments and Contingencies Contractual Commitments On September 5, 2017, prior to the merger and as a result of a spinoff from Sysorex’s previous parent, a computer hardware supplier threatened legal action against the Company and demanded approximately $1.8 million for payment of unpaid invoices. On or about January 29, 2018, the parties executed a settlement agreement resolving the matter. No court action was filed. Subsequently thereafter, the Company The liability of approximately $0.6 million has been accrued and includes interest $0.007 million calculated based on a default rate of 8%, which is included as a component of accounts payable and accrued liabilities as of December 31, 2021, in the Consolidated Balance Sheets. On January 22, 2018, a software vendor filed a motion for entry of default judgment (the “Motion”) against SGS in the Circuit Court of Fairfax County, Virginia. The Motion alleges that SGS failed to respond to a complaint served on November 22, 2017. The Motion requests a default judgment in the amount of $336,000 plus $20,000 in legal fees. On August 10, 2018, the Company and vendor entered into a settlement agreement and the Company is repaying the debt in monthly installments. Subsequently thereafter, the Company The liability of approximately $0.1 million has been accrued and includes interest $0.001 million calculated based on a default rate of 6% and is included as a component of accounts payable and accrued liabilities as of December 31, 2021, in the Consolidated Balance Sheets. The Company entered into a Registration Rights Agreement (the “RRA”) dated April 13, 2021. The Company had ninety (90) calendar days following the closing date of its Merger with TTM Digital Assets & Technologies, Inc. on April 14, 2021, to file an initial registration statement covering the Shares. The ninety (90) calendar day filing date was July 13, 2021 (“Filing Deadline”). The Company did not fulfil its obligation to file a registration statement covering the Shares by July 13, 2021, nor any date thereafter up to and including the filing of this Annual Report on Form 10-K and therefore has accounted for an accrued liability in the amount of $0.2 million recorded in the Consolidated Balance Sheets – Accrued Liabilities for the year ended December 31, 2021. The RRA terminated as of October 14, 2021, by its own terms. The Company, entered into a Promissory Judgment Note dated as of August 15, 2018 (the “Note”), with Tech Data Corporation (“Tech Data”), pursuant to which the Company promised to pay the principal sum of $6,849,423.42 to Tech Data. The Note provides that interest shall accrue on the balance of the Note at the rate of 18% per annum. Due to miscommunication with Tech Data, the Company inadvertently failed to pay, when due, some of the installment payments in the aggregate principal amount of $3,341,801.80, as set forth in the Note and has defaulted under the Note. On December 14, 2021, the Company became aware that a Confession of Judgment (the “Confession of Judgment”) had been entered against the Company in the Superior Court of the State of California, County of Santa Clara by Tech Data on September 24, 2021. The Confession of Judgement is entered for a total sum of $5,942,559.05, which is comprised of the principal sum of $3,341,801.80 and prejudgment interest in the sum of $2,600,757.25. Following a negotiation with Tech Data, the Company was able to reduce the Award by in excess of $4.2 million, and on January 13, 2022, the Company and Tech Data entered into a Settlement and Release Agreement (the “Settlement Agreement”). Pursuant to the Settlement Agreement, the Company was paid $1,375,000.00 (the “Settlement Amount”) on January 14, 2022. The Award was deemed satisfied in full. Among other things, Tech Data agreed to file an acknowledgment of full satisfaction of judgment attached as an exhibit to the Settlement Agreement, not take any further action against the Company in connection with or relating to the Judgment, and release the Company and its representatives from any and all claims, including the Judgment, which Tech Data may have against the Company based upon any transaction that occurred at any time before the date of the Settlement Agreement. The vendor liability of $2,908,133 is recorded in the Consolidated Balance Sheets – Accounts Payable as of December 31, 2021. As a result of the January 14, 2022, settlement of $1,375,000 noted above, the Company will recognize a gain on the settlement of $1,533,133, which will be reported in the first quarter 2022. Operating Leases/Right-of-Use Assets and Lease Liability On December 8, 2021, the Company’s principal executive offices moved to 13880 Dulles Corner Lane, Suite 120, Herndon, Virginia 20171. We lease these premises, which consist of approximately 5,800 square feet, pursuant to a lease that expires on May 31, 2025. The total amount of rent expense under the leases is recognized on a straight-line basis over the term of the leases. The Company has no other operating or financing leases with terms greater than 12 months. The following is a summary of the activity in the Company’s current and long-term operating lease liabilities for the years ended December 31, 2021, and 2020: Year Ended 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ - $ - Leased assets obtained in exchange for new and modified operating lease liabilities $ (558 ) $ - Leased assets surrendered in exchange for termination of operating lease liabilities $ - $ - As of December 31, 2021, future minimum operating leases commitments are as follows: Calendar Years ending December 31, Amount 2022 $ 123 2023 214 2024 219 2025 92 Total future lease payments 648 Less: interest expense at incremental borrowing rate (90 ) Net present value of lease liabilities $ 558 Other assumptions and pertinent information related to the Company’s accounting for operating leases are: Weighted average remaining lease term: 3.41 years Weighted average discount rate used to determine present value of operating lease liability: 8 % Litigation Certain conditions may exist as of the date the financial statements are issued which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed, unless they involve guarantees, in which case the guarantees would be disclosed. There can be no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. See Contractual Commitments above, for disclosure of the settlement agreement. There are no pending legal proceedings to which the Company is a party to. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 18 — Related Party Transactions Effective April 1, 2021, the Company entered a variety of contracts with CoreWeave, Inc. (“CoreWeave”). Asset Contribution and Exchange Agreement On April 1, 2021, CoreWeave contributed 3,130 GPU of data mining equipment with 150 gigahash of computing power to the Company in exchange for an equity interest representing 28.65% of the outstanding pre-merger equity of TTM Digital prior to the merger transaction with Sysorex for a total value of approximately $12 million. As a result of the merger, and in consideration for the 28.65% ownership of TTM Digital. CoreWeave was issued 35,588,548 shares of Sysorex common stock at the merger. Lease to Buy Purchase Order The Company acquired 1,344 GPU data mining equipment with 125 gigahash of computing power in a lease to buy arrangement. The Company agreed to total payments of $2.2 million over 180 days subject to acceleration based on the completion of certain corporate events. Revenue generated by operation of the equipment from April 1, 2021, shall be credited against the purchase price until payment of the balance of the purchase price. The Company has determined that the fair value of the installment payments is $2.1 million and will record $70,000 in financing interest costs for the aggregate $2.2 million in installment payments. The Company recognized approximately $70,000 of such interest expenses for the year ended December 31, 2021, respectively. Hosting Facilities Services Order The Hosting Facility Services Order (the “Hosting Contract”) provided for the provision of hosting facility space and services by CoreWeave. The services are paid for in advance of the service month and the initial term of the hosting services is through June 30, 2022 and renews automatically for successive one year renewal terms unless either party terminates within sixty (60) days of the expiration of the then current term. At the signing of the Hosting Contract an estimated 382 data mining rigs were covered at an estimated monthly cost of approximately $21,556 ($260,000 per year). The Company recorded $194,000 in hosting costs for the year ended December 31, 2021. Services Agreement The initial term of the Services Agreement runs from April 1, 2021, through December 31, 2022, and automatically renews thereafter for successive one (1)-year terms unless either party provides written notice to the other of nonrenewal within sixty (60) days of the expiration of the then current Term. The initiation of the Services Agreement required a one-time payment of $100,000. The monthly base management fee was set to $20.00 per GPU-based Mining System (approximately $20,000 per month), and $6.50 per ASIC-based Mining System. Base management fees are paid in arrears and due within fifteen (15) days of invoice receipt. If, during any calendar month of the Term, CoreWeave operates on average, more than 1,500 Mining Systems on behalf of the Company, the Base Management Fee with respect to the excess Mining Systems above 1,500 is discounted by 40%. The Company recorded $215,460 in mining costs for the year ended December 31, 2021. Master Services Agreement On April 29, 2021, the Company entered into a Master Services Agreement with CoreWeave to provide support to management relating to cryptocurrency expertise, marketing, and other operational matters for a three-month term. The compensation for these services is a fixed fee of $35,000 per 30-day period, which includes 175 hours per period. The Company recorded $105,000 and in service costs for the year ended December 31, 2021. Effective February 24, 2022, the master services agreement has been terminated. First Choice International Company, Inc (“First Choice”) On July 9, 2021, the Company executed an agreement whereby First Choice will provide consulting services to the Company. The Company paid First Choice a fully earned flat fee of $175,000 for its services. The Agreement shall extend for an initial period of six (6) months. Unless immediate termination is otherwise specifically permitted herein, the Company may cancel the agreement by providing thirty (30) calendar days written notice. Notwithstanding, in the event of a Termination Notice, all of the compensation due during the Term or any extension thereof shall be deemed fully earned and/or immediately due and payable. Bespoke Growth Partners, Inc. (“Bespoke”) Effective July 13, 2020, the Company entered into a consulting agreement with Bespoke. Subsequently, on January 13, 2021, the Company and Bespoke agreed to enter into an Expansion Agreement. Pursuant to the expansion agreement, the Company issued to Bespoke 250,000 shares of restricted common stock, of which 20,000 were earned as of the effective date of the original agreement and 230,000 which were earned as a result of the expansion agreement. The issuance of the shares was included within the Sysorex Recapitalization shares associated with the Merger on April 14, 2021. Effective April 1, 2021, the Company entered into a consulting agreement with Bespoke. In connection with the consulting agreement, the Company agreed to issue 5,589,820 shares of common stock, of which 5,250,000 were later exercised for pre-funded warrants, of which 5,250,000 were unexercised as of December 31, 2021. The pre-funded warrants were subsequently exercised on January 21, 2022. The Company recognized an expense associated with the share issuance totaling approximately $1,884,888. Effective as of April 15, 2021, the Company entered into a consulting agreement with Bespoke. Under the terms of the consulting agreement, the Company incurred an expense of approximately $738,221 and paid a total amount of $975,000 during the year ended December 31, 2021. In addition, in accordance with the terms of the consulting agreement, the Company made an additional payment of $200,000 in January 2022 for consulting services for the period of January 15, 2022, through April 14, 2022. Lastly, the Company may request Bespoke to expand its services. Effective as of January 13, 2022, the Company entered into a consulting agreement with Bespoke. Under the terms of the consulting agreement, the Company is to pay Bespoke a gross advisory fee of $975,000. On March 23, 2022, the Company paid off the balance owed for this service. Ressense LLC On August 4, 2021, the Company executed a six (6) month business advisory services agreement with Ressense LLC. The services to be provided include potential business activities including acquisition, merger and reverse merger opportunities. As compensation for the performance of services, the Company paid and recorded $125,000 for the year ended December 31, 2021. The business advisory services agreement expired January 31, 2022. Style Hunter, Inc. On September 26, 2021, the Company acquired a 5% minority interest in Style Hunter, Inc. (“Hunt”). The Hunt issued 613,723 shares of its common stock: par value $0.0001 per share for $0.81470 per share for a total price of $500,000. The Company shall have a one-time option to purchase an additional $500,000 of the Common Stock (“Option”) on or before the 360-day anniversary of Closing Date as follows: (i) if the Buyer exercises its Option prior to the 90-day anniversary of Closing Date the per-share purchase price of the additional shares of Common Stock (the “Option Price”) shall be $0.81470 (a $10,000,000 Company valuation), (ii) if the Buyer exercises its Option after the 90-day anniversary of Closing Date, but prior to the 180-day anniversary of Closing Date, the Option Price will be $1.22200 (a $15,000,000 Company valuation), or (iii) if the Buyer exercises its option after the 180-day anniversary of Closing the Option Price will be $2.03670 (a $25,000,000 Company valuation). |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 19 — Subsequent Events Proposed TTM Asset Sale On March 24, 2022, the Company executed Heads of Terms (“ Heads of Terms Ostendo Assets Purchase Price Definitive Documentation The Purchase Price shall be comprised of the issuance to the Company of 7,125,000 fully paid, non-assessable shares of Ostendo preferred stock (“ Shares Public Listing Transfer Event 312,500 shares to Bespoke Growth Partners, Inc. and 1,562,500 shares to Omniverse LLC, Accordingly, following the closing, the Company will hold 5,250,000 shares, Bespoke Growth Partners, Inc. will hold 312,500 shares and Omniverse LLC will hold 1,562,500 shares. Additionally, pursuant to the Heads of Terms, the Company paid on March 23, 2022, a non-refundable deposit of $1,600,000 (“ Deposit Purchased Shares The Closing of the Asset sale transaction (the “ Closing The Definitive Documentation will include certain other terms and conditions which are customary in asset sale and real property sale agreements. Convertible Debenture Conversion For the three months ended March 31, 2022, the convertible debenture holders converted approximately $1.6 million of debt owed to them into approximately 72.7 million shares. As a result of the conversions, the Company recorded a loss on debt extinguishment of approximately $0.5 million, Subsequent to March 31, 2022, convertible debenture holders have converted approximately $2.1 million of debt owed to them into approximately 257.0 million shares of the Company’s common stock. |
Restatement of Previously Issue
Restatement of Previously Issued Quarterly Financial Statements | 12 Months Ended |
Dec. 31, 2021 | |
Restatement Of Previously Issued Quarterly Financial Statements [Abstract] | |
Restatement of Previously Issued Quarterly Financial Statements | Note 20 — Restatement of Previously Issued Quarterly Financial Statements (Unaudited) The Company is presenting herein restated unaudited condensed consolidated financial information as of September 30, 2021, and for the quarterly and year-to-date periods then ended. See Note 1A “Restatement of Previously Issued Consolidated Financial Statements, for additional information.” September 30, 2021 As Previously Reported Adjustments As Restated ASSETS Current Assets Cash and cash equivalents $ 4,268 $ - $ 4,268 Digital assets 2,334 - 2,334 Accounts receivable, net 663 - 663 Prepaid expenses and other current assets 1,334 - 1,334 Total Current Assets 8,599 - 8,599 Mining equipment, net 12,368 - 12,368 Intangible assets, net 2,696 - 2,696 Goodwill 1,634 - 1,634 Investment in Style Hunter 500 - 500 Investment in Up North Hosting, LLC 664 - 664 Other assets 36 - 36 Total Assets $ 26,497 $ - $ 26,497 - - LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities - - Accounts payable $ 5,979 $ - $ 5,979 Accrued liabilities 1,313 - 1,313 Convertible Debt, net 11,208 (1,653 ) 9,555 Conversion Feature on convertible debt - 2,891 2,891 Deferred revenue 691 - 691 Total Current Liabilities 19,191 1,238 20,429 - - Commitments and Contingencies – Note 13 - - Stockholders’ Equity - - Common stock, par value $0.00001 per share, 499,560,659 shares authorized; 144,613,591 shares issued as of September 30, 2021, and 66,431,920 shares issued as of December 31, 2020, 144,538,212 shares outstanding as of September 30, 2021, and 66,431,920 shares outstanding as of December 31, 2020, respectively 1 - 1 Treasury stock, at cost, 75,379 shares as of September 30, 2021, and 0 shares as of December 31, 2020, respectively - - - Subscription receivable - - - Additional paid-in-capital 35,435 - 35,435 Accumulated Deficit (28,130 ) (1,238 ) (29,368 ) Total Stockholders’ Equity 7,306 (1,238 ) 6,068 Total Liabilities and Stockholders’ Equity $ 26,497 $ - $ 26,497 For the Three Months Ended For the Nine Months Ended As Previously Adjustments As Restated As Previously Adjustments As Restated Revenues Mining income $ 2,992 $ - $ 2,992 $ 9,244 $ - $ 9,244 Product revenue 1,232 - 1,232 2,831 - 2,831 Services revenue 634 - 634 1,047 - 1,047 Total Revenues 4,858 - 4,858 13,122 - 13,122 Operating costs and expenses Mining cost 377 - 377 852 - 852 Product cost 1,141 - 1141 2,532 - 2,532 Services cost 364 - 364 606 - 606 Sales and marketing 319 - 319 619 - 619 General and administrative 3,363 - 3363 7,727 - 7,727 Management Fees - - - 321 - 321 Impairment of digital assets 325 - 325 325 - 325 Depreciation 1,279 - 1279 2,824 - 2,824 Amortization of intangibles 143 - 143 264 - 264 Total Operating Costs and Expenses 7,311 - 7311 16,070 - 16,070 Gain (Loss) from Operations (2,453 ) - (2,453 ) (2,948 ) - (2,948 ) Other Income (Expenses) Merger charges - - - (22,004 ) - (22,004 ) Debt Restructuring fee - - - (2,000 ) - (2,000 ) Change in fair value of debt conversion feature - (814 ) (814 ) - (814 ) (814 ) Interest expense (897 ) (424 ) (1,321 ) (926 ) (424 ) (1,350 ) Realized gain (loss) on sale of digital assets 3 - 3 91 - 91 Gain/(loss) on disposal of assets (131 ) - (131 ) (138 ) - (138 ) Other expense, net 39 - 39 11 - 11 Total Other Income (Expense) (986 ) (1,238 ) (2,224 ) (24,966 ) (1,238 ) (26,204 ) - - Income (Loss) before Income taxes and loss in equity method investee (3,439 ) (1,238 ) (4,677 ) (27,914 ) (1,238 ) (29,152 ) - - - - Income tax benefit - - - - - - Income (Loss) before Income in equity method investee (3,439 ) (1,238 ) (4,677 ) (27,914 ) (1,238 ) (29,152 ) - - - - Share of net loss of equity method investee (23 ) - (23 ) (80 ) - (80 ) - - - - Net Income (Loss) $ (3,462 ) $ (1,238 ) $ (4,700 ) $ (27,994 ) $ (1,238 ) $ (29,232 ) Net Income (Loss) per share - basic and diluted $ (0.022 ) $ (0.007 ) $ (0.029 ) $ (0.212 ) $ (0.010 ) $ (0.222 ) Weighted Average Shares Outstanding - basic and diluted 159,448,204 159,448,204 159,448,204 131,863,780 131,863,780 131,863,780 Common Stock Treasury Stock Additional Subscription Accumulated Shares Amount Shares Amount Capital Receivables Deficit Total Balance – December 31, 2019 55,776,240 $ 1 - $ - $ 2,671 $ (100 ) $ (587 ) $ 1,984 Distributions to shareholders - - - - (152 ) - - (152 ) Net Loss - - - - - - (45 ) (45 ) Balance – March 31, 2020 55,776,240 - - - 2,519 (100 ) (632 ) 1,787 Distributions to shareholders - - - - (149 ) - - (149 ) Net Loss - - - - - - (38 ) (38 ) Balance – June 30, 2020 55,776,240 - - - 2,370 (100 ) (670 ) 1,600 Shares issued 10,655,680 - - - 600 - - 600 Distributions to shareholders - - - - (345 ) - - (345 ) Net Income - - - - - - 242 242 Balance - September 30, 2020 66,431,920 - - - 2,625 (100 ) (428 ) 2,097 Balance - December 30, 2020 66,431,920 - - - 2,060 (100 ) (135 ) 1,825 Payment of subscription receivable - - - - - 100 - 100 Distributions to shareholders - - - - (1,521 ) - - (1,521 ) Exercise of Moon warrants 14,607,980 - - - - - - - Net Income - - - - - - 1,210 1,210 Balance – March 31, 2021 81,039,900 - - - 539 - 1,075 1,614 Shares issued: Mining equipment 35,588,548 - - - 12,000 - - 12,000 Sysorex Recapitalization 25,985,633 - - - 19,401 - - 19,401 TTM digital/Sysorex merger 494,311 1 75,379 - 280 - - 281 Professional services 404,820 - - - 1,883 - - 1,883 Net Loss - - - - - - (25,743 ) (25,743 ) Balance – June 30, 2021 143,513,212 1 75,379 34,103 - (24,668 ) 9,436 Convertible debt warrants - - - - 810 - - 810 Stock based compensation - - - - 28 - - 28 Shares issued for services 1,025,000 - - - 494 - - 494 Net Loss (as restated) - - - - - - (4,700 ) (4,700 ) Balance - September 30, 2021 (as restated) 144,538,212 $ 1 75,379 $ - $ 35,435 $ - $ (29,368 ) $ 6,068 For the Nine Months Ended As Previously Reported Adjustments As Restated Cash Flows from Operating Activities Net loss $ (27,994 ) (1,238 ) (29,232 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 3,088 - 3,088 Stock compensation 28 - 28 Amortization of debt discount and debt issuance costs 631 424 1,055 (Gain) Loss on the sale/disposal of mining equipment 138 - 138 Realized (gain) loss on sale of digital assets (91 ) - (91 ) Gain on settlement of vendor liabilities (38 ) - (38 ) Impairment of digital assets 325 - 325 Change in fair value of debt conversion feature - 814 814 Equity in earnings of equity method investments 79 - 79 Change in fair value of accrued issuable equity (9 ) - (9 ) Issuance of shares in exchange for services 2,377 - 2,377 Merger charges 22,004 - 22,004 Debt restructuring fee 2,000 - 2,000 Changes in assets and liabilities: Digital assets - mining net of pool fees and mgmt fees (8,826 ) - (8,826 ) Related party receivable 17 - 17 Prepaid assets and other current assets (72 ) - (72 ) Accounts receivable and other receivables 4,010 - 4,010 Accounts payable (3,908 ) - (3,908 ) Accrued liabilities and other current liabilities 442 - 442 Net cash used in operating activities (5,799 ) - (5,799 ) - - Cash Flows from Investing Activities Proceeds from sale of digital assets 3,670 - 3,670 Reverse acquisition of Sysorex business 28 - 28 Purchase of mining equipment (50 ) - (50 ) Proceeds from sale of mining equipment 47 - 47 Investments in Up North & Style Hunter (600 ) - (600 ) Net cash provided by (used in) investing activities 3,095 - 3,095 - - Cash Flows from Financing Activities Repayment of loans (4,349 ) - (4,349 ) Issuance of members’ interests 100 - 100 Proceeds received for convertible debt 12,415 - 12,415 Cash paid for convertible debt transaction costs (1,261 ) - (1,261 ) Net cash provided by financing activities 6,905 - 6,905 Net increase in cash and cash equivalents 4,201 - 4,201 Cash and cash equivalents at beginning of period 67 - 67 Cash and cash equivalents at end of period $ 4,268 $ - $ 4,268 Supplemental disclosure of cash flow information: Cash paid for: Interest $ 89 $ - $ 89 Income taxes - - - Supplemental disclosure of noncash investing and financing activities: Sysorex recapitalization $ 19,401 $ - $ 19,401 Payments of short-term borrowing with digital assets 1,091 - 1,091 Debt discount attributed to the fair value of the warrants 810 - 810 Conversion feature derivative on convertible debt - 2,077 2,077 Distribution of digital assets to members 1,521 - 1,521 Equipment exchanged for equity 12,000 - 12,000 Equipment acquired through lease purchase arrangement 2,130 - 2,130 Settlement of loan with mining equipment 75 - 75 |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements have been prepared using the accounting records of Sysorex, TTM Digital and SGS. All inter-company balances and transactions have been eliminated in consolidation. Up until November 2, 2021, the Company’s wholly owned subsidiary, TTM Digital had a 50% interest in Up North Hosting, LLC (“UNH”) which was accounted for as an equity method investment. On November 2, 2021, the Company acquired the remaining 50% interest in UNH making it a wholly owned subsidiary of the Company. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during each of the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates consist of: ● Revenue recognition ● Fair value of digital assets for mining revenue ● Expected useful lives and impairment of mining equipment ● Fair value of derivative liabilities ● Business combinations and reverse merger accounting |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity from the date of purchase of years or less to be cash equivalents. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of cash. The Company’s cash is deposited with commercial banks in the United States but exceeds federally insured limits from time to time. The recorded carrying amount of cash and cash equivalents approximates their fair value. The Company uses a digital asset exchange to custody and liquidate its digital assets. If demand for digital assets decline the Exchange could be negatively impacted. The Company’s digital assets are not insured under the third-party custody provider or exchanges. |
Mining Equipment | Mining Equipment Mining Equipment is stated at cost. Depreciation is computed using the straight-line method regardless of the category of asset. The Company has determined that the useful life of graphics processing units (“GPUs”) is 3-years and remaining mining equipment (primarily chassis, power supply units, computer memory, motherboards, risers, and fans) is depreciated over the estimated useful life of 5-years. Expenditures for repairs and maintenance are charged to expense as incurred. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected in the statement of operations. The rate at which the Company generates digital assets and, therefore, consumes the economic benefits of its transaction verification servers are influenced by several factors including the following: - the complexity of the transaction verification process which is driven by the algorithms contained within the Ethereum open-source software; - the general availability of appropriate computer processing capacity on a global basis (commonly referred to in the industry as hashing capacity which is measured in Terahash units); and - technological obsolescence reflecting rapid development in the transaction verification server industry such that more recently developed hardware is more economically efficient to run in terms of digital assets generated as a function of operating costs, primarily power costs. i.e., the speed of hardware evolution in the industry is such that later hardware models generally have faster processing capacity combined with lower operating costs and on average a lower cost of purchase. The Company operates in an emerging industry for which limited data is available to make estimates of the useful economic lives of specialized equipment. Management will review this estimate quarterly and will revise such estimates as and when data comes available. To the extent that any of the assumptions underlying management’s estimate of useful life of its mining equipment are subject to revision in a future reporting period either because of changes in circumstances or through the availability of greater quantities of data then the estimated useful life could change and have a prospective impact on depreciation expense and the carrying amounts of these assets. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company reviews its long-lived assets, including mining equipment, for impairment whenever events or changes in circumstances indicate the carrying value of an asset or group of assets may not be recoverable. The carrying amount is considered not recoverable if the sum of the undiscounted cash flows to be generated from the use and eventual disposition of the asset group is less than the carrying amount of the asset group. If the carrying amount exceeds the undiscounted cash flows, then the carrying amount is compared to the fair value and an impairment loss is recorded for the difference between the fair value and the carrying amount. An impairment loss of $3.3 million was recorded for long-lived assets during the period ended December 31, 2021. No impairment charges were identified for long-lived assets during the period ended December 31, 2020. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: ● Identification of the contract, or contracts, with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, the Company satisfies a performance obligation. |
Mining Revenue | Mining Revenue TTM Digital has entered into a mining pool with the operator to provide computing power to the mining pool. The Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less transaction fees to the mining pool operator) for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of such computing power is the only performance obligation in the Company’s arrangement with mining pool operators The transaction consideration the Company receives, if any, is non-cash consideration. The transaction price of the Company’s share of the cryptocurrency award is measured at fair value on the date received, which is not materially different than the fair value at the time the Company has earned the award from the mining pool. The consideration is all variable under the definition within ASC 606. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the Company successfully places a block and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the digital asset award received is determined using the quoted price of the related digital asset at the time of receipt. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for digital assets recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could impact the Company’s consolidated financial position and results from operations. |
Hardware and Software Revenue Recognition | Hardware and Software Revenue Recognition SGS is a primary resale channel for a large group of vendors and suppliers, including original equipment manufacturers (“OEMs”), software publishers and wholesale distributors. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance and collectability of consideration is probable. The Company evaluates the following indicators amongst others when determining whether it is acting as a principal in the transaction and recording revenue on a gross basis: (i) the Company is primarily responsible for fulfilling the promise to provide the specified product or service, (ii) the Company has inventory risk before the specified good or service has been transferred to a customer or after transfer of control to the customer and (iii) the Company has discretion in establishing the price for the specified good or service. If the terms of a transaction do not indicate the Company is acting as a principal in the transaction, then the Company is acting as an agent in the transaction and the associated revenues are recognized on a net basis. The Company recognizes revenue once control has passed to the customer. The following indicators are evaluated in determining when control has passed to the customer: (i) the Company has a right to payment for the product or service, (ii) the customer has legal title to the product, (iii) the Company has transferred physical possession of the product to the customer, (iv) the customer has the significant risk and rewards of ownership of the product and (v) the customer has accepted the product. The Company’s products can be delivered to customers in a variety of ways, including (i) as physical product shipped from the Company’s warehouse, (ii) via drop-shipment by the vendor or supplier or (iii) via electronic delivery of keys for software licenses. The Company’s shipping terms typically specify F.O.B. destination. The Company leverages drop-shipment arrangements with many of its vendors and suppliers to deliver products to its customers without having to physically hold the inventory at its warehouse. The Company is the principal in the transaction and recognizes revenue for drop-shipment arrangements on a gross basis. The Company may provide integration of products from multiple vendors as a solution it sells to the customer. In this arrangement, the Company provides direct warranty to the customer with the Company’s own personnel as the customer requires warranty on the solution and not individual vendor products. This type of warranty is sold integral to the overall solution quoted to the customer. The Company considers these service-type warranties to be performance obligations of the principal from the underlying products that make up a solution and therefore is acting as a principal in the transaction and records revenue on a gross basis over time. |
License and Maintenance Services Revenue Recognition | License and Maintenance Services Revenue Recognition SGS provides a customized design and configuration solution for its customers and in this capacity resells hardware, software and other IT equipment license and maintenance services in exchange for fixed fees. The Company selects the vendors and sells the products and services, including maintenance services, that best fit the customer’s needs. For sales of maintenance services and warranties, the customer obtains control at the point in time that the services to be provided by a third-party vendor are purchased by the customer and therefore the Company’s performance obligation to provide the overall systems solution is satisfied at that time. The Company’s customers generally pay within 30 to 60 days from the receipt of a customer-approved invoice. For resale of services, including maintenance services, warranties, and extended warranties, the Company is acting as an agent as the primary activity for those services are fulfilled by a third party. While the Company may facilitate and act as a first responder for these services, the third-party service providers perform the primary maintenance and warranty services for the customer. Therefore, the Company is not primarily responsible for performing these services and revenue is recorded on a net basis. SGS’s professional services include fixed fee contracts. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. For fixed fee contracts, the Company recognizes revenue evenly over the service period using a time-based measure because the Company is providing continuous service. Anticipated losses are recognized as soon as they become known. For the years ended December 31, 2021, SGS did not incur any such losses. These amounts are based on known and estimated factors. Revenues from time and material or firm fixed price long-term and short-term contracts are derived principally with various United States government agencies. |
Contract Balances | Contract Balances The timing of revenue recognition may differ from the timing of payment by customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. The Company had deferred revenue of $0.9 million as of December 31, 2021. |
Accounts Receivable, net | Accounts Receivable, net Account receivables are stated at the amount the Company expects to collect. The Company recognizes an allowance for doubtful accounts to ensure accounts receivables are not overstated due to un-collectability. Bad debt reserves are maintained for various customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligation, such as in the case of bankruptcy filings, or deterioration in the customer’s operating results or financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. The Company’s allowance for doubtful accounts was $0.05 million as of December 31, 2021. |
Equity Method Investments | Equity Method Investments Equity method investments are equity securities in entities the Company does not control but over which it can exercise significant influence. These investments are accounted for under the equity method of accounting in accordance with ASC 323, Investments- Equity Method and Joint Ventures |
Investments | Investments The Company accounts for its investments that represent less than 20% ownership, and for which the Company does not have the ability to exercise significant influence, using the FASB’s Accounting Standards Update (“ASU”) 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities |
Digital Assets | Digital Assets Digital assets (predominantly Ethereum) are included in current assets in the accompanying consolidated balance sheets. The classification of digital assets as a current asset has been made after the Company’s consideration of the consistent daily trading volume on cryptocurrency exchange markets, there are no limitations or restrictions on Company’s ability to sell Ethereum, and the pattern of actual sales of Ethereum by the Company. Digital assets purchased are recorded at cost and cryptocurrencies awarded to the Company through its mining activities are accounted for in connection with the Company’s revenue recognition policy disclosed above. Digital assets held are accounted for as intangible assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the digital asset at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. The Company recorded a $0.7 million impairment charge during the year ended December 31, 2021. No impairment was taken during the year ended December 31, 2020. Digital assets awarded to the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash flows. The sales of digital assets are included within investing activities in the accompanying consolidated statements of cash flows. The Company accounts for its gains or losses in accordance with the first in first out (FIFO) method of accounting. The Company recognized realized gains (losses) through the sale and disbursement of digital assets during the year ended December 31, 2021, and 2020 of $0.1 million and $0.04 million, respectively. |
Business Combinations | Business Combinations The Company applies the provisions of ASC Topic 805, Business Combinations While the company uses its best estimates and assumptions to accurately apply preliminary values to assets acquired and liabilities assumed at the acquisition date, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. As of December 31, 2021, no adjustments have been made to the purchase price accounting under the Company’s transactions accounted for under ASC 805. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets. Although the Company believes the assumptions and estimates that have been made are reasonable and appropriate, they are based in part on historical experience and information obtained from the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets the Company has acquired include future expected cash flows, and discount rates. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Company accounts for intangible assets under ASC 350-30, Intangibles-Goodwill and Other Intangible assets with finite lives are comprised of customer contracts, and trademarks that are amortized on a straight-line basis over their expected useful lives. The carrying value of finite-lived assets and the remaining useful lives are reviewed at least annually to determine if circumstances exist which may indicate a potential impairment or revision to the amortization period. |
Fair Value | Fair Value The Company follows the accounting guidance under FASB’s Accounting Standards Codification 820, Fair Value Measurements for its fair value measurements of financial assets and liabilities measured at fair value on a recurring basis. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and Level 3 — assets and liabilities whose significant value drivers are unobservable. Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment. Certain nonfinancial assets such as property and equipment, land and intangible assets are subject to nonrecurring fair value measurements if they are deemed to be impaired. The impairment models used for nonfinancial assets depend on the type of asset. For the year ended December 31, 2021, the Company recorded impairment charges related to assets measured on a non-recurring basis of $3.3 million for graphics processing units and $0.7 million for digital assets. The Company utilized a market approach as of December 31, 2021, to determine fair value. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, accrued liabilities, and accounts payable, approximate fair value due to the short-term nature of these instruments. Held for Sale and Discontinued Operations Classification The Company classifies a business as held for sale in the period in which management commits to a plan to sell the business, the business is available for immediate sale in its present condition, an active program to complete the plan to sell the business is initiated, the sale of the business within one year is probable and the business is being marketed at a reasonable price in relation to its fair value. Newly acquired businesses that meet the held-for-sale classification criteria upon acquisition are reported as discontinued operations. Upon a business’ classification as held for sale, net assets are measured for impairment. Goodwill impairment is measured in accordance with the method described in the accounting policy. An impairment loss is recorded for long-lived assets held for sale when the carrying amount of the asset exceeds its fair value less cost to sell. Other assets and liabilities are generally measured for impairment by comparing their carrying values to their respective fair values. A long-lived asset shall not be depreciated or amortized while it is classified as held for sale. |
Stock Based Compensation | Stock Based Compensation The Company accounts for its stock-based compensation awards to employees and directors in accordance with FASB ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based compensation to employees, including grants of employee stock options, and restricted stock, to be recognized in the consolidated statements of operations based on their grant date fair values. The fair value of stock options is estimated as of the date of grant using the Monte Carlo Simulation option pricing model. The fair value of restricted stock is calculated as the fair value of the Company’s common stock as of the date of grant. The expense is recognized on a straight-line basis over the requisite service period. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is required to the extent any deferred tax assets may not be realizable. ASC 740-10, Accounting for Uncertainty in Income Taxes, defines uncertainty in income taxes and the evaluation of a tax position as a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely than-not threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The Company had no uncertain tax positions as of December 31, 2021, and 2020. |
Convertible Debt | Convertible Debt The Company’s debt instruments contain a host liability, freestanding warrants, and an embedded conversion feature. The Company uses the guidance under FASB ASC Topic 815 Derivatives and Hedging (“ASC 815”) to determine if the embedded conversion feature must be bifurcated and separately accounted for as a derivative under ASC 815. It also determines whether any embedded conversion features requiring bifurcation and/or freestanding warrants qualify for any scope exceptions contained within ASC 815. Generally, contracts issued or held by a reporting entity that are both (i) indexed to its own stock, and (ii) classified in shareholders equity, would not be considered a derivative for the purposes of applying ASC 815. Any embedded conversion features and/or freestanding warrants that do not meet the scope exception noted above are classified as derivative liabilities, initially measured at fair value, and remeasured at fair value each reporting period with change in fair value recognized in the consolidated statements of operations. Any embedded conversion features and/or freestanding warrants that meet the scope exception under ASC 815 are initially recorded at their relative fair value in paid-in-capital and are not remeasured at fair value in future periods. The host debt instrument is initially recorded at its relative fair value in long-term debt. The host debt instrument is accounted for in accordance with guidance applicable to non-convertible debt under FASB ASC Topic 470 Debt (“ASC 470”) and is accreted to its face value over the term of the debt with accretion expense and periodic interest expense recorded in the consolidated statements of operations. Issuance costs are allocated to each instrument in the same proportion as the proceeds that are allocated to each instrument. Issuance costs allocated to the debt hosted instrument are netted against the proceeds allocated to the debt host. Issuance costs allocated to freestanding warrants classified in equity are recorded in paid-in-capital. |
Leases | Leases The right of use asset (“ROU”) on the Company’s consolidated balance sheet represents a lessee’s right to use an asset over the life of a lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term, plus any lease payments made to the lessor before the lease commencement date, plus any initial direct costs incurred, minus any lease incentives received. The amortization period for the right of use asset is from the lease commencement date to the earlier of the end of the lease term or the end of the useful life of the asset. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has elected to exclude all short-term leases (i.e., leases with a term of 12 months or less) from recognition on the balance sheet. The Company’s lease liabilities are determined by calculating the present value of all future lease payments using the rate implicit in the lease if it can be readily determined, or the lessee’s incremental borrowing rate. The Company uses its incremental borrowing rate at the inception of the lease to determine the present value of future lease payments as the rate implicit in its leases could not be readily determined. |
Net Loss per Share | Net Loss per Share Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus potentially dilutive common shares. Convertible debt, restricted stock, stock options and warrants are excluded from the diluted net loss per share calculation when their impact is antidilutive. The Company reported a net loss for the year ended December 31, 2021, and as a result, all potentially dilutive common shares are considered antidilutive for this period. The Company includes potentially issuable shares in the Weighted-average common shares – basic that include warrants and other agreements that are exercisable for little or no consideration without substantive contingencies and others once any contingencies relative to the issuance of the shares is resolved. Computations of basic and diluted weighted average common shares outstanding were as follows for the periods reported: December 31, 2021 2020 Weighted-average common shares outstanding 128,603,982 60,365,892 Weighted-average potential common shares considered outstanding 10,457,102 15,174,121 Weighted-average common shares outstanding – basic 139,061,084 75,540,013 Dilutive effect of options, warrants and restricted stock - - Weighted-average common shares outstanding – diluted 139,061,084 75,540,013 Options, restricted stock, and warrants and convertible debt excluded from the computation of diluted loss per share because the effect of inclusion would be anti-dilutive 6,603,716 |
Recent Accounting Standards | Recent Accounting Standards In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Any new accounting standards, not disclosed above, that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
Emerging Growth Company | Emerging Growth Company Sysorex is an “emerging growth company” as defined in the JOBS Act. As such, Sysorex is eligible to take advantage of certain exemptions from various reporting requirements that apply to other public companies that are not emerging growth companies, including compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. In addition, Section 107 of the JOBS Act provides that an emerging growth company may take advantage of the extended transition period provided in Section 13(a) of the Exchange Act, for complying with new or revised accounting standards, meaning that Sysorex, as an emerging growth company, can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Sysorex has elected to take advantage of this extended transition period, and therefore our financial statements may not be comparable to those of companies that comply with such new or revised accounting standards. |
Restatement of Consolidated F_2
Restatement of Consolidated Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of consolidated balance sheet | December 31, 2021 As Adjustments As Restated Conversion Feature derivative liability $ - $ 8,355 $ 8,355 Total current liabilities 29,526 8,355 37,881 Accumulated deficit (40,910 ) (8,355 ) (49,265 ) Total stockholders’ deficit (4,753 ) (8,355 ) (13,108 ) |
Schedule of consolidated statements of operations | Year ended December 31, 2021 As Adjustments As Restated Other Income (Expense) Loss contingency on debt default $ (6,594 ) $ (1,227 ) $ (7,821 ) Revaluation of conversion feature derivative liability - (6,278 ) (6,278 ) Interest Expense (2,991 ) (850 ) (3,841 ) Net Loss – continuing operations (46,011 ) (8,355 ) (54,366 ) Net Loss per share - basic and diluted - continuing operations $ (0.33 ) (0.06 ) (0.39 ) Weighted Average Shares Outstanding - basic and diluted 139,061,084 - 139,061,084 |
Schedule of consolidated statement of cash flows | Year ended December 31, 2021 As Adjustments As Restated Net loss from continuing operations $ (46,011 ) $ (8,355 ) $ (54,366 ) Changes in adjustment to reconcile net loss to net cash used in operating activities Loss contingency on debt default 6,594 1,227 7,821 Change in fair value of derivative liability - 6,278 6,278 Amortization of debt discount and debt issuance costs 1,323 850 2,173 Net cash used in operating activities $ (8,473 ) - (8,473 ) |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of fair value of the identified assets acquired and liabilities | Reverse Sysorex Aggregate Acquisition Recapitalization Fair (In thousands of dollars) Fair Value Fair Value Value Cash $ 28 $ - $ 28 Accounts receivable 4,673 - 4,673 Prepaid assets and other current assets 2,551 (1,289 ) 1,262 Property and equipment 7 - 7 Goodwill 1,634 - 1,634 Customer Relationships Intangible 1,900 - 1,900 Tradename Intangible 1,060 - 1,060 Other assets 29 - 29 Accounts payable (10,437 ) 519 (9,918 ) Accrued liabilities (2,722 ) 1,589 (1,133 ) Deferred revenue (590 ) - (590 ) Short term debt (7,136 ) 3,871 (3,265 ) Long term debt (12,711 ) 12,711 - Other liabilities (9 ) - (9 ) Fair value allocated to net assets / (liabilities) $ (21,723 ) $ 17,401 $ (4,322 ) Fair value of consideration and recapitalization equity $ 281 $ 19,401 $ 19,682 Merger charges (22,004 ) - (22,004 ) Debt restructuring fees - (2,000 ) (2,000 ) Net Sysorex equity and charges to income (loss) $ (21,723 ) $ 17,401 $ (4,322 ) |
Schedule of proforma results of operations | December 31, 2021 2020 Total Revenues $ 26,519 $ 13,394 Net Loss (b) (24,160 ) (1,993 ) Net Loss per share - basic and diluted (0.174 ) (0.026 ) Weighted Average Shares Outstanding - basic and diluted 139,061,084 75,540,013 Supplemental Pro forma Information (a) Merger charges 22,004 - Restructuring fee 2,000 - Transaction costs - Accounting acquirer and acquiree 3,093 - Total Nonrecurring Pro forma Adjustments 27,097 - |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of basic and diluted weighted average common shares outstanding | December 31, 2021 2020 Weighted-average common shares outstanding 128,603,982 60,365,892 Weighted-average potential common shares considered outstanding 10,457,102 15,174,121 Weighted-average common shares outstanding – basic 139,061,084 75,540,013 Dilutive effect of options, warrants and restricted stock - - Weighted-average common shares outstanding – diluted 139,061,084 75,540,013 Options, restricted stock, and warrants and convertible debt excluded from the computation of diluted loss per share because the effect of inclusion would be anti-dilutive 6,603,716 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of revenues, cost of revenues for our subsidiary segments | TTM Sysorex Consolidated Revenues Products Revenue $ - $ 6,516 $ 6,516 Services Revenue - 1,756 1,756 Mining Income 4,394 - 4,394 Total Revenues $ 4,394 $ 8,272 $ 12,666 Costs of Revenues Product Cost of Revenue $ - $ 6,036 $ 6,036 Services Cost of Revenue - 868 868 Mining Cost of Revenue 457 - 457 Other Operating Expenses 13,276 4,568 17,844 Operating Income (Loss) $ (9,339 ) $ (3,200 ) $ (12,539 ) Total Segment Assets $ 10,271 $ 8,940 $ 19,211 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of balance sheet | 2021 2020 Current Assets Related Party receivables $ - $ 17 Mining equipment and facilities, net 5,571 - Investment in Style Hunter 500 - Total Current Assets $ 6,071 $ 17 Noncurrent Assets Mining equipment and facilities, net - 1,272 Investment in Up North Hosting, LLC - 644 Total Noncurrent Assets - 1,916 Total Assets associated with discontinued operations $ 6,071 $ 1,933 Liabilities associated with discontinued operations Accounts payable $ - $ 7 Accrued liabilities - 117 Related party loan - 75 Total Current Liabilities - 199 Total Liabilities associated with discontinued operations $ - $ 199 |
Schedule of statement of operations | 2021 2020 Revenues Mining income $ 8,150 $ 1,868 Other revenue 29 - Total Revenues 8,179 1,868 Operating costs and expenses Mining cost 815 433 General and administrative 291 4 Depreciation 1,637 827 Total Operating Costs and Expenses 2,743 1,264 Gain from Discontinued Operations 5,436 604 Other Income (Expenses) Gain (loss) on sale of fixed assets (146 ) 17 Fair value loss on previously held equity interest (18 ) - Other income (expenses), net 58 (29 ) Total Other Income (106 ) 12 Income before net loss of equity method investee 5,330 592 Share of net loss of equity method investee (94 ) (39 ) Net income from discontinued operations $ 5,236 $ 553 |
Schedule of cash flows from operating activities | For the Year Ended 2021 2020 Net cash provided by operating activities – discontinued operations 1,369 595 Net cash used in investing activities – discontinued operations (1,436 ) (582 ) Net cash provided by financing activities – discontinued operations - 20 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) - Up North Hosting [Member] | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments (Tables) [Line Items] | |
Schedule of balance sheet | November 1, December 31, 2021 2020 Current assets $ 260 $ 121 Non-current assets 1,183 1,247 Total assets $ 1,443 $ 1,368 Current liabilities 144 197 Total liabilities 144 197 Members’ equity 1,377 1,177 Retained Earnings (Deficit) (78 ) (6 ) Total Members’ Equity 1,299 1,171 Total Liabilities and Members’ Equity $ 1,443 $ 1,368 |
Schedule of fixed assets, net | November 1, December 31, 2021 2020 Building $ 513 $ 513 Electrical Infrastructure Assets 525 525 Machinery & Equipment Assets 34 30 Mechanical (HVAC) Assets 271 271 Server and Network Assets 50 50 Gross value 1,393 1,389 Accumulated depreciation (244 ) (177 ) Property, plant, and equipment, net $ 1,149 $ 1,212 |
Schedule of operations | 2021 2020 Revenues $ 930 $ 898 Cost of revenues, excluding depreciation 776 725 Selling, general, and administrative 286 351 Other (Income)/Expense (60 ) (5 ) Net loss (72 ) (173 ) Net loss attributable to TTM $ (36 ) $ (87 ) |
Up North Business Combination_2
Up North Business Combination / Bitworks Asset Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Up North Business Combination Bitworks Asset Acquisition [Abstract] | |
Schedule of identified assets acquired and liabilities assumed relating to the Acquisition | (In thousands of dollars) UNH Acquisition Fair Value Bitworks Equipment Fair Value Aggregate Fair Value Cash $ 87 $ - $ 87 Accounts receivable 67 - 67 Prepaid assets and other current assets 1 - 1 Property and equipment 1,098 694 1,792 Property tax abatement intangible 90 - 90 Other assets 34 - 34 Accounts payable (90 ) - (90 ) Accrued liabilities (54 ) - (54 ) Fair value allocated to net assets / (liabilities) $ 1,233 $ 694 $ 1,927 Fair value of transaction consideration $ 706 $ 694 $ 1,400 Fair value of equity method investment exchanged 631 - 631 Effective settlement of intercompany transactions (104 ) - (104 ) Fair value of purchase consideration $ 1,233 $ 694 $ 1,927 |
Mining Equipment, Net (Tables)
Mining Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of mining equipment, net | Balance as of December 31, December 31, 2021 2020 Gross Mining Equipment: Mining Equipment (non-GPUs) $ 493 $ - GPUs 6,033 - Accumulated Depreciation Mining Equipment (non-GPUs) (123 ) - GPUs (2,326 ) - Mining Equipment, net $ 4,077 $ - |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Gross Net Carrying Accumulated Carrying Amount Amortization Amount Trade name $ 1,060 $ (74 ) $ 986 Customer Relationships 1,900 (333 ) 1,567 Total intangible assets $ 2,960 $ (407 ) $ 2,553 |
Schedule of remaining years | Calendar Years ending December 31, Amount 2022 573 2023 573 2024 573 2025 266 2026 105 Thereafter 463 Total $ 2,553 |
Credit Risk and Concentrations
Credit Risk and Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Schedule of risk percentage of revenue | For the Period April 15, 2021, through December 31, 2021 $ % Customer A 4,826 44 % Customer B 2,946 27 % |
Short Term Debt (Tables)
Short Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Short Term Debt | December 31, 2021 Convertible Debentures & Warrants, including interest payable to the Convertible Debenture Holders $ 19,439 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurements asset or a liability | Fair value measurement at reporting date using Balance Quoted prices in Significant Significant As of December 31, 2021 (in thousands) Recurring fair value measurements Derivative liabilities: Conversion feature derivative liability $ 8,355 $ — $ - $ 8,355 Total derivative liabilities 8,355 — - 8,355 Total recurring fair value measurements $ 8,355 $ — $ - $ 8,355 As of December 31, 2020: (in thousands) Recurring fair value measurements Derivative liabilities: Conversion feature derivative liability $ - $ — $ - $ — Total derivative liabilities - — - — Total recurring fair value measurements $ - $ — $ - $ — |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of net loss before income tax | Year ended December 31, 2021 Net loss before income tax $ (49,130 ) |
Schedule of income tax expense (benefit) | Year ended U.S. Federal Current $ - Deferred (4,512 ) State and Local Current - Deferred (807 ) (5,319 ) Change in Valuation Allowance 5,319 Total income tax provision (benefit) $ - |
Schedule of reconciliation between the U.S. statutory federal income tax rate | Year ended Pretax Income 21.0 % State taxes, net of federal benefit 2.2 % Merger charges -8.5 % Other permanent items -1.2 % Derivative valuation -2.7 % Change in valuation allowance -10.8 % Effective income tax rate 0.0 % |
Schedule of deferred tax assets | Year ended Year ended Deferred tax assets: Net operating loss carry forwards $ 3,501 $ - Fixed assets 1,126 - Accrued compensation 40 - Reserves 504 - Intangible assets 3,053 - Business interest limitation 727 - Lease Liabilities 142 - Tax Credits 211 - Derivative adjustment 1,937 - Other 181 - Total deferred tax assets before valuation allowance 11,422 - Valuation allowance (11,280 ) - Total deferred tax assets after valuation allowance 142 - Deferred tax liabilities: Operating lease right of use assets (142 ) - Total deferred tax liabilities (142 ) Net deferred tax assets and liabilities $ - $ - |
Digital Assets (Tables)
Digital Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Digital Assets [Abstract] | |
Schedule of digital asset activity from continuing and discontinued operations | December 31, 2021 2020 Opening Balance $ 24 $ 25 Revenue from mining 12,534 * 1,868 * Received for membership interest - 46 Payment of Mining equipment under lease to buy arrangement (1,091 ) - Mining pool operating fees (129 ) (4 ) Management fees (321 ) (189 ) Transaction fees (26 ) - Owners’ distributions (1,521 ) (1,211 ) Digital asset impairment (704 ) - Proceeds from sale of digital assets (3,670 ) (555 ) Realized gain on sale of digital assets 106 44 Ending Balance $ 5,202 $ 24 * Of the $12.5 million revenue from mining, $4.4 million in continuing operations and $8.1 million in discontinued operations. The $1.8 million in 2020 is included in discontinued operations. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stock option activity | Number of Weighted Average Options Exercise Outstanding, January 1, 2021 - - Granted 1,656,000 $ 2.00 Exercised - - Forfeited or cancelled - - Outstanding, December 31, 2021 1,656,000 $ 2.00 Exercisable, December 31, 2021 1,656,000 $ 2.00 |
Schedule of warrants | Number of Warrants Weighted Average Exercise Outstanding, January 1, 2021 - - Granted 5,926,763 $ * Exercised - - Outstanding, December 31, 2021 5,926,763 $ - Number of Restricted Stock Shares Weighted Average Exercise Price Outstanding, January 1, 2021 - - Granted 1,650,000 $ 0.40 Vested 650,000 - Unvested, December 31, 2021 1,000,000 $ 0.40 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of current and long-term operating lease liabilities | Year Ended 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ - $ - Leased assets obtained in exchange for new and modified operating lease liabilities $ (558 ) $ - Leased assets surrendered in exchange for termination of operating lease liabilities $ - $ - |
Schedule of future minimum operating leases | Calendar Years ending December 31, Amount 2022 $ 123 2023 214 2024 219 2025 92 Total future lease payments 648 Less: interest expense at incremental borrowing rate (90 ) Net present value of lease liabilities $ 558 |
Schedule of operating leases | Weighted average remaining lease term: 3.41 years Weighted average discount rate used to determine present value of operating lease liability: 8 % |
Restatement of Previously Iss_2
Restatement of Previously Issued Quarterly Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Restatement Of Previously Issued Quarterly Financial Statements [Abstract] | |
Schedule of condensed consolidated balance sheets (unaudited) | September 30, 2021 As Previously Reported Adjustments As Restated ASSETS Current Assets Cash and cash equivalents $ 4,268 $ - $ 4,268 Digital assets 2,334 - 2,334 Accounts receivable, net 663 - 663 Prepaid expenses and other current assets 1,334 - 1,334 Total Current Assets 8,599 - 8,599 Mining equipment, net 12,368 - 12,368 Intangible assets, net 2,696 - 2,696 Goodwill 1,634 - 1,634 Investment in Style Hunter 500 - 500 Investment in Up North Hosting, LLC 664 - 664 Other assets 36 - 36 Total Assets $ 26,497 $ - $ 26,497 - - LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities - - Accounts payable $ 5,979 $ - $ 5,979 Accrued liabilities 1,313 - 1,313 Convertible Debt, net 11,208 (1,653 ) 9,555 Conversion Feature on convertible debt - 2,891 2,891 Deferred revenue 691 - 691 Total Current Liabilities 19,191 1,238 20,429 - - Commitments and Contingencies – Note 13 - - Stockholders’ Equity - - Common stock, par value $0.00001 per share, 499,560,659 shares authorized; 144,613,591 shares issued as of September 30, 2021, and 66,431,920 shares issued as of December 31, 2020, 144,538,212 shares outstanding as of September 30, 2021, and 66,431,920 shares outstanding as of December 31, 2020, respectively 1 - 1 Treasury stock, at cost, 75,379 shares as of September 30, 2021, and 0 shares as of December 31, 2020, respectively - - - Subscription receivable - - - Additional paid-in-capital 35,435 - 35,435 Accumulated Deficit (28,130 ) (1,238 ) (29,368 ) Total Stockholders’ Equity 7,306 (1,238 ) 6,068 Total Liabilities and Stockholders’ Equity $ 26,497 $ - $ 26,497 |
Schedule of condensed consolidated statements of operations (unaudited) | For the Three Months Ended For the Nine Months Ended As Previously Adjustments As Restated As Previously Adjustments As Restated Revenues Mining income $ 2,992 $ - $ 2,992 $ 9,244 $ - $ 9,244 Product revenue 1,232 - 1,232 2,831 - 2,831 Services revenue 634 - 634 1,047 - 1,047 Total Revenues 4,858 - 4,858 13,122 - 13,122 Operating costs and expenses Mining cost 377 - 377 852 - 852 Product cost 1,141 - 1141 2,532 - 2,532 Services cost 364 - 364 606 - 606 Sales and marketing 319 - 319 619 - 619 General and administrative 3,363 - 3363 7,727 - 7,727 Management Fees - - - 321 - 321 Impairment of digital assets 325 - 325 325 - 325 Depreciation 1,279 - 1279 2,824 - 2,824 Amortization of intangibles 143 - 143 264 - 264 Total Operating Costs and Expenses 7,311 - 7311 16,070 - 16,070 Gain (Loss) from Operations (2,453 ) - (2,453 ) (2,948 ) - (2,948 ) Other Income (Expenses) Merger charges - - - (22,004 ) - (22,004 ) Debt Restructuring fee - - - (2,000 ) - (2,000 ) Change in fair value of debt conversion feature - (814 ) (814 ) - (814 ) (814 ) Interest expense (897 ) (424 ) (1,321 ) (926 ) (424 ) (1,350 ) Realized gain (loss) on sale of digital assets 3 - 3 91 - 91 Gain/(loss) on disposal of assets (131 ) - (131 ) (138 ) - (138 ) Other expense, net 39 - 39 11 - 11 Total Other Income (Expense) (986 ) (1,238 ) (2,224 ) (24,966 ) (1,238 ) (26,204 ) - - Income (Loss) before Income taxes and loss in equity method investee (3,439 ) (1,238 ) (4,677 ) (27,914 ) (1,238 ) (29,152 ) - - - - Income tax benefit - - - - - - Income (Loss) before Income in equity method investee (3,439 ) (1,238 ) (4,677 ) (27,914 ) (1,238 ) (29,152 ) - - - - Share of net loss of equity method investee (23 ) - (23 ) (80 ) - (80 ) - - - - Net Income (Loss) $ (3,462 ) $ (1,238 ) $ (4,700 ) $ (27,994 ) $ (1,238 ) $ (29,232 ) Net Income (Loss) per share - basic and diluted $ (0.022 ) $ (0.007 ) $ (0.029 ) $ (0.212 ) $ (0.010 ) $ (0.222 ) Weighted Average Shares Outstanding - basic and diluted 159,448,204 159,448,204 159,448,204 131,863,780 131,863,780 131,863,780 |
Schedule of condensed consolidated statements of changes in stockholders’ equity (unaudited) | Common Stock Treasury Stock Additional Subscription Accumulated Shares Amount Shares Amount Capital Receivables Deficit Total Balance – December 31, 2019 55,776,240 $ 1 - $ - $ 2,671 $ (100 ) $ (587 ) $ 1,984 Distributions to shareholders - - - - (152 ) - - (152 ) Net Loss - - - - - - (45 ) (45 ) Balance – March 31, 2020 55,776,240 - - - 2,519 (100 ) (632 ) 1,787 Distributions to shareholders - - - - (149 ) - - (149 ) Net Loss - - - - - - (38 ) (38 ) Balance – June 30, 2020 55,776,240 - - - 2,370 (100 ) (670 ) 1,600 Shares issued 10,655,680 - - - 600 - - 600 Distributions to shareholders - - - - (345 ) - - (345 ) Net Income - - - - - - 242 242 Balance - September 30, 2020 66,431,920 - - - 2,625 (100 ) (428 ) 2,097 Balance - December 30, 2020 66,431,920 - - - 2,060 (100 ) (135 ) 1,825 Payment of subscription receivable - - - - - 100 - 100 Distributions to shareholders - - - - (1,521 ) - - (1,521 ) Exercise of Moon warrants 14,607,980 - - - - - - - Net Income - - - - - - 1,210 1,210 Balance – March 31, 2021 81,039,900 - - - 539 - 1,075 1,614 Shares issued: Mining equipment 35,588,548 - - - 12,000 - - 12,000 Sysorex Recapitalization 25,985,633 - - - 19,401 - - 19,401 TTM digital/Sysorex merger 494,311 1 75,379 - 280 - - 281 Professional services 404,820 - - - 1,883 - - 1,883 Net Loss - - - - - - (25,743 ) (25,743 ) Balance – June 30, 2021 143,513,212 1 75,379 34,103 - (24,668 ) 9,436 Convertible debt warrants - - - - 810 - - 810 Stock based compensation - - - - 28 - - 28 Shares issued for services 1,025,000 - - - 494 - - 494 Net Loss (as restated) - - - - - - (4,700 ) (4,700 ) Balance - September 30, 2021 (as restated) 144,538,212 $ 1 75,379 $ - $ 35,435 $ - $ (29,368 ) $ 6,068 |
Schedule of condensed consolidated statements of cash flows (unaudited) | For the Nine Months Ended As Previously Reported Adjustments As Restated Cash Flows from Operating Activities Net loss $ (27,994 ) (1,238 ) (29,232 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 3,088 - 3,088 Stock compensation 28 - 28 Amortization of debt discount and debt issuance costs 631 424 1,055 (Gain) Loss on the sale/disposal of mining equipment 138 - 138 Realized (gain) loss on sale of digital assets (91 ) - (91 ) Gain on settlement of vendor liabilities (38 ) - (38 ) Impairment of digital assets 325 - 325 Change in fair value of debt conversion feature - 814 814 Equity in earnings of equity method investments 79 - 79 Change in fair value of accrued issuable equity (9 ) - (9 ) Issuance of shares in exchange for services 2,377 - 2,377 Merger charges 22,004 - 22,004 Debt restructuring fee 2,000 - 2,000 Changes in assets and liabilities: Digital assets - mining net of pool fees and mgmt fees (8,826 ) - (8,826 ) Related party receivable 17 - 17 Prepaid assets and other current assets (72 ) - (72 ) Accounts receivable and other receivables 4,010 - 4,010 Accounts payable (3,908 ) - (3,908 ) Accrued liabilities and other current liabilities 442 - 442 Net cash used in operating activities (5,799 ) - (5,799 ) - - Cash Flows from Investing Activities Proceeds from sale of digital assets 3,670 - 3,670 Reverse acquisition of Sysorex business 28 - 28 Purchase of mining equipment (50 ) - (50 ) Proceeds from sale of mining equipment 47 - 47 Investments in Up North & Style Hunter (600 ) - (600 ) Net cash provided by (used in) investing activities 3,095 - 3,095 - - Cash Flows from Financing Activities Repayment of loans (4,349 ) - (4,349 ) Issuance of members’ interests 100 - 100 Proceeds received for convertible debt 12,415 - 12,415 Cash paid for convertible debt transaction costs (1,261 ) - (1,261 ) Net cash provided by financing activities 6,905 - 6,905 Net increase in cash and cash equivalents 4,201 - 4,201 Cash and cash equivalents at beginning of period 67 - 67 Cash and cash equivalents at end of period $ 4,268 $ - $ 4,268 Supplemental disclosure of cash flow information: Cash paid for: Interest $ 89 $ - $ 89 Income taxes - - - Supplemental disclosure of noncash investing and financing activities: Sysorex recapitalization $ 19,401 $ - $ 19,401 Payments of short-term borrowing with digital assets 1,091 - 1,091 Debt discount attributed to the fair value of the warrants 810 - 810 Conversion feature derivative on convertible debt - 2,077 2,077 Distribution of digital assets to members 1,521 - 1,521 Equipment exchanged for equity 12,000 - 12,000 Equipment acquired through lease purchase arrangement 2,130 - 2,130 Settlement of loan with mining equipment 75 - 75 |
Restatement of Consolidated F_3
Restatement of Consolidated Financial Statements (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | May 17, 2022 | |
Condensed Financial Information Disclosure [Abstract] | ||
Convertible debentures | 12.50% | |
Increase in net loss | $ 8.4 | |
Fair value expense | 6.3 | |
Interest expense increase | 0.9 | |
Debt default | $ 1.2 |
Restatement of Consolidated F_4
Restatement of Consolidated Financial Statements (Details) - Schedule of consolidated balance sheet - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
As Previously Reported [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Conversion Feature derivative liability | ||
Total current liabilities | 29,526 | |
Accumulated deficit | (40,910) | $ (28,130) |
Total stockholders’ deficit | (4,753) | |
Adjustments [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Conversion Feature derivative liability | 8,355 | |
Total current liabilities | 8,355 | |
Accumulated deficit | (8,355) | |
Total stockholders’ deficit | (8,355) | |
As Restated [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Conversion Feature derivative liability | 8,355 | |
Total current liabilities | 37,881 | |
Accumulated deficit | (49,265) | $ (29,368) |
Total stockholders’ deficit | $ (13,108) |
Restatement of Consolidated F_5
Restatement of Consolidated Financial Statements (Details) - Schedule of consolidated statements of operations $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
As Previously Reported [Member] | |
Other Income (Expense) | |
Loss contingency on debt default | $ (6,594) |
Revaluation of conversion feature derivative liability | |
Interest Expense | (2,991) |
Net Loss – continuing operations | $ (46,011) |
Net Loss per share - basic and diluted - continuing operations (in Dollars per share) | $ / shares | $ (0.33) |
Weighted Average Shares Outstanding - basic and diluted (in Shares) | shares | 139,061,084 |
Adjustments [Member] | |
Other Income (Expense) | |
Loss contingency on debt default | $ (1,227) |
Revaluation of conversion feature derivative liability | (6,278) |
Interest Expense | (850) |
Net Loss – continuing operations | $ (8,355) |
Net Loss per share - basic and diluted - continuing operations (in Dollars per share) | $ / shares | $ (0.06) |
Weighted Average Shares Outstanding - basic and diluted (in Shares) | shares | |
As Restated [Member] | |
Other Income (Expense) | |
Loss contingency on debt default | $ (7,821) |
Revaluation of conversion feature derivative liability | (6,278) |
Interest Expense | (3,841) |
Net Loss – continuing operations | $ (54,366) |
Net Loss per share - basic and diluted - continuing operations (in Dollars per share) | $ / shares | $ (0.39) |
Weighted Average Shares Outstanding - basic and diluted (in Shares) | shares | 139,061,084 |
Restatement of Consolidated F_6
Restatement of Consolidated Financial Statements (Details) - Schedule of consolidated statement of cash flows $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
As Previously Reported [Member] | |
Restatement of Consolidated Financial Statements (Details) - Schedule of consolidated statement of cash flows [Line Items] | |
Net loss from continuing operations | $ (46,011) |
Changes in adjustment to reconcile net loss to net cash used in operating activities | |
Loss contingency on debt default | 6,594 |
Change in fair value of derivative liability | |
Amortization of debt discount and debt issuance costs | 1,323 |
Net cash used in operating activities | (8,473) |
Adjustments [Member] | |
Restatement of Consolidated Financial Statements (Details) - Schedule of consolidated statement of cash flows [Line Items] | |
Net loss from continuing operations | (8,355) |
Changes in adjustment to reconcile net loss to net cash used in operating activities | |
Loss contingency on debt default | 1,227 |
Change in fair value of derivative liability | 6,278 |
Amortization of debt discount and debt issuance costs | 850 |
Net cash used in operating activities | |
As Restated [Member] | |
Restatement of Consolidated Financial Statements (Details) - Schedule of consolidated statement of cash flows [Line Items] | |
Net loss from continuing operations | (54,366) |
Changes in adjustment to reconcile net loss to net cash used in operating activities | |
Loss contingency on debt default | 7,821 |
Change in fair value of derivative liability | 6,278 |
Amortization of debt discount and debt issuance costs | 2,173 |
Net cash used in operating activities | $ (8,473) |
Going Concern (Details)
Going Concern (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Going Concern [Abstract] | |
Cash balance | $ 0.6 |
Working capital deficit | (22) |
Accumulated deficit | $ 49.3 |
Mining assets percentage | 75.00% |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 02, 2021 | Dec. 31, 2021 | Apr. 01, 2021 | Dec. 31, 2020 |
Basis of Presentation (Details) [Line Items] | ||||
Number of common stock right to receive (in Shares) | 35,588,548 | |||
Common stock par value per share (in Dollars per share) | $ 0.00001 | $ 0.00001 | ||
Percentage of outstanding shares of capital stock | 80.00% | |||
Purchase consideration | $ 0.3 | |||
Goodwill | 1.6 | |||
Debt conversion, converted amount | $ 19.4 | |||
Future shares issued (in Shares) | 5,589,820 | |||
Debt conversion price per share (in Dollars per share) | $ 0.569 | |||
Debt restructuring fees expense | $ 2 | |||
Prepaid consulting contract | 0.7 | |||
General and administrative expenses | 3.1 | |||
Revenues | 8.3 | |||
Operating loss | $ (3.2) | |||
Sysorex stock [Member] | ||||
Basis of Presentation (Details) [Line Items] | ||||
Shares issued (in Shares) | 34,097,255 | |||
Shares were immediately issued (in Shares) | 25,985,633 | |||
Prefunded warrant was issued (in Shares) | 5,111,622 | |||
Future shares issued (in Shares) | 3,000,000 | |||
Minimum [Member] | ||||
Basis of Presentation (Details) [Line Items] | ||||
Operations amounted | $ 8.3 | |||
Maximum [Member] | ||||
Basis of Presentation (Details) [Line Items] | ||||
Operations amounted | $ 27.4 | |||
TTM Digital [Member] | ||||
Basis of Presentation (Details) [Line Items] | ||||
Number of common stock right to receive (in Shares) | 124,218,268 | |||
Common stock par value per share (in Dollars per share) | $ 0.00001 |
Basis of Presentation (Detail_2
Basis of Presentation (Details) - Schedule of fair value of the identified assets acquired and liabilities $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Reverse Acquisition Fair Value [Member] | |
Basis of Presentation (Details) - Schedule of fair value of the identified assets acquired and liabilities [Line Items] | |
Cash | $ 28 |
Accounts receivable | 4,673 |
Prepaid assets and other current assets | 2,551 |
Property and equipment | 7 |
Goodwill | 1,634 |
Customer Relationships Intangible | 1,900 |
Tradename Intangible | 1,060 |
Other assets | 29 |
Accounts payable | (10,437) |
Accrued liabilities | (2,722) |
Deferred revenue | (590) |
Short term debt | (7,136) |
Long term debt | (12,711) |
Other liabilities | (9) |
Fair value allocated to net assets / (liabilities) | (21,723) |
Fair value of consideration and recapitalization equity | 281 |
Merger charges | (22,004) |
Debt restructuring fees | |
Net Sysorex equity and charges to income (loss) | (21,723) |
Sysorex Recapitalization Fair Value [Member] | |
Basis of Presentation (Details) - Schedule of fair value of the identified assets acquired and liabilities [Line Items] | |
Cash | |
Accounts receivable | |
Prepaid assets and other current assets | (1,289) |
Property and equipment | |
Goodwill | |
Customer Relationships Intangible | |
Tradename Intangible | |
Other assets | |
Accounts payable | 519 |
Accrued liabilities | 1,589 |
Deferred revenue | |
Short term debt | 3,871 |
Long term debt | 12,711 |
Other liabilities | |
Fair value allocated to net assets / (liabilities) | 17,401 |
Fair value of consideration and recapitalization equity | 19,401 |
Merger charges | |
Debt restructuring fees | (2,000) |
Net Sysorex equity and charges to income (loss) | 17,401 |
Aggregate Fair Value [Member] | |
Basis of Presentation (Details) - Schedule of fair value of the identified assets acquired and liabilities [Line Items] | |
Cash | 28 |
Accounts receivable | 4,673 |
Prepaid assets and other current assets | 1,262 |
Property and equipment | 7 |
Goodwill | 1,634 |
Customer Relationships Intangible | 1,900 |
Tradename Intangible | 1,060 |
Other assets | 29 |
Accounts payable | (9,918) |
Accrued liabilities | (1,133) |
Deferred revenue | (590) |
Short term debt | (3,265) |
Long term debt | |
Other liabilities | (9) |
Fair value allocated to net assets / (liabilities) | (4,322) |
Fair value of consideration and recapitalization equity | 19,682 |
Merger charges | (22,004) |
Debt restructuring fees | (2,000) |
Net Sysorex equity and charges to income (loss) | $ (4,322) |
Basis of Presentation (Detail_3
Basis of Presentation (Details) - Schedule of proforma results of operations - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Schedule of proforma results of operations [Abstract] | |||
Total Revenues | $ 26,519 | $ 13,394 | |
Net Loss | [1] | $ (24,160) | $ (1,993) |
Net Loss per share - basic and diluted (in Dollars per share) | $ (0.174) | $ (0.026) | |
Weighted Average Shares Outstanding - basic and diluted (in Shares) | 139,061,084 | 75,540,013 | |
Supplemental Pro forma Information (a) | |||
Merger charges | [2] | $ 22,004 | |
Restructuring fee | [2] | 2,000 | |
Transaction costs - Accounting acquirer and acquiree | [2] | 3,093 | |
Total Nonrecurring Pro forma Adjustments | [2] | $ 27,097 | |
[1] | Net Loss does not include supplemental pro forma information included in (a) above. | ||
[2] | Supplemental Pro forma Information consists of material, nonrecurring pro forma adjustments directly attributable to the reverse acquisition and Sysorex Recapitalization |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Nov. 02, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Principles of consolidation interest percentage | 50.00% | ||
Percentage of other interest | 50.00% | ||
Long-lived assets | $ 3,300 | ||
Deferred revenue | 900 | ||
Allowance for doubtful account | $ 50 | ||
Investment ownership, percentage | 20.00% | ||
Impairment charge | $ 700 | ||
Sale and disbursement of digital assets | 100 | $ 40 | |
Assets measured on a non recurring basis | 3,300 | ||
Digital assets | $ 700 | ||
Minimum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful life | 3 years | ||
Maximum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful life | 5 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of basic and diluted weighted average common shares outstanding - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of basic and diluted weighted average common shares outstanding [Abstract] | ||
Weighted-average common shares outstanding | 128,603,982 | 60,365,892 |
Weighted-average potential common shares considered outstanding | 10,457,102 | 15,174,121 |
Weighted-average common shares outstanding – basic | 139,061,084 | 75,540,013 |
Dilutive effect of options, warrants and restricted stock (in Dollars) | ||
Weighted-average common shares outstanding – diluted | 139,061,084 | 75,540,013 |
Options, restricted stock units, and warrants and convertible debt excluded from the computation of diluted loss per share because the effect of inclusion would be anti-dilutive | 6,603,716 |
Segment Reporting (Details)
Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reporting segments | 2 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of revenues, cost of revenues for our subsidiary segments $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
TTM Digital [Member] | |
Revenues | |
Products Revenue | |
Services Revenue | |
Mining Income | 4,394 |
Total Revenues | 4,394 |
Costs of Revenues | |
Product Cost of Revenue | |
Services Cost of Revenue | |
Mining Cost of Revenue | 457 |
Other Operating Expenses | 13,276 |
Operating Income (Loss) | (9,339) |
Total Segment Assets | 10,271 |
Sysorex Government Services [Member] | |
Revenues | |
Products Revenue | 6,516 |
Services Revenue | 1,756 |
Mining Income | |
Total Revenues | 8,272 |
Costs of Revenues | |
Product Cost of Revenue | 6,036 |
Services Cost of Revenue | 868 |
Mining Cost of Revenue | |
Other Operating Expenses | 4,568 |
Operating Income (Loss) | (3,200) |
Total Segment Assets | 8,940 |
Consolidated [Member] | |
Revenues | |
Products Revenue | 6,516 |
Services Revenue | 1,756 |
Mining Income | 4,394 |
Total Revenues | 12,666 |
Costs of Revenues | |
Product Cost of Revenue | 6,036 |
Services Cost of Revenue | 868 |
Mining Cost of Revenue | 457 |
Other Operating Expenses | 17,844 |
Operating Income (Loss) | (12,539) |
Total Segment Assets | $ 19,211 |
Discontinued Operations (Detail
Discontinued Operations (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Discontinued Operations (Details) [Line Items] | |
Mining assets | 75.00% |
Carrying value of digital assets | $ 6,070 |
TTM Digital [Member] | |
Discontinued Operations (Details) [Line Items] | |
Mining assets | 75.00% |
Discontinued Operations (Deta_2
Discontinued Operations (Details) - Schedule of balance sheet - Discontinued Operations [Member] - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Related Party receivables | $ 17 | |
Mining equipment and facilities, net | 5,571 | |
Investment in Style Hunter | 500 | |
Total Current Assets | 6,071 | 17 |
Noncurrent Assets | ||
Mining equipment and facilities, net | 1,272 | |
Investment in Up North Hosting, LLC | 644 | |
Total Noncurrent Assets | 1,916 | |
Total Assets associated with discontinued operations | 6,071 | 1,933 |
Liabilities associated with discontinued operations | ||
Accounts payable | 7 | |
Accrued liabilities | 117 | |
Related party loan | 75 | |
Total Current Liabilities | 199 | |
Total Liabilities associated with discontinued operations | $ 199 |
Discontinued Operations (Deta_3
Discontinued Operations (Details) - Schedule of statement of operations - Discontinued Operations [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | ||
Mining income | $ 8,150 | $ 1,868 |
Other revenue | 29 | |
Total Revenues | 8,179 | 1,868 |
Operating costs and expenses | ||
Mining cost | 815 | 433 |
General and administrative | 291 | 4 |
Depreciation | 1,637 | 827 |
Total Operating Costs and Expenses | 2,743 | 1,264 |
Gain from Discontinued Operations | 5,436 | 604 |
Other Income (Expenses) | ||
Gain (loss) on sale of fixed assets | (146) | 17 |
Fair value gain on previously held equity interest | (18) | |
Other income (expenses), net | 58 | (29) |
Total Other Income | (106) | 12 |
Income before net loss of equity method investee | 5,330 | 592 |
Share of net loss of equity method investee | (94) | (39) |
Net income from discontinued operations | $ 5,236 | $ 553 |
Discontinued Operations (Deta_4
Discontinued Operations (Details) - Schedule of cash flows from operating activities - Discontinued Operations [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Discontinued Operations (Details) - Schedule of cash flows from operating activities [Line Items] | ||
Net cash provided by operating activities -discontinued operations | $ 1,369 | $ 595 |
Net cash used in investing activities – discontinued operations | (1,436) | (582) |
Net cash provided by financing activities – discontinued operations | $ 20 |
Equity Method Investments (Deta
Equity Method Investments (Details) - Schedule of balance sheet - Up North Hosting [Member] - USD ($) $ in Thousands | Nov. 01, 2021 | Dec. 31, 2020 |
Equity Method Investments (Details) - Schedule of balance sheet [Line Items] | ||
Current assets | $ 260 | $ 121 |
Non-current assets | 1,183 | 1,247 |
Total assets | 1,443 | 1,368 |
Current liabilities | 144 | 197 |
Total liabilities | 144 | 197 |
Members’ equity | 1,377 | 1,177 |
Retained Earnings (Deficit) | (78) | (6) |
Total Members’ Equity | 1,299 | 1,171 |
Total Liabilities and Members’ Equity | $ 1,443 | $ 1,368 |
Equity Method Investments (De_2
Equity Method Investments (Details) - Schedule of fixed assets, net - USD ($) $ in Thousands | Nov. 01, 2021 | Dec. 31, 2020 |
Asset Acquisition [Line Items] | ||
Gross value | $ 1,393 | $ 1,389 |
Accumulated depreciation | (244) | (177) |
Property, plant, and equipment, net | 1,149 | 1,212 |
Building [Member] | ||
Asset Acquisition [Line Items] | ||
Gross value | 513 | 513 |
Electrical Infrastructure Assets [Member] | ||
Asset Acquisition [Line Items] | ||
Gross value | 525 | 525 |
Machinery & Equipment Assets [Member] | ||
Asset Acquisition [Line Items] | ||
Gross value | 34 | 30 |
Mechanical (HVAC) Assets [Member] | ||
Asset Acquisition [Line Items] | ||
Gross value | 271 | 271 |
Server and Network Assets [Member] | ||
Asset Acquisition [Line Items] | ||
Gross value | $ 50 | $ 50 |
Equity Method Investments (De_3
Equity Method Investments (Details) - Schedule of operations - Up North Hosting [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Equity Method Investments (Details) - Schedule of operations [Line Items] | ||
Revenues | $ 930 | $ 898 |
Cost of revenues, excluding depreciation | 776 | 725 |
Selling, general, and administrative | 286 | 351 |
Other (Income)/Expense | (60) | (5) |
Net loss | (72) | (173) |
Net loss attributable to TTM | $ (36) | $ (87) |
Up North Business Combination_3
Up North Business Combination / Bitworks Asset Acquisition (Details) - USD ($) $ / shares in Units, shares in Millions | 12 Months Ended | |
Dec. 31, 2021 | Nov. 02, 2021 | |
Up North Business Combination / Bitworks Asset Acquisition (Details) [Line Items] | ||
Ownership percentage | 20.00% | |
Acquired interests | $ 1,000,000 | |
Restricted common stock | 1 | |
Par value per share | $ 0.00001 | |
Business combination transaction description | The total transaction consideration paid for the Acquisition was valued at $1.4 million. The transaction consideration was allocated to the UNH Acquisition and the Bitworks Equipment in the amounts of $705,900 and $694,100, respectively. The UNH Acquisition was accounted for as a business combination using the acquisition method in accordance with Accounting Standards Codification 805, Business Combinations. In accounting for the UNH Acquisition the purchase consideration consisted of the fair value of the Up North membership interest previously owned by the Company and accounted for as an equity method investment of $631,500 and the transaction consideration allocated of $705,900 and reduced by the effective settlement of intercompany transactions of $104,285 for net purchase consideration of $1,233,115. The previous membership interest in Up North had a carrying value of $649,462 resulting in the recognition of a loss on the conversion of the equity method investment of $17,962. | |
Operations amount | $ 1.1 | |
BWP Holdings, LLC [Member] | ||
Up North Business Combination / Bitworks Asset Acquisition (Details) [Line Items] | ||
Membership interest rate | 50.00% | |
North Hosting LLC [Member] | ||
Up North Business Combination / Bitworks Asset Acquisition (Details) [Line Items] | ||
Ownership percentage | 100.00% |
Up North Business Combination_4
Up North Business Combination / Bitworks Asset Acquisition (Details) - Schedule of identified assets acquired and liabilities assumed relating to the Acquisition $ in Thousands | Dec. 31, 2021USD ($) |
UNH Acquisition Fair Value [Member] | |
Up North Business Combination / Bitworks Asset Acquisition (Details) - Schedule of identified assets acquired and liabilities assumed relating to the Acquisition [Line Items] | |
Cash | $ 87 |
Accounts receivable | 67 |
Prepaid assets and other current assets | 1 |
Property and equipment | 1,098 |
Property tax abatement intangible | 90 |
Other assets | 34 |
Accounts payable | (90) |
Accrued liabilities | (54) |
Fair value allocated to net assets / (liabilities) | 1,233 |
Fair value of transaction consideration | 706 |
Fair value of equity method investment exchanged | 631 |
Effective settlement of intercompany transactions | (104) |
Fair value of purchase consideration | 1,233 |
Bitworks Equipment Fair Value [Member] | |
Up North Business Combination / Bitworks Asset Acquisition (Details) - Schedule of identified assets acquired and liabilities assumed relating to the Acquisition [Line Items] | |
Cash | |
Accounts receivable | |
Prepaid assets and other current assets | |
Property and equipment | 694 |
Property tax abatement intangible | |
Other assets | |
Accounts payable | |
Accrued liabilities | |
Fair value allocated to net assets / (liabilities) | 694 |
Fair value of transaction consideration | 694 |
Fair value of equity method investment exchanged | |
Effective settlement of intercompany transactions | |
Fair value of purchase consideration | 694 |
Aggregate Fair Value [Member] | |
Up North Business Combination / Bitworks Asset Acquisition (Details) - Schedule of identified assets acquired and liabilities assumed relating to the Acquisition [Line Items] | |
Cash | 87 |
Accounts receivable | 67 |
Prepaid assets and other current assets | 1 |
Property and equipment | 1,792 |
Property tax abatement intangible | 90 |
Other assets | 34 |
Accounts payable | (90) |
Accrued liabilities | (54) |
Fair value allocated to net assets / (liabilities) | 1,927 |
Fair value of transaction consideration | 1,400 |
Fair value of equity method investment exchanged | 631 |
Effective settlement of intercompany transactions | (104) |
Fair value of purchase consideration | $ 1,927 |
Mining Equipment, Net (Details)
Mining Equipment, Net (Details) $ in Millions | Apr. 02, 2021 | Dec. 31, 2021USD ($)shares |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 2.5 | |
Number of GPUs | 4,500 | 4,500 |
Gross proceeds | $ 2.2 | |
Shares issued (in Shares) | shares | 35,588,548 |
Mining Equipment, Net (Detail_2
Mining Equipment, Net (Details) - Schedule of mining equipment, net - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accumulated Depreciation | ||
Mining Equipment, net | $ 4,077 | |
Mining Equipment (non-GPUs) [Member] | ||
Accumulated Depreciation | ||
Accumulated Depreciation | (123) | |
GPUs [Member] | ||
Accumulated Depreciation | ||
Accumulated Depreciation | (2,326) | |
Mining Equipment (non-GPUs) [Member] | ||
Gross Mining Equipment: | ||
Gross Mining Equipment | 493 | |
GPUs [Member] | ||
Gross Mining Equipment: | ||
Gross Mining Equipment | $ 6,033 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets $ in Thousands | Dec. 31, 2021USD ($) |
Intangible Assets (Details) - Schedule of intangible assets [Line Items] | |
Gross Carrying Amount | $ 2,960 |
Accumulated Amortization | (407) |
Net Carrying Amount | 2,553 |
Trade name [Member] | |
Intangible Assets (Details) - Schedule of intangible assets [Line Items] | |
Gross Carrying Amount | 1,060 |
Accumulated Amortization | (74) |
Net Carrying Amount | 986 |
Customer Relationships [Member] | |
Intangible Assets (Details) - Schedule of intangible assets [Line Items] | |
Gross Carrying Amount | 1,900 |
Accumulated Amortization | (333) |
Net Carrying Amount | $ 1,567 |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of remaining years $ in Thousands | Dec. 31, 2021USD ($) |
Schedule of remaining years [Abstract] | |
2022 | $ 573 |
2023 | 573 |
2024 | 573 |
2025 | 266 |
2026 | 105 |
Thereafter | 463 |
Total | $ 2,553 |
Credit Risk and Concentration_2
Credit Risk and Concentrations (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Credit Risk and Concentrations (Details) [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Purchases from vendors | $ 14,200 | ||
Digital assets | $ 5,202 | 5,202 | $ 24 |
Cash payment | 600 | 600 | |
Vendor One [Member] | |||
Credit Risk and Concentrations (Details) [Line Items] | |||
Purchases from vendors | 3,800 | ||
Vendor Two [Member] | |||
Credit Risk and Concentrations (Details) [Line Items] | |||
Purchases from vendors | 2,600 | ||
Vendor Three [Member] | |||
Credit Risk and Concentrations (Details) [Line Items] | |||
Purchases from vendors | 2,600 | ||
TTM Vendor [Member] | |||
Credit Risk and Concentrations (Details) [Line Items] | |||
Cash pain in common stock | 12,000 | ||
Cash paid | 2,200 | 2,200 | |
Digital assets | 1,100 | 1,100 | |
Cash payment | $ 1,100 | $ 1,100 | |
Accounts receivable [Member] | |||
Credit Risk and Concentrations (Details) [Line Items] | |||
Concentration risk, percentage | 11.00% | ||
Total Purchase [Member] | Vendor One [Member] | |||
Credit Risk and Concentrations (Details) [Line Items] | |||
Concentration risk, percentage | 36.00% | ||
Total Purchase [Member] | Vendor Two [Member] | |||
Credit Risk and Concentrations (Details) [Line Items] | |||
Concentration risk, percentage | 25.00% | ||
Purchases from vendors | $ 14,200 | ||
Total Purchase [Member] | Vendor Three [Member] | |||
Credit Risk and Concentrations (Details) [Line Items] | |||
Concentration risk, percentage | 25.00% | ||
Customer A [Member] | |||
Credit Risk and Concentrations (Details) [Line Items] | |||
Purchases from vendors | $ 4,826 | ||
Customer A [Member] | Accounts receivable [Member] | |||
Credit Risk and Concentrations (Details) [Line Items] | |||
Concentration risk, percentage | 72.00% |
Credit Risk and Concentration_3
Credit Risk and Concentrations (Details) - Schedule of risk percentage of revenue $ in Thousands | 9 Months Ended |
Dec. 31, 2021USD ($) | |
Customer A [Member] | |
Revenue, Major Customer [Line Items] | |
Purchases from vendors | $ 4,826 |
Concentration risk, percentage | 44.00% |
Customer B [Member] | |
Revenue, Major Customer [Line Items] | |
Purchases from vendors | $ 2,946 |
Concentration risk, percentage | 27.00% |
Short Term Debt (Details)
Short Term Debt (Details) - USD ($) | Jan. 07, 2022 | Aug. 13, 2021 | Jul. 07, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Short Term Debt (Details) [Line Items] | |||||
Principal amount | $ 15,200,000 | ||||
Bearing interest rate | 12.50% | ||||
Total gross proceeds | $ 1,500,000 | ||||
Agent fees and expenses | 1,300,000 | ||||
Aggregate principal amount | $ 19,439,000 | ||||
Warrant purchase agreement , description | The exercise price will be either 1) the Qualified Offering Price, in the event of a Qualified Offering or 2) in the event of no Qualified Offering, the lower of a) $18.00 and b) an amount equal to 80% of the average of VWAP (as defined therein) for the common stock. The term of the warrant is five years. The warrants issued in connection with the debt were equity classified at issuance and were allocated a value of approximately $896,000 on a relative fair value basis. | ||||
Debt discount attributed | $ 800,000 | ||||
Derivative liability | $ 2,100,000 | ||||
Convertibility note description | The Conversion Price is set at the lower of (i) $18.00 and (ii) 80% of the average of the VWAP during the 5 Trading Day period immediately prior to the applicable Conversion Date. | ||||
Receives gross proceeds | $ 40,000,000 | ||||
Initial fair value | 2,100,000 | ||||
Revaluation loss | $ 6,300,000 | ||||
Conversion option (in Shares) | 8,400,000 | ||||
Debentures provide | $ 50,000 | ||||
Judgement total | 5,942,559.05 | ||||
Principal sum | 3,341,801.8 | ||||
Prejudgment interest | 2,600,757.25 | ||||
Recorded a loss | 7,800,000 | ||||
Debt issuance costs | 3,300,000 | ||||
Principal increase | 4,200,000 | ||||
Debt and issuance costs incurred | 0.3 | ||||
Interest expense | $ 1,500,000 | ||||
Non-recourse factoring and security agreement | Effective as June 19, 2020, prior to the merger, the Company and SouthStar Financial, LLC (“SouthStar”) entered into a Non-Recourse Factoring and Security Agreement (the “Agreement”) pursuant to which SouthStar may purchase receivables from the Company (the “Purchased Receivables”) for a price not to exceed 85% of the face value of the Purchased Receivables or a lesser percentage agreed upon between the Company and SouthStar. In consideration of SouthStar’s purchase of the Purchased Receivables, the Company will pay to SouthStar an amount equal to 0.8% of the face amount of the Purchased Receivables for the first 10-day period after payment for the Purchased Receivables is transmitted to SouthStar plus 0.9% for each additional 10-day period or part thereof, calculated from the date of purchase until payments received by SouthStar in collected funds on the Purchased Receivables equals the purchase price of the Purchased Receivables plus all charges due SouthStar from the Company at the time. An additional 1.0% per 10-day period will be charged for invoices exceeding 60 days from invoice date. | ||||
Subsequent Event [Member] | |||||
Short Term Debt (Details) [Line Items] | |||||
Bearing interest rate | 18.00% | ||||
Bearing interest rate | 130.00% | ||||
Warrant exercise price (in Dollars per share) | $ 18 | ||||
Weighted average price | 50.00% | ||||
2021 Convertible Debentures & Warrants [Member] | |||||
Short Term Debt (Details) [Line Items] | |||||
Bearing interest rate | 12.50% | 12.50% | |||
Aggregate principal amount | $ 9,990,000 | ||||
Shares of common stock (in Shares) | 1,862,279 | 3,500,000 | |||
Total gross proceeds | $ 3,500,000 | $ 8,900,000 | |||
Bearing interest rate | 12.00% | 12.50% | |||
Agent fees and expenses | $ 300,000 | $ 900,000 | |||
Maturity date | Aug. 13, 2022 | Jul. 7, 2022 | |||
Aggregate principal amount | $ 3,400,000 | ||||
Convertible Debt [Member] | |||||
Short Term Debt (Details) [Line Items] | |||||
Interest payable | $ 1,200,000 |
Short Term Debt (Details) - Sch
Short Term Debt (Details) - Schedule of Short Term Debt $ in Thousands | Dec. 31, 2021USD ($) |
Schedule of Short Term Debt [Abstract] | |
Convertible Debentures & Warrants, including interest payable to the Convertible Debenture Holders | $ 19,439 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | Dec. 31, 2021USD ($) |
Fair Value Disclosures [Abstract] | |
Change in fair value | $ 6,278,000 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - Schedule of fair value measurements asset or a liability - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Measurements (Details) - Schedule of fair value measurements asset or a liability [Line Items] | ||
Conversion feature derivative liability | $ 8,355 | |
Total derivative liabilities | 8,355 | |
Total recurring fair value measurements | 8,355 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Measurements (Details) - Schedule of fair value measurements asset or a liability [Line Items] | ||
Recurring fair value measurements | ||
Conversion feature derivative liability | ||
Total derivative liabilities | ||
Total recurring fair value measurements | ||
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Measurements (Details) - Schedule of fair value measurements asset or a liability [Line Items] | ||
Recurring fair value measurements | ||
Conversion feature derivative liability | 8,355 | |
Total derivative liabilities | 8,355 | |
Total recurring fair value measurements | 8,355 | |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Measurements (Details) - Schedule of fair value measurements asset or a liability [Line Items] | ||
Conversion feature derivative liability | ||
Total derivative liabilities | ||
Total recurring fair value measurements |
Income taxes (Details)
Income taxes (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Income Tax Disclosure [Abstract] | |
U.S. federal net operating loss | $ 15.2 |
Taxable income | $ 6.1 |
Taxable income percentage | 80.00% |
Net change in valuation allowance | $ 11.3 |
Net change in valuation allowance | $ 6 |
Income taxes (Details) - Sched
Income taxes (Details) - Schedule of net loss before income tax $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Schedule of net loss before income tax [Abstract] | |
Net loss before income tax | $ (49,130) |
Income taxes (Details) - Sch_2
Income taxes (Details) - Schedule of income tax expense (benefit) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
U.S. Federal | ||
Current | ||
Deferred | (4,512) | |
State and Local | ||
Current | ||
Deferred | (807) | |
Total | (5,319) | |
Change in Valuation Allowance | 5,319 | |
Total income tax provision (benefit) |
Income taxes (Details) - Sch_3
Income taxes (Details) - Schedule of reconciliation between the U.S. statutory federal income tax rate | 12 Months Ended |
Dec. 31, 2021 | |
Schedule of reconciliation between the U.S. statutory federal income tax rate [Abstract] | |
Pretax Income | 21.00% |
State taxes, net of federal benefit | 2.20% |
Merger charges | (8.50%) |
Other permanent items | (1.20%) |
Derivative valuation | (2.70%) |
Change in valuation allowance | (10.80%) |
Effective income tax rate | 0.00% |
Income taxes (Details) - Sch_4
Income taxes (Details) - Schedule of deferred tax assets - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax assets: | ||
Net operating loss carry forwards | $ 3,501 | |
Fixed assets | 1,126 | |
Accrued compensation | 40 | |
Reserves | 504 | |
Intangible assets | 3,053 | |
Business interest limitation | 727 | |
Lease Liabilities | 142 | |
Tax Credits | 211 | |
Derivative adjustment | 1,937 | |
Other | 181 | |
Total deferred tax assets before valuation allowance | 11,422 | |
Valuation allowance | (11,280) | |
Total deferred tax assets after valuation allowance | 142 | |
Deferred tax liabilities: | ||
Operating lease right of use assets | (142) | |
Total deferred tax liabilities | (142) | |
Net deferred tax assets and liabilities |
Digital Assets (Details)
Digital Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Digital Assets [Abstract] | |||
Revenue from mining | $ 12.5 | ||
Continuing operations | 4.4 | ||
Discontinued operations | $ 72.7 | $ 8.1 | $ 1.8 |
Digital Assets (Details) - Sche
Digital Assets (Details) - Schedule of digital asset activity from continuing and discontinued operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Schedule of digital asset activity from continuing and discontinued operations [Abstract] | |||
Opening Balance | $ 24 | $ 25 | |
Revenue from mining | [1] | 12,534 | 1,868 |
Received for membership interest | 46 | ||
Payment of Mining equipment under lease to buy arrangement | (1,091) | ||
Mining pool operating fees | (129) | (4) | |
Management fees | (321) | (189) | |
Transaction fees | (26) | ||
Owners’ distributions | (1,521) | (1,211) | |
Digital asset impairment | (704) | ||
Proceeds from sale of digital assets | (3,670) | (555) | |
Realized gain on sale of digital assets | 106 | 44 | |
Ending Balance | $ 5,202 | $ 24 | |
[1] | Of the $12.5 million revenue from mining, $4.4 million in continuing operations and $8.1 million in discontinued operations. The $1.8 million in 2020 is included in discontinued operations. |
Equity (Details)
Equity (Details) | Nov. 02, 2021USD ($)$ / sharesshares | Apr. 02, 2021USD ($)shares | Apr. 14, 2021 | Mar. 31, 2021shares | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2021USD ($)$ / sharesshares | Jul. 20, 2021shares |
Equity (Details) [Line Items] | |||||||
Common stock, shares authorized | 499,560,659 | ||||||
Common stock, par value (in Dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |||||
Common stock vote, description | The holders of the Company’s common stock are entitled to one vote per share. | ||||||
Common stock, shares issued | 145,713,591 | ||||||
Common stock, shares outstanding | 145,638,212 | ||||||
Shares issued | 35,588,548 | ||||||
Asset contribution | 4,500 | 4,500 | |||||
Equity outstanding, percentage | 28.65% | ||||||
Value of shares (in Dollars) | $ | $ 12,000,000 | ||||||
Reverse merger, description | As a result of the reverse merger, the Company recognized the 494,311 shares outstanding of the existing Sysorex Shareholders and the 75,379 shares of Treasury stock of Sysorex that are part of the legal capital structure. The Company recorded $0.03 million as purchase consideration on the recognition of the existing Sysorex Shareholders share by the reporting entity. | ||||||
Merger agreement, description | As discussed in Note 3, the majority of the Sysorex debt, certain liabilities classified as current and a forward consulting contract with a former Sysorex Board Member (the “Debt Items”) aggregating $19.4 million were converted to 34,097,255 Sysorex shares when fully issued (the “Sysorex Recapitalization”). 25,985,633 shares were immediately issued, prefunded rights were exchanged from an investor’s issued shares for 5,111,622 shares which were subsequently issued on March 24, 2022, and the right to receive 3,000,000 shares of Sysorex stock at a future date at the option of the holder subject to certain events. | ||||||
Pre-merger shares | 2,577,000 | ||||||
Investment interest rate | 50.00% | ||||||
Purchase obligation (in Dollars) | $ | $ 1,000,000 | ||||||
Restricted stock value shares issued net of tax withholdings (in Dollars) | $ | $ 400,000 | ||||||
Sale of stock price per share (in Dollars per share) | $ / shares | $ 0.00001 | ||||||
Restricted common stock shares issued | 40,000 | ||||||
Equity incentive plan description | The aggregate maximum number of shares of common stock for which stock options or awards may be granted pursuant to the 2018 Plan is 80,000, which number will be automatically increased on the first day of each quarter, beginning on January 1, 2019 and for each quarter thereafter, by a number of shares of common stock equal to the least of (i) 10,000 shares,(ii) 10% of the shares of common stock issued and outstanding on that date, or (iii) a lesser number of shares that may be determined by the board. No awards may be issued after July 30, 2028. | ||||||
Common stock reserved | 8,000,000 | ||||||
Shares of common stock | 1,656,000 | ||||||
Stock options, term | 10 years | ||||||
Derived service period amount (in Dollars) | $ | $ 400,000 | ||||||
Fair value of common stock per share (in Dollars per share) | $ / shares | $ 0.24 | ||||||
Stock-based compensation (in Dollars) | $ | $ 60,000 | ||||||
Unrecognized stock-based compensation (in Dollars) | $ | $ 340,000 | ||||||
Weighted average contractual term, per share (in Dollars per share) | $ / shares | $ 4.61 | ||||||
Unrecognized stock compensation (in Dollars) | $ | $ 200,000 | ||||||
2018 Plan [Member] | |||||||
Equity (Details) [Line Items] | |||||||
Stock option description | The option price must be at least 100% of the fair market value on the date of grant and if an Incentive Stock Option is issued to a 10% or greater shareholder the grant must be 110% of the fair market value on the date of the grant. | ||||||
Common Stock [Member] | |||||||
Equity (Details) [Line Items] | |||||||
Common stock, shares authorized | 499,560,659 | ||||||
Common stock, par value (in Dollars per share) | $ / shares | $ 0.00001 | ||||||
Preferred Stock [Member] | |||||||
Equity (Details) [Line Items] | |||||||
Preferred stock, shares issued | 10,000,000 | ||||||
Preferred stock, par value (in Dollars per share) | $ / shares | $ 0.00001 | ||||||
Moon Manager LLC [Member] | |||||||
Equity (Details) [Line Items] | |||||||
Aggregate of amount proceeds (in Dollars) | $ | $ 66,431,920 | ||||||
Shares issued | 14,607,980 | ||||||
Additional shares purchased | 2,000,000 | ||||||
Common Stock [Member] | |||||||
Equity (Details) [Line Items] | |||||||
Restricted stock value shares issued net of tax withholdings (in Dollars) | $ | $ 1,000,000 |
Equity (Details) - Schedule of
Equity (Details) - Schedule of stock option activity | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Schedule of stock option activity [Abstract] | |
Number of Options, Outstanding, Beginning balance | shares | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ / shares | |
Number of Options, Granted | shares | 1,656,000 |
Weighted Average Exercise Price, Granted | $ / shares | $ 2 |
Number of Options, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Number of Options, Forfeited or cancelled | shares | |
Weighted Average Exercise Price, Forfeited or cancelled | $ / shares | |
Number of Options, Outstanding, Ending balance | shares | 1,656,000 |
Weighted Average Exercise Price, Outstanding, Ending balance | $ / shares | $ 2 |
Number of Options, Exercisable, Ending balance | shares | 1,656,000 |
Weighted Average Exercise Price, Exercisable, Ending balance | $ / shares | $ 2 |
Equity (Details) - Schedule o_2
Equity (Details) - Schedule of warrants | 12 Months Ended | |
Dec. 31, 2021$ / sharesshares | ||
Schedule of warrants [Abstract] | ||
Number of Warrants, Outstanding beginning balance | ||
Weighted Average Exercise Price, Outstanding beginning balance | $ / shares | ||
Number of Restricted Stock Shares, Outstanding beginning balance | ||
Weighted Average Exercise Price, Granted | $ / shares | $ 0.4 | |
Number of Restricted Stock Shares, Granted | 1,650,000 | |
Weighted Average Exercise Price, Vested | $ / shares | ||
Number of Restricted Stock Shares, Vested | 650,000 | |
Weighted Average Exercise Price, Unvested | $ / shares | $ 0.4 | |
Number of Restricted Stock Shares, Unvested | 1,000,000 | |
Number of Warrants, Granted | 5,926,763 | |
Weighted Average Exercise Price, Granted | $ / shares | [1] | |
Number of Warrants, Exercised | ||
Weighted Average Exercise Price, Exercised | $ / shares | ||
Number of Warrants, Outstanding ending balance | 5,926,763 | |
Weighted Average Exercise Price, Outstanding ending balance | $ / shares | ||
[1] | The exercise price will be determined by a 5-day VWAP price calculation on the exercise date. |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | Jan. 14, 2022 | Aug. 15, 2018 | Aug. 10, 2018 | Jan. 29, 2018 | Jan. 22, 2018 | Sep. 05, 2017 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 13, 2022 |
Commitments and Contingencies (Details) [Line Items] | ||||||||||
Payment of unpaid invoices | $ 1,800,000 | |||||||||
Accrued liability | $ 100,000 | $ 600,000 | ||||||||
Interest | $ 1,000 | $ 7,000 | $ 11,000 | |||||||
Default rate percentage | 6.00% | 8.00% | ||||||||
Judgment amount | $ 336,000 | |||||||||
LegalFees | $ 20,000 | |||||||||
Commitment accrued liability | 0.2 | |||||||||
Aggregate of principal amount | $ 6,849,423.42 | $ 3,341,801.8 | ||||||||
Interest rate per annum | 18.00% | |||||||||
Confession of Judgement description | On December 14, 2021, the Company became aware that a Confession of Judgment (the “Confession of Judgment”) had been entered against the Company in the Superior Court of the State of California, County of Santa Clara by Tech Data on September 24, 2021. The Confession of Judgement is entered for a total sum of $5,942,559.05, which is comprised of the principal sum of $3,341,801.80 and prejudgment interest in the sum of $2,600,757.25. | |||||||||
Award excess price | $ 4,200,000 | |||||||||
Settlement amount | $ 1,375,000 | |||||||||
Vendor liability | $ 2,908,133 | |||||||||
Forecast [Member] | ||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||
Recognize gain | $ 1,375,000 | |||||||||
Total recognize gain | $ 1,533,133 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of current and long-term operating lease liabilities - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | ||
Leased assets obtained in exchange for new and modified operating lease liabilities | (558) | |
Leased assets surrendered in exchange for termination of operating lease liabilities |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of future minimum operating leases $ in Thousands | Dec. 31, 2021USD ($) |
Schedule of future minimum operating leases [Abstract] | |
2022 | $ 123 |
2023 | 214 |
2024 | 219 |
2025 | 92 |
Total future lease payments | 648 |
Less: interest expense at incremental borrowing rate | (90) |
Net present value of lease liabilities | $ 558 |
Commitments and Contingencies_5
Commitments and Contingencies (Details) - Schedule of operating leases | Dec. 31, 2021 |
Schedule of operating leases [Abstract] | |
Weighted average remaining lease term | 3 years 4 months 28 days |
Weighted average discount rate used to determine present value of operating lease liability: | 8.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jul. 09, 2021 | Apr. 01, 2021 | Sep. 26, 2021 | Apr. 29, 2021 | Dec. 31, 2021 |
Related Party Transactions (Details) [Line Items] | |||||
Equity interest percentage | 20.00% | ||||
Ownership percentage | 28.65% | ||||
Total payment | $ 2,200,000 | ||||
Fair value of installment payments | 2,100,000 | ||||
Financing interest costs | 70,000 | ||||
Installation expenses | $ 2,200,000 | ||||
Interest expenses, description | The Company recognized approximately $70,000 of such interest expenses for the year ended December 31, 2021, respectively. | ||||
Hosting contract description | At the signing of the Hosting Contract an estimated 382 data mining rigs were covered at an estimated monthly cost of approximately $21,556 ($260,000 per year). | ||||
Hosting costs | $ 194,000 | ||||
Services agreement description | The initial term of the Services Agreement runs from April 1, 2021, through December 31, 2022, and automatically renews thereafter for successive one (1)-year terms unless either party provides written notice to the other of nonrenewal within sixty (60) days of the expiration of the then current Term. The initiation of the Services Agreement required a one-time payment of $100,000. The monthly base management fee was set to $20.00 per GPU-based Mining System (approximately $20,000 per month), and $6.50 per ASIC-based Mining System. Base management fees are paid in arrears and due within fifteen (15) days of invoice receipt. If, during any calendar month of the Term, CoreWeave operates on average, more than 1,500 Mining Systems on behalf of the Company, the Base Management Fee with respect to the excess Mining Systems above 1,500 is discounted by 40%. | ||||
Services cost | $ 175,000 | ||||
Expansion agreement, description | Pursuant to the expansion agreement, the Company issued to Bespoke 250,000 shares of restricted common stock, of which 20,000 were earned as of the effective date of the original agreement and 230,000 which were earned as a result of the expansion agreement. The issuance of the shares was included within the Sysorex Recapitalization shares associated with the Merger on April 14, 2021. | ||||
Common stock, shares issued (in Shares) | 5,589,820 | ||||
Pre-funded warrants (in Shares) | 5,250,000 | ||||
Recognized an expense | $ 1,884,888 | ||||
Consulting agreement, description | Under the terms of the consulting agreement, the Company incurred an expense of approximately $738,221 and paid a total amount of $975,000 during the year ended December 31, 2021. | ||||
Ressense LLC, description | As compensation for the performance of services, the Company paid and recorded $125,000 for the year ended December 31, 2021. | ||||
Warrant [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Common stock, shares issued (in Shares) | 5,250,000 | ||||
Style Hunter, Inc. [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Business combination description | the Company acquired a 5% minority interest in Style Hunter, Inc. (“Hunt”). The Hunt issued 613,723 shares of its common stock: par value $0.0001 per share for $0.81470 per share for a total price of $500,000. The Company shall have a one-time option to purchase an additional $500,000 of the Common Stock (“Option”) on or before the 360-day anniversary of Closing Date as follows: (i) if the Buyer exercises its Option prior to the 90-day anniversary of Closing Date the per-share purchase price of the additional shares of Common Stock (the “Option Price”) shall be $0.81470 (a $10,000,000 Company valuation), (ii) if the Buyer exercises its Option after the 90-day anniversary of Closing Date, but prior to the 180-day anniversary of Closing Date, the Option Price will be $1.22200 (a $15,000,000 Company valuation), or (iii) if the Buyer exercises its option after the 180-day anniversary of Closing the Option Price will be $2.03670 (a $25,000,000 Company valuation). | ||||
Asset Contribution and Exchange Agreement [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Equity interest percentage | 28.65% | ||||
Asset Contribution and Exchange Agreement [Member] | TTM Digital [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Merger transaction value | $ 12,000,000 | ||||
Asset Contribution and Exchange Agreement [Member] | Corweave, Inc. [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Shares issued (in Shares) | 35,588,548 | ||||
Master Services Agreement [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Services cost | $ 35,000 | $ 105,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Mar. 24, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 12, 2022 |
Subsequent Events (Details) [Line Items] | |||||
Mining assets, percentage | 75.00% | ||||
Non-assessable shares (in Shares) | 7,125,000 | ||||
Purpose acquisition, description | The Shares shall not be transferable by the Company and may not be distributed by dividend or otherwise by the Company until such time as the earlier of the following shall occur: (i) Ostendo completes an underwritten initial public offering of its common stock pursuant to a registration statement under the Securities Act of 1933, as amended, or similar law of a foreign jurisdiction, (ii) Ostendo’s outstanding shares of capital stock are exchanged for or otherwise converted into securities that are publicly listed, pursuant to a transaction governing such exchange or conversion, on a national securities exchange, including through a merger (including a reverse merger), acquisition, business combination or similar transaction, in one transaction or series of related transactions, and including a transaction or series of related transactions involving a vehicle commonly known as a special purpose acquisition company (SPAC) (“Public Listing”), (iii) a “change in control” event with at least 50% plus 1 share of Ostendo’s issued and outstanding capital stock being sold to an unaffiliated third-party, or (iv) Ostendo undergoing a liquidity or other event that necessitates the transfer of the Shares (each, a “Transfer Event”). Upon the occurrence of a Transfer Event, the Company shall have the right to transfer the Shares. Pursuant to the Heads of Term agreement, the Company agreed to transfer 312,500 shares to Bespoke Growth Partners, Inc. and 1,562,500 shares to Omniverse LLC, Accordingly, following the closing, the Company will hold 5,250,000 shares, Bespoke Growth Partners, Inc. will hold 312,500 shares and Omniverse LLC will hold 1,562,500 shares. | ||||
Non-refundable deposit | $ 1,600,000 | ||||
Purchase of additional shares (in Shares) | 166,667 | ||||
Convertible debenture holders | $ 1,600,000 | ||||
Debt owed shares | 72,700,000 | $ 8,100,000 | $ 1,800,000 | ||
Loss on debt extinguishment | $ 500,000 | $ 145,000 | |||
Forecast [Member] | |||||
Subsequent Events (Details) [Line Items] | |||||
Mining assets, percentage | 75.00% | ||||
Convertible debenture | $ 2,100,000 | ||||
Company’s common stock. (in Shares) | 257,000,000 |
Restatement of Previously Iss_3
Restatement of Previously Issued Quarterly Financial Statements (Details) - Schedule of condensed consolidated balance sheets (unaudited) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 |
As Previously Reported [Member] | ||
Current Assets | ||
Cash and cash equivalents | $ 4,268 | |
Digital assets | 2,334 | |
Accounts receivable, net | 663 | |
Prepaid expenses and other current assets | 1,334 | |
Total Current Assets | 8,599 | |
Mining equipment, net | 12,368 | |
Intangible assets, net | 2,696 | |
Goodwill | 1,634 | |
Investment in Style Hunter | 500 | |
Investment in Up North Hosting, LLC | 664 | |
Other assets | 36 | |
Total Assets | 26,497 | |
Commitments and Contingencies – Note 13 | ||
Total Stockholders’ Equity | 7,306 | |
Total Liabilities and Stockholders’ Equity | 26,497 | |
Accounts payable | 5,979 | |
Accrued liabilities | 1,313 | |
Convertible Debt, net | 11,208 | |
Conversion Feature on convertible debt | ||
Deferred revenue | 691 | |
Total Current Liabilities | 19,191 | |
Common stock, par value $0.00001 per share, 499,560,659 shares authorized; 144,613,591 shares issued as of September 30, 2021, and 66,431,920 shares issued as of December 31, 2020, 144,538,212 shares outstanding as of September 30, 2021, and 66,431,920 shares outstanding as of December 31, 2020, respectively | 1 | |
Treasury stock, at cost, 75,379 shares as of September 30, 2021, and 0 shares as of December 31, 2020, respectively | ||
Subscription receivable | ||
Additional paid-in-capital | 35,435 | |
Accumulated Deficit | $ (40,910) | (28,130) |
Adjustments [Member] | ||
Current Assets | ||
Cash and cash equivalents | ||
Digital assets | ||
Accounts receivable, net | ||
Prepaid expenses and other current assets | ||
Total Current Assets | ||
Mining equipment, net | ||
Intangible assets, net | ||
Goodwill | ||
Investment in Style Hunter | ||
Investment in Up North Hosting, LLC | ||
Other assets | ||
Total Assets | ||
Commitments and Contingencies – Note 13 | ||
Total Stockholders’ Equity | (1,238) | |
Total Liabilities and Stockholders’ Equity | ||
Accounts payable | ||
Accrued liabilities | ||
Convertible Debt, net | (1,653) | |
Conversion Feature on convertible debt | 2,891 | |
Deferred revenue | ||
Total Current Liabilities | 1,238 | |
Common stock, par value $0.00001 per share, 499,560,659 shares authorized; 144,613,591 shares issued as of September 30, 2021, and 66,431,920 shares issued as of December 31, 2020, 144,538,212 shares outstanding as of September 30, 2021, and 66,431,920 shares outstanding as of December 31, 2020, respectively | ||
Treasury stock, at cost, 75,379 shares as of September 30, 2021, and 0 shares as of December 31, 2020, respectively | ||
Subscription receivable | ||
Additional paid-in-capital | ||
Accumulated Deficit | (1,238) | |
As Restated [Member] | ||
Current Assets | ||
Cash and cash equivalents | 4,268 | |
Digital assets | 2,334 | |
Accounts receivable, net | 663 | |
Prepaid expenses and other current assets | 1,334 | |
Total Current Assets | 8,599 | |
Mining equipment, net | 12,368 | |
Intangible assets, net | 2,696 | |
Goodwill | 1,634 | |
Investment in Style Hunter | 500 | |
Investment in Up North Hosting, LLC | 664 | |
Other assets | 36 | |
Total Assets | 26,497 | |
Commitments and Contingencies – Note 13 | ||
Total Stockholders’ Equity | 6,068 | |
Total Liabilities and Stockholders’ Equity | 26,497 | |
Accounts payable | 5,979 | |
Accrued liabilities | 1,313 | |
Convertible Debt, net | 9,555 | |
Conversion Feature on convertible debt | 2,891 | |
Deferred revenue | 691 | |
Total Current Liabilities | 20,429 | |
Common stock, par value $0.00001 per share, 499,560,659 shares authorized; 144,613,591 shares issued as of September 30, 2021, and 66,431,920 shares issued as of December 31, 2020, 144,538,212 shares outstanding as of September 30, 2021, and 66,431,920 shares outstanding as of December 31, 2020, respectively | 1 | |
Treasury stock, at cost, 75,379 shares as of September 30, 2021, and 0 shares as of December 31, 2020, respectively | ||
Subscription receivable | ||
Additional paid-in-capital | 35,435 | |
Accumulated Deficit | $ (49,265) | $ (29,368) |
Restatement of Previously Iss_4
Restatement of Previously Issued Quarterly Financial Statements (Details) - Schedule of condensed consolidated balance sheets (unaudited) (Parentheticals) - $ / shares | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of condensed consolidated balance sheets (unaudited) [Abstract] | |||
Common stock, par value per share (in Dollars per share) | $ 0.00001 | $ 0.00001 | |
Common stock, shares authorized | 499,560,659 | 499,560,659 | |
Common stock, shares issued | 144,613,591 | 66,431,920 | |
Common stock, shares outstanding | 144,538,212 | 66,431,920 | |
Treasury stock, at cost shares | 0 | 75,379 |
Restatement of Previously Iss_5
Restatement of Previously Issued Quarterly Financial Statements (Details) - Schedule of condensed consolidated statements of operations (unaudited) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | |
Previously Reported [Member] | |||||||
Revenues | |||||||
Mining income | $ 2,992 | $ 9,244 | |||||
Product revenue | 1,232 | 2,831 | |||||
Services revenue | 634 | 1,047 | |||||
Total Revenues | 4,858 | 13,122 | |||||
Operating costs and expenses | |||||||
Mining cost | 377 | 852 | |||||
Product cost | 1,141 | 2,532 | |||||
Services cost | 364 | 606 | |||||
Sales and marketing | 319 | 619 | |||||
General and administrative | 3,363 | 7,727 | |||||
Management Fees | 321 | ||||||
Impairment of digital assets | 325 | 325 | |||||
Depreciation | 1,279 | 2,824 | |||||
Amortization of intangibles | 143 | 264 | |||||
Total Operating Costs and Expenses | 7,311 | 16,070 | |||||
Gain (Loss) from Operations | (2,453) | (2,948) | |||||
Other Income (Expenses) | |||||||
Merger charges | (22,004) | ||||||
Debt Restructuring fee | (2,000) | ||||||
Change in fair value of debt conversion feature | |||||||
Interest expense | (897) | (926) | |||||
Realized gain (loss) on sale of digital assets | 3 | 91 | |||||
Gain/(loss) on disposal of assets | (131) | (138) | |||||
Other expense, net | 39 | 11 | |||||
Total Other Income (Expense) | (986) | (24,966) | |||||
Income (Loss) before Income taxes and loss in equity method investee | (3,439) | (27,914) | |||||
Income tax benefit | |||||||
Income (Loss) before Income in equity method investee | (3,439) | (27,914) | |||||
Share of net loss of equity method investee | (23) | (80) | |||||
Net Income (Loss) | $ (3,462) | $ (27,994) | |||||
Net Income (Loss) per share - basic and diluted (in Dollars per share) | $ (0.022) | $ (0.212) | |||||
Weighted Average Shares Outstanding - basic and diluted (in Shares) | 159,448,204 | 131,863,780 | |||||
Revision of Prior Period, Adjustment [Member] | |||||||
Revenues | |||||||
Mining income | |||||||
Product revenue | |||||||
Services revenue | |||||||
Total Revenues | |||||||
Operating costs and expenses | |||||||
Mining cost | |||||||
Product cost | |||||||
Services cost | |||||||
Sales and marketing | |||||||
General and administrative | |||||||
Management Fees | |||||||
Impairment of digital assets | |||||||
Depreciation | |||||||
Amortization of intangibles | |||||||
Total Operating Costs and Expenses | |||||||
Gain (Loss) from Operations | |||||||
Other Income (Expenses) | |||||||
Merger charges | |||||||
Debt Restructuring fee | |||||||
Change in fair value of debt conversion feature | (814) | (814) | |||||
Interest expense | (424) | (424) | |||||
Realized gain (loss) on sale of digital assets | |||||||
Gain/(loss) on disposal of assets | |||||||
Other expense, net | |||||||
Total Other Income (Expense) | (1,238) | (1,238) | |||||
Income (Loss) before Income taxes and loss in equity method investee | (1,238) | (1,238) | |||||
Income tax benefit | |||||||
Income (Loss) before Income in equity method investee | (1,238) | (1,238) | |||||
Share of net loss of equity method investee | |||||||
Net Income (Loss) | $ (1,238) | $ (1,238) | |||||
Net Income (Loss) per share - basic and diluted (in Dollars per share) | $ (0.007) | $ (0.01) | |||||
Weighted Average Shares Outstanding - basic and diluted (in Shares) | 159,448,204 | 131,863,780 | |||||
As Restated [Member] | |||||||
Revenues | |||||||
Mining income | $ 2,992 | $ 9,244 | |||||
Product revenue | 1,232 | 2,831 | |||||
Services revenue | 634 | 1,047 | |||||
Total Revenues | 4,858 | 13,122 | |||||
Operating costs and expenses | |||||||
Mining cost | 377 | 852 | |||||
Product cost | 1,141 | 2,532 | |||||
Services cost | 364 | 606 | |||||
Sales and marketing | 319 | 619 | |||||
General and administrative | 3,363 | 7,727 | |||||
Management Fees | 321 | ||||||
Impairment of digital assets | 325 | 325 | |||||
Depreciation | 1,279 | 2,824 | |||||
Amortization of intangibles | 143 | 264 | |||||
Total Operating Costs and Expenses | 7,311 | 16,070 | |||||
Gain (Loss) from Operations | (2,453) | (2,948) | |||||
Other Income (Expenses) | |||||||
Merger charges | (22,004) | ||||||
Debt Restructuring fee | (2,000) | ||||||
Change in fair value of debt conversion feature | (814) | (814) | |||||
Interest expense | (1,321) | (1,350) | |||||
Realized gain (loss) on sale of digital assets | 3 | 91 | |||||
Gain/(loss) on disposal of assets | (131) | (138) | |||||
Other expense, net | 39 | 11 | |||||
Total Other Income (Expense) | (2,224) | (26,204) | |||||
Income (Loss) before Income taxes and loss in equity method investee | (4,677) | (29,152) | |||||
Income tax benefit | |||||||
Income (Loss) before Income in equity method investee | (4,677) | (29,152) | |||||
Share of net loss of equity method investee | (23) | (80) | |||||
Net Income (Loss) | $ (4,700) | $ (25,743) | $ 1,210 | $ 242 | $ (38) | $ (45) | $ (29,232) |
Net Income (Loss) per share - basic and diluted (in Dollars per share) | $ (0.029) | $ (0.222) | |||||
Weighted Average Shares Outstanding - basic and diluted (in Shares) | 159,448,204 | 131,863,780 |
Restatement of Previously Iss_6
Restatement of Previously Issued Quarterly Financial Statements (Details) - Schedule of condensed consolidated statements of changes in stockholders’ equity (unaudited) - As Restated [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Restatement of Previously Issued Quarterly Financial Statements (Details) - Schedule of condensed consolidated statements of changes in stockholders’ equity (unaudited) [Line Items] | ||||||||
Balance | $ 9,436 | $ 1,614 | $ 1,825 | $ 1,600 | $ 1,787 | $ 1,984 | $ 1,825 | $ 1,984 |
Payment of subscription receivable | 100 | |||||||
Distributions to shareholders | (1,521) | (345) | (149) | (152) | ||||
Exercise of Moon warrants | ||||||||
Net Income (loss) | (4,700) | (25,743) | 1,210 | 242 | (38) | (45) | (29,232) | |
Balance | 6,068 | 9,436 | $ 1,614 | 2,097 | $ 1,600 | $ 1,787 | $ 6,068 | $ 1,825 |
Convertible debt warrants | 810 | |||||||
Stock based compensation | 28 | |||||||
Shares issued for services | $ 494 | |||||||
Mining equipment | 12,000 | |||||||
Sysorex Recapitalization | 19,401 | |||||||
TTM digital/Sysorex merger | 281 | |||||||
Professional services | $ 1,883 | |||||||
Shares issued | $ 600 | |||||||
Common Stock | ||||||||
Restatement of Previously Issued Quarterly Financial Statements (Details) - Schedule of condensed consolidated statements of changes in stockholders’ equity (unaudited) [Line Items] | ||||||||
Balance (in Shares) | 143,513,212 | 81,039,900 | 66,431,920 | 55,776,240 | 55,776,240 | 55,776,240 | 66,431,920 | 55,776,240 |
Balance | $ 1 | $ 1 | $ 1 | |||||
Payment of subscription receivable | ||||||||
Distributions to shareholders | ||||||||
Exercise of Moon warrants (in Shares) | 14,607,980 | |||||||
Exercise of Moon warrants | ||||||||
Net Income (loss) | ||||||||
Balance (in Shares) | 144,538,212 | 143,513,212 | 81,039,900 | 66,431,920 | 55,776,240 | 55,776,240 | 144,538,212 | 66,431,920 |
Balance | $ 1 | $ 1 | $ 1 | |||||
Convertible debt warrants | ||||||||
Stock based compensation | ||||||||
Shares issued for services (in Shares) | 1,025,000 | |||||||
Shares issued for services | ||||||||
Mining equipment (in Shares) | 35,588,548 | |||||||
Mining equipment | ||||||||
Sysorex Recapitalization (in Shares) | 25,985,633 | |||||||
Sysorex Recapitalization | ||||||||
TTM digital/Sysorex merger (in Shares) | 494,311 | |||||||
TTM digital/Sysorex merger | $ 1 | |||||||
Professional services (in Shares) | 404,820 | |||||||
Professional services | ||||||||
Shares issued (in Shares) | 10,655,680 | |||||||
Shares issued | ||||||||
Treasury Stock | ||||||||
Restatement of Previously Issued Quarterly Financial Statements (Details) - Schedule of condensed consolidated statements of changes in stockholders’ equity (unaudited) [Line Items] | ||||||||
Balance (in Shares) | 75,379 | |||||||
Balance | ||||||||
Payment of subscription receivable | ||||||||
Distributions to shareholders | ||||||||
Exercise of Moon warrants (in Shares) | ||||||||
Exercise of Moon warrants | ||||||||
Net Income (loss) | ||||||||
Balance (in Shares) | 75,379 | 75,379 | 75,379 | |||||
Balance | ||||||||
Convertible debt warrants | ||||||||
Stock based compensation | ||||||||
Shares issued for services (in Shares) | ||||||||
Shares issued for services | ||||||||
Mining equipment (in Shares) | ||||||||
Mining equipment | ||||||||
Sysorex Recapitalization (in Shares) | ||||||||
Sysorex Recapitalization | ||||||||
TTM digital/Sysorex merger (in Shares) | 75,379 | |||||||
TTM digital/Sysorex merger | ||||||||
Professional services (in Shares) | ||||||||
Professional services | ||||||||
Shares issued | ||||||||
Additional Paid-In Capital | ||||||||
Restatement of Previously Issued Quarterly Financial Statements (Details) - Schedule of condensed consolidated statements of changes in stockholders’ equity (unaudited) [Line Items] | ||||||||
Balance | 34,103 | 539 | 2,060 | 2,370 | 2,519 | 2,671 | 2,060 | 2,671 |
Payment of subscription receivable | ||||||||
Distributions to shareholders | (1,521) | (345) | (149) | (152) | ||||
Exercise of Moon warrants | ||||||||
Net Income (loss) | ||||||||
Balance | 35,435 | 34,103 | 539 | 2,625 | 2,370 | 2,519 | 35,435 | 2,060 |
Convertible debt warrants | 810 | |||||||
Stock based compensation | 28 | |||||||
Shares issued for services | 494 | |||||||
Mining equipment | 12,000 | |||||||
Sysorex Recapitalization | 19,401 | |||||||
TTM digital/Sysorex merger | 280 | |||||||
Professional services | 1,883 | |||||||
Shares issued | 600 | |||||||
Subscription Receivables | ||||||||
Restatement of Previously Issued Quarterly Financial Statements (Details) - Schedule of condensed consolidated statements of changes in stockholders’ equity (unaudited) [Line Items] | ||||||||
Balance | (100) | (100) | (100) | (100) | (100) | (100) | ||
Payment of subscription receivable | 100 | |||||||
Distributions to shareholders | ||||||||
Exercise of Moon warrants | ||||||||
Net Income (loss) | ||||||||
Balance | (100) | (100) | (100) | (100) | ||||
Convertible debt warrants | ||||||||
Stock based compensation | ||||||||
Shares issued for services | ||||||||
Mining equipment | ||||||||
Sysorex Recapitalization | ||||||||
TTM digital/Sysorex merger | ||||||||
Professional services | ||||||||
Shares issued | ||||||||
Accumulated Deficit | ||||||||
Restatement of Previously Issued Quarterly Financial Statements (Details) - Schedule of condensed consolidated statements of changes in stockholders’ equity (unaudited) [Line Items] | ||||||||
Balance | (24,668) | 1,075 | (135) | (670) | (632) | (587) | (135) | (587) |
Payment of subscription receivable | ||||||||
Distributions to shareholders | ||||||||
Exercise of Moon warrants | ||||||||
Net Income (loss) | (4,700) | (25,743) | 1,210 | 242 | (38) | (45) | ||
Balance | (29,368) | (24,668) | $ 1,075 | (428) | $ (670) | $ (632) | $ (29,368) | $ (135) |
Convertible debt warrants | ||||||||
Stock based compensation | ||||||||
Shares issued for services | ||||||||
Mining equipment | ||||||||
Sysorex Recapitalization | ||||||||
TTM digital/Sysorex merger | ||||||||
Professional services | ||||||||
Shares issued |
Restatement of Previously Iss_7
Restatement of Previously Issued Quarterly Financial Statements (Details) - Schedule of condensed consolidated statements of cash flows (unaudited) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
As Previously Reported [Member] | |
Cash Flows from Operating Activities | |
Net loss | $ (27,994) |
Depreciation and amortization | 3,088 |
Stock compensation | 28 |
Amortization of debt discount and debt issuance costs | 631 |
(Gain) Loss on the sale/disposal of mining equipment | 138 |
Realized (gain) loss on sale of digital assets | (91) |
Gain on settlement of vendor liabilities | (38) |
Impairment of digital assets | 325 |
Change in fair value of debt conversion feature | |
Equity in earnings of equity method investments | 79 |
Change in fair value of accrued issuable equity | (9) |
Issuance of shares in exchange for services | 2,377 |
Merger charges | 22,004 |
Debt restructuring fee | 2,000 |
Changes in assets and liabilities: | |
Digital assets - mining net of pool fees and mgmt fees | (8,826) |
Related party receivable | 17 |
Prepaid assets and other current assets | (72) |
Accounts receivable and other receivables | 4,010 |
Accounts payable | (3,908) |
Accrued liabilities and other current liabilities | 442 |
Net cash used in operating activities | (5,799) |
Cash Flows from Investing Activities | |
Proceeds from sale of digital assets | 3,670 |
Reverse acquisition of Sysorex business | 28 |
Purchase of mining equipment | (50) |
Proceeds from sale of mining equipment | 47 |
Investments in Up North & Style Hunter | (600) |
Net cash provided by (used in) investing activities | 3,095 |
Cash Flows from Financing Activities | |
Repayment of loans | (4,349) |
Issuance of members’ interests | 100 |
Proceeds received for convertible debt | 12,415 |
Cash paid for convertible debt transaction costs | (1,261) |
Net cash provided by financing activities | 6,905 |
Net increase in cash and cash equivalents | 4,201 |
Cash and cash equivalents at beginning of period | 67 |
Cash and cash equivalents at end of period | 4,268 |
Cash paid for: | |
Interest | 89 |
Income taxes | |
Sysorex recapitalization | 19,401 |
Payments of short-term borrowing with digital assets | 1,091 |
Debt discount attributed to the fair value of the warrants | 810 |
Conversion feature derivative on convertible debt | |
Distribution of digital assets to members | 1,521 |
Equipment exchanged for equity | 12,000 |
Equipment acquired through lease purchase arrangement | 2,130 |
Settlement of loan with mining equipment | 75 |
Adjustments [Member] | |
Cash Flows from Operating Activities | |
Net loss | (1,238) |
Depreciation and amortization | |
Stock compensation | |
Amortization of debt discount and debt issuance costs | 424 |
(Gain) Loss on the sale/disposal of mining equipment | |
Realized (gain) loss on sale of digital assets | |
Gain on settlement of vendor liabilities | |
Impairment of digital assets | |
Change in fair value of debt conversion feature | 814 |
Equity in earnings of equity method investments | |
Change in fair value of accrued issuable equity | |
Issuance of shares in exchange for services | |
Merger charges | |
Debt restructuring fee | |
Changes in assets and liabilities: | |
Digital assets - mining net of pool fees and mgmt fees | |
Related party receivable | |
Prepaid assets and other current assets | |
Accounts receivable and other receivables | |
Accounts payable | |
Accrued liabilities and other current liabilities | |
Net cash used in operating activities | |
Cash Flows from Investing Activities | |
Proceeds from sale of digital assets | |
Reverse acquisition of Sysorex business | |
Purchase of mining equipment | |
Proceeds from sale of mining equipment | |
Investments in Up North & Style Hunter | |
Net cash provided by (used in) investing activities | |
Cash Flows from Financing Activities | |
Repayment of loans | |
Issuance of members’ interests | |
Proceeds received for convertible debt | |
Cash paid for convertible debt transaction costs | |
Net cash provided by financing activities | |
Net increase in cash and cash equivalents | |
Cash and cash equivalents at beginning of period | |
Cash and cash equivalents at end of period | |
Cash paid for: | |
Interest | |
Income taxes | |
Sysorex recapitalization | |
Payments of short-term borrowing with digital assets | |
Debt discount attributed to the fair value of the warrants | |
Conversion feature derivative on convertible debt | 2,077 |
Distribution of digital assets to members | |
Equipment exchanged for equity | |
Equipment acquired through lease purchase arrangement | |
Settlement of loan with mining equipment | |
As Restated [Member] | |
Cash Flows from Operating Activities | |
Net loss | (29,232) |
Depreciation and amortization | 3,088 |
Stock compensation | 28 |
Amortization of debt discount and debt issuance costs | 1,055 |
(Gain) Loss on the sale/disposal of mining equipment | 138 |
Realized (gain) loss on sale of digital assets | (91) |
Gain on settlement of vendor liabilities | (38) |
Impairment of digital assets | 325 |
Change in fair value of debt conversion feature | 814 |
Equity in earnings of equity method investments | 79 |
Change in fair value of accrued issuable equity | (9) |
Issuance of shares in exchange for services | 2,377 |
Merger charges | 22,004 |
Debt restructuring fee | 2,000 |
Changes in assets and liabilities: | |
Digital assets - mining net of pool fees and mgmt fees | (8,826) |
Related party receivable | 17 |
Prepaid assets and other current assets | (72) |
Accounts receivable and other receivables | 4,010 |
Accounts payable | (3,908) |
Accrued liabilities and other current liabilities | 442 |
Net cash used in operating activities | (5,799) |
Cash Flows from Investing Activities | |
Proceeds from sale of digital assets | 3,670 |
Reverse acquisition of Sysorex business | 28 |
Purchase of mining equipment | (50) |
Proceeds from sale of mining equipment | 47 |
Investments in Up North & Style Hunter | (600) |
Net cash provided by (used in) investing activities | 3,095 |
Cash Flows from Financing Activities | |
Repayment of loans | (4,349) |
Issuance of members’ interests | 100 |
Proceeds received for convertible debt | 12,415 |
Cash paid for convertible debt transaction costs | (1,261) |
Net cash provided by financing activities | 6,905 |
Net increase in cash and cash equivalents | 4,201 |
Cash and cash equivalents at beginning of period | 67 |
Cash and cash equivalents at end of period | 4,268 |
Cash paid for: | |
Interest | 89 |
Income taxes | |
Sysorex recapitalization | 19,401 |
Payments of short-term borrowing with digital assets | 1,091 |
Debt discount attributed to the fair value of the warrants | 810 |
Conversion feature derivative on convertible debt | 2,077 |
Distribution of digital assets to members | 1,521 |
Equipment exchanged for equity | 12,000 |
Equipment acquired through lease purchase arrangement | 2,130 |
Settlement of loan with mining equipment | $ 75 |