Ends Q3 with more than $4.3 million in Cash
Current Market Value of Mined Ethereum Exceeds $6.1 million
HERNDON, Va., Nov. 15, 2021 (GLOBE NEWSWIRE) — Sysorex (OTCQB: SYSX), the preeminent, U.S.-based, publicly traded Ethereum mining and technologies company, today provided a business update and reported financial results Sysorex (OTCQB: SYSX), the preeminent, U.S.-based, publicly traded Ethereum mining and technologies company, today provided a business update and reported financial results for the third quarter ended September 30, 2021.
Wayne Wasserberg, CEO of Sysorex, commented, “We continue to make solid progress following the merger between Sysorex and TTM Digital Assets & Technologies in April of this year. Notably, our Q3 revenue increased more than eight-fold to $4.9 million, compared to $0.6 million for the same period last year. We continue to implement our strategy of mining Ethereum and holding the Ethereum we mine in our Ethereum treasury wallets at Coinbase and Gemini, and the current value of the Company’s Ethereum holdings exceeds $6.1 million. By strategically holding our Ethereum, we believe the Company will expand its opportunities for revenue generation above the expected appreciation in the value of Ethereum but we may adjust this strategy depending on a number of market factors.”
“Earlier this month, we purchased the remaining interests in our primary data center located in upstate New York. With 100% ownership of our data center, and the data center and all GPUs owned free and clear by Sysorex, we have since increased our Ethereum mining capacity by approximately 10%, and we expect to achieve cost savings as we centralize our mining operations. We are also in the process of implementing an advanced management system to further maximize the efficiencies of our GPUs.”
“Additionally, our Sysorex Government Services (SGS) business was awarded multiple government contracts in Q3 totaling more than $16 million in value, which amount should be realized in the coming months as SGS executes on these agreements, and the work is underway. We continue to pursue opportunities to utilize smart contracts on the Ethereum Blockchain, by leveraging SGS’s government presence and contract portfolio.”
“The Company maintains a solid balance sheet with over $4.3 million of cash at the end of the quarter. Our net income for the first nine months of 2021 was negatively impacted by one-time expenses related to the acquisition of TTM and transaction costs. However, we still generated over $3 million of adjusted EBITDA (see reconciliation below), year-to-date. Overall, we have built a highly scalable business model, and, given our strong revenue growth, we look forward to driving significant value for shareholders in 2022. Additionally, we remain focused on up-listing to a national exchange, which we believe will help drive increased awareness within the investment community. The Company is extremely encouraged by the outlook for the business and looks forward to providing further updates in the weeks and months ahead, as we execute on a number of key upcoming milestones.”
Revenues for the three months ended September 30, 2021, and 2020 were $4.9 million and $0.6 million, respectively. Gain (losses) from operations for the three months ended September 30, 2021, and 2020 were $(2.5) million and $0.2 million, respectively. Net gains (losses) for the three months ended September 30, 2021, and 2020 were $(3.5) million, or ($0.02) per share, and $0.2 million, or $0.00 per share, respectively.
The complete financials will be available in the Company’s Form 10-Q, which will be filed with the Securities and Exchange Commission.
The Company presents adjusted EBITDA because it believes it conveys useful information to investors regarding the operating results as an additional way for investors to view operations, when considered with both GAAP results and the reconciliation to net income (loss). By including this information, the Company believes it can provide investors with a more complete understanding of the business. The Company believes Adjusted EBITDA is a useful tool for investors to assess the operating performance of the business without the effect of interest, income taxes, depreciation and amortization and other non-cash items including stock based compensation, amortization of intangibles, change in the fair value of shares to be issued, impairment of goodwill and one time charges, including gain/loss on the settlement of obligations, severance costs, provision for doubtful accounts, acquisition costs and the costs associated with public offerings. The Company believes that it is useful to provide to investors a standard operating metric used by management to evaluate our operating performance. Even though the Company believes Adjusted EBITDA is useful for investors, it does have limitations as an analytical tool. Thus, the Company urges investors not to consider this metric in isolation or as a substitute for net income (loss) and the other combined carve-out statement of operations data prepared in accordance with GAAP. Adjusted EBITDA should not be considered a measure of discretionary cash available to invest in the growth of the business or as a measure of performance in compliance with GAAP. The Company compensates for these limitations by relying primarily on our GAAP results and providing Adjusted EBITDA only as supplemental information.
|Three Months EndedSeptember 30,||Nine Months EndedSeptember 30,|
|Net gain (loss)||$||(3,462||)||$||241||$||(27,994||)||$||160|
|Depreciation and amortization||1,422||213||3,088||619|
|Non-recurring one-time charges:|
|Debt Restructuring fee||–||–||2,000||–|
|Acquisition related costs – Accounting acquirer||–||–||2,884||–|
|Acquisition related costs – Accounting acquiree||–||–||209||–|
ABOUT SYSOREX, INC.
Sysorex, Inc. (“Company”) is a data center owner and operator and is the preeminent U.S.-based, publicly traded Ethereum mining and Ethereum Blockchain technologies company. Following the Company’s merger with TTM Digital Assets & Technologies, Inc. (“TTM”), the Company shifted its primary business focus to the mining of Ethereum (“Ether” or “ETH”) and opportunities related to the Ethereum Blockchain. The Company currently owns and operates approximately 11,000 NVIDIA GPUs generating more than 550 Gigahash of computing power, which GPUs include thousands of Cryptocurrency Mining Processors (“CMPs”). These GPUs are currently online and securing the Ethereum Blockchain and generating ETH around the clock with industry leading efficiency. In addition to the mining of ETH, the Company continues to operate its wholly owned subsidiary, Sysorex Government Services, Inc. (“SGS”), a business that provides information technology products, solutions and services to federal, state, and local government, including system integrators. The Company is also advancing strategies to leverage decentralized finance (“De-Fi”) and Non-Fungible Token (“NFT”) opportunities powered by the Ethereum Blockchain.
Safe Harbor Statement
All statements in this release that are not based on historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of the control of Sysorex, Inc. and its subsidiaries, which could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not limited to, the fluctuation of economic conditions, the impact of COVID-19 on Sysorex’s results of operations, Sysorex’s ability to integrate the products and business from recent acquisitions into its existing business, the performance of management and employees, the regulatory landscape as it relates to privacy regulations and their applicability to Sysorex’s technology. Other factors that are detailed in Sysorex’s periodic and current reports available for review at sec.gov. Furthermore, Sysorex operates in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. Sysorex disclaims any intention to, and undertakes no obligation to, update or revise forward-looking statements.