XTI Aerospace (XTIA) 10-Q 16 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 12, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Sysorex Global
Entity Central Index Key	1,529,113
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		25,116,035

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current Assets
Cash and cash equivalents	$ 2,853	$ 4,060
Accounts receivable, net	10,795	12,209
Notes and other receivables	1,756	1,340
Inventory	822	755
Prepaid licenses and maintenance contracts	7,460	7,509
Assets held for sale	772	772
Other current assets	1,829	1,967
Total Current Assets	26,287	28,612
Prepaid licenses and maintenance contracts, non-current	6,189	6,586
Property and equipment, net	1,306	1,392
Software development costs, net	1,565	1,281
Intangible assets, net	16,105	17,161
Goodwill	13,166	13,166
Other assets	516	517
Total Assets	65,134	68,715
Current Liabilities
Accounts payable	8,474	9,320
Accrued liabilities	1,670	2,992
Deferred revenue	12,992	9,095
Short-term debt	8,828	9,417
Liabilities held for sale	2,030	2,026
Total Current Liabilities	33,994	32,850
Long Term Liabilities
Deferred revenue, non-current	7,140	7,666
Long-term debt	1,059	1,226
Other liabilities	434	542
Acquisition liability - LightMiner	3,476	3,475
Total Liabilities	$ 46,103	$ 45,759
Commitments and Contingencies
Stockholders' Equity
Preferred stock - $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding
Common stock - $0.001 par value; 50,000,000 shares authorized; 25,354,863 and 25,309,863 issued and 25,116,035 and 25,071,035 outstanding at March 31, 2016 and December 31, 2015, respectively	$ 25	$ 25
Additional paid-in capital	58,590	58,226
Treasury stock, at cost, 238,828 shares	(695)	(695)
Due from Sysorex Consulting Inc.	(666)	(666)
Accumulated other comprehensive income	48	31
Accumulated deficit (excluding $2,442 reclassified to additional paid in capital in quasi-reorganization)	(36,661)	(32,359)
Stockholders' Equity Attributable to Sysorex Global	20,641	24,562
Non- controlling Interest	(1,610)	(1,606)
Total Stockholders' Equity	19,031	22,956
Total Liabilities and Stockholders' Equity	$ 65,134	$ 68,715

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	25,354,863	25,309,863
Common stock, shares outstanding	25,116,035	25,071,035
Treasury stock, shares	238,828	238,828
Accumulated deficit reclassified to additional paid in capital in quasi-reorganization	$ 2,442	$ 2,442

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues
Products	$ 10,348	$ 10,388
Services	3,739	3,734
Total Revenues	14,087	14,122
Cost of Revenues
Products	8,042	8,650
Services	2,098	1,425
Total Cost of Revenues	10,140	10,075
Gross Profit	3,947	4,047
Operating Expenses
Research and development	587	163
Sales and marketing	2,501	2,463
General and administrative	3,965	3,274
Acquisition related costs	20	76
Amortization of intangibles	1,056	882
Total Operating Expenses	8,129	6,858
Loss from Operations	(4,182)	(2,811)
Other Income (Expense)
Interest expense	(143)	(99)
Other income	20	$ 5
Change in fair value of shares to be issued	(1)
Total Other Income (Expense)	(124)	$ (94)
Loss before Provision for Income Taxes	$ (4,306)	$ (2,905)
Provision for Income Taxes
Net Loss	$ (4,306)	$ (2,905)
Net Loss Attributable to Non-controlling Interest	(4)	(5)
Net Loss Attributable to Stockholders of Sysorex Global	$ (4,302)	$ (2,900)
Net Loss Per Share - Basic and Diluted	$ (0.17)	$ (0.15)
Weighted Average Shares Outstanding
Basic and Diluted	25,105,705	19,765,585

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net Loss	$ (4,306)	$ (2,905)
Unrealized foreign exchange gain/(loss) from cumulative translation adjustments	17	(7)
Comprehensive Loss	$ (4,289)	$ (2,912)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Treasury Stock	Due from Sysorex Consulting, Inc.	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Non-Controlling Interest
Balance at Dec. 31, 2015	$ 22,956	$ 25	$ 58,226	$ (695)	$ (666)	$ 31	$ (32,359)	$ (1,606)
Balance, Shares at Dec. 31, 2015		25,309,863		(238,828)
Common shares issued for services	26		26
Common shares issued for services, Shares		45,000
Stock options granted to employees for services	338		$ 338
Cumulative translation adjustment	17					17
Net loss	(4,306)						(4,302)	(4)
Balance at Mar. 31, 2016	$ 19,031	$ 25	$ 58,590	$ (695)	$ (666)	$ 48	$ (36,661)	$ (1,610)
Balance, Shares at Mar. 31, 2016		25,354,863		(238,828)

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows from Operating Activities
Net loss	$ (4,306)	$ (2,905)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	263	121
Amortization of intangible assets	1,056	882
Stock based compensation	$ 364	386
Amortization of deferred financing costs		$ 23
Change in fair value of shares to be issued	$ 1
Provision for doubtful accounts	212
Other	2
Changes in operating assets and liabilities:
Accounts receivable and other receivables	787	$ (1,252)
Inventory	(67)	68
Other current assets	140	(27)
Prepaid licenses and maintenance contracts	446	354
Other assets	1	(2)
Accounts payable	(848)	814
Accrued liabilities	(1,323)	(488)
Deferred revenue	3,371	(201)
Other liabilities	(103)	(34)
Total Adjustments	4,302	644
Net Cash Used in Operating Activities	(4)	(2,261)
Cash Flows Used in Investing Activities
Purchase of property and equipment	(48)	(22)
Investment in capitalized software	(414)	(97)
Net Cash Flows Used in Investing Activities	(462)	(119)
Cash Flows provided by Financing Activities
Advances (repayment) of line of credit	(588)	1,980
Repayment of term loan	(167)	$ (125)
Repayments to related party	$ (3)
Repayment of notes payable		$ (1)
Net Cash (Used In) Provided by Financing Activities	$ (758)	1,854
Effect of Foreign Exchange Rate on Changes on Cash	17	(7)
Net Decrease in Cash and Cash Equivalents	(1,207)	(533)
Cash and Cash Equivalents - Beginning of period	4,060	3,228
Cash and Cash Equivalents - End of period	2,853	2,695
Supplemental Disclosure of cash flow information:
Cash paid for Interest	$ 142	$ 76
Cash paid for Income Taxes

Organization and Nature of Busi

Organization and Nature of Business	3 Months Ended
	Mar. 31, 2016
Organization and Nature of Business [Abstract]
Organization and Nature of Business	Note 1 - Organization and Nature of Business Overview Sysorex Global (“SG”), through its wholly-owned subsidiaries, Sysorex USA f/k/a Lilien Systems (“SUSA”), Sysorex Government Services, Inc. (“SGS”), Sysorex Canada Corp. f/k/a. AirPatrol Research Corp. (“Sysorex Canada”) and the majority-owned subsidiary, Sysorex Arabia LLC (“SA”) (collectively the “Company” or “Sysorex”), provides big data analytics and location based products and related services for the cyber-security and Internet of Things markets. The Company is headquartered in California, and has subsidiary offices in Virginia, Maryland, Oregon, Hawaii, State of Washington, California, Vancouver, Canada and Riyadh, Saudi Arabia. Liquidity As of March 31, 2016, the Company has a working capital deficiency of approximately $7.7 million. For the three months ended March 31, 2016, the Company incurred a net loss of approximately $4.2 million and utilized cash in operations of approximately $4,000. On May 4, 2015 but effective as of April 29, 2015, the Company amended its bank line of credit to increase the credit limit to $10 million and provide for a second term loan of up to $2 million of which $167,000 was used to pay off the balance of the initial term loan. Additionally, Sysorex was awarded two large IDIQ (indefinite delivery/indefinite quantity) government vehicles as a prime contractor in April 2015. While the Company believes that it will be successful in securing task orders under the contracts and will generate revenue, there are no assurances that any task orders under the contracts will ultimately be awarded to the Company. The Company also sold 5,250,000 shares of its common stock at a price of $1.00 per share on September 25, 2015. After deducting underwriting discounts and commissions and offering expenses, the net proceeds from the offering were approximately $4.7 million. The Company’s capital resources as of March 31, 2016, increased bank facility, net proceeds from the September 25, 2015 offering, higher margin business line expansion and recent contract awards, including prepayments anticipated to be received are expected to be sufficient to fund planned operations during the next twelve months from the date of filing this quarterly report. While the Company also has an effective registration statement on Form S-3 which will allow it to raise additional capital from the sale of its securities, subject to certain limitations for registrants with a market capitalization of less than $75 million, if additional financing is needed we anticipate such financing will come from an increase in our bank facility rather than through a sale of equity, however, our decision will be based on our capital requirements and the terms of the various types of financing that will be available to us when we need it. The information in these condensed consolidated financial statements concerning the Company’s Form S-3 registration statement does not constitute an offer of any securities for sale. If these sources do not provide the capital necessary to fund the Company’s operations during the next twelve months, the Company may need to curtail certain aspects of its expansion activities or consider other means of obtaining additional financing, although there is no guarantee that any such additional financing would be available to the Company.

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2016
Basis of Presentation/Summary of Significant Accounting Policies [Abstract]
Basis of Presentation	Note 2 - Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of the Company’s operations for the three month period ended March 31, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016. These interim condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements and footnotes for the years ended December 31, 2015 and 2014 included in the Form 10-K filed with the Securities and Exchange Commission on March 30, 2016.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Basis of Presentation/Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 3 - Summary of Significant Accounting Policies Significant Accounting Policies The Company's complete accounting policies are described in Note 2 to the Company's audited financial statements and footnotes for the years ended December 31, 2015 and 2014. Use of Estimates The preparation of financial statements in conformity with 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: ● The valuation of stock-based compensation; ● The allowance for doubtful accounts; ● The valuation allowance for the deferred tax asset; and ● Impairment of long-lived assets and goodwill. Revenue Recognition The Company provides IT solutions and services to customers with revenues currently derived primarily from the sale of third-party hardware and software products, software, assurance, licenses and other consulting services, including maintenance services and recognizes revenue once the following four criteria are met: (1) persuasive evidence of an arrangement exists, (2) the price is fixed and determinable, (3) shipment (software and hardware) or fulfillment (maintenance) has occurred, and (4) there is reasonable assurance of collection of the sales proceeds (the “Revenue Recognition Criteria”). In addition, the Company also records revenues in accordance with Accounting Standards Codification (“ASC”) Topic 605-45 “Principal Agent Consideration” (“ASC 605-45”). The Company evaluates the sales of products and services on a case by case basis to determine whether the transaction should be recorded gross or net, including, but not limited to, assessing whether or not the Company: 1) is the primary obligor in the transaction; 2) has inventory risk with respect to the products and/or services sold; 3) has latitude in pricing; and 4) changes the product or performs part of the services sold. The Company evaluates whether revenues received from the sale of hardware and software products, licenses, and services, including maintenance and professional consulting services, should be recognized on a gross or net basis on a transaction by transaction basis. As of March 31, 2016, the Company has determined that all revenues received should be recognized on a gross basis in accordance with applicable standards. Cooperative reimbursements from vendors, which are earned and available, are recorded during the period the related transaction has occurred. Cooperative reimbursements are recorded as a reduction of cost of sales in accordance with ASC Topic 605-50 “Accounting by a Customer (including reseller) for Certain Consideration Received from a Vendor.” Provisions for returns are estimated based on historical collections and credit memo analysis for the period. The Company receives Marketing Development Funds (MDF) from vendors based on quarterly or annual sales performance to promote the marketing of vendor products and services. The Company must file claims with vendors for these cooperative reimbursements by providing invoices and receipts for marketing expenses. Reimbursements are recorded as a reduction of marketing expenses and other applicable selling general and administrative expenses ratably over the period in which the expenses are expected to occur. The Company receives vendor rebates which are recorded to cost of sales. The Company also enters into sales transactions whereby customer orders contain multiple deliverables, and reports its multiple deliverable arrangements under ASC 605-25 “Revenue Arrangements with Multiple Deliverables” (“ASC-605-25”). These multiple deliverable arrangements primarily consist of the following deliverables: the Company’s design, configuration, installation, integration, warranty/maintenance and consulting services; and third-party computer hardware, software and warranty maintenance services. In situations where the Company bundles all or a portion of the separate elements, Vendor Specific Objective Evidence (“VSOE”) is determined based on prices when sold separately. For the three months ended March 31, 2016 and 2015 revenues recognized as a result of customer contracts requiring the delivery of multiple elements were $5.3 million and $7.6 million, respectively. Hardware, Software and Licensing Revenue Recognition Generally, the Revenue Recognition Criteria are met with respect to the sales of hardware and software products when they are shipped to the customer. The delivery of products to our customers occurs in a variety of ways, including (i) as a physical product shipped from the Company’s warehouse, (ii) via drop-shipment by a third-party vendor, or (iii) via electronic delivery with respect to software licenses. The Company leverages drop-ship arrangements with many of its vendors and suppliers to deliver products to customers without having to physically hold the inventory at its warehouse. In such arrangements, the Company negotiates the sale price with the customer, pays the supplier directly for the product shipped, bears credit risk of collecting payment from its customers and is ultimately responsible for the acceptability of the product and ensuring that such product meets the standards and requirements of the customer. As a result, the Company recognizes the sale of the product and the cost of such upon receiving notification from the supplier that the product has shipped. Vendor rebates and price protection are recorded when earned as a reduction to cost of sales or merchandise inventory, as applicable. Vendor product price discounts are recorded when earned as a reduction to cost of sales. Maintenance and Professional Services Revenue Recognition With respect to sales of our maintenance, consulting and other service agreements including our digital advertising and electronic services, the Revenue Recognition Criteria is met once the service has been provided. Revenue on time and material contracts is recognized based on a fixed hourly rate as direct labor hours are expended. The fixed rate includes direct labor, indirect expenses, and profits. Materials, or other specified direct costs, are reimbursed as actual costs and may include markup. Anticipated losses are recognized as soon as they become known. For the three months ended March 31, 2016 and 2015, the Company 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 and commercial customers. The Company recognizes revenue for sales of all services billed as a fixed fee ratably over the term of the arrangement as such services are provided. Billings for such services that are made in advance of the related revenue recognized are recorded as deferred revenue and recognized as revenue ratably over the billing coverage period. Amounts received as prepayments for services to be rendered are recognized as deferred revenue. Revenue from such prepayments is recognized when the services are provided. The Company’s storage and computing segment maintenance services agreements permit customers to obtain technical support from the Company and/or the manufacturer and to update, at no additional cost, to the latest technology if new software updates are introduced during the period that the maintenance agreement is in effect. Since the Company assumes certain responsibility for product staging, configuration, installation, modification, and integration with other client systems, or retains general inventory risk upon customer return or rejection and is most familiar with the customer and its required specifications, it generally serves as the initial contact with the customer with respect to any storage and computing maintenance services required and therefore will perform all or part of the required service. Typically, the Company sells maintenance contracts for a separate fee with initial contractual periods ranging from one to three years with renewal for additional periods thereafter. The Company generally bills maintenance fees in advance and records the amounts received as deferred revenue with respect to any portion of the fee for which services have not yet been provided. The Company recognizes the related revenue ratably over the term of the maintenance agreement as services are provided. In situations where the Company bundles all or a portion of the maintenance fee with products, VSOE for maintenance is determined based on prices when sold separately. Customers that have purchased maintenance/warranty services have a right to cancel and receive a refund of the amounts paid for unused services at any time during the service period upon advance written notice to the Company. Cancellation and refund privileges with respect to maintenance/warranty services lapse as to any period during the term of the agreement for which such services have already been provided. Customers do not have the right to a refund of paid fees for maintenance/warranty services that the Company has earned and recognized as revenue. Invoices issued for maintenance/warranty services not yet rendered are recorded as deferred revenue and then recognized as revenue ratably over the service period. As a result (1) the warranty and maintenance service fees payable by each customer are separately accounted for in each customer purchase order as a separate line item, and (2) upon the Company’s receipt and acceptance of a request for refund of maintenance/warranty services not yet provided, the Company’s obligation to perform any additional maintenance/warranty services will end. Sales are recorded net of discounts and returns. Stock-Based Compensation The Company accounts for options granted to employees by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as expense over the period during which the recipient is required to provide services in exchange for that award. Options and warrants granted to consultants and other non-employees are recorded at fair value as of the grant date and subsequently adjusted to fair value at the end of each reporting period until such options and warrants vest, and the fair value of such instruments, as adjusted, is expensed over the related vesting period. The Company incurred stock-based compensation charges, net of estimated forfeitures of $364,000 and $386,000 for the three months ended March 31, 2016 and 2015, respectively. The following table summarizes the nature of such charges for the years then ended (in thousands): For the Three Months Ended 2016 2015 Compensation and related benefits $ 338 $ 254 Professional and legal fees 26 132 Totals $ 364 $ 386 Net Loss Per Share The Company computes basic and diluted earnings per share by dividing net loss by the weighted average number of common shares outstanding during the period. Basic and diluted net loss per common share were the same since the inclusion of common shares issuable pursuant to the exercise of options and warrants in the calculation of diluted net loss per common shares would have been anti-dilutive. The following table summarizes the number of common shares and common share equivalents excluded from the calculation of diluted net loss per common share for the three months ended March 31, 2016 and 2015: For the Three Months Ended 2016 2015 Options 4,817,109 2,981,658 Warrants 561,262 511,262 Shares accrued but not issued 1,842,000 35,715 Totals 7,220,371 3,528,635 Recent Accounting Pronouncements The FASB and the SEC have issued certain accounting standards updates and regulations that will become effective in subsequent periods; however, management of the Company does not believe that any of those updates would have significantly affected the Company’s financial accounting measures or disclosures had they been in effect during 2016 or 2015, and does not believe that any of those pronouncements will have a significant impact on the Company’s consolidated financial statements at the time they become effective. Subsequent Events The Company evaluates events and/or transactions occurring after the balance sheet date and before the issue date of the condensed consolidated financial statements to determine if any of those events and/or transactions requires adjustment to or disclosure in the condensed consolidated financial statements.

Related Party

Related Party	3 Months Ended
	Mar. 31, 2016
Related Party Transactions [Abstract]
Related Party	Note 4 – Related Party Due from Related Parties Non-interest bearing amounts due on demand from a related party was $666,000 as of March 31, 2016 and December 31, 2015, and consists primarily of amounts due from Sysorex Consulting, Inc. As Sysorex Consulting, Inc. is a direct shareholder of and an investor in the Company, the amounts due from Sysorex Consulting, Inc. as of March 31, 2016 and December 31, 2015 have been classified in and as a reduction of stockholders' deficiency. Consulting Services Ordering Agreement Amendment On March 25, 2016, the Company entered into an Amendment No. 3 to its Consulting Services Ordering Agreement with Mr. A Salam Qureishi, Chairman of the Board and a Director of the Company (the “Consultant”), effective March 16, 2016 (the “Amended Agreement”), pursuant to which the Company agreed to pay the Consultant a fee of $20,000 per month for all consulting services performed during the term of the agreement. In addition, the Amended Agreement provided for an extension of the original term for an additional nine months from March 31, 2016 to December 31, 2016.

Notes and Other Receivables

Notes and Other Receivables	3 Months Ended
	Mar. 31, 2016
Notes and Other Receivables [Abstract]
Notes and Other Receivables	Note 5 - Notes and Other Receivables Notes and other receivables at March 31, 2016 and December 31, 2015 consisted of the following (in thousands): March 31, December 31, Notes receivable $ 900 $ 900 Other receivables 856 440 Total Notes and Other Receivables $ 1,756 $ 1,340 Note Receivable On July 17, 2014, the Company loaned $900,000 to a third party pursuant to the terms of a promissory note. The promissory note’s extended due date is March 31, 2016. The promissory note accrues interest at a rate of 8% per annum. The Company and the third party are negotiating an extension of the note. Other Receivables Other receivables primarily consist of receivables for cooperative reimbursements from vendors; marketing development funds from vendors; interest receivables; and revenue earned under contracts in advance of billings.

Inventory

Inventory	3 Months Ended
	Mar. 31, 2016
Inventory [Abstract]
Inventory	Note 6 - Inventory Inventory at March 31, 2016 and December 31, 2015 consisted of the following (in thousands): March 31, December 31, Raw materials $ 110 $ 153 Work in process 33 64 Finished goods 679 538 Total Inventory $ 822 $ 755

Discontinued Operations

Discontinued Operations	3 Months Ended
	Mar. 31, 2016
Discontinued Operations [Abstract]
Discontinued Operations	Note 7 – Discontinued Operations As of December 31, 2015, the Company’s management decided to close its Saudi Arabia legal entity as business activities and operations have been strategically shifted according to the business plan of the Company. In accordance with ASC topic 360 “Property, Plant and Equipment”, the Company has elected to classify the assets and liabilities as discontinued assets and liabilities in the accompanying consolidated financial statements. The major categories of discontinued assets and liabilities in the consolidated balance sheets at March 31, 2016 and December 31, 2015 (in thousands): March 31, 2016 December 31, 2015 Assets Accounts receivable, net 1 1 Notes and other receivables 8 8 Other assets 763 763 Total Current Assets 772 772 Other assets -- -- Total Assets $ 772 $ 772 Liabilities and Stockholders’ Equity Current Liabilities Accounts payable $ 178 $ 178 Accrued liabilities 895 888 Deferred revenue 236 236 Due to related party (1 ) 2 Short-term debt 722 722 Total Current Liabilities 2,030 2,026 Long Term Liabilities -- -- Total Liabilities $ 2,030 $ 2,026 The Company has entered into surety bonds with a financial institution in Saudi Arabia which guaranteed performance on certain contracts. Deposits for surety bonds amounted to $749,000 as of March 31, 2016 and December 31, 2015. These bonds will be released once the related contract is closed out which is expected to occur during the year ended December 31, 2016. Deposits are included on the condensed consolidated balance sheets in assets held for sale.

Deferred Revenue

Deferred Revenue	3 Months Ended
	Mar. 31, 2016
Deferred Revenue [Abstract]
Deferred Revenue	Note 8 - Deferred Revenue Deferred revenue as of March 31, 2016 and December 31, 2015 consisted of the following: March 31, December 31, Deferred Revenue, Current Maintenance agreements $ 8,804 $ 9,025 Services 4,188 70 Total Deferred Revenue, Current 12,992 9,095 Deferred Revenue, Non-Current Maintenance agreements 7,140 7,666 Total Deferred Revenue $ 20,132 $ 16,761 The fair value of the deferred revenue approximates the services to be rendered.

Debt

Debt	3 Months Ended
	Mar. 31, 2016
Debt [Abstract]
Debt	Note 9 - Debt Debt as of March 31, 2016 and December 31, 2015 consisted of the following (in thousands): March 31, December 31, Short-Term Debt Notes payable $ 170 $ 170 Revolving line of credit 7,991 8,580 Term loan 667 667 Total Short-Term Debt $ 8,828 $ 9,417 Long-Term Debt Notes payable $ 282 $ 282 Term loan, non-current portion 777 944 Total Long-Term Debt $ 1,059 $ 1,226 Revolving Line of Credit and Term Loan On May 4, 2015 (effective as of April 29, 2015), the Company and Bridge Bank entered into Amendment 4 to Bridge Bank’s Business Financing Agreement (“BFA”) dated March 15, 2013 to add the Company, Sysorex Federal, AirPatrol and Shoom as borrowers under the agreement (collectively, the “Borrowers”), amend certain financial covenants, increase the credit limit to $10.0 million and provide for a second term loan of $2 million which matures on April 29, 2018 of which $167,000 was used to pay off the balance of the initial term loan. The term loan accrues interest at the greater of 5.25% or Bridge Bank's prime rate plus 2%. The Company will make payments of $56,000 on the term loan on the first day of each month commencing on May 1, 2015 until the loan amount is paid in full. The balance due on the term loan is scheduled to be paid in full during the year ending December 31, 2018. Effective as of September 30, 2015 the Borrowers, entered into Amendment 5 (the “Amendment”), dated October 7, 2015, to the BFA, with Western Alliance Bank, as successor in interest (“Western Alliance”) to Bridge Bank. Pursuant to Amendment 5, Western Alliance assumed the rights and obligations of Bridge Bank as successor in interest to Bridge Bank and the lender under the Agreement. The Amendment also amended certain financial covenants of the Borrowers required by the Agreement. Western Alliance Amendment On March 25, 2016, the Borrowers entered into an amendment and waiver (the “Amendment”) to the BFA with Western Alliance, pursuant to which the Lender waived any non-compliance by the Borrowers with respect to the minimum adjusted EBITDA requirements as of December 31, 2015. In addition, the Lender and the Borrowers agreed that the adjusted EBITDA for the six months ended March 31, 2016 would not be less than $(2,200,000) and on or before April 30, 2016, the Borrowers and Lender must agree to additional financial covenants for the fiscal quarters ended June 30, 2016, September 30, 2016 and December 31, 2016. The lender has agreed to extend the April 30, 2016 deadline and the parties are currently negotiating the additional financial covenants.

Common Stock

Common Stock	3 Months Ended
	Mar. 31, 2016
Common Stock [Abstract]
Common Stock	Note 10 - Common Stock During the three months ended March 31, 2016, the Company issued 45,000 shares of common stock for services which were fully vested upon the date of grant. The Company recorded an expense of $26,000 for the fair value of those shares.

Stock Options

Stock Options	3 Months Ended
	Mar. 31, 2016
Stock Options [Abstract]
Stock Options	Note 11 - Stock Options During the three months ended March 31, 2016, the Company granted options for the purchase of 102,500 shares of common stock to employees of the Company. These options vest pro-rata over 48 months and have a life of ten years and an exercise price of $0.52 per share. The Company valued the stock options using the Black-Scholes option valuation model and the fair value of the award was $27,000. The fair value of the common stock as of the grant date was determined to be $0.52 per share. As of March 31, 2016, the fair value of non-vested options totaled $3,109,000 which will be amortized to expense over the weighted average remaining term of 1.57 years. The fair value of each employee option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. Key weighted-average assumptions used to apply this pricing model during the three months ended March 31, 2016 and 2015 were as follows: March 31, March 31, Risk-free interest rate 1.47% 1.99% Expected life of option grants 7 years 7 years Expected volatility of underlying stock 49.02% 39.4% Dividends Assumption $ -- $ -- The expected stock price volatility for the Company’s stock options was determined by the historical volatilities for industry peers and used an average of those volatilities. The Company attributes the value of stock-based compensation to operations on the straight-line single option method. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. The dividends assumptions was $0 as the Company historically has not declared any dividends and does not expect to.

Credit Risk and Concentrations

Credit Risk and Concentrations	3 Months Ended
	Mar. 31, 2016
Credit Risk and Concentrations [Abstract]
Credit Risk and Concentrations	Note 12 - Credit Risk and Concentrations Financial instruments that subject the Company to credit risk consist principally of trade accounts receivable and cash and cash equivalents. 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, as a consequence, 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. Cash is also maintained at a foreign financial institution for its majority-owned subsidiary. Cash in foreign financial institutions as of March 31, 2016 and December 31, 2015 was immaterial. 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 revenue derived by the Company from those customers which accounted for at least 10% of revenues during the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended Three Months Ended March 31, 2015 $ % $ % Customer A 5,209 36% 3,038 22% Customer B 1,841 13% -- -- As of March 31, 2016, Customer A represented approximately 17% and Customer C represented approximately 33% of total accounts receivable. As of March 31, 2015, Customer A represented approximately 13%, Customer D represented approximately 16%, and Customer E represented approximately 11% of total accounts receivable. As of March 31, 2016, Vendor A represented approximately 38% and Vendor B represented 10% of total gross accounts payable. Purchases from Vendor A were $3.2 million and purchases from Vendor B were $0.9 million during the three months ended March 31, 2016. As of March 31, 2015, Vendor A represented approximately 46% and Vendor C represented approximately 14% of total gross accounts payable. Purchases from Vendor A were $3.8 million and purchases from Vendor C were $1.1 million during the three months ended March 31, 2015. For the three months ended March 31, 2016, Vendor A represented approximately 55%, Vendor B represented approximately 11%, and Vendor D represented approximately 10% of total purchases. For the three months ended March 31, 2015, Vendor A represented approximately 56% and Vendor B represented approximately 11% of total purchases.

Segment Reporting and Foreign O

Segment Reporting and Foreign Operations	3 Months Ended
	Mar. 31, 2016
Segment Reporting and Foreign Operations [Abstract]
Segment Reporting and Foreign Operations	Note 13 - Segment Reporting and Foreign Operations The Company operates in the following business segments: ● Mobile, IoT & Big Data Products: These products currently include our AirPatrol product line (location-based security and marketing platform for wireless and cellular devices that can detect, monitor and manage the content and behavior of smartphones, tablets and other mobile devices based on their location and user); on-premise big data appliance product (Light Miner Studio “LMS”) and will include future Sysorex owned products. ● Storage and Computing: This segment includes third party hardware, software and related maintenance/warranty products and services that Sysorex resells. It includes but is not limited to products for enterprise computing; storage; virtualization; networking; etc. ● SaaS Revenues: These are Software-as-a-Services (SaaS) or internet based hosted services including the Shoom product line and cloud based big data analytics services (based on our LMS product) and other data science services; analytics services for AirPatrol products and other managed services on a SaaS basis. ● Professional Services: These are general IT services including but not limited to: custom application/software design; architecture and development; project management; C4I system consulting; strategic outsourcing; staff augmentation; data center design and operations services; data migration services and other non-SaaS services. The following tables present key financial information of the Company's reportable segments before unallocated corporate expenses (in thousands): Mobile, IoT & Big Data Products Storage SaaS Revenues Professional Services Consolidated Three Months Ended March 31, 2016: Net revenues $ 195 $ 10,153 $ 829 $ 2,910 $ 14,087 Cost of net revenues $ (81 ) $ (7,961 ) $ (205 ) $ (1,893 ) $ (10,140 ) Gross profit $ 114 $ 2,192 $ 624 $ 1,017 $ 3,947 Gross margin % 58 % 22 % 75 % 35 % 28 % Depreciation and amortization $ 71 $ 186 $ 6 $ -- $ 263 Amortization of intangibles $ 728 $ 192 $ 136 $ -- $ 1,056 Three Months Ended March 31, 2015: Net revenues $ 143 $ 10,277 $ 973 $ 2,729 $ 14,122 Cost of net revenues $ (125 ) $ (8,530 ) $ (222 ) $ (1,198 ) $ (10,075 ) Gross profit $ 18 $ 1,747 $ 751 $ 1,531 $ 4,047 Gross margin % 12 % 17 % 77 % 56 % 29 % Depreciation and amortization $ 31 $ 32 $ 21 $ 1 $ 85 Amortization of intangibles $ 554 $ 192 $ 136 $ -- $ 882 Reconciliation of reportable segments’ combined income from operations to the consolidated loss before income taxes is as follows (in thousands): For the Three Months Ended 2016 2015 Income from operations of reportable segments $ 3,947 $ 4,047 Unallocated operating expenses (8,129 ) (6,858 ) Interest expense (143 ) (99 ) Other income (expense) 19 5 Consolidated loss before income taxes $ (4,306 ) $ (2,905 ) The Company’s operations are located primarily in the United States, Canada and Saudi Arabia. Revenues by geographic area are attributed by country of domicile of our subsidiaries. The financial data by geographic area are as follows (in thousands): United Saudi States Canada Arabia Eliminations Total Three Months Ended March 31, 2016: Revenues by geographic area $ 14,049 $ 38 $ -- $ -- $ 14,087 Operating loss by geographic area $ (3,790 ) $ (383 ) $ (9 ) $ -- $ (4,182 ) Net income (loss) by geographic area $ (3,914 ) $ (383 ) $ (9 ) $ -- $ (4,306 ) Three Months Ended March 31, 2015: Revenues by geographic area $ 14,122 $ -- $ -- $ -- $ 14,122 Operating loss by geographic area $ (2,522 ) $ (280 ) $ (9 ) $ -- $ (2,811 ) Net loss by geographic area $ (2,616 ) $ (280 ) $ (9 ) $ -- $ (2,905 ) As of March 31, 2016: Identifiable assets by geographic area $ 63,798 $ 564 $ 772 $ -- $ 65,134 Long lived assets by geographic area $ 31,851 $ 291 $ -- $ -- $ 32,142 As of December 31, 2015: Identifiable assets by geographic area $ 67,538 $ 405 $ 772 $ -- $ 68,715 Long lived assets by geographic area $ 32,759 $ 241 $ -- $ -- $ 33,000

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note 14 - Commitments and Contingencies Litigation Certain conditions may exist as of the date the consolidated 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 consolidated 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. During the year ended December 31, 2011, a judgment in the amount of $936,000 was levied against Sysorex Arabia LLC in favor of Creative Edge, Inc. in connection with amounts advanced for operations. Of that amount, $214,000 has been repaid, $515,000 will be repaid through a surety bond and the remaining $207,000 has been accrued and is included as a component of liabilities held for sale as of March 31, 2016 and December 31, 2015 in the condensed consolidated balance sheets.

Summary of Significant Accoun22

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Basis of Presentation/Summary of Significant Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies The Company's complete accounting policies are described in Note 2 to the Company's audited financial statements and footnotes for the years ended December 31, 2015 and 2014.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with 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: ● The valuation of stock-based compensation; ● The allowance for doubtful accounts; ● The valuation allowance for the deferred tax asset; and ● Impairment of long-lived assets and goodwill.
Revenue Recognition	Revenue Recognition The Company provides IT solutions and services to customers with revenues currently derived primarily from the sale of third-party hardware and software products, software, assurance, licenses and other consulting services, including maintenance services and recognizes revenue once the following four criteria are met: (1) persuasive evidence of an arrangement exists, (2) the price is fixed and determinable, (3) shipment (software and hardware) or fulfillment (maintenance) has occurred, and (4) there is reasonable assurance of collection of the sales proceeds (the “Revenue Recognition Criteria”). In addition, the Company also records revenues in accordance with Accounting Standards Codification (“ASC”) Topic 605-45 “Principal Agent Consideration” (“ASC 605-45”). The Company evaluates the sales of products and services on a case by case basis to determine whether the transaction should be recorded gross or net, including, but not limited to, assessing whether or not the Company: 1) is the primary obligor in the transaction; 2) has inventory risk with respect to the products and/or services sold; 3) has latitude in pricing; and 4) changes the product or performs part of the services sold. The Company evaluates whether revenues received from the sale of hardware and software products, licenses, and services, including maintenance and professional consulting services, should be recognized on a gross or net basis on a transaction by transaction basis. As of March 31, 2016, the Company has determined that all revenues received should be recognized on a gross basis in accordance with applicable standards. Cooperative reimbursements from vendors, which are earned and available, are recorded during the period the related transaction has occurred. Cooperative reimbursements are recorded as a reduction of cost of sales in accordance with ASC Topic 605-50 “Accounting by a Customer (including reseller) for Certain Consideration Received from a Vendor.” Provisions for returns are estimated based on historical collections and credit memo analysis for the period. The Company receives Marketing Development Funds (MDF) from vendors based on quarterly or annual sales performance to promote the marketing of vendor products and services. The Company must file claims with vendors for these cooperative reimbursements by providing invoices and receipts for marketing expenses. Reimbursements are recorded as a reduction of marketing expenses and other applicable selling general and administrative expenses ratably over the period in which the expenses are expected to occur. The Company receives vendor rebates which are recorded to cost of sales. The Company also enters into sales transactions whereby customer orders contain multiple deliverables, and reports its multiple deliverable arrangements under ASC 605-25 “Revenue Arrangements with Multiple Deliverables” (“ASC-605-25”). These multiple deliverable arrangements primarily consist of the following deliverables: the Company’s design, configuration, installation, integration, warranty/maintenance and consulting services; and third-party computer hardware, software and warranty maintenance services. In situations where the Company bundles all or a portion of the separate elements, Vendor Specific Objective Evidence (“VSOE”) is determined based on prices when sold separately. For the three months ended March 31, 2016 and 2015 revenues recognized as a result of customer contracts requiring the delivery of multiple elements were $5.3 million and $7.6 million, respectively. Hardware, Software and Licensing Revenue Recognition Generally, the Revenue Recognition Criteria are met with respect to the sales of hardware and software products when they are shipped to the customer. The delivery of products to our customers occurs in a variety of ways, including (i) as a physical product shipped from the Company’s warehouse, (ii) via drop-shipment by a third-party vendor, or (iii) via electronic delivery with respect to software licenses. The Company leverages drop-ship arrangements with many of its vendors and suppliers to deliver products to customers without having to physically hold the inventory at its warehouse. In such arrangements, the Company negotiates the sale price with the customer, pays the supplier directly for the product shipped, bears credit risk of collecting payment from its customers and is ultimately responsible for the acceptability of the product and ensuring that such product meets the standards and requirements of the customer. As a result, the Company recognizes the sale of the product and the cost of such upon receiving notification from the supplier that the product has shipped. Vendor rebates and price protection are recorded when earned as a reduction to cost of sales or merchandise inventory, as applicable. Vendor product price discounts are recorded when earned as a reduction to cost of sales. Maintenance and Professional Services Revenue Recognition With respect to sales of our maintenance, consulting and other service agreements including our digital advertising and electronic services, the Revenue Recognition Criteria is met once the service has been provided. Revenue on time and material contracts is recognized based on a fixed hourly rate as direct labor hours are expended. The fixed rate includes direct labor, indirect expenses, and profits. Materials, or other specified direct costs, are reimbursed as actual costs and may include markup. Anticipated losses are recognized as soon as they become known. For the three months ended March 31, 2016 and 2015, the Company 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 and commercial customers. The Company recognizes revenue for sales of all services billed as a fixed fee ratably over the term of the arrangement as such services are provided. Billings for such services that are made in advance of the related revenue recognized are recorded as deferred revenue and recognized as revenue ratably over the billing coverage period. Amounts received as prepayments for services to be rendered are recognized as deferred revenue. Revenue from such prepayments is recognized when the services are provided. The Company’s storage and computing segment maintenance services agreements permit customers to obtain technical support from the Company and/or the manufacturer and to update, at no additional cost, to the latest technology if new software updates are introduced during the period that the maintenance agreement is in effect. Since the Company assumes certain responsibility for product staging, configuration, installation, modification, and integration with other client systems, or retains general inventory risk upon customer return or rejection and is most familiar with the customer and its required specifications, it generally serves as the initial contact with the customer with respect to any storage and computing maintenance services required and therefore will perform all or part of the required service. Typically, the Company sells maintenance contracts for a separate fee with initial contractual periods ranging from one to three years with renewal for additional periods thereafter. The Company generally bills maintenance fees in advance and records the amounts received as deferred revenue with respect to any portion of the fee for which services have not yet been provided. The Company recognizes the related revenue ratably over the term of the maintenance agreement as services are provided. In situations where the Company bundles all or a portion of the maintenance fee with products, VSOE for maintenance is determined based on prices when sold separately. Customers that have purchased maintenance/warranty services have a right to cancel and receive a refund of the amounts paid for unused services at any time during the service period upon advance written notice to the Company. Cancellation and refund privileges with respect to maintenance/warranty services lapse as to any period during the term of the agreement for which such services have already been provided. Customers do not have the right to a refund of paid fees for maintenance/warranty services that the Company has earned and recognized as revenue. Invoices issued for maintenance/warranty services not yet rendered are recorded as deferred revenue and then recognized as revenue ratably over the service period. As a result (1) the warranty and maintenance service fees payable by each customer are separately accounted for in each customer purchase order as a separate line item, and (2) upon the Company’s receipt and acceptance of a request for refund of maintenance/warranty services not yet provided, the Company’s obligation to perform any additional maintenance/warranty services will end. Sales are recorded net of discounts and returns.
Stock-Based Compensation	Stock-Based Compensation The Company accounts for options granted to employees by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as expense over the period during which the recipient is required to provide services in exchange for that award. Options and warrants granted to consultants and other non-employees are recorded at fair value as of the grant date and subsequently adjusted to fair value at the end of each reporting period until such options and warrants vest, and the fair value of such instruments, as adjusted, is expensed over the related vesting period. The Company incurred stock-based compensation charges, net of estimated forfeitures of $364,000 and $386,000 for the three months ended March 31, 2016 and 2015, respectively. The following table summarizes the nature of such charges for the years then ended (in thousands): For the Three Months Ended 2016 2015 Compensation and related benefits $ 338 $ 254 Professional and legal fees 26 132 Totals $ 364 $ 386
Net Loss Per Share	Net Loss Per Share The Company computes basic and diluted earnings per share by dividing net loss by the weighted average number of common shares outstanding during the period. Basic and diluted net loss per common share were the same since the inclusion of common shares issuable pursuant to the exercise of options and warrants in the calculation of diluted net loss per common shares would have been anti-dilutive. The following table summarizes the number of common shares and common share equivalents excluded from the calculation of diluted net loss per common share for the three months ended March 31, 2016 and 2015: For the Three Months Ended 2016 2015 Options 4,817,109 2,981,658 Warrants 561,262 511,262 Shares accrued but not issued 1,842,000 35,715 Totals 7,220,371 3,528,635
Recent Accounting Pronouncements	Recent Accounting Pronouncements The FASB and the SEC have issued certain accounting standards updates and regulations that will become effective in subsequent periods; however, management of the Company does not believe that any of those updates would have significantly affected the Company’s financial accounting measures or disclosures had they been in effect during 2016 or 2015, and does not believe that any of those pronouncements will have a significant impact on the Company’s consolidated financial statements at the time they become effective.
Subsequent Events	Subsequent Events The Company evaluates events and/or transactions occurring after the balance sheet date and before the issue date of the condensed consolidated financial statements to determine if any of those events and/or transactions requires adjustment to or disclosure in the condensed consolidated financial statements.

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2016
Basis of Presentation/Summary of Significant Accounting Policies [Abstract]
Schedule of stock-based compensation charges	For the Three Months Ended 2016 2015 Compensation and related benefits $ 338 $ 254 Professional and legal fees 26 132 Totals $ 364 $ 386
Schedule of number of common shares and common share equivalents excluded from the calculation of diluted net loss per common share	For the Three Months Ended 2016 2015 Options 4,817,109 2,981,658 Warrants 561,262 511,262 Shares accrued but not issued 1,842,000 35,715 Totals 7,220,371 3,528,635

Notes and Other Receivables (Ta

Notes and Other Receivables (Tables)	3 Months Ended
	Mar. 31, 2016
Notes and Other Receivables [Abstract]
Schedule of Notes and other receivable	March 31, December 31, Notes receivable $ 900 $ 900 Other receivables 856 440 Total Notes and Other Receivables $ 1,756 $ 1,340

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Mar. 31, 2016
Inventory [Abstract]
Schedule of inventory	March 31, December 31, Raw materials $ 110 $ 153 Work in process 33 64 Finished goods 679 538 Total Inventory $ 822 $ 755

Discontinued Operations (Tables

Discontinued Operations (Tables)	3 Months Ended
	Mar. 31, 2016
Discontinued Operations [Abstract]
Schedule of major categories of discontinued assets and liabilities	March 31, 2016 December 31, 2015 Assets Accounts receivable, net 1 1 Notes and other receivables 8 8 Other assets 763 763 Total Current Assets 772 772 Other assets -- -- Total Assets $ 772 $ 772 Liabilities and Stockholders’ Equity Current Liabilities Accounts payable $ 178 $ 178 Accrued liabilities 895 888 Deferred revenue 236 236 Due to related party (1 ) 2 Short-term debt 722 722 Total Current Liabilities 2,030 2,026 Long Term Liabilities -- -- Total Liabilities $ 2,030 $ 2,026

Deferred Revenue (Tables)

Deferred Revenue (Tables)	3 Months Ended
	Mar. 31, 2016
Deferred Revenue [Abstract]
Schedule of deferred revenue	March 31, December 31, Deferred Revenue, Current Maintenance agreements $ 8,804 $ 9,025 Services 4,188 70 Total Deferred Revenue, Current 12,992 9,095 Deferred Revenue, Non-Current Maintenance agreements 7,140 7,666 Total Deferred Revenue $ 20,132 $ 16,761

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2016
Debt [Abstract]
Schedule of debt	March 31, December 31, Short-Term Debt Notes payable $ 170 $ 170 Revolving line of credit 7,991 8,580 Term loan 667 667 Total Short-Term Debt $ 8,828 $ 9,417 Long-Term Debt Notes payable $ 282 $ 282 Term loan, non-current portion 777 944 Total Long-Term Debt $ 1,059 $ 1,226

Stock Options (Tables)

Stock Options (Tables)	3 Months Ended
	Mar. 31, 2016
Stock Options [Abstract]
Schedule of weighted-average assumptions Black-Scholes option-pricing model	March 31, March 31, Risk-free interest rate 1.47% 1.99% Expected life of option grants 7 years 7 years Expected volatility of underlying stock 49.02% 39.4% Dividends Assumption $ -- $ --

Credit Risk and Concentrations

Credit Risk and Concentrations (Tables)	3 Months Ended
	Mar. 31, 2016
Credit Risk and Concentrations [Abstract]
Schedule of risk percentage of revenue from customers	Three Months Ended Three Months Ended March 31, 2015 $ % $ % Customer A 5,209 36% 3,038 22% Customer B 1,841 13% -- --

Segment Reporting and Foreign31

Segment Reporting and Foreign Operations (Tables)	3 Months Ended
	Mar. 31, 2016
Segment Reporting and Foreign Operations [Abstract]
Schedule of financial data by business segment	Mobile, IoT & Big Data Products Storage SaaS Revenues Professional Services Consolidated Three Months Ended March 31, 2016: Net revenues $ 195 $ 10,153 $ 829 $ 2,910 $ 14,087 Cost of net revenues $ (81 ) $ (7,961 ) $ (205 ) $ (1,893 ) $ (10,140 ) Gross profit $ 114 $ 2,192 $ 624 $ 1,017 $ 3,947 Gross margin % 58 % 22 % 75 % 35 % 28 % Depreciation and amortization $ 71 $ 186 $ 6 $ -- $ 263 Amortization of intangibles $ 728 $ 192 $ 136 $ -- $ 1,056 Three Months Ended March 31, 2015: Net revenues $ 143 $ 10,277 $ 973 $ 2,729 $ 14,122 Cost of net revenues $ (125 ) $ (8,530 ) $ (222 ) $ (1,198 ) $ (10,075 ) Gross profit $ 18 $ 1,747 $ 751 $ 1,531 $ 4,047 Gross margin % 12 % 17 % 77 % 56 % 29 % Depreciation and amortization $ 31 $ 32 $ 21 $ 1 $ 85 Amortization of intangibles $ 554 $ 192 $ 136 $ -- $ 882
Schedule of reconciliation of reportable segments' combined income from operations to the consolidated loss before income taxes	For the Three Months Ended 2016 2015 Income from operations of reportable segments $ 3,947 $ 4,047 Unallocated operating expenses (8,129 ) (6,858 ) Interest expense (143 ) (99 ) Other income (expense) 19 5 Consolidated loss before income taxes $ (4,306 ) $ (2,905 )
Schedule of financial data by geographic area	United Saudi States Canada Arabia Eliminations Total Three Months Ended March 31, 2016: Revenues by geographic area $ 14,049 $ 38 $ -- $ -- $ 14,087 Operating loss by geographic area $ (3,790 ) $ (383 ) $ (9 ) $ -- $ (4,182 ) Net income (loss) by geographic area $ (3,914 ) $ (383 ) $ (9 ) $ -- $ (4,306 ) Three Months Ended March 31, 2015: Revenues by geographic area $ 14,122 $ -- $ -- $ -- $ 14,122 Operating loss by geographic area $ (2,522 ) $ (280 ) $ (9 ) $ -- $ (2,811 ) Net loss by geographic area $ (2,616 ) $ (280 ) $ (9 ) $ -- $ (2,905 ) As of March 31, 2016: Identifiable assets by geographic area $ 63,798 $ 564 $ 772 $ -- $ 65,134 Long lived assets by geographic area $ 31,851 $ 291 $ -- $ -- $ 32,142 As of December 31, 2015: Identifiable assets by geographic area $ 67,538 $ 405 $ 772 $ -- $ 68,715 Long lived assets by geographic area $ 32,759 $ 241 $ -- $ -- $ 33,000

Organization and Nature of Bu32

Organization and Nature of Business (Details) - USD ($)	May. 04, 2015	Sep. 25, 2015	Mar. 31, 2016	Mar. 31, 2015
Organization consolidation and presentation of financial statements (Textuals)
Working capital deficiency			$ 7,700,000
Net loss			(4,306,000)	$ (2,905,000)
Net Cash Provided by (Used in) Operating Activities			(4,000)	$ (2,261,000)
Sale of common stock shares		5,250,000
Price per share		$ 1
Net proceeds from offering		$ 4,700,000
S-3 Market capitalization ceiling			$ 75,000,000
Bank [Member]
Organization consolidation and presentation of financial statements (Textuals)
New credit limit of the line of credit	$ 10,000,000
Loans Payable	2,000,000
Repayments of term loan	$ 167,000

Summary of Significant Accoun33

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Stock Based Compensation [Abstract]
Compensation and related benefits	$ 338	$ 254
Professional and legal fees	26	132
Totals	$ 364	$ 386

Summary of Significant Accoun34

Summary of Significant Accounting Policies (Details 1) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of common shares and common share equivalents excluded from the calculation of diluted net loss per share	7,220,371	3,528,635
Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of common shares and common share equivalents excluded from the calculation of diluted net loss per share	4,817,109	2,981,658
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of common shares and common share equivalents excluded from the calculation of diluted net loss per share	561,262	511,262
Shares accrued but not issued [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of common shares and common share equivalents excluded from the calculation of diluted net loss per share	1,842,000	35,715

Summary of Significant Accoun35

Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Summary of Significant Accounting Policies (Textual)
Share-based Compensation	$ 364	$ 386
Revenues	14,087	14,122
Multiple Deliverable Elements [Member]
Summary of Significant Accounting Policies (Textual)
Revenues	$ 5,300	$ 7,600

Related Party (Details)

Related Party (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Related Party (Textual)
Due from Sysorex Consulting Inc.	$ 666	$ 666
Effective date of Amended Agreement	Mar. 16, 2016
Monthly consultant fee	$ 20,000
Related party Amendment Agreement, Description	The Amended Agreement provided for an extension of the original term for an additional nine months from March 31, 2016 to December 31, 2016.

Notes and Other Receivables (De

Notes and Other Receivables (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Notes and Other Receivables [Abstract]
Notes receivable	$ 900	$ 900
Other receivables	856	440
Total Notes and Other Receivables	$ 1,756	$ 1,340

Notes and Other Receivables (38

Notes and Other Receivables (Details Textual) - Third Party [Member]	1 Months Ended
	Jul. 17, 2014USD ($)
Notes Receivable (Textual)
Interest rate per annum	8.00%
Debt Instrument, maturity date	Mar. 31, 2016
Notes receivable net	$ 900,000

Inventory (Details)

Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory [Abstract]
Raw materials	$ 110	$ 153
Work in process	33	64
Finished goods	679	538
Total Inventory	$ 822	$ 755

Discontinued Operations (Detail

Discontinued Operations (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Assets
Accounts receivable, net	$ 1	$ 1
Notes and other receivables	8	8
Other assets	763	763
Total Current Assets	$ 772	$ 772
Other assets
Total Assets	$ 772	$ 772
Current Liabilities
Accounts payable	178	178
Accrued liabilities	895	888
Deferred revenue	236	236
Due to related party	(1)	2
Short-term debt	722	722
Total Current Liabilities	$ 2,030	$ 2,026
Long Term Liabilities
Total Liabilities	$ 2,030	$ 2,026

Discontinued Operations (Deta41

Discontinued Operations (Details Textual) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Discontinued Operations [Abstract]
Deposits for surety bonds	$ 749,000	$ 749,000

Deferred Revenue (Details)

Deferred Revenue (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Deferred Revenue, Current
Total Deferred Revenue, Current	$ 12,992	$ 9,095
Deferred Revenue, Non-Current
Total Deferred Revenue, Non-Current	7,140	7,666
Total Deferred Revenue	20,132	16,761
Maintenance agreements [Member]
Deferred Revenue, Current
Total Deferred Revenue, Current	8,804	9,025
Deferred Revenue, Non-Current
Total Deferred Revenue, Non-Current	7,140	7,666
Services [Member]
Deferred Revenue, Current
Total Deferred Revenue, Current	$ 4,188	$ 70

Debt (Details)

Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Short-Term Debt
Notes payable	$ 170	$ 170
Revolving line of credit	7,991	8,580
Term loan	667	667
Total Short-Term Debt	8,828	9,417
Long-Term Debt
Notes payable	282	282
Term loan, non-current portion	777	944
Total Long-Term Debt	$ 1,059	$ 1,226

Debt (Details Textual)

Debt (Details Textual) - USD ($)	Mar. 25, 2016	May. 04, 2015	Mar. 31, 2016
Debt Instrument [Line Items]
Borrowers adjusted EBITDA covenant			$ (2,200,000)
Western Alliance Amendment, Description	The Lender and the Borrowers agreed that the adjusted EBITDA for the six months ended March 31, 2016 would not be less than $(2,200,000) and on or before April 30, 2016, the Borrowers and Lender must agree to additional financial covenants for the fiscal quarters ended June 30, 2016, September 30, 2016 and December 31, 2016.
Bridge Bank [Member]
Debt Instrument [Line Items]
New credit limit of the line of credit		$ 10,000,000
Bank term loan payable		$ 2,000,000
Debt Instrument, maturity date		Apr. 29, 2018
Repayments of term loan		$ 167,000
Description on debt instrument		The term loan accrues interest at the greater of 5.25% or Bridge Bank's prime rate plus 2%
Debt Instrument periodic payment principal		$ 56,000

Common Stock (Details)

Common Stock (Details) - Common Stock [Member]	3 Months Ended
	Mar. 31, 2016USD ($)shares
Common shares issued for services, Shares | shares	45,000
Fair value of shares issued for services | $	$ 26,000

Stock Options (Details)

Stock Options (Details) - Stock Options [Member] - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule of weighted-average assumptions Black-Scholes option-pricing model
Risk-free interest rate	1.47%	1.99%
Expected life of option grants	7 years	7 years
Expected volatility of underlying stock	49.02%	39.40%
Dividends Assumption

Stock Options (Details Textual)

Stock Options (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Employee Stock Option [Member]
Share-based Arrangements with Employees and Nonemployees [Abstract]
Expected life of option grants	7 years	7 years
Fair value of non-vested options	$ 3,109,000
Weighted average remaining term of non-vested options	1 year 6 months 26 days
Dividends Assumption
Employee [Member]
Share-based Arrangements with Employees and Nonemployees [Abstract]
Number of options granted, shares	102,500
Options vest period	48 months
Expected life of option grants	10 years
Options exercise price	$ 0.52
Fair value of options granted	$ 27,000
Fair value of the stock option as of grant date	$ 0.52

Credit Risk and Concentration48

Credit Risk and Concentrations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Concentration Risk [Line Items]
Net revenues	$ 14,087	$ 14,122
Customer concentration risk [Member] | Customer A [Member]
Concentration Risk [Line Items]
Net revenues	$ 5,209	$ 3,038
Concentration risk, percentage	36.00%	22.00%
Customer concentration risk [Member] | Customer B [Member]
Concentration Risk [Line Items]
Net revenues	$ 1,841
Concentration risk, percentage	13.00%

Credit Risk and Concentration49

Credit Risk and Concentrations (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Vendor one [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	55.00%	56.00%
Vendor two [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	11.00%	11.00%
Vendor Four [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	10.00%
Accounts payable [Member] | Vendor one [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	38.00%	46.00%
Purchases from vendors	$ 3.2	$ 3.8
Accounts payable [Member] | Vendor two [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	10.00%
Purchases from vendors	$ 0.9
Accounts payable [Member] | Vendor three [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		14.00%
Purchases from vendors		$ 1.1
Accounts Receivable [Member] | Customer A [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	17.00%	13.00%
Accounts Receivable [Member] | Customer C [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	33.00%
Accounts Receivable [Member] | Customer D [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		16.00%
Accounts Receivable [Member] | Customer E [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		11.00%

Segment Reporting and Foreign50

Segment Reporting and Foreign Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting Information [Line Items]
Net revenues	$ 14,087	$ 14,122
Cost of net revenues	(10,140)	(10,075)
Gross profit	$ 3,947	$ 4,047
Gross margin %	28.00%	29.00%
Depreciation and amortization	$ 263	$ 85
Amortization of intangibles	1,056	882
Mobile, IoT & Big Data Products [Member]
Segment Reporting Information [Line Items]
Net revenues	195	143
Cost of net revenues	(81)	(125)
Gross profit	$ 114	$ 18
Gross margin %	58.00%	12.00%
Depreciation and amortization	$ 71	$ 31
Amortization of intangibles	728	554
Storage and Computing [Member]
Segment Reporting Information [Line Items]
Net revenues	10,153	10,277
Cost of net revenues	(7,961)	(8,530)
Gross profit	$ 2,192	$ 1,747
Gross margin %	22.00%	17.00%
Depreciation and amortization	$ 186	$ 32
Amortization of intangibles	192	192
SaaS Revenues [Member]
Segment Reporting Information [Line Items]
Net revenues	829	973
Cost of net revenues	(205)	(222)
Gross profit	$ 624	$ 751
Gross margin %	75.00%	77.00%
Depreciation and amortization	$ 6	$ 21
Amortization of intangibles	136	136
Professional Services [Member]
Segment Reporting Information [Line Items]
Net revenues	2,910	2,729
Cost of net revenues	(1,893)	(1,198)
Gross profit	$ 1,017	$ 1,531
Gross margin %	35.00%	56.00%
Depreciation and amortization		$ 1
Amortization of intangibles

Segment Reporting and Foreign51

Segment Reporting and Foreign Operations (Details 1) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting and Foreign Operations [Abstract]
Income from operations of reportable segments	$ 3,947	$ 4,047
Unallocated operating expenses	(8,129)	(6,858)
Interest expense	(143)	(99)
Other income (expense)	19	5
Consolidated loss before income taxes	$ (4,306)	$ (2,905)

Segment Reporting and Foreign52

Segment Reporting and Foreign Operations (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues by geographic area	$ 14,087	$ 14,122
Operating loss by geographic area	(4,182)	(2,811)
Net income (loss) by geographic area	(4,306)	(2,905)
Identifiable assets by geographic area	65,134		$ 68,715
Long lived assets by geographic area	32,142		33,000
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues by geographic area	14,049	14,122
Operating loss by geographic area	(3,790)	(2,522)
Net income (loss) by geographic area	(3,914)	$ (2,616)
Identifiable assets by geographic area	63,798		67,538
Long lived assets by geographic area	31,851		32,759
Canada [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues by geographic area	38
Operating loss by geographic area	(383)	$ (280)
Net income (loss) by geographic area	(383)	$ (280)
Identifiable assets by geographic area	564		405
Long lived assets by geographic area	$ 291		241
Saudi Arabia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues by geographic area
Operating loss by geographic area	$ (9)	$ (9)
Net income (loss) by geographic area	(9)	$ (9)
Identifiable assets by geographic area	$ 772		$ 772
Long lived assets by geographic area
Eliminations [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues by geographic area
Operating loss by geographic area
Net income (loss) by geographic area
Identifiable assets by geographic area
Long lived assets by geographic area

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2011	Dec. 31, 2015
Commitments and Contingencies [Abstract]
Litigation settlement in favor of Creative Edge, Inc.		$ 936,000
Amount paid towards loss contingency	$ 214,000
Surety bond towards loss contingency	515,000
Litigation amount accrued as advances payable	$ 207,000		$ 207,000