Sysorex (SYSX) 10-Q 16 Nov 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 14, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	Sysorex, Inc.
Entity Central Index Key	1,737,372
Trading Symbol	SYSX
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		32,411,083

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current Assets
Cash	$ 89	$ 22
Accounts receivable, net	654	1,881
Other receivables	163	170
Inventory		7
Prepaid licenses and maintenance contracts	5	4,638
Prepaid assets and other current assets	1,317	263
Total Current Assets	2,228	6,981
Prepaid licenses and maintenance contracts, non current		2,264
Property and equipment, net	39	172
Intangible assets, net	3,323	5,113
Other assets	35	10
Total Assets	5,625	14,540
Current Liabilities
Accounts payable	15,105	24,271
Accrued liabilities	731	3,215
Related party payable	750
Short-term debt	1,019
Deferred revenue	130	5,554
Total Current Liabilities	17,735	33,040
Long Term Liabilities
Accrued issuable equity	154
Deferred revenue- non-current		2,636
Acquisition liability - Integrio	62	997
Other liabilities	40	39
Total Liabilities	17,991	36,712
Commitments and Contingencies
Stockholders' Deficit
Net parent investment		(22,172)
Common stock, par value $0.00001 per share, 500,000,000 shares authorized; 41,000,000 shares issued and 29,208,310 shares outstanding as of September 30, 2018	4
Treasury stock, at cost, 11,791,690 shares at September 30, 2018	(1)
Additional paid-in-capital	(11,567)
Accumulated deficit	(802)
Total Stockholders' Deficit	(12,366)	(22,172)
Total Liabilities and Stockholders' Deficit	$ 5,625	$ 14,540

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical)	Sep. 30, 2018$ / sharesshares
Statement of Financial Position [Abstract]
Common stock, par value | $ / shares	$ 0.00001
Common stock, shares authorized	500,000,000
Common stock, shares issued	41,000,000
Common stock, shares outstanding	29,208,310
Treasury stock, shares	11,791,690

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues
Products	$ 349	$ 9,514	$ 1,249	$ 30,750
Services	365	1,539	1,700	6,744
Total Revenues	714	11,053	2,949	37,494
Cost of Revenues
Products	230	8,426	676	26,394
Services	271	980	981	4,195
Total Cost of Revenues	501	9,406	1,657	30,589
Gross Profit	213	1,647	1,292	6,905
Operating Expenses
Research and development	10	223	168	745
Sales and marketing	356	860	1,488	3,605
General and administrative	1,403	2,140	3,947	6,307
Amortization of intangibles	751	519	1,789	1,558
Impairment of goodwill		7,805		7,805
Total Operating Expenses	2,520	11,547	7,392	20,020
Loss from Operations	(2,307)	(9,900)	(6,100)	(13,115)
Other Income (Expenses)
Interest expense	(29)	(442)	(764)	(1,403)
Other income, net	(72)	597	1,465	599
Total Other Income (Expense)	(101)	155	701	(804)
Net Loss	$ (2,408)	$ (9,745)	$ (5,399)	$ (13,919)
Net Loss per share - basic and diluted	$ (0.08)	$ (0.35)	$ (0.19)	$ (0.49)
Weighted Average Shares Outstanding - basic and diluted	28,534,396	28,208,310	28,318,200	28,208,310

Condensed Consolidated Statem_2

Condensed Consolidated Statement of Changes in Stockholders' Deficit - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	Net Parent Investment	Accumulated Deficit
Balance at Dec. 31, 2017	$ (22,172)
Balance, shares at Dec. 31, 2017
Net loss for the period January 1, 2018 through August 31, 2018	(4,778)				$ (4,778)
Adoption of accounting standards	1,287				1,287
Net transfers from former Parent	14,187				14,059
Reclassification of net parent investment in connection with distribution				(11,604)	11,604
Common stock distributed in connection with spinoff		$ 4	$ (1)	(3)
Common stock distributed in connection with spinoff, shares		40,000,000	11,791,690
Shared issues for trademark	40			40
Shared issues for trademark, shares		1,000,000
Net Loss	(5,399)					$ (802)
Balance at Sep. 30, 2018	$ (12,366)
Balance, shares at Sep. 30, 2018		41,000,000	11,791,690

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash Flows from Operating Activities
Net loss	$ (5,399)	$ (13,919)
Adjustment to reconcile net loss to net cash provided by operating activities:
Depreciation	108	40
Amortization of intangibles	1,789	1,558
Impairment of goodwill		7,805
Gain on earn out - Integrio acquisition	(934)
Gain on the settlement of vendor liabilities	(220)
Amortization of debt discount	299	498
Provision for doubtful accounts	41
Other	79	206
Changes in operating assets and liabilities:
Accounts receivable	1,187	5,017
Other receivables	7	(25)
Inventories	7	193
Prepaid assets and other current assets	(1,054)	365
Prepaid licenses & maintenance contracts	6,898	9,787
Other assets	(25)	35
Accounts payable	(8,010)	3,711
Accrued liabilities	(2,484)	62
Accrued issuable equity	154
Deferred revenue	(8,060)	(10,671)
Other liabilities	(934)	(681)
Total Adjustments	(11,152)	17,900
Net Cash (Used In) Provided By Operating Activities	(16,551)	3,981
Cash Flows From Financing Activities
Related party advances	750
Revolver line of credit	1,019
Net distributions from (to) parent	14,849	(4,906)
Net Cash Provided by (Used In) Financing Activities	16,618	(4,906)
Net Increase (Decrease) in Cash	67	(925)
Cash- beginning of period	22	937
Cash- end of period	89	12
Cash paid for:
Interest	465	12
Income taxes
Supplemental Disclosure of non-cash financing activities:
Common shares issued for a trademark license	40
Adjustment to opening retained earnings for adoption of ASC 606	$ 1,287

Description of Business, the Sp

Description of Business, the Spin-Off and Going Concern and Management's Plans	9 Months Ended
	Sep. 30, 2018
Description of Business, the Spin-Off and Going Concern and Management's Plans [Abstract]
Description of Business, the Spin-Off and Going Concern and Management's Plans	Note 1 — Description of Business, the Spin-Off and Going Concern and Management’s Plans Description of Business Sysorex, Inc., through its wholly-owned subsidiary, Sysorex Government Services, Inc., formerly known as (f/k/a) Inpixon Federal, Inc. (“SGS”), (unless otherwise stated or the context otherwise requires, the terms “SGS” “we,” “us,” “our” and the “Company” refer collectively to Sysorex and the above subsidiary, SGS), provides information technology solutions primarily to the public sector. These solutions include cybersecurity, professional services, engineering support, IT consulting, enterprise level technology, networking, wireless, help desk, and custom IT solutions. The Company is headquartered in Virginia. The Spin-Off On August 31, 2018 (the "Distribution Date"), the Company became an independent company through the pro rata distribution by Inpixon (Inpixon) of 100% of the outstanding common stock of Sysorex to Inpixon equity holders (which the Company refers to as the Distribution). Each Inpixon equity holder of record as of the close of business on August 21, 2018 received one share of the Company’s common stock for every three shares of Inpixon common stock held on the record date or such number of shares of common stock issuable upon complete conversion of Inpixon convertible preferred stock or exercise of certain participating warrants. Approximately 40 million shares of the Company’s common stock were distributed on the Distribution Date to Inpixon equity holders. The Company’s common stock began regular-way trading on the OTC Markets under the symbol SYSX on September 4, 2018. Immediately prior to the Distribution, Inpixon transferred substantially all of the assets and liabilities and operations of Inpixon’s value added reseller business to the Company, which was completed on August 31, 2018 (the Capitalization). The Company’s condensed consolidated financial statements prior to the Capitalization were prepared on a stand-alone basis and were derived from Inpixon's condensed consolidated financial statements and accounting records. The condensed consolidated financial statements included herein reflect the Company’s financial position, results of operations, and cash flows as the Company’s business was operated as part of Inpixon’s prior to the Capitalization. Following the Capitalization, the condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All periods presented have been accounted for in conformity with GAAP. Going Concern and Management’s Plans As of September 30, 2018, the Company had an $89,000 cash balance and a working capital deficit of approximately $15.5 million. In addition, the Company has a stockholders’ deficit of approximately $12.4million. For the nine months ended September 30, 2018, the Company incurred net losses of approximately $5.4 million. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed 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 condensed 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 condensed consolidated financial statements are issued. The Company expects its capital resources as of September 30, 2018, availability on the Payplant facility to finance purchase orders and invoices in an amount equal to 80% of the face value of purchase orders received, funds from financing from our former parent Inpixon, higher margin public sector contracts capture, reauthorization of key vendors and credit limitation improvements should be sufficient to fund planned operations during the year ending December 31, 2018; however, the Company will need additional funds to support its operations for the next twelve months. The Company may raise additional capital as needed, through the issuance of equity, equity-linked or debt securities. The Company’s condensed consolidated financial statements as of September 30, 2018 have been prepared under the assumption that we will continue as a going concern for the next twelve months from the date the financial statements are issued. Management’s plans and assessment of the probability that such plans will mitigate and alleviate any substantial doubt about the Company’s ability to continue as a going concern, is dependent upon the ability to attain funding to secure additional resources to generate sufficient revenues and increased margin, which without these represent the principal conditions that raise substantial doubt about our ability to continue as a going concern. The Company’s condensed consolidated financial statements as of September 30, 2018 do not include any adjustments that might result from the outcome of this uncertainty.

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2018
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, which are the accounting principles that are generally accepted in the United States of America. 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 nine month period ended September 30, 2018 is not necessarily indicative of the results to be expected for the year ending December 31, 2018. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the years ended December 31, 2017 and 2016 included in the Form 10 filed with SEC on June 15, 2018, as amended.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2018
Basis of Presentation/Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 3 — Summary of Significant Accounting Policies The condensed consolidated financial statements have been prepared using the accounting records of Sysorex and SGS. All material inter-company balances and transactions have been eliminated. 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 allowance for doubtful accounts; and ● the impairment of long-lived assets. Revenue Recognition In March 2016, the Financial Accounting Standards Board (‘FASB”) issued Accounting Standards Update (“ASU”) No. 2016-08, “Revenue from Contracts with Customers — Principal versus Agent Considerations”, in April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606) — Identifying Performance Obligations and Licensing” and in May 9, 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606)”, or ASU 2016-12. This update provides clarifying guidance regarding the application of ASU No. 2014-09 — Revenue from Contracts with Customers which is not yet effective. These new standards provide for a single, principles-based model for revenue recognition that replaces the existing revenue recognition guidance. In July 2015, the FASB deferred the effective date of ASU 2014-09 until annual and interim periods beginning on or after December 15, 2017. It has replaced most existing revenue recognition guidance under GAAP. The ASU may be applied retrospectively to historical periods presented or as a cumulative-effect adjustment as of the date of adoption. The Company has adopted Topic 606 using a modified retrospective approach and will be applied prospectively in the financial statements from January 1, 2018 forward. Revenues under Topic 606 are required to be recognized either at a “point in time” or “over time”, depending on the facts and circumstances of the arrangement, and will be evaluated using a five-step model. The adoption of Topic 606 did have a material impact on our financial statements. Hardware and Software Revenue Recognition The Company 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 goods 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 warehouses. 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 at the point of sale. License and Maintenance Services Revenue Recognition The Company 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. Professional Services Revenue Recognition The Company’s professional services include fixed fee and time and materials contracts. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. The Company’s time and materials contracts are paid weekly or monthly based on hours worked. Revenue on time and material contracts is recognized based on a fixed hourly rate as direct labor hours are expended. Materials, or other specified direct costs, are reimbursed as actual costs and may include markup. The Company has elected the practical expedient to recognize revenue for the right to invoice because the Company’s right to consideration corresponds directly with the value to the customer of the performance completed to date. 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. Because the Company’s contracts have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Anticipated losses are recognized as soon as they become known. For the nine months ended September 30, 2018 and 2017, 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. Impairment of Long-Lived Assets The Company amortizes intangible assets with finite lives over their estimated useful lives and review them for impairment whenever an impairment indicator exists. The Company continually monitors events and changes in circumstances that could indicate carrying amounts of our long-lived assets, including our intangible assets, may not be recoverable. When such events or changes in circumstances occur, we assess recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. The Company did not recognize any intangible asset impairment charges for the nine months ended September 30, 2018 and 2017. Recent Accounting Standards The Company adopted ASC 606 effective January 1, 2018 using the modified retrospective method which was applied to all contracts at the date of initial application. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09, Revenue — Revenue from Contracts with Customers Balance at December 31, Adjustments due to ASU 2014-09 Balance at January 1, Balance Sheet: Assets Prepaid licenses & maintenance contracts, current 4,638 (4,638 ) — Prepaid licenses & maintenance contracts, non-current 2,264 (2,264 ) — Liabilities Deferred revenue, current 5,554 (5,554 ) — Deferred revenue, non-current 2,636 (2,636 ) — Equity Accumulated deficit (22,172 ) 1,287 (20,885 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our condensed consolidated income statement and balance sheet was as follows (in millions): For the Three Months Ended As Reported Balances Without Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 349 1,649 (1,300 ) Services 365 365 — Cost and expenses Cost of Revenues Products (A) 230 1,330 (1,100 ) Services 271 271 — Gross Profit 213 413 (200 ) Income/Loss from Operations (2,307 ) (2,107 ) (200 ) Net Income (Loss) (2,408 ) (2,208 ) (200 ) For the Nine Months Ended As Balances Without Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 1,249 6,218 (4,969 ) Services 1,700 1,700 — Cost and expenses Cost of Revenues Products (A) 676 4,877 (4,201 ) Services 981 981 — Gross Profit 1,292 2,059 (767 ) Income/Loss from Operations (6,100 ) (5,333 ) (767 ) Net Income (Loss) (5,399 ) (4,632 ) (767 ) As of September 30, 2018 As Balances Without Effect of Change Balance Sheet Assets Prepaid Licenses & Maintenance Contracts, current — 436 (436 ) Prepaid Licenses & Maintenance Contracts, non-Current — 2,264 (2,264 ) Liabilities Deferred Revenue, current — 585 (585 ) Deferred Revenue, non-current — 2,636 (2,636 ) Equity Accumulated Deficit (13,173 ) (13,693 ) 520 (A) Product revenues and cost of revenues include maintenance/licenses contracts that are sold by the company but performed by third parties. 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.

Net Loss per Common Share

Net Loss per Common Share	9 Months Ended
	Sep. 30, 2018
Net Loss per Common Share [Abstract]
Net loss per common share	Note 4 — Net loss per common share Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding, plus the number of additional common shares that would have been outstanding if the common share equivalents had been issued (computed using the treasury stock or if converted method), if dilutive. For the three and nine months ended September 30, 2017, in determining the weighted average number of common shares outstanding, the Company assumed 21,208,310 shares were outstanding for the period as prior to the date of the spin-off, no common stock of the Company existed. The following common share equivalents are excluded from the calculation of weighted average common shares because their inclusion would have been anti-dilutive: September 30, 2018 2017 Options 1,945 -- Total potentially dilutive shares 1,945 --

Credit Risk and Concentrations

Credit Risk and Concentrations	9 Months Ended
	Sep. 30, 2018
Credit Risk and Concentrations [Abstract]
Credit Risk and Concentrations	Note 5 — 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 revenue derived by the Company from those customers which accounted for at least 10% of revenues during the nine months ended September 30, 2018 and 2017 (in thousands of dollars): For the Nine Months Ended For the Nine Months Ended $ % $ % Customer A 633 21 % — — Customer B 520 18 % — — Customer C 323 11 % — — Customer E — — 5,264 14 % 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 September 30, 2018 and 2017 (in thousands of dollars): For the Three Months Ended For the Three Months Ended $ % $ % Customer A 211 29 % — — Customer C 166 23 % 3,613 33 % Customer D 121 17 % — — Customer F — — 1,424 13 % Customer G — — 1,237 11 % As of September 30, 2018, Customer A represented approximately 31%, Customer B represented approximately 0%, Customer C represented approximately 8%,Customer D represented approximately 3%, of total accounts receivable. As of September 30, 2017, Customer E represented approximately 0%, Customer F represented approximately 27% and Customer G represented approximately 21% of total accounts receivable. For the three months ended September 30, 2018, two vendors represented approximately 19% and 17% of total purchases. Purchases from these vendors during the three months ended September 30, 2018 were $134 thousand, and $117 thousand. For the nine months ended September 30, 2018, three vendors represented approximately 26%,14% and 10% of total purchases. Purchases from these vendors during the nine months ended September 30, 2018 were $0.4 million, $$0.2 million and $0.1 million. For the three months ended September 30, 2017, three vendors represented approximately 43%, 16% and 11% of total purchases. Purchases from this vendor during the three months ended September 30, 2017 were $2.8 million, $1 million and $707 thousand. For the nine months ended September 30, 2017, two vendors represented approximately 29%, and 13% of total purchases. Purchases from these vendors during the nine months ended September 30, 2017 were $6.5 million and $2.8 million. As of September 30, 2018, three vendors represented approximately 38%, 19% and 10% of total gross accounts payable. As of September 30, 2017, two vendors represented approximately 27% and 13% of total gross accounts payable.

Short-Term Debt

Short-Term Debt	9 Months Ended
	Sep. 30, 2018
Short-Term Debt [Abstract]
Short-Term Debt	Note 6 — Short-Term Debt Revolving Credit Facility On August 31, 2018, the Company and SGS (together with the Company, the “Borrowers”), entered in an agreement with Payplant Alternatives Funds LLC, pursuant to which Payplant may purchase from the Borrowers, in Payplant’s sole and absolute discretion, Eligible Receivables, as that term is defined in the agreement, in exchange for cash advances, subject to the terms and conditions in the agreement. On September 21, 2018, the Company entered into the Payplant Loan and Security Agreement (the “Loan Agreement”) with Payplant LLC as agent for Payplant Alternatives Fund LLC (“Payplant”). Pursuant to the Loan Agreement and the terms set forth in the form of promissory note attached as Exhibit A to the Loan Agreement, (the “Note”), Payplant, in its sole and absolute discretion, may loan money to the Borrowers on the basis of purchase orders or invoices issued by the Borrowers to customers for goods and services provided. The term of any loan made to the Borrowers may not exceed 360 days. The principal amount of any loan will accrue interest at a 30 day rate of 2%, calculated per day. Upon the occurrence and during the continuance of an Event of Default, as defined in the Loan Agreement, interest will accrue at a rate equal to the interest rate plus 0.42% per 30 days. In no event will interest, when combined with all fees that may be characterized as interest, exceed the Maximum Rate, as defined in the Loan Agreement. All computations of interest will be made on the basis of a 360 day year. The Borrowers will have the right to prepay any loan upon the payment of a premium of least 30 days of interest. As security for the repayment of any loans and the performance of the Borrowers’ Obligations, as defined in the Loan Agreement, the Borrowers granted to Payplant a security interest in the Collateral, as defined in the Loan Agreement. The Loan Agreement also includes representations and warranties made by the Borrowers, negative covenants prohibiting certain actions by the Borrowers (including, but not limited to, restrictions on additional borrowing without the consent of Payplant, restrictions on the creation of liens on the Borrowers’ property, restrictions on transactions with affiliates, restrictions on the transfer or sale of assets and restrictions on the payment of dividends) and a definition of “Events of Default” that are customary in agreements of this type. Upon the occurrence and during the continuance of any Event of Default, Payplant may, without notice or demand, declare the entire unpaid principal amount of the loans, all interest accrued and unpaid thereon and all other amounts payable under the Loan Agreement to be immediately due and payable. As of September 30, 2018, the principal amount outstanding under the Loan Agreement was $1,019,097.

Accrued Issuable Equity

Accrued Issuable Equity	9 Months Ended
	Sep. 30, 2018
Accrued Issuable Equity [Abstract]
Accrued Issuable Equity	Note 7 — Accrued Issuable Equity In connection with the Distribution of its common stock, the Company has reserved in treasury 3,194,120 shares of common stock for eventual issuance to certain holders of Inpixon securities that are currently subject to beneficial ownership limitations in connection with the Distribution. On August 31, 2018, we recorded approximately $128,000 of accrued issuable equity in connection with these share issuance obligations. During the three and nine months ended September 30, 2018, the Company has recorded a gain on change in fair value of accrued issuable equity of approximately $26,000 which was charged to the statement of operations.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2018
Related Party Transactions [Abstract]
Related Party Transactions	Note 8 — Related Party Transactions Nadir Ali is the Chief Executive Officer of Inpixon as well as the Chairman of the board of directors of Sysorex. Pursuant to the terms of those certain employee transition agreements entered into between the Company and Inpixon, effective as of August 31, 2018 (collectively, the “Transition Agreements”), the Company agreed to furnish to Inpixon, on a transitional basis, the services of certain of its employees and keep such employees’ on its payroll and benefits plans from August 31, 2018 through and including December 31, 2018 (the “Transitional Period”). Inpixon agreed to reimburse the Company for all costs and expenses incurred by the Company with respect to such employees’ employment during the Transitional Period. the Company agreed to invoice Inpixon upon the calculation of amounts owed for the foregoing costs, and Inpixon agreed to reimburse the Company for all such costs within 3 days of its receipt of each such invoice, plus an administrative service fee of 2% of the gross amount of each respective invoice; provided, however, that the Company agreed to waive such fee for so long as any Inpixon employees are providing any necessary administrative services on behalf of and for the benefit of the Company, including any employees that are furnished to Inpixon in accordance with the Transition Agreements. The total amount of payroll and benefits reimbursed to the Company during the month ended September 30, 2018 was $543,000. In addition, the Company owes Inpixon approximately $750,000 resulting from transactions between the companies during this transition period. The Company anticipates this balance to be repaid by the end of the Transitional Period, December 31, 2018.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2018
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note 9 — Commitments and Contingencies 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. On August 10, 2017, Embarcadero Technologies, Inc. (“Embarcadero”) and Idera, Inc. (“Idera”) filed a complaint in the U.S. Federal District Court for the Western District of Texas against SGS and Integrio for failure to pay for purchased software and services pursuant to certain reseller agreements. The complaint alleges that SGS entered into an agreement with Integrio to acquire certain assets and assume certain liabilities of Integrio and are therefore responsible for any amounts due. In the complaint, Embarcadero and Idera demand that SGS and Integrio pay $1,100,000.00 in damages. On April 26, 2018, the parties filed a stipulation of dismissal to dismiss this case with prejudice following entry into a settlement agreement pursuant to which the Company agreed to satisfy the outstanding payables. On April 28, 2018, the court rendered the final judgment to approve this stipulation. The liability has been accrued and is included as a component of accounts payable as of September 30, 2018 in the condensed consolidated balance sheets. On August 11, 2017, Micro Focus (US) Inc. (“Micro Focus”), filed a complaint in the Circuit Court of Fairfax County, Virginia against SGS for failure to pay a debt settlement entered into on March 13, 2017 for a principal amount of approximately $246,000 plus accrued interest. The complaint demands full payment of the principal amount of approximately $246,000 plus accrued interest. On October 31, 2017, Micro Focus filed a motion for summary judgment against SGS. The Company consented to the court entering summary judgment in favor of Micro Focus in the amount of approximately $246,000, with interest accruing at 10% per annum from June 13, 2017 until payment is completed. On April 19, 2018, the Company signed a settlement agreement with Microfocus for $200,000 which has been paid as of the date of this filing. On March 1, 2017, VersionOne, Inc. filed a complaint in the United States District Court, Eastern District of Virginia, against Inpixon, Sysorex, and SGS (collectively, “Defendants”). The complaint alleges that VersionOne provided services to Integrio having a value of approximately $486,000, that in settlement of this amount Integrio and VersionOne entered into an agreement (the “Settlement Agreement”) whereby Integrio agreed to pay, and VersionOne agreed to accept as full payment, approximately $243,000 (the “Settlement Amount”), and that as a result of the Defendants’ acquisition of the assets of Integrio, Defendants assumed the Settlement Amount but failed to pay amounts owed to VersionOne. The complaint also alleges that, subsequent to closing of the acquisition, VersionOne provided additional services to Defendants having a value of approximately $145,000, for which it has not been paid. VersionOne alleges that, Defendants have an obligation to pay both the Settlement Amount and the cost of the additional services. On Dec. 8, 2017, the court entered judgment against Inpixon, SGS, and Sysorex, jointly and severally, in the amount of approximately $334,000. The liability has been accrued and is included as a component of accounts payable as of September 30, 2018 in the condensed consolidated balance sheets. On September 5, 2017, Dell Marketing threatened legal action against Sysorex 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. The liability has been accrued and is included as a component of accounts payable as of September 30, 2018 in the condensed consolidated balance sheets. On December 28, 2017, Virtual Imaging, Inc. (“Virtual Imaging”) filed a complaint in the United States District Court, Eastern District of Virginia, against Sysorex and SGS (collectively, the “Defendants”). The complaint alleges that Virtual Imaging provided products to the Defendants having an aggregate value of approximately $3,938,000, of which approximately $3,688,000 remains outstanding and overdue. Virtual Imaging has demanded compensation for the unpaid amount of approximately $3,688,000. The parties have settled this matter and agreed to a settlement payment schedule. The liability has been accrued and is included as a component of accounts payable as of September 30, 2018 in the condensed consolidated balance sheets. On January 2, 2018, VMS, Inc. sent a demand letter claiming Sysorex owes approximately $1.2 million in unpaid invoices. The parties have settled this matter and agreed to a settlement payment schedule. The liability has been accrued and is included as a component of accounts payable as of September 30, 2018 in the condensed consolidated balance sheets. On January 22, 2018, Deque Systems, Inc. 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 Deque entered into a settlement agreement and the Company is repaying the debt in monthly installments. The liability has been accrued and is included as a component of accounts payable as of September 30, 2018 in the condensed consolidated balance sheets. On February 16, 2018, the Versata Companies submitted a notice of mediation to the WIPO Arbitration and Mediation Center claiming that SGS owes approximately $421,000 in unpaid invoices and late fees. Approximately $176,000 of that amount is under dispute by SGS. The parties are currently negotiating a settlement agreement and payment plan to pay the outstanding liability. The liability has been accrued and is included as a component of accounts payable as of September 30, 2018 in the condensed consolidated balance sheets. On April 6, 2018, AVT Technology Solutions, LLC, filed a complaint in the United States District Court Middle District of Florida Tamp Division against Inpixon and Sysorex alleging breach of contract, breach of corporate guaranty and unjust enrichment in connection with non-payment for goods received and requesting a judgment in an amount of not less than $9,152,698.71. On August 15, 2018 the Company entered into a settlement agreement with AVT and is making payments based on the settlement schedule for repayment. The liability has been accrued and is included as a component of accounts payable as of September 30, 2018 in the condensed consolidated balance sheets. On March 19, 2018, Inpixon and the Company was notified by a consultant for advisory services (the “Consultant”) that it believes it is entitled to a minimum project fee in an amount equal to $1 million less certain amounts previously paid as a result of Inpixon’s completion of certain financing transactions. On April 18, 2018, the Consultant filed a demand for arbitration with the American Arbitration Association. The Company is contesting such demand and a hearing has been scheduled for December 4-6, 2018. Vendor Agreements During the nine months ended September 30, 2018, the Company was successful in renegotiating its vendor payables with its major suppliers and recorded a gain of approximately $220,000.

Stockholders' Deficit

Stockholders' Deficit	9 Months Ended
	Sep. 30, 2018
Stockholders' Deficit [Abstract]
Stockholders' deficit	Note 10 — Stockholders’ deficit Authorized capital The Company is authorized to issue 500,000,000 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 September 30, 2018, no preferred stock has been designated or issued. Equity incentive plan On July 30, 2018, the board of directors of the Company and its sole director approved 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. 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. The 2018 Plan is to be administered by the Board, which shall have discretion over the awards and grants thereunder. The aggregate maximum number of shares of common stock for which stock options or awards may be granted pursuant to the 2018 Plan is 8,000,000, 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) 1,000,000 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. As of September 30, 2018 and December 31, 2017, there were no awards outstanding under the plan. As of September 30, 2018, there were 8,000,000 securities available for future issuance under the 2018 Plan. Common stock On August 31, 2018, as part of the spinoff from Inpixon, the Company entered into a Trademark License Agreement with Sysorex Consulting, Inc. for use of the mark “Sysorex”. As consideration for the license, the Company issued 1,000,000 shares of its common stock with a fair value of $40,000 to Sysorex Consulting, Inc. and has agreed to issue to Sysorex Consulting, Inc. 250,000 shares of its common stock on each anniversary of the spinoff date until the License Agreement is terminated. The Company has expensed the licensing fee in the quarter ended September 30, 2018. Stock options On August 31, 2018, as part of the spinoff from Inpixon, the Company had issued stock options to employees of Sysorex to purchase an aggregate of 1,945 shares of common stock with exercise prices ranging from$ 22.76 to $224.12 and expiration dates ranging from March 2023 to February 2027. The options vest as follows: (i.) every month after the grant date up to 4 years or (ii.) 25% upon the issuance and every year thereafter after on the grant date. Treasury stock As part of the Spin-off from Inpixon, and in connection with the initial Distribution of its common stock, the Company has 11,791,690 shares of common stock reserved for issuance in treasury to the holders of certain Inpixon warrants holders who will be entitled to receive shares of the Company’s common stock if the warrants are exercised, reserved for issuance to certain holders of Inpixon securities from treasury that are currently subject to beneficial ownership limitations in connection with the distribution and for future issuances.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2018
Basis of Presentation/Summary of Significant Accounting Policies [Abstract]
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 allowance for doubtful accounts; and ● the impairment of long-lived assets.
Revenue Recognition	Revenue Recognition In March 2016, the Financial Accounting Standards Board (‘FASB”) issued Accounting Standards Update (“ASU”) No. 2016-08, “Revenue from Contracts with Customers — Principal versus Agent Considerations”, in April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606) — Identifying Performance Obligations and Licensing” and in May 9, 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606)”, or ASU 2016-12. This update provides clarifying guidance regarding the application of ASU No. 2014-09 — Revenue from Contracts with Customers which is not yet effective. These new standards provide for a single, principles-based model for revenue recognition that replaces the existing revenue recognition guidance. In July 2015, the FASB deferred the effective date of ASU 2014-09 until annual and interim periods beginning on or after December 15, 2017. It has replaced most existing revenue recognition guidance under GAAP. The ASU may be applied retrospectively to historical periods presented or as a cumulative-effect adjustment as of the date of adoption. The Company has adopted Topic 606 using a modified retrospective approach and will be applied prospectively in the financial statements from January 1, 2018 forward. Revenues under Topic 606 are required to be recognized either at a “point in time” or “over time”, depending on the facts and circumstances of the arrangement, and will be evaluated using a five-step model. The adoption of Topic 606 did have a material impact on our financial statements. Hardware and Software Revenue Recognition The Company 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 goods 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 warehouses. 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 at the point of sale. License and Maintenance Services Revenue Recognition The Company 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. Professional Services Revenue Recognition The Company’s professional services include fixed fee and time and materials contracts. Fixed fees are paid monthly, in phases, or upon acceptance of deliverables. The Company’s time and materials contracts are paid weekly or monthly based on hours worked. Revenue on time and material contracts is recognized based on a fixed hourly rate as direct labor hours are expended. Materials, or other specified direct costs, are reimbursed as actual costs and may include markup. The Company has elected the practical expedient to recognize revenue for the right to invoice because the Company’s right to consideration corresponds directly with the value to the customer of the performance completed to date. 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. Because the Company’s contracts have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Anticipated losses are recognized as soon as they become known. For the nine months ended September 30, 2018 and 2017, 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.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets The Company amortizes intangible assets with finite lives over their estimated useful lives and review them for impairment whenever an impairment indicator exists. The Company continually monitors events and changes in circumstances that could indicate carrying amounts of our long-lived assets, including our intangible assets, may not be recoverable. When such events or changes in circumstances occur, we assess recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. The Company did not recognize any intangible asset impairment charges for the nine months ended September 30, 2018 and 2017.
Recent Accounting Standards	Recent Accounting Standards The Company adopted ASC 606 effective January 1, 2018 using the modified retrospective method which was applied to all contracts at the date of initial application. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09, Revenue — Revenue from Contracts with Customers Balance at December 31, Adjustments due to ASU 2014-09 Balance at January 1, Balance Sheet: Assets Prepaid licenses & maintenance contracts, current 4,638 (4,638 ) — Prepaid licenses & maintenance contracts, non-current 2,264 (2,264 ) — Liabilities Deferred revenue, current 5,554 (5,554 ) — Deferred revenue, non-current 2,636 (2,636 ) — Equity Accumulated deficit (22,172 ) 1,287 (20,885 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our condensed consolidated income statement and balance sheet was as follows (in millions): For the Three Months Ended As Reported Balances Without Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 349 1,649 (1,300 ) Services 365 365 — Cost and expenses Cost of Revenues Products (A) 230 1,330 (1,100 ) Services 271 271 — Gross Profit 213 413 (200 ) Income/Loss from Operations (2,307 ) (2,107 ) (200 ) Net Income (Loss) (2,408 ) (2,208 ) (200 ) For the Nine Months Ended As Balances Without Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 1,249 6,218 (4,969 ) Services 1,700 1,700 — Cost and expenses Cost of Revenues Products (A) 676 4,877 (4,201 ) Services 981 981 — Gross Profit 1,292 2,059 (767 ) Income/Loss from Operations (6,100 ) (5,333 ) (767 ) Net Income (Loss) (5,399 ) (4,632 ) (767 ) As of September 30, 2018 As Balances Without Effect of Change Balance Sheet Assets Prepaid Licenses & Maintenance Contracts, current — 436 (436 ) Prepaid Licenses & Maintenance Contracts, non-Current — 2,264 (2,264 ) Liabilities Deferred Revenue, current — 585 (585 ) Deferred Revenue, non-current — 2,636 (2,636 ) Equity Accumulated Deficit (13,173 ) (13,693 ) 520 (A) Product revenues and cost of revenues include maintenance/licenses contracts that are sold by the company but performed by third parties.
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 Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2018
Basis of Presentation/Summary of Significant Accounting Policies [Abstract]
Schedule of the cumulative effect of the changes made to our consolidated income statement and balance sheet	Balance at December 31, Adjustments due to ASU 2014-09 Balance at January 1, Balance Sheet: Assets Prepaid licenses & maintenance contracts, current 4,638 (4,638 ) — Prepaid licenses & maintenance contracts, non-current 2,264 (2,264 ) — Liabilities Deferred revenue, current 5,554 (5,554 ) — Deferred revenue, non-current 2,636 (2,636 ) — Equity Accumulated deficit (22,172 ) 1,287 (20,885 ) For the Three Months Ended As Reported Balances Without Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 349 1,649 (1,300 ) Services 365 365 — Cost and expenses Cost of Revenues Products (A) 230 1,330 (1,100 ) Services 271 271 — Gross Profit 213 413 (200 ) Income/Loss from Operations (2,307 ) (2,107 ) (200 ) Net Income (Loss) (2,408 ) (2,208 ) (200 ) For the Nine Months Ended As Balances Without Effect of Change Higher/(Lower) Income Statement Revenues Products (A) 1,249 6,218 (4,969 ) Services 1,700 1,700 — Cost and expenses Cost of Revenues Products (A) 676 4,877 (4,201 ) Services 981 981 — Gross Profit 1,292 2,059 (767 ) Income/Loss from Operations (6,100 ) (5,333 ) (767 ) Net Income (Loss) (5,399 ) (4,632 ) (767 ) As of September 30, 2018 As Balances Without Effect of Change Balance Sheet Assets Prepaid Licenses & Maintenance Contracts, current — 436 (436 ) Prepaid Licenses & Maintenance Contracts, non-Current — 2,264 (2,264 ) Liabilities Deferred Revenue, current — 585 (585 ) Deferred Revenue, non-current — 2,636 (2,636 ) Equity Accumulated Deficit (13,173 ) (13,693 ) 520 (A) Product revenues and cost of revenues include maintenance/licenses contracts that are sold by the company but performed by third parties.

Net Loss per Common Share (Tabl

Net Loss per Common Share (Tables)	9 Months Ended
	Sep. 30, 2018
Net Loss per Common Share [Abstract]
Schedule of weighted average common shares	September 30, 2018 2017 Options 1,945 -- Total potentially dilutive shares 1,945 --

Credit Risk and Concentrations

Credit Risk and Concentrations (Tables)	9 Months Ended
	Sep. 30, 2018
Credit Risk and Concentrations [Abstract]
Schedule of risk percentage of revenue from customers	For the Nine Months Ended For the Nine Months Ended $ % $ % Customer A 633 21 % — — Customer B 520 18 % — — Customer C 323 11 % — — Customer E — — 5,264 14 % For the Three Months Ended For the Three Months Ended $ % $ % Customer A 211 29 % — — Customer C 166 23 % 3,613 33 % Customer D 121 17 % — — Customer F — — 1,424 13 % Customer G — — 1,237 11 %

Description of Business, the _2

Description of Business, the Spin-Off and Going Concern and Management's Plans (Details) - USD ($) $ in Thousands	Aug. 31, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Description of Business, the Spin-Off and Going Concern and Management's Plans (Textual)
Cash balance		$ 89	$ 12	$ 89	$ 12	$ 22	$ 937
Working capital deficit		15,500		15,500
Stockholders' deficit		(12,366)		(12,366)		$ (22,172)
Net Loss		$ (2,408)	$ (9,745)	$ (5,399)	$ (13,919)
Description of stock	The Company became an independent company through the pro rata distribution by Inpixon (Inpixon) of 100% of the outstanding common stock of Sysorex to Inpixon equity holders (which the Company refers to as the Distribution). Each Inpixon equity holder of record as of the close of business on August 21, 2018 received one share of the Company’s common stock for every three shares of Inpixon common stock held on the record date or such number of shares of common stock issuable upon complete conversion of Inpixon convertible preferred stock or exercise of certain participating warrants. Approximately 40 million shares of the Company’s common stock were distributed on the Distribution Date to Inpixon equity holders.

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Assets
Prepaid licenses & maintenance contracts, current	$ 5	$ 4,638
Prepaid licenses & maintenance contracts, non-current		2,264
Liabilities
Deferred revenue, current	130	5,554
Deferred revenue- non-current		2,636
Equity
Accumulated deficit	(802)
Adjustments due to ASU 2014-09 [Member]
Assets
Prepaid licenses & maintenance contracts, current	(4,638)
Prepaid licenses & maintenance contracts, non-current	(2,264)
Liabilities
Deferred revenue, current	(5,554)
Deferred revenue- non-current	(2,636)
Equity
Accumulated deficit	1,287
Balance at January 1, 2018 [Member]
Assets
Prepaid licenses & maintenance contracts, current
Prepaid licenses & maintenance contracts, non-current
Liabilities
Deferred revenue, current
Deferred revenue- non-current
Equity
Accumulated deficit	$ (20,885)

Summary of Significant Accoun_5

Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands		3 Months Ended			9 Months Ended
		Sep. 30, 2018		Sep. 30, 2017	Sep. 30, 2018		Sep. 30, 2017
Revenues
Products		$ 349	[1]	$ 9,514	$ 1,249	[1]	$ 30,750
Services		365		1,539	1,700		6,744
Cost and expenses
Products		230	[1]	8,426	676	[1]	26,394
Services		271		980	981		4,195
Gross Profit		213		1,647	1,292		6,905
Income/Loss from Operations		(2,307)		(9,900)	(6,100)		(13,115)
Net Income (Loss)		(2,408)		$ (9,745)	(5,399)		$ (13,919)
Balances Without Adoption of ASC 606 [Member]
Revenues
Products	[1]	1,649			6,218
Services		365			1,700
Cost and expenses
Products	[1]	1,330			4,877
Services		271			981
Gross Profit		413			2,059
Income/Loss from Operations		(2,107)			(5,333)
Net Income (Loss)		(2,208)			(4,632)
Effect of Change Higher/(Lower) [Member]
Revenues
Products	[1]	(1,300)			(4,969)
Services
Cost and expenses
Products	[1]	(1,100)			(4,201)
Services
Gross Profit		(200)			(767)
Income/Loss from Operations		(200)			(767)
Net Income (Loss)		$ (200)			$ (767)
[1]	Product revenues and cost of revenues include maintenance/licenses contracts that are sold by the company but performed by third parties.

Summary of Significant Accoun_6

Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Assets
Prepaid licenses & maintenance contracts, current	$ 5	$ 4,638
Prepaid licenses & maintenance contracts, non-current		2,264
Liabilities
Deferred revenue, current	130	5,554
Deferred Revenue, non-current		2,636
Equity
Accumulated deficit	(802)
Balances Without Adoption of ASC 606 [Member]
Assets
Prepaid licenses & maintenance contracts, current	436
Prepaid licenses & maintenance contracts, non-current	2,264
Liabilities
Deferred revenue, current	585
Deferred Revenue, non-current	2,636
Equity
Accumulated deficit	(13,693)
Effect of Change Higher/(Lower) [Member]
Assets
Prepaid licenses & maintenance contracts, current	(436)
Prepaid licenses & maintenance contracts, non-current	(2,264)
Liabilities
Deferred revenue, current	(585)
Deferred Revenue, non-current	(2,636)
Equity
Accumulated deficit	$ 520

Net Loss per Common Share (Deta

Net Loss per Common Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares			1,945
Weighted average number of common shares outstanding	28,534,396	28,208,310	28,318,200	28,208,310
Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares			1,945

Credit Risk and Concentration_2

Credit Risk and Concentrations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Concentration Risk [Line Items]
Net revenues	$ 714	$ 11,053	$ 2,949	$ 37,494
Customer concentration risk [Member] | Customer A [Member]
Concentration Risk [Line Items]
Net revenues	$ 211		$ 633
Concentration risk, percentage	29.00%		21.00%
Customer concentration risk [Member] | Customer B [Member]
Concentration Risk [Line Items]
Net revenues			$ 520
Concentration risk, percentage			18.00%
Customer concentration risk [Member] | Customer C [Member]
Concentration Risk [Line Items]
Net revenues	$ 166	$ 3,613	$ 323
Concentration risk, percentage	23.00%	33.00%	11.00%
Customer concentration risk [Member] | Customer D [Member]
Concentration Risk [Line Items]
Net revenues	$ 121
Concentration risk, percentage	17.00%
Customer concentration risk [Member] | Customer E [Member]
Concentration Risk [Line Items]
Net revenues				$ 5,264
Concentration risk, percentage				14.00%
Customer concentration risk [Member] | Customer F [Member]
Concentration Risk [Line Items]
Net revenues		$ 1,424
Concentration risk, percentage		13.00%
Customer concentration risk [Member] | Customer G [Member]
Concentration Risk [Line Items]
Net revenues		$ 1,237
Concentration risk, percentage		11.00%

Credit Risk and Concentration_3

Credit Risk and Concentrations (Details Textual) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018USD ($)Vendor	Sep. 30, 2017USD ($)Vendor	Sep. 30, 2018USD ($)Vendor	Sep. 30, 2017USD ($)Vendor
Accounts Payable [Member] | One Vendors [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage			38.00%	27.00%
Number of vendors			3	2
Accounts Payable [Member] | Two Vendors [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage			19.00%	13.00%
Number of vendors			3	2
Accounts Payable [Member] | Three Vendors [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage			10.00%
Number of vendors			3
Accounts Receivable [Member] | Customer A [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage			31.00%
Accounts Receivable [Member] | Customer B [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage			0.00%
Accounts Receivable [Member] | Customer C [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage			8.00%
Accounts Receivable [Member] | Customer D [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage			3.00%
Accounts Receivable [Member] | Customer E [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage				0.00%
Accounts Receivable [Member] | Customer G [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage				21.00%
Accounts Receivable [Member] | Customer F [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage				27.00%
Purchases [Member] | One Vendors [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage	19.00%	43.00%	26.00%	29.00%
Purchases from vendors | $	$ 134	$ 2,800	$ 400	$ 6,500
Number of vendors	2	3	3	2
Purchases [Member] | Two Vendors [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage	17.00%	16.00%	14.00%	13.00%
Purchases from vendors | $	$ 117	$ 1,000	$ 200	$ 2,800
Number of vendors	2	3	3	2
Purchases [Member] | Three Vendors [Member]
Credit Risk and Concentrations (Textual)
Concentration risk, percentage		11.00%	10.00%
Purchases from vendors | $		$ 707	$ 100
Number of vendors		3	3

Short-Term Debt (Details)

Short-Term Debt (Details) - USD ($)	1 Months Ended
	Sep. 21, 2018	Sep. 30, 2018
Short-Term Debt (Textual)
Principal amount outstanding		$ 1,019,097
Revolving credit facility, description	The term of any loan made to the Borrowers may not exceed 360 days. The principal amount of any loan will accrue interest at a 30 day rate of 2%, calculated per day. Upon the occurrence and during the continuance of an Event of Default, as defined in the Loan Agreement, interest will accrue at a rate equal to the interest rate plus 0.42% per 30 days. In no event will interest, when combined with all fees that may be characterized as interest, exceed the Maximum Rate, as defined in the Loan Agreement. All computations of interest will be made on the basis of a 360 day year. The Borrowers will have the right to prepay any loan upon the payment of a premium of least 30 days of interest.

Accrued Issuable Equity (Detail

Accrued Issuable Equity (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Aug. 31, 2018
Accrued Issuable Equity (Textual)
Treasury shares of common stock	3,194,120	3,194,120
Accrued issuable equity			$ 128,000
Gain on change in fair value of accrued issuable equity	$ 26,000	$ 26,000

Related Party Transactions (Det

Related Party Transactions (Details)	9 Months Ended
	Sep. 30, 2018USD ($)
Related Party Transactions (Textual)
Related party agreement, description	The Company agreed to invoice Inpixon upon the calculation of amounts owed for the foregoing costs, and Inpixon agreed to reimburse the Company for all such costs within 3 days of its receipt of each such invoice, plus an administrative service fee of 2% of the gross amount of each respective invoice; provided, however, that the Company agreed to waive such fee for so long as any Inpixon employees are providing any necessary administrative services on behalf of and for the benefit of the Company, including any employees that are furnished to Inpixon in accordance with the Transition Agreements.
Total reimbursed amount of payroll and benefits	$ 543,000
Additional related party transaction, amount	$ 750,000

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)

Apr. 06, 2018

Jan. 22, 2018

Sep. 05, 2017

Aug. 10, 2017

Apr. 19, 2018

Mar. 19, 2018

Feb. 16, 2018

Jan. 02, 2018

Dec. 28, 2017

Mar. 01, 2017

Sep. 30, 2018

Sep. 30, 2017

Aug. 11, 2017

Jun. 13, 2017

Mar. 13, 2017

Commitments and Contingencies (Textual)

Amount of project fees claimed as owed

$ 1,000,000

Amount claimed as owed for unpaid vendor invoices

$ 1,800,000

$ 421,000

$ 1,200,000

Amount of vendor invoices under dispute

$ 176,000

Default judgment amount

$ 336,000

Legal fees

$ 20,000

Gain on vendor payables

$ 220,000

Integrio Technologies, LLC [Member]

Commitments and Contingencies (Textual)

Original liability amount

$ 486,000

Vendor settlement agreement amount

243,000

Additional vendor services provided

145,000

Vendor judgment value

$ 334,000

Micro Focus (US) Inc. [Member]

Commitments and Contingencies (Textual)

Principal amount plus accrued interest

$ 246,000

$ 246,000

$ 246,000

Interest rate

10.00%

Settlement agreement, description

The Company signed a settlement agreement with Microfocus for $200,000 which has been paid as of the date of this filing.

Vendor settlement agreement amount

$ 200,000

Embarcadero Technologies, Inc. / Idera, Inc. [Member]

Commitments and Contingencies (Textual)

Amount of damages requested under legal complaint

$ 1,100,000

Virtual Imaging, Inc. [Member]

Commitments and Contingencies (Textual)

Value of products provided to defendant

$ 3,938,000

Aggregate value outstanding and overdue

3,688,000

Unpaid value of products demanded by vendor

$ 3,688,000

AVT Technology Solutions, LLC [Member]

Commitments and Contingencies (Textual)

Value of judgment for non-payment of goods received

$ 9,152,698.71

Stockholders' Deficit (Details)

Stockholders' Deficit (Details) - USD ($)	Aug. 31, 2018	Sep. 30, 2018
Stockholders' Deficit (Textual)
Common stock authorized to issue		500,000,000
Common stock par value		$ 0.00001
Preferred stock authorized to issue		10,000,000
Preferred stock par value		$ 0.00001
Common stock voting rights		The holders of the Company's common stock are entitled to one vote per share.
Designated or issued preferred stock
Stock Options [Member]
Stockholders' Deficit (Textual)
Stock options to purchase of common stock	1,945
Exercise price lower range	$ 22.76
Exercise price upper range	$ 224.12
Options vest, description	The options vest as follows: (i.) every month after the grant date up to 4 years or (ii.) 25% upon the issuance and every year thereafter after on the grant date.
Minimum [Member] | Stock Options [Member]
Stockholders' Deficit (Textual)
Expiration date	Mar. 1, 2023
Maximum [Member] | Stock Options [Member]
Stockholders' Deficit (Textual)
Expiration date	Feb. 28, 2027
Common Stock [Member]
Stockholders' Deficit (Textual)
Common stock shares issued	1,000,000
Common stock issued, value	$ 40,000
Common Stock [Member] | Sysorex Consulting, Inc. [Member]
Stockholders' Deficit (Textual)
Common stock shares issued	250,000
Treasury Stock [Member]
Stockholders' Deficit (Textual)
Securities available for future issuance	11,791,690
2018 Equity Incentive Plan [Member]
Stockholders' Deficit (Textual)
Equity incentive plan, description		On July 30, 2018, the board of directors of the Company and its sole director approved 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. 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. The 2018 Plan is to be administered by the Board, which shall have discretion over the awards and grants thereunder. The aggregate maximum number of shares of common stock for which stock options or awards may be granted pursuant to the 2018 Plan is 8,000,000, 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) 1,000,000 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. As of September 30, 2018 and December 31, 2017, there were no awards outstanding under the plan. As of September 30, 2018, there were 8,000,000 securities available for future issuance under the 2018 Plan.
Securities available for future issuance		8,000,000