Sysorex Inc (OTCMKTS: SYSX) made a big runup earlier this year put has been stagnent since then. On friday the stock was down 25% on 198 million shares traded.
On May 5 SYSX announced an update to shareholders. “At the outset, I would like to thank our valued shareholders, many of whom like Bigger Capital Fund, LP and District 2 Capital Fund LP, which issued an open letter to shareholders earlier this week, recognize the significant “untapped potential” in Sysorex,” stated Wayne Wasserberg, CEO of Sysorex. “While markets have been under severe pressure over the last six or more months given economic conditions.”
Sysorex Inc (OTCMKTS: SYSX) is a data center owner and operator and preeminent U.S.-based, publicly traded Ethereum mining and technology company. The Company currently owns and operates approximately 11,000 NVIDIA GPUs generating approximately 500 Gigahash of computing power, which GPUs include thousands of Cryptocurrency Mining Processors (CMPs). These GPUs are currently online and securing the Ethereum Blockchain and generating ETH around the clock with industry leading efficiency. In addition to the mining of ETH, the Company operates its wholly owned subsidiary, Sysorex Government Services, Inc. (SGS), a business that provides information technology products, solutions and services to federal, state, and local government, including system integrators. The Company, in conjunction with SGS, is advancing strategies to leverage decentralized finance (De-Fi) and Non-Fungible Token (NFT) opportunities powered by the Ethereum Blockchain.
Earlier in the year the Company reported: Bigger Capital Fund, LP and District 2 Capital Fund LP (together with its affiliates, the “Funds”), are now among the largest shareholders of Sysorex, Inc. (“Sysorex” or the “Company”), with ownership of approximately 9.6% of the Company’s outstanding common stock. Bigger Capital Fund, LP and District 2 Capital Fund LP are research intensive investment funds. The Funds are led by Michael Bigger, a highly respected value investor who has achieved great success investing in various companies over more than 30 years. Joining Michael in the District 2 Capital Fund LP entity is Eric Schlanger, Co-Portfolio Manager and former Head of Equities, Americas at Barclays.
On May 5 SYSX announced an update to shareholders. “At the outset, I would like to thank our valued shareholders, many of whom like Bigger Capital Fund, LP and District 2 Capital Fund LP, which issued an open letter to shareholders earlier this week, recognize the significant “untapped potential” in Sysorex,” stated Wayne Wasserberg, CEO of Sysorex. “While markets have been under severe pressure over the last six or more months given economic news and world events, and this time has seen a commensurate decline in the value of crypto assets, Sysorex firmly believes in the future of the Ethereum Blockchain and the viability of our Sysorex Government Services business. Our anticipated transaction with Ostendo Technologies, Inc., slated to close later this month, is just one example of a number of strategic steps we are undertaking to potentially create substantial value during this market downturn. If our common stock was to remain at these levels following the Ostendo transaction, we would be trading at far less than one-half of book value, which is likely one of the reasons that funds like Bigger Capital and District 2 have identified Sysorex as a deep value opportunity.”=
Mr. Wasserberg continued, “From a business operational standpoint, Sysorex´s footing remains strong as the Company´s Sysorex Government Services division continues to execute and has seen revenue growth the last several months, which has positively impacted our bottom line. We have historically been able to supplement our balance sheet by mining more than $800,000 a month of Ethereum (ETH) on average. Although the planned sale to Ostendo of our wholly-owned data center in Upstate New York and approximately 75% of our Ethereum mining capacity will reduce our monthly gross revenue by about $600,000 on average, the addition of approximately $70,000,000 in Ostendo securities to our balance sheet is expected to place our Company in a large net-positive shareholders’ equity position. In turn, this supports our planned efforts to work with several New York City-based investment banks to list Sysorex on a national securities exchange by year-end. It is our strong belief that we are not at the end of the road by any means; in fact, we are nearly ready to unlock our Company´s significant untapped potential.”
The Company continues to successfully mine Ethereum and from October 2021 through April 2022, on average, the Company has mined approximately 236 ETH per month. Historically, the Company´s ETH mining has yielded an average monthly gross of revenue of $816,951 at an average price of $3,461.66 per ETH for the same period. The Company continually seeks to optimize the value of its Ethereum holdings and while during this period the Company has been selling a percentage of its mined ETH to advance other corporate initiatives, the Company retains a substantial ETH position on its balance sheet.