Equity

9 Months Ended

Sep. 30, 2022

Stockholders' Equity Note [Abstract]

Equity

Note 11 — Equity

As discussed in Note 3 Basis of Presentation the Company completed a reverse merger of Sysorex and TTM Digital with TTM Digital being the accounting acquirer and reporting entity. In a reverse merger, the capital accounts of the reporting entity (TTM Digital) are restated to reflect the legal capital structure of the legal acquirer (Sysorex). As a result, the share data of the reporting entity has been retroactively restated for all periods presented to the equivalent share values of Sysorex for the capital transaction activity of TTM Digital, as if the reverse merger occurred on January 1, 2020. The share data of the reporting entity has been retroactively stated for all periods presented to the equivalent share values of Sysorex. On September 22, 2022, the Company’s stockholders voted to approve an amendment to the Articles of Incorporation to increase the total number of authorized shares of the Company’s capital stock from 510,000,000 shares, par value $0.00001 per share, to 3,010,000,000 shares, of which 3,000,000,000 shares will be designated as common stock and 10,000,000 shares will be designated as preferred stock, in accordance with the voting results listed below. As of September 30, 2022, 736,609,855 shares were issued, and 736,534,476 shares were outstanding. No preferred stock has been designated or issued.

Stock Options

A summary of stock option activity for the nine months ended September 30, 2022, is as follows:

	Number of Options (in Shares)		Weighted Average Exercise Price
Outstanding, January 1, 2022		1,656,000	$	2.00
Granted		-	$	-
Exercised		-		-
Forfeited or cancelled		-		-
Outstanding, September 30, 2022		1,656,000	$	2.00
Exercisable, September 30, 2022		1,656,000	$	2.00

Warrants

The following table represents the activity related to the Company’s warrants during the nine months ended September 30, 2022:

	Number of Warrants (in Shares)			Weighted Average Exercise Price
Outstanding, January 1, 2022		5,926,763		$	*
Granted		-			-
Exercised		(418,931	)		-
Outstanding, September 30, 2022		5,507,832		$	-

The weighted average contractual term as of September 30, 2022, is 3.8 years.

If at any time after the six month anniversary of the closing date as disclosed in Note 8 Short-term debt, 2021 convertible debenture and warrants, there is no effective registration statement registering the warrant shares granted to the convertible debenture holders and placement agent, then, for each thirty days following the six month anniversary of the their respective closing date or portion of any thirty day period thereafter in which no effective registration statement is available, the amount of warrant shares shall be automatically increased by five percent over the warrant shares available on such dates. As such, the Company is obligated to grant 3,219,824 warrants through September 30, 2022. The Company has recorded on the condensed consolidated balance sheets, accrued liabilities, approximately $0.2 million of accrued registration rights penalties and interest.

* The exercise price will be determined by a 5-day VWAP price calculation on the exercise date.

Restricted Stock Units

The following table represents the activity related to the Company’s restricted stock awards granted to employees and directors during the nine months ended September 30, 2022:

	Number of Restricted Stock Shares		Weighted Average Grant Date Fair Value
Outstanding, January 1, 2022		1,000,000	$	0.48
Granted		-		-
Vested		1,000,000		0.40
Unvested, September 30, 2022		-	$	-

As of September 30,2022, there is no unrecognized stock compensation expense.

Share Derivative Liabilities

As the amount of common stock on an as converted basis as of September 30, 2022, exceeded our authorized share amount, the Company’s outstanding warrants, stock options and vested but unissued restricted stock shares (“RSUs”) were reclassified to derivative liabilities in the consolidated financial statements. This results in non-cash gains or losses each period during the term of the warrants, stock options, RSU vesting period and convertible debt. The table below summarizes the reclassified share derivative liabilities as of September 30, 2022 (dollars in thousands):

	September 30, 2022
Warrants	$	38
Stock options		6
RSUs vested but unissued		1
Total share derivative liability	$	45

Reverse Stock split

As discussed in Note 15 Subsequent events – reverse stock split, the Company has included below certain data points that are reported in the financial statements (“as stated”) and have been disclosed herein as if the effect of the reverse stock split (1000 for 1) has been implemented (“proforma effect”).

			Proforma
	As stated		Effect
Balance Sheet
Common stock:
Shares Issued:
9/30/2022		736,609,855		736,610
9/30/2021		145,713,591		145,714
Shares Outstanding:
9/30/2022		736,534,476		736,534
9/30/2021		145,638,212		145,638
Treasury Stock:		75,379		75

		Three months ended September 30,						Nine months ended September 30,
EPS		2022			2021			2022			2021
Weighted Average Shares
Outstanding - basic and diluted	As stated		500,173,946			159,448,204			318,558,213			131,863,780
	Proforma		573,174			159,448			318,558			131,864
Net income (loss) per share:
Continuing operations	As stated		0.0001			(0.0370	)		(0.0310	)		(0.2620	)
	Proforma		0.1000			(37.00	)		(31.00	)		(262.00	)
Discontinued Operations	As stated		(0.002	)		0.0070			(0.0030	)		0.0400
	Proforma		(2.00	)		7.00			(3.00	)		40.00