Sysorex, Inc. (OTCQB: SYSX), a publicly-traded Ethereum mining company, announced its plans, potential partnerships with the government and talked exclusively to Benzinga about the reverse triangular merger with TTM Digital Assets & Technologies.
In its current form, Sysorex is a holding company and has two subsidiaries, Sysorex Government Services, Inc. (SGS) and TTM Digital Assets & Technologies.
It officially announced the reverse triangular merger on April 14.
Previously, Sysorex was trading publicly on the over-the-counter markets and focused primarily on government-related contracts as a supplier of products and services to the government.
TTM Digital Assets & Technologies was a private data center owner and operator under the name TTM Ventures, founded in 2017. Before the merger, TTM mined and distributed Ethereum to its investors and management, with an estimated value of approximately $35,000,000 worth of Ether (ETH).
With the recent merger, Sysorex formed an acquisition corporation, while TTM Ventures was converted into a corporation and became TTM Digital Assets & Technologies.
“It then was merged with the merger subsidiary of Sysorex, resulting in shareholders of TTM receiving a controlling interest of the public company — about 82% of the total company,” explains Mark Peikin, CEO of Bespoke Growth Partners, the consulting firm that advised on the merger. “As a result of the merger, TTM Digital Assets & Technologies became a wholly owned subsidiary of Sysorex, and now Sysorex’s core business is the mining and aggregation of Ethereum.”
The company is considering a name change to avoid confusion between the entities to capture its larger, going-forward business strategy.
Work With Government
Given the previous experience of working with governmental bodies, Sysorex plans to continue existing partnerships and expand to large enterprises.
“We will be targeting agencies based on who’s adopting blockchain the quickest, and agencies that are burning significant money because they’re doing a lot of transactional work, and they can benefit from the cost savings via blockchain,” said Zaman Khan, President of SGS, and a member of Sysorex’s Board of Directors.
The company shared they already have contracts — “NASA SEWP V GWAC,” “NIH CIO-CS GWAC,” and “GSA Federal Supply Schedule IT 70,” from which any agency within the government can purchase. Each of these contracts has a ceiling cap of $20 billion that they can utilize.
“So, what we need is sponsorship within an agency; for example, we do a lot of work with the United States Department of Agriculture (USDA). Food Safety Inspection is a big issue, and we believe blockchain can resolve a lot of the transactions that go on there. We’ve been looking at customers like that,” continued Khan.
In terms of having the clients sponsor either a contract or a proof of concept, Sysorex can develop applications or use already developed applications right away.
“The recent acquisition of a controlling interest in Sysorex, the government contracts, and our strong hold in Ethereum puts us in a unique position to work with the government and large enterprises,” said Wayne Wasserberg, CEO of Sysorex and President of TTM Digital Assets & Technologies.
At the moment, TTM Digital Assets & Technologies is the largest US-based Ethereum miner, with over 12,000 NVIDIA graphics processing units (GPUs), and it has a significant data center ownership stake. In addition, along with its investor, CoreWeave, TTM Digital Assets & Technologies has thousands of GPUs currently operating and generating ETH hosted in other US-based data center facilities.
The company not only mines Ethereum but also aggregates the cryptocurrency in its treasury because it believes “in the long-term prospects of the cryptocurrency and that it will continue to rise in value as Ethereum moves from proof-of-work to proof-of-stake,” said Peikin.
The main advantage of mining cryptocurrencies in the US, according to Peikin, is that it takes care of the concerns many investors in the US have regarding foreign miners, as it’s much more difficult to verify and authenticate what it is being mined overseas.
The highly anticipated Ethereum 2.0., the proof-of-stake network upgrade, will be beneficial for the company and might also allow it to repurpose the GPUs towards mining other cryptocurrencies or other objectives like artificial intelligence or rendering.
“We believe in the strength of Ethereum. It’s an appropriate asset for a publicly-traded company. Bitcoin is more of a store of value and a platform that works better for larger transactions, but it is rigid, and therefore, less practical for smaller and more frequent transactions,” explains Peikin, CEO of Bespoke Growth Partners.
“The Ethereum blockchain is best positioned for the next generation of the web, Web 3.0, as well as the larger volume of transactions expected across a variety of industries,” continued Peikin.
As for future mining plans, Sysorex says one of the main goals is to increase the number of miners online. TTM Digital Assets & Technologies plans to continue ordering more GPUs from NVIDIA as well as utilize its opportunity to acquire from CoreWeave additional GPUs that are currently installed and hosted.
Image: Courtesy of TTM Digital Assets & Technologies
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