Good afternoon and welcome to the Sysorex Global Earnings Conference Call for the Quarter-Ended September 30, 2016. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] A replay of the call will be available approximately one hour after the end of call through December 14, 2016. I would like to now turn the conference over to Scott Arnold, Managing Director of Core IR, the Company's Investor Relation firm. Please go ahead.

Thank you, Gary. Thank you for joining today's conference call to discuss Sysorex Global's corporate development and financial results for the quarter ended September 30, 2016. With us today are Nadir Ali, the Company's CEO; and Kevin Harris, CFO. At 4:05 P.M. Eastern Time today, Sysorex released financial results for the quarter ended September 30, 2016. If you have not received Sysorex's earnings release, please visit the investors page at www.sysorex.com. During the course of this conference call the company will be making forward-looking statements. The company cautions you that any statements that is not a statement of historical fact is a forward-looking statement. This includes any projections of earnings, revenues, cash or any statements relating to the Company's future financial results, any statements about plans, strategies or objectives of management for future operations, any statements concerning proposed new products, any statements regarding anticipating new relationships or agreements, any statements regarding expectations with the success of the company's products in U.S. and international markets, any statements regarding future economic conditions or performance, statements of belief and any statements of assumptions underlying any forgo [ph]. These statements are based on expectations and assumptions as of the date of this conference call and is subject to numerous risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Some of these risks are described in the section of today's press release titled Cautionary Note on Forward-Looking Statements and the public periodic reports accompany files with the Securities and Exchange Commission. Investors and potential investors should read these risks. Sysorex assumes no obligation to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so. In addition, to supplement the GAAP numbers the companies have provided non-GAAP adjusted net loss and net loss per share information in addition to non-GAAP adjusted EBITDA information. The company believes that these non-GAAP numbers provide manful supplemental information and are helpful in assessing our historical and future performance. A single reconciling the GAAP information to the non-GAAP information is included in the company's financial release. I will now turn the call over to Nadir Ali, Sysorex's CEO. Nadir?

Thanks, Scott and good afternoon, everyone. Welcomes to our third quarter 2016 earnings call and corporate update, and thank you for joining us. I'm joined on the call today by Kevin Harris, our CFO, who will be discussing our financial results for the quarter ended September 30, 2016 after my opening remarks. And I will return to conclude our prepared remarks and fill your questions. Sysorex empowers data driven customers with an innovative approach to data analytics, security and Internet of Things. Sysorex products helps client improve security, better manage assets, and discover fresh opportunities by combining data from both, the physical and digital world. We help clients derive real-time value by giving them 100% of their data analyzed up to 1000 times faster. Our portfolio of products and services deliver innovative technologies solutions tailored specifically for a number of industries and applications, from corporate security to real-time customer analytics and shopping centers; Sysorex solutions are helping customers worldwide improve decision making, increase productivity, and fuel discoveries of tomorrow. Now as many of you know, we didn't start with these solutions I just described. We have been building these over the past couple of years and is certainly the key to the future success of our company. However, a majority of our revenue today continues to be from our VAR business which is reported in our numbers, primarily in the storage and computing segment. The VAR industry has been undergoing changes, John Donnelly of the VAR Guide talks about certain core products of VARs are more vulnerable than others. Storage, for example, represents a significant piece of revenue for VARs. A quick look at AWS's revenue numbers and the momentum shows that the storage business will be hit harder in the next few years as companies like NetApp and AMC…

Thanks, Nadir. Total revenues for the three months ended September 30, 2016 were $11.2 million compared to $14.9 million for the comparable period in the prior year. The decrease in revenue is of $3.7 million is primarily attributable to the storage and computing segment as explained by Nadir early on this call. For the 3 months ended September 30, 2016 mobile IoT and Big Data product revenue was $542,000 compared to $487,000 for the prior year period. Storage and computing revenue was 7.9 million for the three months ended September 30 2016 and $10.3 million for the prior year period. Tax revenue worth $826,000 during the three months ended September 30, 2016 and $871,000 during the prior year period. Professional services revenue was $2 million during the three months ended September 30, 2016 and $3.2 million during the prior year period. Total gross profit for the quarter ended September 30, 2016 was $3.1 million compared to $4.4 million for the comparable period in the prior year. Gross profit margin for the three months ended September 30, 2016 was 28% compared to 30% during the three months ended September 30, 2015. The decrease in gross margin was primarily trial to lower gross margin for the storage and computing segment during the quarter ended September 30 2016. Net loss attributed to common stock holders for the three months ended September 30, 2016 was $4.7 million compared $3.2 million for the prior year period. This increase of net loss of $1.5 million was attributable to lower revue during the quarter and therefore lower gross profit offset the operating expenses. For the quarter ended September 30, 2016 pro forma non-GAAP net loss was $3.3 million compared to a non-GAAP net loss of $1.8 million for the prior year period. The quarter ended September 30 2016 non-GAAP net loss per share was $0.13 compared to a non-GAAP net loss per share of $0.09 for the prior year period. Non GAAP net loss per share is defined as net loss for basic and diluted share adjusted for non-cash items including stock-based comp, amortization of tangibles, change in the fair value of shares to be issued, change of the fair value of derivative liability and one-time charges including acquisition cost. Total adjusted EBITDA for the quarter ended September 30, 2016 was a loss $2.4 million compared to a loss of $1.5 million for the prior year period. Non-GAAP adjusted EBITDA defined as net income or loss before interest provision for benefit from income taxes and depreciation and amortization plus adjustments for other income, expense items, non-recurring items and non-cash stock-based compensation. On the balance sheet, we ended the quarter with cash and cash equivalent of approximately $505,000 and total current assets of $20.2 million. Our net cash used in operations was approximately $1.1 million for the nine months ended September 30, 2016. This concludes my comments, and I'd like to turn the call back over to Nadir. Nadir?

Thanks, Kevin. Sysorex is strongly positioned to deliver on its promise of innovation and value creation with market aiding technology driving diversified growth across our products and services. We are excited about our pending acquisition of Integrio and look forward to our future with enthusiasm and confidence in our expectations for growth and our past profitability. With that Gary, we are ready to open up the call to any questions.

Thank you. [Operator Instructions] The first question comes from Josh Nickels with B. Riley. Please go ahead.

Looking at the acquisition looks like it should be additive to EBITDA, just real quick I dint think you mentioned it could you talk about the funding mechanics briefly.

Sure. So the acquisition is accommodation of Cash and closing and installment payments, there is an earnout component, assumptions and liabilities, and of course a stock component.

Okay. Then you talked a bit about the AirPatrol opportunities with the recent deployment of the mall. When did you think that's going to be up and running and any high level detail you can provide about the opportunity to expand within that one-mark key mall and then what it might mean if you were to expand to other malls under the same umbrella as well.

Without going into specifics about that particular deal what I can tell you is yes its well underway and the goal is not just to one location for them it's definitely a roll up plan that we will work with them on and as you can imagine as you think about the business model I discussed earlier on the call. Scrambling from every mall starts becoming additive to the cash flow and recurrent revenues we see. These mall operators have millions of square feet, some of these operators have hundreds of malls others have 20, 30, 40, 50 malls. This is a vertical very excited about I think we have a unique solution for them and except that we can scale this across multiple mall operators and within multiple malls and within each mall operator itself.

Lastly, follow-up on point then I'll hop back into the queue is do you have anything that you can provide as far as -- is there a roll out time line or maybe how long the operator might want to test an installment before moving on to expand on the two additional areas?

We've actually gone through a testing period already with them during the year half of diligence and so we don't expect any delays unnecessarily it's just a matter of their timing in terms of being able to execute in the installations of the sensors right they have to open up ceilings and put these ensures up and things like that. They have timetables and process used to figure that out. We are hopping that's it -- it doesn't happen all over night but we are hoping to roll out sooner rather than later one mall at a time for that.

Thank you.

Thanks, Josh.

The next question comes from David Riedel from Riedel Research. Please go ahead.

Hi guys, this is David Riedel, a couple of questions about the Integrio acquisition. Are you planning to keep that brand and also you list a number of contracts and relationships that they have. Is there one there that stands out to you as a being especially valuable to Sysorex and AirPatrol?

Hi David, we -- this is an asset purchase -- well, we are capturing the brand use for some time it's really going to get rolled into our Sysorex government series division so we'll be transferring that under the Sysorex name at some point. There is definably some history there with the company and relationships and we are capturing and maintain those. They have actually several excellent contracts. We are pretty excited about the department of justice the FBI contract. We also have a few US army contracts - I don't know that its contract that we've - think we can leverage with some of the relationships we have and the products sources that we have. Variety of contracts that I think we can take advantage of and grow and that will integrate well and compliment a couple of contracts that we have. They also have a [indiscernible] but carry different product sets than we do so we'll be able to expand our offering under those contracts.

Great, Okay, thank you.

The next question comes from Mike Crawford with B. Riley & Company. Please go ahead.

Thank you. Nadir did you -- is the cash balance up in Q4 so far from the Q3 in because it seems otherwise it's a little tight on the outside cash portion of the acquisition.

The cash balance I mean as you can imagine we pay down our AR line AR collections come in and so the cash balance maybe on a date where we significantly at that point and time and significant pay it down and then we can borrow against our line as the receivables come back up. We manage to Cash from that perspective so you know it's - the balance has gone up and down throughout Q4 as well but it's really driven by our AR and Q4 is pretty good quarter for us typical on these [indiscernible] computing side because it's the end of the year so we are expediting that business4 to grow this quarter and drive the AR and we'll be able to use our line at that point.

Great. As far the mall operator ripping off these ceilings etcetera, did you say when you thought that you might be able to start recognizing these monthly service revenues?

We happened but its eminent is what I can say is - the contract has been signed the sensors have been deployed and its potentially going live here shortly so its eminent.

In time for the holidays?

Yes.

Okay, good and then as far as the two developments with Rune 1 where you the prime overseeing everything and the other one where it's just the [indiscernible] what the timing of the cash flow related to those?

We are looking at Q1 -- well there is still chance of part of the larger camp there 20-acre camp for little bit in Q4 then the balance in Q1. The bigger contract a $91 million contract that we talked about earlier because of construction delays I don't expect that revenue start kicking until possibly late Q1.

Okay. But the larger camp that's just a sale where you deliver AirPatrol and you get cash pretty quickie I believe right.

Yes, that's right and so we are expecting that to be part in Q4 and part in Q1.

Okay. Just back to the mall, I think you said - did you say one of their standard malls could represent close to $100,000 a month and recurring big data service revenue?

Yes, I was saying the range is $30,000 to $100,000 it's a pretty small mall it maybe can be 20 25,000 buts that's the range and what that means is that it could be going beyond just the common area potential to get the $100,000 per month fee or a combination of other thing that there are other services that they are buying from us on top of the AirPatrol solution. We atypically see I think the average probably in the 40 to 50 range but if you extend that's for the commentary if you extend beyond that then these malls could easily 100,000 per month.

Half million to a million of revenue per year ore mall and this is what like 60 to 70% type of gross margin business?

That's right.

Okay, thank you.

Thanks, Mike.

[Operator Instructions] I'm showing no questions at this time. This concludes our question and answer session. I'd like to turn the conference back over to Nadir Ali for any closing remarks.

Thank you, Gary. I wish to thank everyone again for your time today I want you reiterate the enthusiasm and confidence that brings to this call regarding our future. Sysorex tries to be a leader provider of real time data analytics Iota and security solutions. We are driving the realization out in the market that our AirPatrol and LightMiner analytics platform solutions are incomparable and drive real long-term value. We are highly encouraged by the marketing responses we are experiencing from our clients and prospective customers alike. We seek to drive ever more or alike from their data thanks very much.

The conference is now concluded thank you for attending today's presentation you may now disconnect.