SYSX Sysorex Inc (CE)

Item 1.01 Entry into a Material Definitive Agreement

Exchange Agreement

On May 25, 2021, Sysorex, Inc. (the “Company”) entered into exchange agreements, dated May 25, 2021 (each, an “Exchange Agreement”), with three of the Company’s shareholders – First Choice International Company, Inc., a Delaware corporation, Bespoke Growth Partners, Inc., a Delaware corporation, and One Percent Investments, Inc., a Delaware corporation (collectively, the “Shareholders”).

Under the terms of the Exchange Agreements, the Shareholders agreed to convey, transfer, and assign their shares of common stock of the Company, $0.00001 par value per share (the “Common Stock”), in exchange for prefunded warrants (the “Prefunded Warrants”) based on a one-for-one exchange ratio. The Exchange Agreements contain additional terms typical of exchange agreements including representations and warranties of the parties. The terms and conditions of the Exchange Agreement for each Shareholder are essentially the same, except for the number of shares of Common Stock exchanged and the corresponding number of Prefunded Warrants received, as more particularly illustrated below:

The issuances of Prefunded Warrants under the Exchange Agreements were made in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), as no commission or other remuneration was or will be paid or given directly or indirectly for such transactions.

The above description of the Exchange Agreements does not purport to be complete and is qualified in its entirety by the form of Exchange Agreement, which is incorporated herein and attached hereto as Exhibit 10.1.

Prefunded Warrant

In connection with the Exchange Agreement, as of the date of the Exchange Agreement, the Company issued prefunded warrants (each, a “Prefunded Warrant”) to purchase shares of Common Stock to the Shareholders. The exercise price of each Prefunded Warrant is equal to $0.00001 per share, and the Prefunded Warrants are exercisable on or after August 8, 2021. The Company will receive an aggregate of $123.61 in proceeds upon full and complete exercise of the Prefunded Warrants for cash. The exercise of the Prefunded Warrants is subject to the beneficial ownership limitation of 9.99% of the Attribution Parties (as defined in the Prefunded Warrants) as a group. The Prefunded Warrants are subject to customary adjustments in the event of stock splits and dividends, fundamental transactions, etc.

The above description of the Prefunded Warrants does not purport to be complete and is qualified in its entirety by the form of Prefunded Warrant, which is incorporated herein and attached hereto as Exhibit 4.1.