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syso20131009_corresp.htm

DAVIDOFF HUTCHER & CITRON LLP

605 Third Avenue, 34th Floor

New York, New York 10158

Telephone: (212) 557-7200

Facsimile: (212) 286-1884

October 9, 2013

Via Edgar Correspondence

Barbara C. Jacobs

Assistant Director
Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Re:          Sysorex Global Holdings Corp.

Registration Statement on Form S-1

Filed August 12, 2013

File No.333-190574

Dear Sir or Madam:

As counsel to Sysorex Global Holdings Corp. (the “Company”), we are responding to the Staff’s Comment Letter dated September 6, 2013. The comments are repeated in the order set forth with our responses following in order.

The Company has elected to pursue a firm commitment underwritten public offering prior to the resale Registration Statement filed on August 12, 2013 (No. 333-190574) (the “Resale Prospectus”). The new registration statement on Form S-1 was filed together with this response letter. Notwithstanding that fact, we are replying to each comment in the Staff’s September 6, 2013 letter. We have noted in our response those comments pertaining solely to the Resale Prospectus to which we are not currently responding. We will respond to those comments at such time, if ever, that we move forward with the Resale Prospectus. A decision whether to withdraw the Resale Prospectus will be made prior to the effective date of the attached primary registrations statement.

1.            Since you appear to qualify as an "emerging growth company," as defined in the Jumpstart Our Business Startups Act, please:

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Disclose that you are an emerging growth company;

Securities and Exchange Commission

Attention: Barbara C. Jacobs

Page 2

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Describe how and when a company may lose emerging growth company status;

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Briefly describe the various exemptions that are available to you, such as exemptions from Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934; and

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State your election under Section 107(b) of the JOBS Act:

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If you have elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b), include a statement that the election is irrevocable; or

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If you have elected to use the extended transition period for complying with new or revised accounting standards under Section 1 02(b)(1), provide a risk factor explaining that this election allows you to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. Please state in your risk factor that, as a result of this election, your financial statements may not be comparable to companies that comply with public company effective dates. Include a similar statement in your critical accounting policy disclosures.

Response 1.

This comment has been complied with on the cover page; page 3 under “Implications of being an Emerging Growth Company;” page 21 Risk Factors -- “We are eligible to be treated as an “emerging growth company” . . .; page 26 “Emerging Growth Company Status” concerning the Company’s decision to “opt out;” and page 32 “Management’s Discussion and Analysis of Financial of Operations -- JOBS Act.”

2.

In addition to the above, consider describing the extent to which any of these exemptions under the JOBS Act are available to you as a Smaller Reporting Company.

Response 2.

This comment has been complied with on page 3.

3.

Please supplementally provide us with copies of all written communications, as defined in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your behalf, present to potential investors in reliance on Section 5(d) of the Securities Act, whether or not they retain copies of the communications. Similarly, please supplementally provide us with any research reports about you that are published or distributed in reliance upon Section 2(a)(3) of the Securities Act of 1933 added by Section 1 05(a) of the Jumpstart Our Business Startups Act by any broker or dealer that is participating or will participate in your offering.

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Securities and Exchange Commission

Attention: Barbara C. Jacobs

Page 3

Response 3.

There are no written communications that have been provided to potential investors that are qualified institutional buyers or institutional accredited investors in reliance on Section 5(d) under the Securities Act, nor are there any research reports published or distributed by any broker-dealer that is or will be participating in the Offering. If any of the foregoing documents come to exist, we will provide same to the Staff.

4.

It appears that you will be conducting this offering in reliance on Rule 415. Please ensure that the appropriate box is checked on the cover page of the registration statement.

Response 4.

This comment has been complied with. The Rule 415 box has been checked with regard to the exercise of the Underwriter’s warrants.

5.           We note that you are registering for resale 6,888,233 shares of common stock, a significant portion of which are held by related parties. Additionally, it appears that the company has an economic interest in the outcome of the offering as a result of the "Guaranteed Amount" provisions of the Asset Purchase and Merger Agreement entered into in connection with the acquisition of Lilien Systems. As a result, it appears that this offering by certain of the selling shareholders may be an offering by or on behalf of the company. Please provide a detailed legal analysis to explain why this offering should be appropriately characterized as a secondary offering under Rule 415. For further guidance, refer to Question 612.09 under the Division's Compliance and Disclosure Interpretations for the Securities Act Rules.

Response 5.

This comment applies solely to the Resale Prospectus and is not being responded to at this time.

6.

Please supplementally provide us with documentation supporting any factual assertions in your prospectus, appropriately marked to highlight the sections relied upon and cross­ referenced to your prospectus. For example, we note the following statements:

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"The U.S. government spends approximately $80 billion in IT spending annually and this spending will continue although at a 3% compound annual growth rate (CAGR), compared with 6% historically in the first decade of the 21st Century."

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Securities and Exchange Commission

Attention: Barbara C. Jacobs

Page 4

Response:

For the current spending of the U.S. government, please see page 347 of the document titled “Fiscal Year 2013 Analytical Perspectives - Budget of the U.S. Government,” published by the U.S. Office of Management and Budget.  For the claim regarding the growth in IT spending, please see the printout of the website titled “U.S. Federal IT Market Forecast 2013-2018” from Market Research Media.

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"Security of all forms especially cyber-security are significant growth areas ...."

Response:

Please see the October 19, 2012 Daily Caller article titled “Cybersecurity industry expects continued growth through 2016, says industry expert,” the August 14, 2013 Forbes article titled “IT Security Industry to Expand Tenfold,” and the July 14, 2013 Washington Post article titled “Despite sequestration, cybersecurity funding growing.”

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"The technology segments like business intelligence, cloud computing, eDiscovery, GIS and geospatial, non-relational database management systems, Smart Grid, SOA, unified communications and virtualization are expected to see double digit growth during 2013- 2018."

Response:

Please see the printout of the website titled “U.S. Federal IT Market Forecast 2013-2018” from Market Research Media.

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"The total annual U.S. Federal IT market is expected to surpass $93 billion by 2018 (Source: Market Research Media- U.S. Federal IT Market Forecast 2013-2018.)"

Response:

Please see the printout of the website titled “U.S. Federal IT Market Forecast 2013-2018” from Market Research Media.

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"Spending on devices-smartphones, tablets and printers has grown exponentially, which should not surprise anybody, and will continue to grow, Gartner said."

Response:

Please see the enclosed March 28, 2013 All Things Digital Article titled “Gartner Raises 2013 IT Spending Forecasts to $3.8 Trillion” for this quote.

Please note that the above list is not meant to be complete. Additionally, for each factual statement in your prospectus, please identify the source of such information if it has not already been identified. To the extent any such assertions are management's belief, please clarify. Also, please advise whether any third-party reports or sources were commissioned by you, and if so, please disclose this fact in the prospectus.

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Securities and Exchange Commission

Attention: Barbara C. Jacobs

Page 5

Response 6.

This comment has been complied with. We are providing the Staff supplementally with the requested documentation marked to show the sources relied upon and cross referenced to the prospectus. In addition to the documents referenced above, we are providing the Staff supplementally with the press release titled “Cloud Analytics Market is Growing at an Estimated CAGR of 25.8% & to Reach $16.52 Billion by 2018 - New Report by MarketsandMarkets” in reference to a statement in the 2nd paragraph of page 2 of the prospectus. No third-party reports or sources were commissioned by the Company.

7.

We note that you rely on Rule 416 to register an indeterminate number of additional shares of common stock issuable as a result of the anti-dilution provisions in the Bridge Bank warrants. The footnote as written appears to exceed the scope of Rule 416. Please revise the footnote to track the language of Rule 416, which provides for the registration of additional securities "being offered or issued to prevent dilution resulting from stock splits, stock dividends or similar transactions."

Response 7.

This comment has been complied with.

Outside Front Cover Page of Prospectus

8.

Please disclose in the initial paragraph that this offering constitutes your initial public offering.

Response 8.

This comment has been complied with.

9.

Schedule A, paragraph 16 of the Securities Act and Item 50l(b)(3) of Regulation S-K require that you disclose the price at which the securities will be sold. Given the lack of an established market for your securities, please disclose the fixed price at which the selling shareholders will sell the shares covered by the prospectus. We will not object if you state that the securities will be sold at the disclosed fixed price until your shares are listed on a national securities exchange and thereafter at prevailing market prices or privately negotiated prices. Please make corresponding changes throughout the prospectus.

Response 9.

This comment applies solely to the Resale Prospectus and is not being responded to at this time.

Risk Factors, page 7

10.

Item 503(c) of Regulation S-K requires that you "set forth each risk factor under a subcaption that adequately describes the risk." Several of your current risk factor following subcaptions:

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Securities and Exchange Commission

Attention: Barbara C. Jacobs

Page 6

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"The company competes with much larger companies";

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"Risks of fixed price government contracts";

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"Dependence on key personnel who do not have public company regulatory experience";

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"Sysorex Arabia is currently without contracts"; and

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"Our stock price may be volatile."

Please review each risk factor and revise as necessary to succinctly state in your subheading the risks that result from the facts or circumstances facing the company or this offering.

Response 10.

This comment has been complied with.

Anti-Takeover, Limited Liability and Indemnification Provisions

"Some provisions of our articles of incorporation and by-laws may deter takeover attempts ... ," page 22

11.

Please revise this risk factor to concisely describe the risk that affects the company or makes the offering speculative or risky. See Item 503(c) to Regulation S-K.

Response 11.

This comment has been complied with.

Forward Looking Statements, page 26

12.

Please remove the reference to Section 27A of the Securities Act and Section 21E of the Exchange Act. The safe harbor for forward-looking-statements provided by these sections does not apply to statements made in connection with an initial public offering. See Securities Act Section 27A(b)(2)(0) and Exchange Act Section 21 E(b)(2)(0). Subparagraph (b)(l)(C) of Section 27A concerning statements in filings of penny stock issuers may also apply to your company.

Response 12.

This comment has been complied with.

Use of Proceeds, page 27

13.

You indicate on page 3 that you "expect to use the proceeds received from the exercise of the warrants, if any, for general working capital purposes and partial payment for potential acquisitions." Please revise these disclosures to accurately and consistently describe your intended use of proceeds. Additionally, if the proceeds from the offering may be used to finance acquisitions of other businesses, the status of any negotiations with respect to an acquisition, and a brief description of such business, should be included to the extent that you reasonably determine that public disclosure of such information would not jeopardize the acquisition. Refer to Instruction 6 to Item 504 of Regulation S-K. Please revise or advise.

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Securities and Exchange Commission

Attention: Barbara C. Jacobs

Page 7

Response 13.

This comment has been complied with. The status of negotiations and a description of the business of the pending acquisition is set forth under “Business - Pending Letter of Interest” which is cross-referenced in the “Use of Proceeds” section. We are providing the staff with the Loan Documents described in the Business section and intend to file same with the name of Target in the next amendment.

Market for Registrant’s Common Equity and Related Stockholder Matters. page 27

14.

We note that you have filed a Registration Rights Agreement as Exhibit 10.3. Please disclose the number of shares entitled to registration rights and include a general discussion of the origin of the registration rights.

Response 14.

This comment has been complied with.

Management's Discussion and Analysis of Financial Condition and Results of Operation

Overview, page 31

15.

Please expand this section to provide a balanced and meaningful discussion of known material trends and uncertainties that will have, or are reasonably likely to have, a material impact on your revenues or income or result in your liquidity decreasing or increasing in any material way. In this regard, we note the disclosure on page 14 that Sysorex Arabia has no contracts and the discussion on page 15 regarding the financial and operational challenges you have experienced in the last nine years. Your discussion of trends, challenges and uncertainties should provide insight into the extent to which reported financial information is indicative of future results. Please provide additional analysis concerning the quality and variability of your earnings and cash flows. Further, please discuss in reasonable detail any economic or industry-wide factors relevant to your company and any material opportunities, challenges and risks you may face in the short and long term and the actions you are taking to address them.

Response 15.

This comment has been complied with. As requested, the Company has expanded the disclosures in the Overview section.

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Securities and Exchange Commission

Attention: Barbara C. Jacobs

Page 8

Liquidity and Capital Resources - Bridge Bank Financing Agreement, page 39

16.

Please revise to disclose the identity of the borrowers and the guarantor and the date