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SRAX Reports 219% Year-Over-Year Revenue Growth for Third Quarter 2021

SRAX, Inc. (NASDAQ: SRAX), a financial technology company that unlocks data and insights for publicly traded companies through Sequire, its SaaS platform, is providing unaudited financial results for Q3, today, November 15th, 2021.

Third Quarter 2021 and Recent Operational Highlights and Guidance

  • Revenue for Q3 of $8.3M, up 219% year-over-year, 8% sequentially quarter-over-quarter.
  • Q4 revenue guidance of $10.1M, reaffirming full year guidance, and increasing target to $31.5M.
  • Sequire bookings of $8.9M for Q3 with record Q4 bookings of $12.5M as of today. Projection of an additional $4M during the 4th quarter, bringing the total booked in Q4 to $16.5M.
  • 12 consecutive quarters of Sequire revenue growth.
  • Currently holding approximately $29M worth of marketable securities, as of today.
  • 250 public companies/partners have subscribed to Sequire, up 25 since the Q2 release.
  • Launched IR Website Builder, SMS Communication platform and VIRA, an IR chatbot.
  • Hosted in-person LD Micro Event with over 750 in-person attendees and 12K virtual attendees.

SRAX less BIGtoken, Three months ended September 30, 2021

  • Total Revenue was $7.7M, an increase of 278% as compared to the same period last year and an increase of 5% sequentially quarter-over-quarter.
  • Gross Margin was 79% as compared to 56% in the same period last year.
  • Operating Expenses were $5.6M as compared to $4.2M in the same period last year.
  • EBITDA of $940,000 for an increase of $2M vs. ($1.1M) in Q3 2020.

Consolidated, Three months ended September 30, 2021

  • Total Revenue was $8.3M, an increase of 218% as compared to the same period last year, and an increase of 8% sequentially quarter-over-quarter.
  • Gross Margin was 78% as compared to 67% in the same period last year.
  • Operating Expenses were $8.1M as compared to $4.2M in the same period last year.
  • EBITDA increase of $1.1M, ($790K) vs ($1.9M) in Q3 2020.

“Our team continues to innovate on product, sales, and marketing; and this is translating into increased revenue. We will hit the high end of our 2021 guidance and are well positioned to close out 2021 strong, with an amazing 2022 on the horizon,” said Christopher Miglino, Founder and CEO of SRAX.

Video Conference:

SRAX's Founder and CEO, Christopher Miglino, and CFO, Michael Malone, will provide an operational and financial summary of Q3 2021 on a video call, with a live question and answer session, today, Monday, November 15th, at 4:30 pm ET / 1:30 pm PT.

To register for the live webcast and view the presentation, please sign up here: https://audience.mysequire.com/webinar-view?webinar_id=ddab2293-22bd-4d5b-b59c-28a53d09e152

To access the conference by phone:

Dial in: +1 253-215-8782

Meeting ID: 98690403594

Passcode: 790524

The webcast will be available on srax.com following the scheduled conference call.

Non-GAAP Measures:

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), we use the following non-GAAP financial measures: EBITDA. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business. For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the "Reconciliation of GAAP to Non-GAAP Results" table in this press release.

SRAX less BIGtoken EBITDA is defined as earnings before interest, taxes, depreciation and amortization, changes in the fair-value of derivative and warrant liabilities and certain additional one-time charges and excluding the results from our BIGtoken operations.

About SRAX:

SRAX (NASDAQ: SRAX) is a financial technology company that unlocks data and insights for publicly traded companies. Through its premier investor intelligence and communications platform, Sequire, companies can track their investors’ behaviors and trends and use those insights to engage current and potential investors across marketing channels. For more information on SRAX, visit srax.com.

Safe Harbor Statement:

This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as "anticipate," "plan," "will," "intend," "believe" or "expect" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including, without limitation, statements made with respect to expectations of our ability to increase our revenues, satisfy our obligations as they become due, report profitable operations and other risks and uncertainties as set forth in our Annual Report on Form 10-K for the year ended December 31, 2020, and our subsequent Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of SRAX and are difficult to predict. SRAX undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

CONSOLIDATED BALANCE SHEET

(Unaudited)
As of As of
September 30, December 31,

2021

2020

(Unaudited)
Assets
Current assets
Cash and cash equivalents $

6,823,000

$

451,000

Accounts receivable, net

1,376,000

2,608,000

Prepaid expenses and other current assets

998,000

367,000

Marketable securities

18,221,000

8,447,000

Designated assets for return of capital

6,255,000

-

Total current assets

33,673,000

11,873,000

 
Notes receivable

926,000

893,000

Property and equipment, net

154,000

118,000

Intangible assets, net

1,889,000

2,409,000

Right of use assets

286,000

366,000

Other assets

36,000

3,000

Goodwill

23,351,000

23,351,000

Total Assets $

60,315,000

$

39,013,000

 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable and accrued liabilities $

3,932,000

$

3,561,000

Deferred revenue

14,824,000

4,842,000

Other current liabilities

469,000

3,869,000

Payroll protection loan - short-term

10,000

747,000

OID convertible debentures

1,055,000

6,016,000

Series A preferred stock, authorized 36,412,417 shares, $0.001 par value, 36,412,417 shares and none authorized, issued and outstanding, respectively

6,253,000

-

Total current liabilities

26,543,000

19,035,000

 
Right of use liability - long term

148,000

243,000

Payroll protection loan, less current portion

-

379,000

Deferred tax liability

131,000

131,000

Total liabilities

26,822,000

19,788,000

 
Stockholders’ equity
Common stock, authorized 250,000,000 shares, $0.001 par value, 25,630,747 and 16,145,778 shares issued and outstanding, respectively

25,000

16,000

Additional paid-in capital

93,859,000

69,551,000

Accumulated deficit

(71,001,000

)

(50,342,000

)

Total equity attributable to SRAX, Inc.

22,883,000

19,225,000

Noncontrolling interest

10,610,000

-

Total stockholders’ equity

33,493,000

19,225,000

Total Liabilities and Stockholders’ Equity $

60,315,000

$

39,013,000

 
 
CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)
Three Months ended Nine Months ended
September 30, September 30,

2021

2020

2021

2020

 
Revenues $

8,313,000

$

2,609,000

$

21,432,000

$

4,125,000

Cost of revenues

1,804,000

880,000

4,907,000

1,388,000

Gross profit

6,509,000

1,729,000

16,525,000

2,737,000

 
Operating expenses
Employee related costs

2,853,000

1,689,000

7,996,000

5,406,000

Marketing and selling expenses

2,075,000

809,000

5,105,000

1,631,000

Platform costs

132,000

391,000

350,000

1,181,000

Depreciation and amortization

366,000

333,000

1,122,000

962,000

General and administrative expenses

2,681,000

984,000

6,045,000

3,157,000

Total operating expenses

8,107,000

4,206,000

20,618,000

12,337,000

 
Loss from operations

(1,598,000

)

(2,477,000

)

(4,093,000

)

(9,600,000

)

 
Other income (expense):
Financing costs

(528,000

)

(3,302,000

)

(15,958,000

)

(5,340,000

)

Realized gain on marketable securities

286,000

-

1,096,000

376,000

Unrealized loss on marketable securities

(3,906,000

)

(800,000

)

(4,784,000

)

(660,000

)

Realized gain on designated assets

2,000

-

2,000

-

Unrealized loss on designated assets

(134,000

)

-

(134,000

)

-

Interest income

10,000

-

33,000

-

Other income

1,131,000

8,000

1,145,000

8,000

Change in fair value of preferred stock

134,000

-

134,000

-

Change in fair value of derivative liabilities

-

-

-

321,000

Total other expense

(3,005,000

)

(4,094,000

)

(18,466,000

)

(5,295,000

)

 
Loss before provision for income taxes

(4,603,000

)

(6,571,000

)

(22,559,000

)

(14,895,000

)

 
Provision for income taxes

-

-

-

-

Net loss

(4,603,000

)

(6,571,000

)

(22,559,000

)

(14,895,000

)

Net loss attributable to noncontrolling interest

774,000

-

1,900,000

-

Net loss attributable to SRAX, Inc. and subsidiaries $

(3,829,000

)

$

(6,571,000

)

$

(20,659,000

)

$

(14,895,000

)

 
Net loss per share, basic and diluted $

(0.15

)

$

(0.45

)

$

(0.91

)

$

(1.05

)

 
Weighted average shares outstanding – basic and diluted

25,019,645

14,479,519

22,707,446

14,186,721

 
CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

Nine Months ended

September 30,

2021

2020

Cash Flows From Operating Activities
Net loss $

(22,559,000

)

$

(14,895,000

)

Adjustments to reconcile net loss to net cash used in operating activities:
Unrealized loss from securities held for sale

4,784,000

660,000

Realized gain from securities held for sale

(1,096,000

)

(376,000

)

Unrealized loss on designated assets

134,000

-

Realized gain on designated assets

(2,000

)

-

Forgiveness of payroll protection program loan

(1,116,000

)

-

Interest income

(33,000

)

-

Fair value of warrants issued by FPVD for SRAX, Inc. debenture holders

885,000

-

Stock based compensation

757,000

917,000

Amortization of debt issue costs

799,000

3,746,000

Loss on extinguishment of debt

-

1,103,000

Recognition of beneficial conversion feature - FPVD series B preferred stock

5,860,000

-

Warrant inducement expense

7,737,000

-

Change in fair value of preferred stock

(134,000

)

-

Change in fair value of derivative liabilities

-

(321,000

)

Marketable securities received for accounts receivable previously written off

(409,000

)

-

Provision for bad debts

104,000

69,000

Depreciation expense

61,000

57,000

Amortization of intangibles

1,061,000

905,000

Net change in right of use asset and liability

(15,000

)

(4,000

)

Non-cash financing expense

213,000

-

Changes in operating assets and liabilities:
Accounts receivable

1,537,000

(494,000

)

Prepaid expenses

(630,000

)

372,000

Other current assets

(1,000

)

243,000

Accounts payable and accrued expenses

371,000

23,000

Deferred revenue

(16,582,000

)

-

Other current liabilities

(396,000

)

(1,893,000

)

Net Cash Used in Operating Activities

(18,670,000

)

(9,888,000

)

 
Cash Flows From Investing Activities
Net cash received from acquisition of FPVD

955,000

-

Acquisition of LD Micro, net of cash acquired

-

(697,000

)

Proceeds from the sale of marketable securities

7,144,000

397,000

Purchase of marketable securities

(429,000

)

-

Payment for deferred consideration to LD Micro

(3,004,000

)

-

Purchase of property and equipment

(97,000

)

-

Development of software

(541,000

)

(870,000

)

Other assets

(33,000

)

13,000

Net Cash Provided by (Used) in Investing Activities

3,995,000

(1,157,000

)

 
Cash Flows From Financing Activities
Proceeds from issuance of FPVD series B preferred stock

4,810,000

-

Proceeds from the exercise of warrants

15,953,000

-

Proceeds from issuance of common stock

284,000

-

Proceeds from issuance of OID convertible debentures, less issuance cost

-

11,885,000

Proceeds from the issuance of short-term notes payable, less issuance cost

-

960,000

Repayment of short-term notes payable

-

(100,000

)

Proceeds from payroll protection program loan

-

1,084,000

Proceeds from the issuance of notes payable

-

2,130,000

Repayment of notes payable

-

(2,500,000

)

Net Cash Provided by Financing Activities

21,047,000

13,459,000

 
Net increase in Cash

6,372,000

2,414,000

Cash, Beginning of Period

451,000

32,000

Cash, End of Period $

6,823,000

$

2,446,000

 
Supplemental disclosure of cash flow information:
Cash paid for interest $

14,000

$

176,000

Cash paid for income taxes $

-

$

-

 
Noncash investing and financing activities:
Convertible notes converted into shares $

5,973,000

$

-

Fair value of marketable securities received for revenue contracts $

26,564,000

$

5,398,000

Designation of marketable securities for dividend distribution $

6,387,000

$

-

Dividends on preferred stock $

6,387,000

$

-

Vesting of prepaid common stock award $

-

$

94,000

Shares issued to settle liability $

-

$

181,000

Relative fair value of warrants issued with term loan $

-

$

83,000

Derivative liabilities transferred to equity $

-

$

4,076,000

Shares of common stock issued for extension agreement $

-

$

71,000

Fair value of BCF for debt financings $

-

$

6,311,000

Fair value of warrants issued for debt financings $

-

$

4,248,000

Premium on debt financings $

-

$

46,000

Original issue discount recorded on OID convertible debentures $

-

$

1,931,000

Payables converted into convertible notes payable $

-

$

234,000

Shares of common stock issued for the acquisition of LD Micro $

-

$

4,264,000

 
 
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)  
Shares Amount Capital Deficit Interest Equity
Common Stock Additional Accumulated Noncontrolling Stockholders’
paid-in
Shares Amount Capital Deficit Interest Equity
 
Balance, December 31, 2020

16,145,778

$

16,000

$

69,551,000

$

(50,342,000

)

$

-

$

19,225,000

Share based compensation

-

-

253,000

-

-

253,000

Shares issued for cash

53,616

-

284,000

-

-

284,000

Conversion of convertible debt to equity

2,041,551

2,000

3,445,000

-

-

3,447,000

Shares issued for exercise of warrants, net of offering costs

4,945,320

5,000

12,215,000

-

-

12,220,000

Warrants issued as inducement to exercise warrants

-

-

7,737,000

-

-

7,737,000

Acquisition of noncontrolling interest of FVPD

-

-

-

-

(95,000

)

(95,000

)

Warrants issued by FVPD for SRAX, Inc. debenture holders

-

-

-

-

885,000

885,000

Series B convertible preferred stock issued by FPVD

-

-

-

-

5,775,000

5,775,000

Beneficial conversion feature FPVD series B convertible preferred stock

-

-

-

-

5,775,000

5,775,000

Net loss

-

-

-

(11,090,000

)

(854,000

)

(11,944,000

)

Balance, March 31, 2021

23,186,265

23,000

93,485,000

(61,432,000

)

11,486,000

43,562,000

Share based compensation

-

-

253,000

-

-

253,000

Conversion of convertible debt to equity

350,000

-

701,000

-

-

701,000

Shares issued for exercise of warrants, net of offering costs

1,310,198

1,000

3,575,000

-

-

3,576,000

Series B convertible preferred stock issued by FPVD

-

-

-

-

85,000

85,000

Beneficial conversion feature FPVD series B convertible preferred stock

-

-

-

-

85,000

85,000

Net loss

-

-

-

(5,740,000

)

(272,000

)

(6,012,000

)

Balance, June 30, 2021

24,846,463

24,000

98,014,000

(67,172,000

)

11,384,000

42,250,000

Share based compensation

-

-

251,000

-

-

251,000

Shares issued for exercise of warrants, net of offering costs

53,668

-

157,000

-

-

157,000

Conversion of convertible debt to equity

730,616

1,000

1,824,000

-

-

1,825,000

Dividends on preferred stock

-

-

(6,387,000

)

-

-

(6,387,000

)

Net loss

-

-

-

(3,829,000

)

(774,000

)

(4,603,000

)

Balance, September 30, 2021

25,630,747

$

25,000

$

93,859,000

$

(71,001,000

)

$

10,610,000

$

33,493,000

 
NON-GAAP TO GAAP RECONCILIATIONS

(Unaudited)
 
Three months ended September 30, Nine months ended September 30,

2021

 

2020

 

2021

 

2020

 

Consolidated
 
Operating loss

(1,597,000

)

(2,477,000

)

(4,092,000

)

(9,600,000

)

less:
Depreciation and amortization expense

355,000

 

470,000

 

412,000

 

387,000

 

Stock-based compensation expense

254,000

 

270,000

 

-

 

237,000

 

Acquisition costs

201,000

 

-

 

-

 

-

 

Adjusted EBITDA

(787,000

)

(1,737,000

)

(3,680,000

)

(8,976,000

)

 

 

 

SRAX / Sequire
 
Operating Income / (loss)

461,000

 

(1,684,000

)

1,473,000

 

(5,765,000

)

less:
Depreciation and amortization expense

225,000

 

332,000

 

Stock-based compensation expense

254,000

 

270,000

 

Adjusted EBITDA

940,000

 

(1,082,000

)

1,473,000

 

(5,765,000

)

 
BIGToken
 
Operating loss

(2,058,000

)

(793,000

)

(5,565,000

)

(3,835,000

)

less:
Depreciation and amortization expense

130,000

 

138,000

 

412,000

 

387,000

 

Stock-based compensation expense

-

 

-

 

-

 

237,000

 

Acquisition cost

201,000

 

Adjusted EBITDA

(1,727,000

)

(655,000

)

(5,153,000

)

(3,211,000

)

 

SRAX, Inc. is providing unaudited financial results for Q3 on a call, today, November 15th, 2021 at 4:30 pm ET / 1:30 pm PT.

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