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 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20211115006198/en/
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.
Contacts
Bri Kelvin
investors@srax.com