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

Rhea-AI Summary

SRAX, a financial technology firm, reported Q3 2021 revenue of $8.3M, marking a 219% year-over-year increase and 8% sequential growth. The company reaffirmed its guidance for Q4 revenue at $10.1M, with a total projected annual revenue of $31.5M. Sequire bookings reached $8.9M in Q3, with a record $12.5M for Q4. Gross margins improved to 79%, while EBITDA was $940K, reflecting a $2M increase from last year. SRAX also introduced new products and expanded its partner base to 250 companies.

Positive

• Q3 revenue of $8.3M, up 219% year-over-year.
• Q4 guidance of $10.1M, increasing full-year target to $31.5M.
• Sequire bookings of $8.9M in Q3; record $12.5M for Q4.
• 12 consecutive quarters of revenue growth for Sequire.
• Gross margin improved to 79%, up from 56% year-over-year.
• EBITDA of $940K, an increase of $2M compared to Q3 2020.

Negative

• Operating expenses increased to $8.1M from $4.2M year-over-year.

LOS ANGELES--(BUSINESS WIRE)-- 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/

Bri Kelvin

investors@srax.com

Source: SRAX, Inc.

FAQ

What were SRAX's Q3 2021 financial results?

SRAX reported $8.3M in revenue for Q3 2021, marking a 219% increase year-over-year.

What revenue guidance did SRAX provide for Q4 2021?

SRAX reaffirmed Q4 2021 revenue guidance of $10.1M.

How did SRAX's EBITDA change in Q3 2021?

SRAX reported EBITDA of $940K in Q3 2021, a $2M increase from the same period in 2020.

What are the recent bookings reported by SRAX for Q3 2021?

SRAX reported Sequire bookings of $8.9M for Q3 2021, with Q4 bookings currently at $12.5M.

How many public companies are subscribed to SRAX's Sequire platform?

SRAX has 250 public company partners subscribed to its Sequire platform.