SRAX Reports Record Full Year and Q4 2021 Financial Results

Rhea-AI Summary

SRAX reported record annual revenue of $28.6 million for 2021, marking a 336% increase from 2020, exceeding its guidance of $31.5 million. The company anticipates 2022 revenue between $47 million and $50 million. Q4 2021 revenue reached $9.6 million, up 27% from Q3 and 170% year-over-year. Despite a $24 million non-cash charge for BIGtoken, SRAX reported $3.8 million in adjusted EBITDA. The strong growth reflects the success of its Sequire platform and new product launches, with growing customer interest and robust bookings in Q2 2022.

Positive

• Record annual revenue of $28.6 million for 2021, a 336% increase from 2020.
• Q4 2021 revenue of $9.6 million, up 27% from Q3 and 170% year-over-year.
• Guidance for 2022 revenue between $47 million and $50 million, representing a 65% to 75% increase compared to 2021.
• Record adjusted EBITDA of $3.8 million in 2021, a significant improvement from the prior year.

Negative

• One-time non-cash charges of $24 million related to the deconsolidation of BIGtoken.
• Management distractions due to the BIGtoken transaction may have impacted overall results.

LOS ANGELES, June 06, 2022 (GLOBE NEWSWIRE) -- SRAX, Inc. (NASDAQ: SRAX), a financial technology company that unlocks data and insights for publicly traded companies through Sequire, its SaaS platform, is providing full year financial results.

SRAX exceeded guidance of $31.5M for 2021, with SRAX totaling $28.6 million in revenue, and its former subsidiary, BIGtoken, totaling $3.4 million in revenue. Due to the deconsolidation of BIGtoken as of December 31, 2021, the following full year earnings report includes BIGtoken’s results from operations as discontinued operations. Due to an increase in bookings, SRAX is providing guidance of $47M-$50M for 2022.

Financial Highlights

• SRAX generated record annual revenue of $28.6 million in 2021, up 336% from 2020.
• Record quarterly SRAX revenue in Q4 of $9.6 million, up 27% from Q3 and 170% over prior year period
• Record GAAP Operating income of $2 million in 2021 versus a loss of $7 million in 2020, up $9 million year-over-year on an as reported basis
• Record Adjusted EBITDA of $3.8 million in 2021 versus a loss of $2 million in 2020, up $5.8 million or 287% versus prior year.
• Repurchased approximately $0.9 million of common stock.
• One time non-cash charges of $24 million, attributable to the deconsolidation of BIGtoken.

Q4 Financial Highlights

• In the fourth quarter of 2021, SRAX reported Sequire revenue of $9.6 million, up 27% from the prior quarter and 170% over the year-ago period. The strong growth in Sequire revenues were the result of continued adoption of the Sequire Platform.
• Employee related costs in the fourth quarter of 2021 were $2.2 million, or 23.3% of revenues. This was an improvement from the third quarter of 25.3% and 64.5% in the year-ago period.
• Sales and marketing costs were $2.1 million in the fourth quarter of 2021 versus $1.7 million in the prior quarter and $0.5 million in the year-ago period. The increase in sales and marketing costs were driven by increased marketing spend to promote our offerings.
• General and administrative expenses increased to $2.5 million in the third quarter of 2021, up from $1.6 million in the prior quarter and $0.5 million in the year-ago period. The increase in general and administrative expenses were a result of infrastructure needed to accommodate our growth.

“Not only was 2021 a record revenue and growth year for SRAX, it was also a transformational year for us and we were able to successfully meet our 2 main objectives for the year:

1) Continue to grow our highly profitable Sequire business and

2) Deconsolidate BIGtoken

The numbers we will report in our next report for Q1 2022 will not include any BIGtoken noise and we hope will make it easier for the investment community to appreciate the exciting business we have built at Sequire,” said Christopher Miglino, Founder and CEO of SRAX.

“While we are very proud of our results for FY 2021, we appreciate that the reported results include large, non-recurring, non-cash charges totaling $24 million for BIGtoken as we move the asset to discontinued operations. However, we believe that analyzing our revenue and adjusted EBITDA for the year will give investors a better perspective of the health and opportunities for our business. For 2021 we reported revenue growth of 336% and EBITDA of $3.8 million.

Q4 2021 results reflected another strong quarter with revenue of $9.6 million and adjusted EBITDA of $0.9 million. While these results exceed our expectations, we believe the figures would have been even better had management not been distracted by the BIGtoken transaction and had the company not been required to incur certain expenses related to the BIGtoken transaction.

Despite the turbulence in the stock market, our business remains very strong with record weekly bookings taking place in Q2 of 2022. Our customers remain excited about the value proposition Sequire offers and our backlog remains stronger than ever giving us strong visibility into our results. For Q1 2022, we expect revenue to be approximately $11.5 million, which would be our highest quarter ever. For full year 2022, we expect revenue to be $47-50 million,” added Christopher Miglino.

Business Highlights For 2021

• Deconsolidated BIGtoken following BIGtoken and BritePool merger
• Launched VIRA™, the Virtual Investor Relations Assistant and AI solution specially designed to support Sequire user communication with the investment community
• Launched Microcaps.com, an editorial content and curated news distribution site, which sees substantial growth averaging 250,000 unique monthly visitors
• Hosted 10 Virtual Conferences
• Integrated short interest data into the Sequire platform in the new Short Interest Data Feature
• Launched Shelf Registration Feature, which combines data and technology to provide actionable insights to public companies in regards to their shelf availability
• Teamed up with Zoom Video Communications, Inc. to further integrate Zoom with the Sequire Audience Feature
• Added the 1x1 Meeting Feature to the Sequire platform, allowing companies to launch their earnings calls, shareholder meetings, and other customizable webinars through the platform
• Released the Investment Advisor Feature, a search tool to find contact information on individuals who are registered investment advisors
• Launched the Investor Relations Website Feature giving issuers the ability to create and customize their own IR website through the platform

Financial Outlook

• First Quarter 2022 Guidance
  • Revenue is expected to be in the range of $11.5 million representing an increase of 20% over the fourth quarter and 250% over the previous year.

• Full Year 2022 Guidance
  • 2022 Revenue is expected to be in the range of $47 million to $50 million, representing an increase in the range of 65% to 75% versus 2021 revenue of $28.5 million

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 and mysequire.com.

Cautionary Statement Regarding Forward-Looking Information:

This news release contains "forward-looking statements'' made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future, not past, events and may often be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "seek" or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Specific risks and uncertainties that could cause our actual results to differ materially from those expressed in our forward-looking statements include risks inherent in our business, and our need for future capital. Actual results may differ materially from the results anticipated in these forward-looking statements. Additional information on potential factors that could affect our results and other risks and uncertainties are detailed from time to time in SRAX's periodic reports filed with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year ended December 31, 2020, its Quarterly Reports on Form 10-Q as well as and in other reports filed with the SEC. We do not assume any obligation to update any forward-looking statements.

SRAX, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
		As of December 31,			As of December 31,
		2021			2020
Assets
Cash and cash equivalents	$	1,348,000		$	450,000
Accounts receivable		821,000			1,409,000
Prepaid expenses and other current assets		430,000			361,000
Securities held for sale		19,894,000			8,447,000
Designated assets		4,111,000			-
Contract assets		1,282,000
Current assets of discontinued operations		-			1,206,000
Current assets		27,886,000			11,873,000
Notes receivable		935,000			893,000
Property and equipment		114,000			117,000
Intangible assets		1,443,000			1,492,000
Right of use assets		257,000			366,000
Other assets		36,000			2,000
Goodwill		17,906,000			17,906,000
Long-term assets of discontinued operations					6,364,000
Total Assets	$	48,577,000		$	39,013,000
Liabilities and stockholders' equity
Accounts payable and accrued liabilities	$	3,893,000		$	2,708,000
Deferred revenue		17,398,000			4,842,000
Other current liabilities		763,000			3,417,000
Payroll protection loan - current portion		10,000			747,000
OID notes payable - current portion		1,164,000			6,016,000
Preferred stock		4,111,000
Current liabilities for disposal		-			1,305,000
Current liabilities		27,339,000			19,035,000
Right to use liability - long term		114,000			243,000
Payroll protection loan - long term		-			379,000
Deferred Tax Liability		131,000			131,000
Total liabilities		27,584,000			19,788,000
Class A common		26,000			16,000
Additional paid-in capital		51,075,000			69,551,000
Accumulated deficit		(30,108,000	)		(50,342,000	)
Total stockholders' equity		20,993,000			19,225,000
Total liabilities and stockholders' equity	$	48,577,000		$	39,013,000

SRAX Inc.
Condensed Consolidated Statement of Cash Flows (Unaudited)
(Unaudited)
in dollars		FY 2021			FY 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(39,728,000	)	$	(14,705,000	)
Less: discontinued operations, net of tax		(23,808,000	)		(4,641,000	)
Income (loss) from discontinued operations, net of tax		(15,920,000	)		(10,064,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		919,000			772,000
Stock based compensation		1,006,000			1,615,000
Change in fair value of marketable securities, net		11,038,000			(945,000	)
Forgiveness of payroll protection program loan
Stock based compensation		(1,167,000	)		1,615,000
Other, net		7,157,000			529,000
Changes in operating assets and liabilities, net of discontinued operations		(18,827,000	)		(2,676,000	)
Net cash used in continuing operations		(15,794,000	)		(9,154,000	)
Net cash used in discontinued operations		(8,118,000	)		(4,335,000	)
Net Cash Used in Operating Activities		(23,912,000	)		(13,489,000	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of securities held for sale		8,627,000			519,000
Purchases of marketable securities		(934,000	)		-
Proceeds from sale of TI Health, net		-			7,000,000
Acquisition of LD Micro, net		(3,004,000	)		(697,000	)
Development of software		(798,000	)		(633,000	)
Other assets, net		(102,000	)		32,000
Net cash from continuing operations		3,789,000			6,221,000
Net cash from discontinued operations		917,000			(175,000	)
Net Cash Provided (Used) by Investing Activities		3,789,000			6,221,000
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from payroll protection program					1,084,000
Proceeds from the issuance of notes payable, net					6,778,000
Proceeds from the sale of common stock units		284,000
Proceeds from the exercise of warrants		15,952,000
Due from prior subsidiary		(793,000	)
Net cash from continuing operations		15,443,000			7,862,000
Net cash from discontinued operations		4,736,000
Net Cash Provided by Financing Activities		20,179,000			7,862,000
Net increase (decrease) in Cash from continuing operations		3,438,000			4,929,000
Net increase (decrease) in Cash from discontinued operations		(2,465,000	)		(4,510,000	)
Cash, Beginning of Period		451,000			32,000
Cash, End of Period	$	1,424,000		$	451,000
Less: Cash from discontinued operations		76,000			1,000
Cash from continuing operations		1,348,000			450,000

SRAX Inc.
Quarterly Operating Results (Unaudited)
(Unaudited)												Q/Q				Y/Y
	Q4-2020		Ql-2021		Q2-2021		Q3-2021		Q4-2021			$ CHG		% CHG		$ CHG		% CHG		FY-2021		FY-2020			$ CHG		% CHG
REVENUE
Total revenues	3,554,000		4,587,000		6,828,000		7,548,000		9,587,000			2,039,000		27%		6,033,000		170%		28,550,000		6,479,000			22,071,000		341%
COSTS AND EXPENSES
Total cost of revenues	892,000		1,377,000		1,218,000		1,597,000		2,102,000			505,000		32%		1,210,000		136%		6,294,000		1,789,000			4,505,000		252%
Employee related costs	2,292,000		1,550,000		1,891,000		1,906,000		2,230,000			324,000		17%		(62,000	)	-3%		7,577,000		4,683,000			2,894,000		62%
Marketing and selling expenses	550,000		994,000		1,547,000		1,703,000		2,068,000			365,000		21%		1,518,000		276%		6,312,000		1,717,000			4,595,000		268%
Platform Costs	341,000		20,000		31,000		54,000		109,000			55,000		102%		(232,000	)	-68%		214,000		960,000			(746,000	)	-78%
Depreciation and amortization	238,000		242,000		233,000		235,000		132,000			(103,000	)	-44%		(106,000	)	-45%		842,000		772,000			70,000		9%
General selling general and administrative	453,000		1,164,000		137,000		1,592,000		2,463,000			871,000		55%		2,010,000		444%		5,356,000		3,590,000			1,766,000		49%
Total costs and expenses	4,766,000		5,347,000		5,057,000		7,087,000		9,104,000			2,017,000		28%		4,338,000		91%		26,595,000		13,511,000			13,084,000		97%
(LOSS) INCOME FROM OPERATIONS	(1,212,000	)	(760,000	)	1,771,000		461,000		483,000			22,000		5%		1,695,000		140%		1,955,000		(7,032,000	)		8,987,000		128%
Financing Costs, net	(6,810,000	)	(760,000	)	(297,000	)	(518,000	)	(188,000	)		330,000		64%		6,622,000		97%		(10,253,000	)	(12,150,000	)		1,897,000		16%
Gain on sale of investment in TI-Health	7,873,000		-		-		-		-			-		0%		(7,873,000	)	-100%				7,873,000			(7,873,000	)	-100%
Gain (loss) on marketable securities	1,158,000		4,507,000		(4,561,000	)	(3,632,000	)	(5,076,000	)		(1,444,000	)	-40%		(6,234,000	)	-538%		(8,762,000	)	945,000			(9,707,000	)	-1027%
Other income	(8,000	)	15,000		8,000				(1,000	)		(1,000	)	n/a		7,000		88%		1,144,000					1,144,000		100%
Change in fair value of derivative liabilities			(9,265,000	)	(305,000	)			-			-		0%		-		0%				321,000			(321,000	)	-100%
(LOSS) INCOME BEFORE INCOME TAXES	1,001,000		(6,263,000	)	(3,384,000	)	(3,689,000	)	(4,782,000	)		(1,093,000	)	-30%		(5,783,000	)	-578%		(15,916,000	)	(10,043,000	)		(5,873,000	)	-58%
Provision for income taxes			14,000		-		-		-			-		0%		-		0%		(4,000	)	(21,000	)		17,000		81%
INCOME (LOSS) FROM CONTINUING OPERATIONS	1,001,000		(6,249,000	)	(3,384,000	)	(3,689,000	)	(4,782,000	)		(1,093,000	)	-30%		(5,783,000	)	-578%		(15,920,000	)	(10,064,000	)		(5,856,000	)	-58%
Discontinued Operations
Loss before income tax benefits	(783,000	)	(1,521,000	)	(1,985,000	)	(2,029,000	)	(8,841,000	)		(6,812,000	)	-336%		(8,058,000	)	-1029		(14,376,000	)	(4,641,000	)		(9,735,000	)	-210%
Loss on disposal of subsidiary									(9,432,000	)		(9,432,000	)	n/a		(9,432,000	)	n/a		(9,432,000	)				(9,432,000	)	n/a
Income tax benefit												-		0%		-		0%							-		0%
(LOSS) FROM DISCONTINUED OPERATIONS	(783,000	)	(1,521,000	)	(1,985,000	)	(2,029,000	)	(18,273,000	)		(16,244,000	)	-801%		(17,490,000	)	-2234%		(23,808,000	)	(4,641,000	)		(19,167,000	)	-413%
NET LOSS	218,000		(7,770,000	)	(5,369,000	)	(5,718,000	)	(23,055,000	)		(17,337,000	)	-303%		(23,273,000	)	-10676%		(39,728,000	)	(14,705,000	)		(25,023,000	)	-170%
	-		845,000		272,000		774,000		3,515,000			2,741,000		354%		3,515,000		100%		5,406,000		-			5,406,000		100%
NET LOSS ATTRIBUTABLE TO SRAX, INC.	218,000		(6,925,000	)	(5,097,000	)	(4,944,000	)	(19,540,000	)		(14,596,000	)	-295%		(19,758,000	)	-9063%		(34,322,000	)	(14,705,000	)		(19,617,000	)	-133%
BASIC AND DILUTED INCOME (LOSS) PER SHARE
Continuing operations	0.07		(0.32	)	(0.14	)	(0.16	)	(0.20	)		(0.04	)	-25%		(0.27	)	-397%		(0.68	)	(0.69	)		0.01		2%
Discontinued operations	(0.05	)	(0.08	)	(0.08	)	(0.09	)	(0.78	)		(0.69	)	-768%		(0.72	)	-1352%		(1.01	)	(0.32	)		(0.69	)	-219%
NET INCOME / (LOSS) PER SHARE, BASIC AND DILUTED	0.01		(0.40	)	(0.26	)	(0.25	)	(0.98	)		(0.73	)	-289%		(0.99	)	-6679%		(1.69	)	(1.00	)		(0.68	)	-68%
Weighted average shares used in computing net (loss) income per share of common stock, basic and diluted	14,649,788		19,411,519		23,631,449		22,707,446		23,550,744			843,298		4%		8,900,955		61%		23,550,744		14,649,788			8,900,956		61%

 

SRAX Inc.
Reconciliation of GAAP to non-GAAP information (Unaudited)
In dollars		FY 2021			FY 2020			$ CHG		% CHG
Net (loss) income attributable to common stockholders (GAAP)		(34,322,000	)		(14,705,000	)		(19,617,000	)	-133%
Financing costs, net		10,253,000			12,150,000			(1,897,000	)	-16%
Gain (loss) on marketable securities		8,762,000			(945,000	)		9,707,000		1027%
Other (expense) income		(1,144,000	)		-			(1,144,000	)	n/a
Gain on sale of equity investment in TI-Health		-			(7,873,000	)		7,873,000		100%
Adjustment to fair value of derivative		-			(321,000	)		321,000		100%
Loss from discontinued operations		14,376,000			4,641,000			9,735,000		210%
Loss attributable to non-controlling interest in discontinued operations		(5,406,000	)					(5,406,000	)	n/a
Loss on disposal of discontinued operations		9,432,000						9,432,000		100%
Provision for income taxes		4,000			21,000			(17,000	)	-81%
Operating (loss) income (GAAP)		1,955,000			(7,032,000	)		8,987,000		128%
Depreciation and amortization		842,000			772,000			70,000		9%
Stock-based compensation expense		1,007,000			524,000			483,000		92%
Adjusted EBITDA (non-GAAP)		3,804,000			(2,031,000	)		5,835,000		287%
BIGtoken - Discontinued Operations
Revenues		3,431,000			2,168,000			(2,168,000	)	58%
Costs of sales		(1,090,000	)		(800,000	)		800,000		-36%
Operating Expenses		(9,587,000	)		(5,933,000	)		5,933,000		-62%
Other (loss) income		(7,130,000	)		(76,000	)		76,000		-9282%
Net (loss) income		(14,376,000	)		(4,641,000	)		4,641,000		-210%

FAQ

What were SRAX's financial results for 2021?

SRAX reported $28.6 million in revenue for 2021, a 336% increase from 2020.

What is SRAX's revenue guidance for 2022?

SRAX expects revenue between $47 million and $50 million for 2022.

How did SRAX perform in Q4 2021?

In Q4 2021, SRAX achieved a revenue of $9.6 million, up 27% from Q3 and 170% year-over-year.

What were the key highlights for SRAX in 2021?

Key highlights include record revenue growth, successful launch of new features, and strong customer engagement.

What impact did BIGtoken have on SRAX's financials?

BIGtoken's deconsolidation resulted in a $24 million non-cash charge but allowed SRAX to focus on its Sequire platform.