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

November 15, 2021 at 15:00 PM EST

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’
		Common Stock				paid-in			Accumulated			Noncontrolling			Stockholders’
		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

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

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