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Press release content from Business Wire. The AP news staff was not involved in its creation.

SRAX Reports Continued Revenue Growth in Q2 2021 and Increases Full-Year Guidance

August 16, 2021 GMT

LOS ANGELES--(BUSINESS WIRE)--Aug 16, 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 Q2 of 2021 today, August 16th, 2021.

Second Quarter 2021 and Recent Operational Highlights and Guidance

  • Revenue for Q2 of $7.7M up 557% year-over-year, 41% sequentially quarter-over-quarter, exceeding previous guidance of $7M.
  • Full-year revenue guidance increased from $25M - $27M to $30M - $32M
  • Sequire bookings of $11.4M for Q2
  • 10 consecutive quarters of Sequire SaaS growth
  • Currently holding approximately $29M worth of marketable securities
  • 225 public companies/partners have subscribed to Sequire, up 25 since our Q1 release
  • Sequire revenue to be recognized from existing contracts in 2021: $23.6M as of this release.
  • Third Quarter revenue guidance of $8.3M

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SRAX less BIGtoken, Three months ended June 30, 2021

  • Total Revenue was $7.1M, an increase of 803% as compared to the same period last year and an increase of 49% sequentially quarter-over-quarter.
  • Gross Margin was 83% as compared to 97% in the same period last year.
  • Operating Expenses were $5M as compared to $2.8M in the same period last year.
  • EBITDA of $1.4M for an increase of $3M vs. ($1.6M) in Q1 2020, and a sequential quarter-over-quarter increase of $850k or 150% vs. Q1 2021

Three months ended June 30, 2021

  • Total Revenue was $7.7M, an increase of 557% as compared to the same period last year and an increase of 41% sequentially quarter-over-quarter .
  • Gross Margin was 81% as compared to 65% in the same period last year.
  • Operating Expenses were $7.3M as compared to $4.0M in the same period last year.
  • EBITDA increase of $2.2M, ($440K) vs ($2.6M) in Q2 2020  and an sequential quarter-over-quarter increase of $400k vs.($822K) Q1 2021

Video Call:

SRAX’s Founder and CEO Christopher Miglino, and CFO Michael Malone will provide an operational and financial summary of Q2 2021 on a video call, with a live question and answer session, on Monday, August 16th, at 4:30 pm ET / 1:30 pm PT.

To register for the live webcast and view the presentation, please sign up here: https://srax-earnings-q2.mysequire.com

To access the conference by phone:

Dial in US +1 3462487799 | Meeting ID: 93255970733 | Passcode: 163778

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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, 2019, 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.

SRAX SEGMENT OPERATING RESULTS
 

2Q 2021

 

1H 2021

SEGMENT 

(Dollars,

except GM%)

 

YoY $

Growth

 

YoY %

Growth

 

(Dollars,

except GM%)

 

YoY $

Growth

 

YoY %

Growth

       
Sequire 

7,160,000

 

 

6,370,000

 

 

806

%

 

11,420,000

 

 

10,470,000

 

 

1102

%

BIGtoken 

850,000

 

 

470,000

 

 

124

%

 

1,700,000

 

 

1,130,000

 

 

198

%

Other / Elim 

(330,000

)

 

(330,000

)

 

n/a

 

 

(660,000

)

 

(660,000

)

 

n/a

 

Revenue 

7,680,000

 

 

6,510,000

 

 

872

%

 

12,460,000

 

 

10,940,000

 

 

720

%

      
Sequire 

5,940,000

 

 

5,170,000

 

 

671

%

 

8,820,000

 

 

7,810,000

 

 

773

%

BIGToken 

620,000

 

 

410,000

 

 

195

%

 

1,200,000

 

 

890,000

 

 

287

%

Other / Elim 

(330,000

)

 

(330,000

)

 

n/a

 

 

(660,000

)

 

(660,000

)

 

n/a

 

Gross margin 

6,230,000

 

 

5,250,000

 

 

709

%

 

9,360,000

 

 

8,040,000

 

 

609

%

Gross margin percentage 

81

%

 

81

%

  

75

%

 

73

%

 
       
Sequire 

1,400,000

 

 

2,970,000

 

 

n/a

 

 

1,962,000

 

 

4,943,000

 

 

n/a

 

BIGToken 

(1,840,000

)

 

(990,000

)

 

n/a

 

 

(3,224,000

)

 

(668,000

)

 

n/a

 

Other / Elim 

-

 

 

-

 

 

n/a

 

 

-

 

 

-

 

 

n/a

 

Adjusted EBITDA 

(440,000

)

 

1,980,000

 

 

n/a

 

 

(1,262,000

)

 

4,275,000

 

 

n/a

 

       
CONSOLIDATED STATEMENT OF OPERATIONS
 For the Six Months Ended June 30,
 

2021

 

2020

   
Revenues 

$

13,119,000

 

 

$

1,516,000

 

Cost of revenues 

3,103,000

 

 

508,000

 

Gross profit 

10,016,000

 

 

1,008,000

 

 

76.35

 

 
   
Employee related costs 

5,143,000

 

 

4,249,000

 

Marketing and selling expenses 

3,030,000

 

 

690,000

 

Platform Costs 

218,000

 

 

258,000

 

Depreciation and amortization 

756,000

 

 

630,000

 

General and administrative 

3,364,000

 

 

2,304,000

 

 

12,511,000

 

 

8,131,000

 

   
Loss from operations 

(2,495,000

)

 

(7,123,000

)

   
Other income (expense)  
Interest income 

23,000

 

 
Financing Costs 

(15,430,000

)

 

(2,038,000

)

Gain (loss) from marketable securities 

(68,000

)

 

516,000

 

Other income 

14,000

 

 
Change in fair value of derivative liabilities 

-

 

 

321,000

 

Total other income (loss) 

(15,461,000

)

 

(1,201,000

)

   
Loss before provision for income taxes 

(17,956,000

)

 

(8,324,000

)

   
Provision for income taxes 

-

 

 

-

 

Net income (loss) 

(17,956,000

)

 

(8,324,000

)

Net (income) loss attributable to noncontrolling interest 

1,126,000

 

 

-

 

Net income attributable to SRAX, Inc. 

$

(16,830,000

)

 

$

(8,324,000

)

   
   
Net income / ( loss) per share, basic and diluted 

$

(0.78

)

 $

(0.59

)

   
Weighted average shares outstanding - basic and diluted

21,533,141

 

 

14,038,940

 

   
CONSOLIDATED BALANCE SHEET
 

As of June 30,

 

As of December 31,

 

2021

 

2020

Assets  
Cash and cash equivalents 

$

10,060,000

 

 

$

451,000

 

Accounts receivable 

2,172,000

 

 

2,608,000

 

Prepaid expenses 

1,125,000

 

 

367,000

 

Securities held for sale 

24,130,000

 

 

8,447,000

 

Current assets 

37,487,000

 

 

11,873,000

 

   
Notes receivable 

917,000

 

 

893,000

 

Property and equipment 

161,000

 

 

118,000

 

Intangible assets 

2,046,000

 

 

2,409,000

 

Right of use assets 

314,000

 

 

366,000

 

Other assets 

36,000

 

 

3,000

 

Goodwill 

23,351,000

 

 

23,351,000

 

Total Assets 

$

64,312,000

 

 

$

39,013,000

 

   
Liabilities and stockholders' equity  
Accounts payable and accrued liabilities 

$

3,328,000

 

 

$

3,561,000

 

Other current liabilities 

1,408,000

 

 

3,869,000

 

Deferred revenue 

13,186,000

 

 

4,842,000

 

Payroll protection loan - current portion 

1,126,000

 

 

747,000

 

OID notes payable - current portion 

2,701,000

 

 

6,016,000

 

Current liabilities 

21,749,000

 

 

19,035,000

 

   
Right to use liability - long term 

182,000

 

 

243,000

 

Payroll protection loan - long term  

379,000

 

Deferred Tax Liability 

131,000

 

 

131,000

 

Total liabilities 

22,062,000

 

 

19,788,000

 

   
Preferred stock  

-

 

Class A common 

24,000

 

 

16,000

 

Additional paid-in capital 

98,014,000

 

 

69,551,000

 

Accumulated deficit 

(67,172,000

)

 

(50,342,000

)

Total SRAX shareholders' equity 

30,866,000

 

 

19,225,000

 

Non-controlling interest 

11,384,000

 

 

-

 

Total stockholders' equity 

42,250,000

 

 

19,225,000

 

Total liabilities and stockholders' equity 

$

64,312,000

 

 

$

39,013,000

 

  
 

-

 

 

-

 

   
Working Capital 

15,738,000

 

 

(7,162,000

)

   
CONSOLIDATED BALANCE SHEET

Common Stock

    
Shares Amount 

Additional

Paid-in

Capital

 

Non Controlling

Interest

 

Accumulated

Deficit

 

Stockholders'

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 warrant exercise, net of offering costs

4,945,320

 

5,000

 

12,215,000

   

12,220,000

 

Shares issued for cash

53,616

 

-

 

284,000

   

284,000

 

Conversions

2,041,551

 

2,000

 

3,445,000

   

3,447,000

 

Warrants issued as inducement to exercise warrants  

7,737,000

   

7,737,000

 

Warrants issued by FVPD for SRAX, Inc. debenture holders   

885,000

 

  

885,000

 

Beneficial conversion feature FPVD series B convertible preferred stock    

5,775,000

 

  

5,775,000

 

Series B convertible preferred stock issued by FPVD   

5,775,000

 

  

5,775,000

 

Acquisition of noncontrolling interest   

(95,000

)

  

(95,000

)

Net Income (Loss)   

(854,000

)

 

(11,090,000

)

 

(11,944,000

)

Balance, March 31, 2021

23,186,265

 

23,000

 

93,485,000

 

11,486,000

 

 

(61,432,000

)

 

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 warrant exercise, net of offering costs

1,310,198

 

1,000

 

3,575,000

   

3,576,000

 

Beneficial conversion feature FPVD series B convertible preferred stock    

85,000

 

  

85,000

 

Series B convertible preferred stock issued by FPVD   

85,000

 

  

85,000

 

Net Income (Loss)   

(272,000

)

 

(5,740,000

)

 

(6,012,000

)

Balance, June 30, 2021

24,846,463

 

24,000

 

98,014,000

 

11,384,000

 

 

(67,172,000

)

 

42,250,000

 

24,846,463

 

24,000

 

98,014,000

 

11,384,000

 

 

(67,172,000

)

 

42,250,000

 

      
Common Stock    
Shares Amount 

Additional

Paid-in

Capital

 

Accumulated

Deficit

 

Stockholders'

Equity

 
      
Balance, December 31, 2019

13,997,452

 $

14,000

 $

48,129,000

 $

(35,637,000

)

 $

12,506,000

 

 
Share based compensation

-

 

-

 

260,000

 

-

 

 

260,000

 

 
Relative fair value of warrants issued with notes payable

-

 

-

 

83,000

 

-

 

 

83,000

 

 
Shares issued for extension agreement

36,700

 

-

 

71,000

 

-

 

 

71,000

 

 
Net loss   

(3,003,000

)

 

(3,003,000

)

 
Balance, March 31, 2020

14,034,152

 

14,000

 

48,543,000

 

(38,640,000

)

 

9,917,000

 

 
Share based compensation  

246,000

  

246,000

 

 
Reclassification of warrants from liability to equity

-

 

-

 

4,076,000

 

-

 

 

4,076,000

 

 
Shares issued for debt extinguishment

100,000

 

-

 

181,000

 

-

 

 

181,000

 

 
Premium on debt extinguishment

-

 

-

 

46,000

 

-

 

 

46,000

 

 
Beneficial conversion feature

-

 

-

 

3,913,000

 

-

 

 

3,913,000

 

 
Relative fair value of warrants issued with notes payable  

2,889,000

  

2,889,000

 

 
Net loss

-

 

-

 

-

 

(5,321,000

)

 

(5,321,000

)

 
Balance, June 30, 2020

14,134,152

 $

14,000

 $

59,894,000

 

(43,961,000

)

 $

15,947,000

 

 
Checking     
Per June 2020 1Q

14,134,152

 

14,000

 

59,894,000

 

(43,961,000

)

 

15,947,000

 

 
Difference     
      
CONSOLIDATED STATEMENT OF CASH FLOWS
 For the Six Months Ended June 30,
 

2021

 

2020

   
Cash Flows From Operating Activities  
Net Loss $

(17,956,000

)

 $

(8,324,000

)

Adjustments to reconcile net loss to net cash used in operating activities:  
Interest income 

(24,000

)

 
Unrealized loss (gain) on Securities held for sale 

878,000

 

 

(140,000

)

Realized loss (gain) on Securities held for sale 

(810,000

)

 

(376,000

)

Warrants issued by FVPD for SRAX, Inc. debenture holders 

885,000

 

 
Stock-based compensation 

506,000

 

 

506,000

 

Amortization of debt issue costs 

686,000

 

 

453,000

 

Loss on extinguishment of debt  

1,103,000

 

Recognition of beneficial conversion feature - FPVD preferred B 

5,860,000

 

 
Warrant inducement charge 

7,737,000

 

 
Change in fair value of derivative liabilities  

(321,000

)

Marketable securities received for accounts receivable previously written off 

(409,000

)

 
Provision for bad debts 

79,000

 

 

41,000

 

Depreciation expense 

39,000

 

 

38,000

 

Amortization of intangibles 

717,000

 

 

592,000

 

Non-cash financing expense 

147,000

 

 
Change in right of use of asset 

52,000

 

 
Changes in operating assets and liabilities  
Accounts receivable 

766,000

 

 

117,000

 

Prepaid expenses 

(757,000

)

 

352,000

 

Marketable securities 

-

 

 
Other current assets 

(1,000

)

 

95,000

 

Accounts payable and accrued expenses 

(233,000

)

 

1,527,000

 

Other current liabilities 

(10,754,000

)

 

(354,000

)

Change in right of use liability 

(61,000

)

 

(43,000

)

Net Cash Used in Operating Activities 

(12,789,000

)

 

(4,734,000

)

   
Cash Flows From Investing Activities  
Available for Sale Securities 

2,890,000

 

 

397,000

 

Deferred payments to LD Micro 

(2,004,000

)

 
Net cash received from acquisition of FPVD 

955,000

 

 
Acquisition of P& E 

(82,000

)

 

-

 

Development of software 

(354,000

)

 

(575,000

)

Other assets 

(33,000

)

 

3,000

 

Net Cash Used by Investing Activities 

1,508,000

 

 

(175,000

)

   
Cash Flows From Financing Activities  
Proceeds from issuance of notes payable less issuance costs  

8,415,000

 

Proceeds from payroll protection program  

1,074,000

 

Issuance of Preferred Stocks 

4,810,000

 

 
Proceeds from issuance of shares 

284,000

 

 
Proceeds from the exercise of warrants 

15,796,000

 

 
Net Cash Provided by Financing Activities 

20,890,000

 

 

9,489,000

 

   
Net increase (decrease) in Cash 

9,609,000

 

 

4,580,000

 

   
Cash, Beginning of Period 

451,000

 

 

32,000

 

Cash, End of Period $

10,060,000

 

 $

4,612,000

 

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

14,000

 

 $

52,000

 

Cash paid for income taxes $

-

 

 $

-

 

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

6,422,000

 

 $
Fair value of marketable securities received for revenue contracts $

18,641,000

 

 $
Vesting of prepaid common stock award $ $

94,000

 

Relative fair value of warrants issued with term loan $ $

83,000

 

Shares of common stock issued for extension agreement $ $

71,000

 

   
NON-GAAP TO GAAP RECONCILIATIONS
Three months ended June 30,Six months ended June 30,

2021

 

2020

2021

 

2020

Consolidated  
   
Operating Income

$

(1,040,000

)

 

$

(3,248,000

)

$

(2,495,000

)

 

$

(7,123,000

)

Depreciation and Amortization

 

347,000

 

 

 

321,000

 

 

727,000

 

 

 

630,000

 

Stock-based compensation expense

 

253,000

 

 

 

294,000

 

 

506,000

 

 

 

648,000

 

Adjusted EBITDA

 

(440,000

)

 

 

(2,633,000

)

 

(1,262,000

)

 

 

(5,845,000

)

   
SRAX  
   
Operating Income

 

939,000

 

 

 

(2,007,000

)

 

1,011,000

 

 

 

(3,773,000

)

Depreciation and Amortization

 

208,000

 

 

 

192,000

 

 

445,000

 

 

 

381,000

 

Stock-based compensation expense

 

253,000

 

 

 

245,000

 

 

506,000

 

 

 

411,000

 

Adjusted EBITDA

 

1,400,000

 

 

 

(1,570,000

)

 

1,962,000

 

 

 

(2,981,000

)

   
BIGToken  
   
Operating Income

 

(1,979,000

)

 

 

(1,028,000

)

 

(3,506,000

)

 

 

(3,042,000

)

Depreciation and Amortization

 

139,000

 

 

 

129,000

 

 

282,000

 

 

 

249,000

 

Stock-based compensation expense

 

-

 

 

 

49,000

 

 

-

 

 

 

237,000

 

Adjusted EBITDA

 

(1,840,000

)

 

 

(850,000

)

 

(3,224,000

)

 

 

(2,556,000

)

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20210816005242/en/

CONTACT: Bri Kelvin

investors@srax.com

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: OTHER PROFESSIONAL SERVICES SOFTWARE INTERNET FINANCE DATA MANAGEMENT PROFESSIONAL SERVICES TECHNOLOGY OTHER TECHNOLOGY

SOURCE: SRAX, Inc.

Copyright Business Wire 2021.

PUB: 08/16/2021 09:00 AM/DISC: 08/16/2021 09:02 AM

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