SRAX Reports Record Full Year and Q4 2021 Financial 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 SRAXSRAX (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% | ||||
Contact Bri Kelvin [email protected]
