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SRAX REPORTS Positive Net Income for Q4 2020 and Increases Guidance

SRAX

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 Q4 of 2020 today, March 29th, 2021.

Fourth Quarter 2020 and Recent Operational Highlights and Guidance

  • Revenue for Q4 of $4.5M up 316% year-over-year, 74% sequentially quarter-over-quarter, exceeding previous guidance.
  • Full-year revenue guidance increased from $17M - $18M to $23M - $25M
  • Sequire bookings of $4.8M and $10M for Q4 and 1Q, respectively
  • 8 consecutive quarters of Sequire SAAS growth
  • Currently holding approximately $23.8M worth of publicly listed securities
  • 183 public companies/partners have subscribed to Sequire, up 92 since our Q3 release
  • Sold position in TI Health (SRAXmd) for $8M
  • Sequire revenue to be recognized from existing contracts in 2021: $16.5M as of this release.
  • Second Quarter revenue guidance of $7M
  • BIGtoken share exchange completed. BIGtoken now listed under TICKER:FPVD

Three months ended December 31, 2020

  • Total Revenue was $4.5M, an increase of 316% as compared to the same period in prior year.
  • Gross Margin was 73%, as compared to 44% in the same period last year.
  • Operating Expenses were $5.3M as compared to $4.8m in the same period last year.
  • EBITDA increase of $3M, ($739K) vs ($3.7M) in Q4 2019
  • SRAX less BIGtoken Pro forma EBITDA of $255K as compared to ($500K)
  • Net Income of $200K compared to Net loss of $4.4M in the same period last year.

Full Year Ended December 31, 2020

  • Total Revenue was $8.7M, an increase of 141% as compared to the same period in prior year.
  • Gross Margin was 70%, as compared to 53% in the same period last year.
  • Operating Expenses were $17.7, a decrease of $2.1M, or 11% as compared to the same period last year.
  • EBITDA was -$8.4M as compared to -$15.5M last year.
  • Net Income was -$14.7M compared to -$16.9M in the same period last year.

“We are making great progress with our platform and we are seeing continued adoption of the products that we are building for issuers. We had another record quarter of bookings for Sequire. In the first quarter of 2021 we have closed over $10 million in contracts. This momentum is not slowing down and we are growing the business to accommodate this demand,” said Christopher Miglino, Founder and CEO of SRAX. “Our team did an amazing job in delivering a number of cutting-edge technological improvements to the platform and they have laid the foundation for some amazing enhancements that we will bring to market throughout the rest of this year. I could not be more proud of the hard work and dedication that the team has demonstrated as our sales continue to skyrocket,” added Miglino.

Video Call:

Management will review the results on a video call, with a live question and answer session, March 29th, 2021 at 1:30 pm PT/4:30 pm ET.

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

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 the BIGtoken carved-out entity.

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:

For the Three Months Ended December 31, (Unaudited)

Sequire

BIGToken

Corporate and Other

Consolidated

2020

2019

2020

2019

2020

2019

2020

2019

Sequire platform revenue

2,970,000

46,000

-

-

-

-

2,970,000

$

46,000

Conference revenue

506,000

-

-

-

-

-

506,000

-

BIGtoken revenue

-

-

996,000

987,000

-

-

996,000

987,000

Other

-

-

-

-

52,000

55,000

52,000

55,000

Total Revenue

3,476,000

46,000

996,000

987,000

52,000

55,000

4,524,000

1,088,000

Cost of Revenue

888,000

7000

309,000

600,000

5,000

-2,000

1,202,000

605,000

Gross profit

2,588,000

39,000

687,000

387,000

47,000

57,000

3,322,000

483,000

margin %

74.5

%

84.8

%

69.0

%

39.2

%

90.4

%

103.6

%

73.4

%

44.4

%

Operating expenses

1,501,000

174,000

1,444,000

2,471,000

2,394,000

2,114,000

5,339,000

4,759,000

Operating Income $

1,087,000

-135,000

-757,000

-2,084,000

-2,347,000

-2,057,000

-2,017,000

-4,276,000

Year ended December 31, (Unaudited)

Sequire

BIGToken

Corporate and Other

Consolidated

2020

2019

2020

2019

2020

2019

2020

2019

Sequire platform revenue

5,781,000

87,000

-

-

-

-

5,781,000

$

87,000

Conference revenue

503,000

-

-

-

-

-

503,000

-

BIGtoken revenue

-

-

2,140,000

3,228,000

-

-

2,140,000

3,228,000

Other

-

-

-

-

223,000

268,000

223,000

268,000

Total Revenue

6,284,000

87,000

2,140,000

3,228,000

223,000

268,000

8,647,000

3,583,000

Cost of Revenue

1,783,000

7,000

800,000

1,613,000

6,000

61,000

2,589,000

1,681,000

Gross profit

4,501,000

80,000

1,340,000

1,615,000

217,000

207,000

6,058,000

1,902,000

margin %

72

%

92

%

63

%

50

%

97

%

77

%

70

%

53

%

Operating expenses

3,412,000

462,000

5,933,000

10,751,000

8,310,000

8,521,000

17,655,000

19,734,000

Operating Income $

1,089,000

-382,000

-4,593,000

-9,136,000

-8,093,000

-8,314,000

-11,597,000

-17,832,000

SRAX STATEMENT OF OPERATIONS

For the Years Ended December 31, For the Three Months Ended December 31,
(Unaudited)
in $

2020

2019

$ CHG

% CHG

2020

2019

$ CHG

% CHG

REVENUE
Total Revenue $

8,647,000

$

3,584,000

$

5,063,000

141

%

4,522,000

1,087,000

3,435,000

316

%

Cost of revenue

2,589,000

1,680,000

909,000

54

%

1,201,000

605,000

596,000

99

%

GROSS PROFIT

6,058,000

1,904,000

4,154,000

218

%

3,321,000

482,000

2,839,000

589

%

Gross profit margin

70

%

53

%

73

%

44

%

OPERATING EXPENSES
Employee related costs

7,895,000

8,656,000

(761,000

)

-9

%

2,489,000

1,926,000

563,000

29

%

Marketing and selling expenses

2,675,000

2,454,000

221,000

9

%

1,044,000

252,000

792,000

314

%

Platform Costs

1,667,000

1,738,000

(71,000

)

-4

%

486,000

579,000

(93,000

)

-16

%

Depreciation and amortization

1,303,000

1,164,000

139,000

12

%

341,000

330,000

11,000

3

%

General and administrative

4,115,000

5,750,000

(1,635,000

)

-28

%

958,000

1,681,000

(723,000

)

-43

%

Total operating expenses

17,655,000

19,762,000

(2,107,000

)

-11

%

5,318,000

4,768,000

550,000

12

%

LOSS FROM OPERATIONS

(11,597,000

)

(17,858,000

)

6,261,000

-35

%

(1,997,000

)

(4,286,000

)

2,289,000

-53

%

Other income (expense)
Financing Costs

(12,150,000

)

(725,000

)

(11,425,000

)

1576

%

(6,810,000

)

(366,000

)

(6,444,000

)

1761

%

Interest income

9,000

(9,000

)

-100

%

-

9,000

0

%

Gain (loss) on sale of assets

7,873,000

658,000

7,215,000

1097

%

7,873,000

263,000

7,519,000

2859

%

Other gain (loss)

-

-

n/a

(8,000

)

(14,000

)

6,000

-43

%

Exchange gain or loss

12,000

(12,000

)

-100

%

-

354,000

0

%

Gains from marketable securities

874,000

-

874,000

n/a

1,158,000

-

n/a

Change in fair value of derivative liabilities

321,000

1,045,000

(724,000

)

-69

%

-

(345,000

)

345,000

-100

%

Total other income (loss)

(3,082,000

)

999,000

(4,081,000

)

-409

%

2,213,000

(99,000

)

2,312,000

-2335

%

Loss before provision for income taxes

(14,679,000

)

(16,859,000

)

2,180,000

-13

%

216,000

(4,385,000

)

4,601,000

-105

%

Provision for income taxes

(26,000

)

(26,000

)

n/a

(26,000

)

-

(26,000

)

n/a

Net income (loss) $

(14,705,000

)

$

(16,859,000

)

2,154,000

-13

%

190,000

$

(4,385,000

)

4,575,000

-104

%

SRAX BALANCE SHEET

Balance Sheets
(Unaudited)
In dollars 31-Dec-20 31-Dec-19
ASSETS
Current Assets
Cash

451,000

32,000

Accounts receivable, net

2,608,000

805,000

Securities held for sale

367,000

-

Prepaid expense

8,447,000

715,000

Other current assets

-

306,000

Total current assets

11,873,000

1,858,000

Notes receivable

893,000

-

Property and equipment, net

118,000

191,000

Goodwill

23,351,000

15,645,000

Intangible assets, net

2,409,000

1,966,000

Right-of-Use Asset

366,000

456,000

Other assets

3,000

118,000

Total Assets

39,013,000

20,234,000

LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses

3,561,000

2,442,000

Derivative liabilities

-

4,397,000

Other current liabilities

8,711,000

537,000

Payroll protection loan - current portion

747,000

-

OID convertible debentures - current portion

6,016,000

-

Total Current Liabilities

19,035,000

7,376,000

Right-of-Use liability - long term

243,000

352,000

Payroll protection loan, less current portion

379,000

-

OID convertible debentures, less current portion

-

Deffered Tax Liability

131,000

Total Liabilities

19,788,000

7,728,000

Stockholders' equity

19,225,000

12,506,000

Total liabilities and equity

39,013,000

20,234,000

SRAX STATEMENT OF CASH FLOWS

STATEMENT OF CASH FLOWS
(Unaudited)
For the Years Ended December 31,
in dollars

2020

2019

Cash Flows From Operating Activities
Net Cash Used in Operating Activities

(6,489,000)

(15,350,000)

Cash Flows From Investing Activities
Proceeds from the sale of securities held for sale

984,000

Proceeds from sale of SRAXmd, net

-

570,000

Acquisition of LD Micro, net of cash received

(697,000)

(73,000)

Development of software

(1,205,000)

(1,292,000)

Other assets

32,000

Net Cash Used by Investing Activitities

(886,000)

(795,000)

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

13,268,000

Redemption of OID notes payable

(6,980,000)

Proceeds from issuance of short term notes payable less issaunce costs

960,000

Repayment of short term notes payable

(100,000)

Proceeds from payroll protection program

1,084,000

Proceeds from the issuace of notes payable

2,130,000

Repayment of notes payable

(2,500,000)

Proceeds from the sale of common stock units

12,197,000

Proceeds from the exercise of warrants

1,196,000

Net Cash Provided by Financing Activities

7,862,000

13,393,000

Net increase (decrease) in Cash

487,000

(2,752,000)

Cash, Beginning of Period

32,000

2,784,000

Cash, End of Period $

519,000

$

32,000

OPERATING RESULTS SRAX LESS BIGTOKEN

Three months ended December 31, 2020
(Unaudited) CONSOLIDATED SRAX BIGTOKEN CARVE-OUT SRAX - LESS BIGTOKEN CARVE - OUT
($'s)

2020

2019

2020

2019

2020

2019

TOTAL REVENUE

4,524,000

1,088,000

994,000

986,000

3,530,000

102,000

Cost of Revenue

1,202,000

605,000

309,000

600,000

893,000

5,000

Gross Profit

3,322,000

483,000

685,000

386,000

2,637,000

97,000

Margin %

73%

44%

69%

39%

75%

95%

Cash OPEX

4,062,000

4,132,000

1,680,000

3,536,000

2,382,000

596,000

EBITDA

(740,000)

(3,649,000)

(995,000)

(3,150,000)

255,000

(499,000)

Non cash OPEX

1,277,000

627,000

759,000

561,000

518,000

66,000

Operating Income

(2,017,000)

(4,276,000)

685,000

386,000

(2,702,000)

(4,662,000)

Bri Kelvin
investors@srax.com



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