BusinessWire

SRAX Reports 161% Year-Over-Year and 124% Quarter-Over-Quarter Revenue Growth

LOS ANGELES--(BUSINESS WIRE)--$SRAX #earnings--SRAX, Inc. (NASDAQ: SRAX), a financial technology company that unlocks data and insights to publicly traded companies through Sequire, reported results for the three months ended September 30, 2020.



Third Quarter 2020 and Recent Operational Highlights

  • Revenue for Q3 of $2.6M up 161% year-over-year, 124% sequentially quarter-over-quarter
  • Reduced operating expenses by 22% year-over-year for Q3 and 18% year-to-date
  • EBITDA increase of $2.1M, or 53%, vs Q3 2019
  • Sequire segment EBITDA positive in Q3 2020
  • 7 consecutive quarters of Sequire SAAS growth
  • Sequire bookings for the quarter were $6.7M
  • Currently holding approximately $10M worth of publicly listed securities
  • 125 public companies/partners have subscribed to Sequire, up 34 companies since Q2 release, a 37% increase
  • BIGToken share exchange agreement signed – anticipated to move into its own publicly traded company in Q4 (TICKER:FPVD)
  • Completed the acquisition of LD Micro
  • Sold position in TI Health (SRAXmd) for $8M
  • Fourth Quarter revenue guidance of $4M

Third Quarter 2020

  • Total Revenue was $2.6M, an increase of 161% as compared to Q3 2019 and up 124% from Q2 2020.
  • Gross Margin was 66%, as compared to 68% in the same period last year.
  • Operating Expenses were $4.2M, a decrease of $1.2M, or 22% as compared to the same period last year.
  • EBITDA was -$1.9M as compared to -$4M in the same period last year.
  • Net Income was -$6.6M compared to $1.4M in the same period last year. This includes a one-time $3.3M in non-cash financing costs related to our convertible debenture financing, and $800K in non-cash mark-to-market adjustment on our publicly listed securities. The prior year net income includes a $6.3M derivative liability gain on the valuation of our warrants.

Nine Months Ended September 30, 2020

  • Total Revenue was $4.1M, an increase of 65% as compared to the same period in prior year.
  • Gross Margin was 66%, as compared to 57% in the same period last year.
  • Operating Expenses were $12.3M, a decrease of $2.7M, or 18% as compared to the same period last year.
  • EBITDA was -$7.7M as compared to -$12.2M in the same period last year.
  • Net Income was -$14.9M compared to -$12.2M in the same period last year. This includes $5.3M in non-cash financing costs and $300K in non-cash mark-to-market adjustment on our publicly listed securities. The prior year includes a $359K in financing costs and $1.4M of derivative liability gain on the valuation of our warrants.

“As the Sequire platform continues to grow and adapt to customer needs, we are seeing a tremendous increase in our recurring revenue stream. Sequire is changing the way public issuers interact with and engage their investors, and it shows. We are pleased to report our first quarter of positive EBITDA from our Sequire segment,” said Chris Miglino, Founder and CEO of SRAX.

“The whole company is very proud of everything we’ve accomplished this quarter and is excited about the momentum we have going into quarter four. We acquired LD Micro, moved BIGToken to its own public company, and successfully sold our remaining MD asset, which was not on our balance sheet. Additionally, as we are seeing continued addition of our Sequire platform, SRAX is providing guidance of $4M in revenue for the fourth quarter,” Miglino added.

Conference Call:

Management will review the results on a conference call with a live question and answer session, November 16th, 2020, at 12:00 p.m. ET / 9:00 a.m. PT.

To access the live webcast and presentation, please register here: https://zoom.us/webinar/register/WN_Hj1BLJk9Rma0d-g4ZfBbVg

The webcast will be available on srax.com for at least 90 days. To dial-in to the conference call, please call US: +1 669 900 6833. Webinar ID: 942 4818 0377.

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: Adjusted 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.

Adjusted 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.

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.

For the Three Months Ended September 30,

Sequire

 

BIGToken

 

Corporate and Other

 

Consolidated

 

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 
Total Revenue

1,956,000

 

31,000

 

604,000

 

915,000

 

49,000

 

54,000

 

2,609,000

 

1,000,000

 

 
Cost of Revenue

650,000

 

-

 

230,000

 

335,000

 

-

 

(13,000

)

880,000

 

322,000

 

Gross profit

1,306,000

 

31,000

 

374,000

 

580,000

 

49,000

 

67,000

 

1,729,000

 

678,000

 

margin %

66.8

%

100.0

%

61.9

%

63.4

%

100.0

%

124.1

%

66.3

%

67.8

%

 
Operating expenses

1,128,000

 

96,000

 

1,140,000

 

3,171,000

 

1,930,000

 

2,102,000

 

4,198,000

 

5,369,000

 

 
Operating Income

178,000

 

(65,000

)

(766,000

)

(2,591,000

)

(1,882,000

)

(2,035,000

)

(2,470,000

)

(4,691,000

)

 
 

For the Nine Months Ended September 30,

Sequire

 

BIGToken

 

Corporate and Other

 

Consolidated

 

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 
Total Revenue

2,808,000

41,000

1,174,000

2,291,000

142,000

164,000

4,124,000

2,496,000

 
Cost of Revenue

896,000

 

-

 

491,000

 

1,013,000

 

1,000

 

62,000

 

1,388,000

 

1,075,000

 

Gross profit

1,912,000

 

41,000

 

683,000

 

1,278,000

 

141,000

 

102,000

 

2,736,000

 

1,421,000

 

margin %

68.1

%

100.0

%

58.2

%

55.8

%

99.3

%

62.2

%

66.3

%

56.9

%

 
Operating expenses

1,934,000

 

288,000

 

4,490,000

 

8,281,000

 

5,907,000

 

6,407,000

 

12,331,000

 

14,976,000

 

 
Operating Income

(22,000

)

(247,000

)

(3,807,000

)

(7,003,000

)

(5,766,000

)

(6,305,000

)

(9,595,000

)

(13,555,000

)

 
STATEMENT OF OPERATIONS
(Unaudited)

Three months ending September 30

 

Nine months ending June September 30

In dollars

2020

 

2019

 

$ CHG

 

% CHG

 

2020

 

2019

 

$ CHG

 

% CHG

REVENUE
Total revenues

 

2,609,000

 

 

1,001,000

 

1,608,000

 

161

%

 

4,125,000

 

 

2,497,000

 

1,628,000

 

65

%

COST OF REVENUES
Total cost of revenues

 

880,000

 

 

322,000

 

558,000

 

173

%

 

1,388,000

 

 

1,075,000

 

313,000

 

29

%

Gross profit

 

1,729,000

 

 

679,000

 

1,050,000

 

155

%

 

2,737,000

 

 

1,422,000

 

1,315,000

 

92

%

Gross profit margin

 

66

%

 

68

%

 

66

%

 

57

%

OPERATING EXPENSES
Employee related costs

1,689,000

2,162,000

(473,000

)

-22

%

5,406,000

6,730,000

(1,324,000

)

-20

%

Marketing and selling expenses

 

809,000

 

1,115,000

(306,000

)

-27

%

 

1,631,000

 

2,202,000

(571,000

)

-26

%

Platform Costs

 

391,000

 

453,000

(62,000

)

-14

%

 

1,181,000

 

 

1,159,000

 

22,000

 

2

%

Depreciation and amortization

 

333,000

 

304,000

29,000

10

%

 

962,000

 

 

834,000

128,000

15

%

General selling general and administrative

 

984,000

 

1,355,000

(371,000

)

-27

%

 

3,157,000

 

4,069,000

(912,000

)

-22

%

Total operating expenses

 

4,206,000

 

5,389,000

(1,183,000

)

-22

%

 

12,337,000

 

 

14,994,000

 

(2,657,000

)

-18

%

(LOSS) INCOME FROM OPERATIONS

 

(2,477,000

)

 

(4,710,000

)

2,233,000

 

-47

%

 

(9,600,000

)

 

(13,572,000

)

3,972,000

 

-29

%

Financing Costs

 

(3,302,000

)

 

(108,000

)

(3,194,000

)

2957

%

 

(5,340,000

)

 

(359,000

)

(4,981,000

)

1387

%

Interest Income

 

-

 

-

 

n/a

 

 

-

 

 

-

 

-

 

n/a

 

Gain (loss) on sale of assets

-

n/a

 

-

 

395,000

(395,000

)

-100

%

Gain / (Loss) from marketable securities

 

(800,000

)

(800,000

)

n/a

 

(284,000

)

 

-

(284,000

)

n/a

Other gain (loss)

 

8,000

8,000

n/a

 

8,000

 

14,000

(6,000

)

-43

%

Loss on repricing of equity warrants

-

n/a

 

(342,000

)

342,000

-100

%

Change in fair value of derivative liabilities

 

-

 

6,227,000

(6,227,000

)

-100

%

 

321,000

 

1,390,000

(1,069,000

)

-77

%

(LOSS) INCOME BEFORE INCOME TAXES

 

(6,571,000

)

 

1,409,000

(7,980,000

)

-566

%

 

(14,895,000

)

 

(12,474,000

)

(2,421,000

)

19

%

Provision for income taxes

 

-

 

-

 

-

 

-

NET (LOSS) INCOME

 

(6,571,000

)

 

1,409,000

(7,980,000

)

-566

%

 

(14,895,000

)

 

 

(12,474,000

)

(2,421,000

)

19

%

 
NET (LOSS) INCOME PER SHARE, BASIC AND DILUTED

$

(0.45

)

$

(0.67

)

0.22

 

-32

%

$

(1.05

)

$

(0.67

)

(0.38

)

57

%

Weighted average shares used in computing net (loss) income per share, basic and diluted

 

14,479,519

 

12,933,585

1,545,934

 

12

%

 

14,186,721

 

12,965,773

1,220,948

 

9

%

 
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(Unaudited)
In dollars

2020

 

2019

 

$ CHG

 

% CHG

 

2020

 

2019

 

$ CHG

 

% CHG

 
Net income (loss) - GAAP

 

(6,571,000

)

 

1,409,000

(7,980,000

)

-566

%

 

(14,895,000

)

 

(12,474,000

)

(2,421,000

)

19

%

Adjustments:
Equity based compensation

 

268,000

 

 

423,000

 

 

916,000

 

 

870,000

 

Adjustments to derivative liabilities

 

-

 

 

(6,227,000

)

 

(321,000

)

 

(1,390,000

)

Interest expense and financing costs

 

3,302,000

 

 

108,000

 

 

5,340,000

 

 

359,000

 

Depreciation and amortization

 

332,000

 

 

305,000

 

 

963,000

 

 

834,000

 

Gain on Sale of Assets

 

-

 

 

(409,000

)

Other income

 

(8,000

)

 

(4,000

)

Gain / (Loss) from marketable securities

 

800,000

 

 

-

 

 

284,000

 

 
Adjusted EBITDA - NON GAAP

 

(1,877,000

)

 

(3,982,000

)

2,105,000

 

-53

%

 

(7,717,000

)

 

(12,210,000

)

4,493,000

 

-37

%

 

Balance Sheets

(Unaudited)

In dollars 30-Sep-20 31-Dec-19
ASSETS
Current Assets
Cash

2,446,000

32,000

Accounts receivable, net

1,260,000

805,000

Prepaid expense

273,000

715,000

Securities held for sale

4,800,000

-

Other current assets

63,000

306,000

Total current assets

8,842,000

1,858,000

Property and equipment, net

134,000

191,000

Goodwill

23,348,000

15,645,000

Intangible assets, net

2,399,000

1,966,000

Right-of-Use Asset

390,000

456,000

Other assets

22,000

118,000

Total Assets

35,135,000

20,234,000

 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses

2,415,000

2,442,000

Derivative liabilities

-

4,397,000

Other current liabilities

6,850,000

537,000

Payroll protection loan - current portion

548,000

-

OID convertible debentures - current portion

3,683,000

-

Total Current Liabilities

13,496,000

7,376,000

Right-of-Use liability - long term

282,000

352,000

Payroll protection loan, less current portion

578,000

-

OID convertible debentures, less current portion

2,748,000

-

Deferred Tax Liability

131,000

 
Total Liabilities

17,235,000

7,728,000

 
Stockholders' equity

17,900,000

12,506,000

 
Total liabilities and equity

35,135,000

20,234,000

 
STATEMENT OF CASH FLOWS
Nine months ended
(Unaudited)
In dollars

30-Sep-20

30-Sep-19

CASH FLOWS FROM OPERATING ACTIVITIES
Net Cash Used in Operating Activities

(9,888,000

)

(12,555,000

)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of marketable securities

397,000

 

-

 

Proceeds from sale of SRAXmd, net

-

 

307,000

 

Purchase of property and equipment

-

 

(66,000

)

Development of software

(870,000

)

(892,000

)

Acquisition of LD Micro, net

(697,000

)

Other assets

13,000

 

(79,000

)

Net Cash Used in investing activities

(1,157,000

)

(730,000

)

CASH FLOWS FROM FINANCING ACTIVITIES
Net cash flows from debt activities

13,459,000

 

-

 

Proceeds from the issuance of common stock units

-

 

12,197,000

 

Proceeds from issuance of common stock for warrants exercised

-

 

1,146,000

 

Net Cash provided by financing activities

13,459,000

 

13,343,000

 

 
Net increase /(decrease) in cash and cash equivalents

2,414,000

 

58,000

 

Cash and cash equivalents at beginning of period

32,000

 

2,785,000

 

Cash and cash equivalents at end of period

2,446,000

 

2,843,000

 


Contacts

Bri Kelvin
investors@srax.com

BusinessWire

SRAX Reports 161% Year-Over-Year and 124% Quarter-Over-Quarter Revenue Growth

LOS ANGELES--(BUSINESS WIRE)--$SRAX #earnings--SRAX, Inc. (NASDAQ: SRAX), a financial technology company that unlocks data and insights to publicly traded companies through Sequire, reported results for the three months ended September 30, 2020.



Third Quarter 2020 and Recent Operational Highlights

  • Revenue for Q3 of $2.6M up 161% year-over-year, 124% sequentially quarter-over-quarter
  • Reduced operating expenses by 22% year-over-year for Q3 and 18% year-to-date
  • EBITDA increase of $2.1M, or 53%, vs Q3 2019
  • Sequire segment EBITDA positive in Q3 2020
  • 7 consecutive quarters of Sequire SAAS growth
  • Sequire bookings for the quarter were $6.7M
  • Currently holding approximately $10M worth of publicly listed securities
  • 125 public companies/partners have subscribed to Sequire, up 34 companies since Q2 release, a 37% increase
  • BIGToken share exchange agreement signed – anticipated to move into its own publicly traded company in Q4 (TICKER:FPVD)
  • Completed the acquisition of LD Micro
  • Sold position in TI Health (SRAXmd) for $8M
  • Fourth Quarter revenue guidance of $4M

Third Quarter 2020

  • Total Revenue was $2.6M, an increase of 161% as compared to Q3 2019 and up 124% from Q2 2020.
  • Gross Margin was 66%, as compared to 68% in the same period last year.
  • Operating Expenses were $4.2M, a decrease of $1.2M, or 22% as compared to the same period last year.
  • EBITDA was -$1.9M as compared to -$4M in the same period last year.
  • Net Income was -$6.6M compared to $1.4M in the same period last year. This includes a one-time $3.3M in non-cash financing costs related to our convertible debenture financing, and $800K in non-cash mark-to-market adjustment on our publicly listed securities. The prior year net income includes a $6.3M derivative liability gain on the valuation of our warrants.

Nine Months Ended September 30, 2020

  • Total Revenue was $4.1M, an increase of 65% as compared to the same period in prior year.
  • Gross Margin was 66%, as compared to 57% in the same period last year.
  • Operating Expenses were $12.3M, a decrease of $2.7M, or 18% as compared to the same period last year.
  • EBITDA was -$7.7M as compared to -$12.2M in the same period last year.
  • Net Income was -$14.9M compared to -$12.2M in the same period last year. This includes $5.3M in non-cash financing costs and $300K in non-cash mark-to-market adjustment on our publicly listed securities. The prior year includes a $359K in financing costs and $1.4M of derivative liability gain on the valuation of our warrants.

“As the Sequire platform continues to grow and adapt to customer needs, we are seeing a tremendous increase in our recurring revenue stream. Sequire is changing the way public issuers interact with and engage their investors, and it shows. We are pleased to report our first quarter of positive EBITDA from our Sequire segment,” said Chris Miglino, Founder and CEO of SRAX.

“The whole company is very proud of everything we’ve accomplished this quarter and is excited about the momentum we have going into quarter four. We acquired LD Micro, moved BIGToken to its own public company, and successfully sold our remaining MD asset, which was not on our balance sheet. Additionally, as we are seeing continued addition of our Sequire platform, SRAX is providing guidance of $4M in revenue for the fourth quarter,” Miglino added.

Conference Call:

Management will review the results on a conference call with a live question and answer session, November 16th, 2020, at 12:00 p.m. ET / 9:00 a.m. PT.

To access the live webcast and presentation, please register here: https://zoom.us/webinar/register/WN_Hj1BLJk9Rma0d-g4ZfBbVg

The webcast will be available on srax.com for at least 90 days. To dial-in to the conference call, please call US: +1 669 900 6833. Webinar ID: 942 4818 0377.

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: Adjusted 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.

Adjusted 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.

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.

For the Three Months Ended September 30,

Sequire

 

BIGToken

 

Corporate and Other

 

Consolidated

 

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 
Total Revenue

1,956,000

 

31,000

 

604,000

 

915,000

 

49,000

 

54,000

 

2,609,000

 

1,000,000

 

 
Cost of Revenue

650,000

 

-

 

230,000

 

335,000

 

-

 

(13,000

)

880,000

 

322,000

 

Gross profit

1,306,000

 

31,000

 

374,000

 

580,000

 

49,000

 

67,000

 

1,729,000

 

678,000

 

margin %

66.8

%

100.0

%

61.9

%

63.4

%

100.0

%

124.1

%

66.3

%

67.8

%

 
Operating expenses

1,128,000

 

96,000

 

1,140,000

 

3,171,000

 

1,930,000

 

2,102,000

 

4,198,000

 

5,369,000

 

 
Operating Income

178,000

 

(65,000

)

(766,000

)

(2,591,000

)

(1,882,000

)

(2,035,000

)

(2,470,000

)

(4,691,000

)

 
 

For the Nine Months Ended September 30,

Sequire

 

BIGToken

 

Corporate and Other

 

Consolidated

 

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 

2020

 

2019

 
Total Revenue

2,808,000

41,000

1,174,000

2,291,000

142,000

164,000

4,124,000

2,496,000

 
Cost of Revenue

896,000

 

-

 

491,000

 

1,013,000

 

1,000

 

62,000

 

1,388,000

 

1,075,000

 

Gross profit

1,912,000

 

41,000

 

683,000

 

1,278,000

 

141,000

 

102,000

 

2,736,000

 

1,421,000

 

margin %

68.1

%

100.0

%

58.2

%

55.8

%

99.3

%

62.2

%

66.3

%

56.9

%

 
Operating expenses

1,934,000

 

288,000

 

4,490,000

 

8,281,000

 

5,907,000

 

6,407,000

 

12,331,000

 

14,976,000

 

 
Operating Income

(22,000

)

(247,000

)

(3,807,000

)

(7,003,000

)

(5,766,000

)

(6,305,000

)

(9,595,000

)

(13,555,000

)

 
STATEMENT OF OPERATIONS
(Unaudited)

Three months ending September 30

 

Nine months ending June September 30

In dollars

2020

 

2019

 

$ CHG

 

% CHG

 

2020

 

2019

 

$ CHG

 

% CHG

REVENUE
Total revenues

 

2,609,000

 

 

1,001,000

 

1,608,000

 

161

%

 

4,125,000

 

 

2,497,000

 

1,628,000

 

65

%

COST OF REVENUES
Total cost of revenues

 

880,000

 

 

322,000

 

558,000

 

173

%

 

1,388,000

 

 

1,075,000

 

313,000

 

29

%

Gross profit

 

1,729,000

 

 

679,000

 

1,050,000

 

155

%

 

2,737,000

 

 

1,422,000

 

1,315,000

 

92

%

Gross profit margin

 

66

%

 

68

%

 

66

%

 

57

%

OPERATING EXPENSES
Employee related costs

1,689,000

2,162,000

(473,000

)

-22

%

5,406,000

6,730,000

(1,324,000

)

-20

%

Marketing and selling expenses

 

809,000

 

1,115,000

(306,000

)

-27

%

 

1,631,000

 

2,202,000

(571,000

)

-26

%

Platform Costs

 

391,000

 

453,000

(62,000

)

-14

%

 

1,181,000

 

 

1,159,000

 

22,000

 

2

%

Depreciation and amortization

 

333,000

 

304,000

29,000

10

%

 

962,000

 

 

834,000

128,000

15

%

General selling general and administrative

 

984,000

 

1,355,000

(371,000

)

-27

%

 

3,157,000

 

4,069,000

(912,000

)

-22

%

Total operating expenses

 

4,206,000

 

5,389,000

(1,183,000

)

-22

%

 

12,337,000

 

 

14,994,000

 

(2,657,000

)

-18

%

(LOSS) INCOME FROM OPERATIONS

 

(2,477,000

)

 

(4,710,000

)

2,233,000

 

-47

%

 

(9,600,000

)

 

(13,572,000

)

3,972,000

 

-29

%

Financing Costs

 

(3,302,000

)

 

(108,000

)

(3,194,000

)

2957

%

 

(5,340,000

)

 

(359,000

)

(4,981,000

)

1387

%

Interest Income

 

-

 

-

 

n/a

 

 

-

 

 

-

 

-

 

n/a

 

Gain (loss) on sale of assets

-

n/a

 

-

 

395,000

(395,000

)

-100

%

Gain / (Loss) from marketable securities

 

(800,000

)

(800,000

)

n/a

 

(284,000

)

 

-

(284,000

)

n/a

Other gain (loss)

 

8,000

8,000

n/a

 

8,000

 

14,000

(6,000

)

-43

%

Loss on repricing of equity warrants

-

n/a

 

(342,000

)

342,000

-100

%

Change in fair value of derivative liabilities

 

-

 

6,227,000

(6,227,000

)

-100

%

 

321,000

 

1,390,000

(1,069,000

)

-77

%

(LOSS) INCOME BEFORE INCOME TAXES

 

(6,571,000

)

 

1,409,000

(7,980,000

)

-566

%

 

(14,895,000

)

 

(12,474,000

)

(2,421,000

)

19

%

Provision for income taxes

 

-

 

-

 

-

 

-

NET (LOSS) INCOME

 

(6,571,000

)

 

1,409,000

(7,980,000

)

-566

%

 

(14,895,000

)

 

 

(12,474,000

)

(2,421,000

)

19

%

 
NET (LOSS) INCOME PER SHARE, BASIC AND DILUTED

$

(0.45

)

$

(0.67

)

0.22

 

-32

%

$

(1.05

)

$

(0.67

)

(0.38

)

57

%

Weighted average shares used in computing net (loss) income per share, basic and diluted

 

14,479,519

 

12,933,585

1,545,934

 

12

%

 

14,186,721

 

12,965,773

1,220,948

 

9

%

 
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(Unaudited)
In dollars

2020

 

2019

 

$ CHG

 

% CHG

 

2020

 

2019

 

$ CHG

 

% CHG

 
Net income (loss) - GAAP

 

(6,571,000

)

 

1,409,000

(7,980,000

)

-566

%

 

(14,895,000

)

 

(12,474,000

)

(2,421,000

)

19

%

Adjustments:
Equity based compensation

 

268,000

 

 

423,000

 

 

916,000

 

 

870,000

 

Adjustments to derivative liabilities

 

-

 

 

(6,227,000

)

 

(321,000

)

 

(1,390,000

)

Interest expense and financing costs

 

3,302,000

 

 

108,000

 

 

5,340,000

 

 

359,000

 

Depreciation and amortization

 

332,000

 

 

305,000

 

 

963,000

 

 

834,000

 

Gain on Sale of Assets

 

-

 

 

(409,000

)

Other income

 

(8,000

)

 

(4,000

)

Gain / (Loss) from marketable securities

 

800,000

 

 

-

 

 

284,000

 

 
Adjusted EBITDA - NON GAAP

 

(1,877,000

)

 

(3,982,000

)

2,105,000

 

-53

%

 

(7,717,000

)

 

(12,210,000

)

4,493,000

 

-37

%

 

Balance Sheets

(Unaudited)

In dollars 30-Sep-20 31-Dec-19
ASSETS
Current Assets
Cash

2,446,000

32,000

Accounts receivable, net

1,260,000

805,000

Prepaid expense

273,000

715,000

Securities held for sale

4,800,000

-

Other current assets

63,000

306,000

Total current assets

8,842,000

1,858,000

Property and equipment, net

134,000

191,000

Goodwill

23,348,000

15,645,000

Intangible assets, net

2,399,000

1,966,000

Right-of-Use Asset

390,000

456,000

Other assets

22,000

118,000

Total Assets

35,135,000

20,234,000

 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses

2,415,000

2,442,000

Derivative liabilities

-

4,397,000

Other current liabilities

6,850,000

537,000

Payroll protection loan - current portion

548,000

-

OID convertible debentures - current portion

3,683,000

-

Total Current Liabilities

13,496,000

7,376,000

Right-of-Use liability - long term

282,000

352,000

Payroll protection loan, less current portion

578,000

-

OID convertible debentures, less current portion

2,748,000

-

Deferred Tax Liability

131,000

 
Total Liabilities

17,235,000

7,728,000

 
Stockholders' equity

17,900,000

12,506,000

 
Total liabilities and equity

35,135,000

20,234,000

 
STATEMENT OF CASH FLOWS
Nine months ended
(Unaudited)
In dollars

30-Sep-20

30-Sep-19

CASH FLOWS FROM OPERATING ACTIVITIES
Net Cash Used in Operating Activities

(9,888,000

)

(12,555,000

)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of marketable securities

397,000

 

-

 

Proceeds from sale of SRAXmd, net

-

 

307,000

 

Purchase of property and equipment

-

 

(66,000

)

Development of software

(870,000

)

(892,000

)

Acquisition of LD Micro, net

(697,000

)

Other assets

13,000

 

(79,000

)

Net Cash Used in investing activities

(1,157,000

)

(730,000

)

CASH FLOWS FROM FINANCING ACTIVITIES
Net cash flows from debt activities

13,459,000

 

-

 

Proceeds from the issuance of common stock units

-

 

12,197,000

 

Proceeds from issuance of common stock for warrants exercised

-

 

1,146,000

 

Net Cash provided by financing activities

13,459,000

 

13,343,000

 

 
Net increase /(decrease) in cash and cash equivalents

2,414,000

 

58,000

 

Cash and cash equivalents at beginning of period

32,000

 

2,785,000

 

Cash and cash equivalents at end of period

2,446,000

 

2,843,000

 


Contacts

Bri Kelvin
investors@srax.com