LOS ANGELES, Nov. 14, 2019 /PRNewswire/ -- SRAX, Inc. (Nasdaq:
SRAX), a digital marketing and consumer data management and
distribution technology platform company, reported results for the
three months ended September 30,
2019.
"SRAX is leveraging our core technologies to develop platforms
and build valuable and specific data sets," said Christopher Miglino, founder and CEO of SRAX.
"Our platforms are gaining traction and creating synergies. In
fact, sales from existing platforms grew 11% and 17%, for Q3 2019
compared to Q2 2019 and Q3 2018, respectively, and are already
benefiting from advances in BIGtoken."
"BIGtoken is expanding in reach and scope. As of today, we
have a subscriber base of 16.3 million. To broaden and
accommodate our international subscriber base, we signed key
partnerships in India and
the Philippines; completed
integration for international users; and started the process to
offer BIGtoken in multiple languages. Now, we are implementing more
initiatives to scale subscriber growth and launch additional
offerings. After unveiling BIG Rewards™, some of the largest
consumer packaged goods (CPG) brands in the world initiated
programs to offer coupons, exclusive product deals and more. Upon
introducing BIG Research to gather insights on behalf of large
brands looking for global customer insights, we have signed deals
with two of the largest research platforms. Additionally, after
spending the past two quarters integrating our platforms and
realigning the sales process, in Q4 2019, we expect to accelerate
revenue growth driven by brands activating on our platforms to
engage with consumers complemented by increased adoption of SRAX
IR."
Q3 2019 Financial Highlights:
- Revenue was $1.0 million. This
compares to $904,000 in Q2 2019 and
$2.0 million for Q3 2018 that
includes $1.2 million from SRAXmd and
other.
- Continuing product sales, referred to as vertical sales, were
up 11% and 17%, respectively compared to Q2 2019 and Q3 2018.
- Gross profit margin was 68%, compared to 55% in Q2 2019 and 62%
in Q3 2018.
- Net income was $1.4 million,
compared to a net loss of $8.1
million in Q2 2019 and net income of $21.3 million, including a $23.9 million gain on sale of SRAXmd, in Q3
2018.
- Adjusted EBITDA loss was $4.0
million, compared to $4.0
million in Q2 2019 and $2.9
million in Q3 2018.
Operating Highlights:
- SRAX IR, 32 subscribers and 20 resellers
-
- Enhanced features, adding real-time trading data, warrant
management and the ability to access shareholder contact data,
including email, phone number and social media links.
- BIGtoken, 16.3 million subscribers
-
- Activated major CPG brands on BIG Rewards, a new feature that
enables marketers to engage BIGtoken subscribers.
- Partnered with ZAPGroup, one of the largest point-of-sale
retail loyalty programs based in the
Philippines.
- Entered the 28 member countries of the European Union.
- Enabled data payments for users outside of the U.S. and
initiated a process to offer in multiple languages.
- Unveiled plans to launch BIGtoken India with Yash Birla Group,
one of India's largest
conglomerates.
- Partnered with several high-profile non-profit associations to
provide BIGtoken users the ability to donate their earnings. They
include
-
- American Heart Association, the nation's oldest and largest
voluntary organization dedicated to fighting heart disease and
stroke; and
- HealthCorps, founded by Dr. Mehmet
Oz, dedicated to helping high-school students make better
choices about their health and physical fitness.
- Formed a strategic partnership with LiveXLive, a global digital
media company focused on live entertainment, to increase each
platform's user base while generating data-based insight.
- Signed an agreement with Blue Chip, an integrated marketing
agency, to activate anonymized self-attested, transaction,
location, and social media data.
- Corporate:
-
- Changed the company name to SRAX to better reflect the
company's positioning.
- Raised $5.5 million from a
registered direct offering.
Conference Call:
Management will review the results on a conference call with a live
question and answer session today, November
13, 2019, at 4:30 p.m.
ET/1:30 p.m. PT.
- If calling from the U.S. or Canada, please dial 1-877-451-6152 to access
the live call and 1-844-512-2921 for the replay, code 13695604
available until November 27,
2019.
- If calling internationally, please dial 1-201-389-0879 to
access the live call and 1-412-317-6671 for the replay, code
13695604.
- The call will be webcast over the Internet and accessible at
the company's website at https://srax.com/investors/ for at least
90 days.
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 net income (loss) and 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 net income (loss) is defined as net income (loss) less
non-cash equity-based compensation and the accretion of
warrants.
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, Inc. (NASDAQ: SRAX) is a digital marketing and consumer data
management technology company. SRAX's technology unlocks data to
reveal brands' core consumers and their characteristics across
marketing channels. Monetizing its data sets, SRAX is growing
multiple recurring revenue streams through its various platforms.
Through the BIGtoken platform, SRAX has developed a
consumer-managed data marketplace where people can own and earn
from their data thereby offering everyone in the Internet ecosystem
choice, transparency, and compensation. SRAX's tools deliver a
digital competitive advantage for brands in the CPG, automotive,
investor relations, luxury, and lifestyle verticals by integrating
all aspects of the advertising experience, including verified
consumer participation, into one platform. For more information on
SRAX, visit www.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, 2018, 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 Social Reality
and are difficult to predict. Social Reality undertakes no
obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or
otherwise.
Contact Information:
Kirsten Chapman/Mary Magnani, LHA Investor Relations, +1 415 433
3777, srax@lhai.com
SRAX,
INC.
|
(Formerly Known As
Social Reality, Inc.)
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
Three Months
ended
|
|
|
Nine Months
ended
|
|
|
September
30,
|
|
|
September
30,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
(restated)
|
|
|
|
|
|
(restated)
|
Revenue
|
|
$
|
1,001,000
|
|
|
$
|
2,015,000
|
|
|
$
|
2,497,000
|
|
|
$
|
8,824,000
|
Cost of
revenue
|
|
|
322,000
|
|
|
|
764,000
|
|
|
|
1,075,000
|
|
|
|
2,902,000
|
Gross
profit
|
|
|
679,000
|
|
|
|
1,251,000
|
|
|
|
1,422,000
|
|
|
|
5,922,000
|
Operating
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General, selling and
administrative expense
|
|
|
5,389,000
|
|
|
|
4,869,000
|
|
|
|
14,994,000
|
|
|
|
14,392,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(4,710,000)
|
|
|
|
(3,618,000)
|
|
|
|
(13,572,000)
|
|
|
|
(8,470,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(108,000)
|
|
|
|
(319,000)
|
|
|
|
(359,000)
|
|
|
|
(1,241,000)
|
Amortization of debt
issuance costs
|
|
|
-
|
|
|
|
(619,000)
|
|
|
|
-
|
|
|
|
(1,538,000)
|
Total Interest
Expense
|
|
|
(108,000)
|
|
|
|
(938,000)
|
|
|
|
(359,000)
|
|
|
|
(2,779,000)
|
Gain (loss) on sale
of Assets
|
|
|
-
|
|
|
|
23,978,000
|
|
|
|
395,000
|
|
|
|
23,956,000
|
Exchange gain
(loss)
|
|
|
-
|
|
|
|
10,000
|
|
|
|
14,000
|
|
|
|
5,000
|
Loss on repricing of
equity warrants
|
|
|
-
|
|
|
|
-
|
|
|
|
(342,000)
|
|
|
|
-
|
Change in fair value
of warrant derivative liabilities
|
|
|
6,227,000
|
|
|
|
1,839,000
|
|
|
|
1,390,000
|
|
|
|
4,549,000
|
Total other income
(expense)
|
|
|
6,119,000
|
|
|
|
24,889,000
|
|
|
|
1,098,000
|
|
|
|
25,731,000
|
Loss before provision
for income taxes
|
|
|
1,409,000
|
|
|
|
21,271,000
|
|
|
|
(12,474,000)
|
|
|
|
17,261,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
—
|
|
|
|
—
|
|
|
|
-
|
|
|
|
—
|
Net income
(loss)
|
|
$
|
1,409,000
|
|
|
$
|
21,271,000
|
|
|
$
|
(12,474,000)
|
|
|
$
|
17,261,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share, basic and diluted
|
|
$
|
0.11
|
|
|
$
|
2.10
|
|
|
$
|
(0.96)
|
|
|
$
|
1.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding – basic and diluted
|
|
|
12,933,585
|
|
|
|
10,112,804
|
|
|
|
12,965,773
|
|
|
|
10,121,717
|
SRAX,
INC.
|
(Formerly Known As
Social Reality, Inc)
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
2018
|
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,843,000
|
|
$
|
2,785,000
|
Accounts receivable,
net
|
|
|
1,241,000
|
|
|
1,829,000
|
Prepaid
expenses
|
|
|
866,000
|
|
|
467,000
|
Other current
assets
|
|
|
301,000
|
|
|
387,000
|
Total current
assets
|
|
|
5,251,000
|
|
|
5,468,000
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
205,000
|
|
|
192,000
|
Goodwill
|
|
|
15,645,000
|
|
|
15,645,000
|
Intangible assets,
net
|
|
|
1,874,000
|
|
|
1,763,000
|
Right-of-Use Asset -
Long Term Portion
|
|
|
429,000
|
|
|
—
|
Other
assets
|
|
|
130,000
|
|
|
51,000
|
Total
assets
|
|
$
|
23,534,000
|
|
$
|
23,119,000
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
|
1,594,000
|
|
|
3,575,000
|
Warrant Derivative
liabilities
|
|
|
4,052,000
|
|
|
5,442,000
|
Other current
liabilities
|
|
|
906,000
|
|
|
—
|
Total current
liabilities
|
|
|
6,552,000
|
|
|
9,017,000
|
Long term
liabilities:
|
|
|
|
|
|
|
Lease Obligation -
Long Term Portion
|
|
|
295,000
|
|
|
—
|
Total
liabilities
|
|
|
6,847,000
|
|
|
9,017,000
|
|
|
|
|
|
|
|
Commitments and
contingencies (Note 11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
16,687,000
|
|
|
14,102,000
|
Total liabilities and
stockholders' equity
|
|
$
|
23,534,000
|
|
$
|
23,119,000
|
SRAX,
INC.
|
(Formerly Known As
Social Reality, Inc)
|
Reconciliation of
GAAP to Non – GAAP Results
|
(Unaudited)
|
|
|
|
For the three
months ended
|
|
As Reported -
GAAP
|
|
Disc.
Products
|
|
Excl. Disc
Products
|
($s in
'000s)
|
|
Sept
30,
2019
|
June
30,
2019
|
Sept
30,
2018
|
QoQ
|
YoY
|
|
Sept
30,
2019
|
June
30,
2019
|
Sept
30,
2018
|
QoQ
|
YoY
|
|
Sept
30,
2019
|
June
30,
2019
|
Sept
30,
2018
|
QoQ
|
YoY
|
Net
Revenue
|
|
1,001
|
904
|
2,015
|
11%
|
-50%
|
|
-
|
-
|
1,161
|
n/m
|
-100%
|
|
1,001
|
904
|
855
|
11%
|
17%
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
322
|
411
|
764
|
-22%
|
-58%
|
|
-
|
-
|
225
|
n/m
|
-100%
|
|
322
|
411
|
538
|
-22%
|
-40%
|
Gross
Profit
|
|
679
|
493
|
1,252
|
38%
|
-46%
|
|
-
|
-
|
935
|
n/m
|
-100%
|
|
679
|
493
|
317
|
38%
|
115%
|
Margin
%
|
|
68%
|
55%
|
62%
|
1330
bps
|
574
bps
|
|
n/a
|
n/a
|
81%
|
n/m
|
n/m
|
|
68%
|
55%
|
37%
|
1329
bps
|
3081
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expense
|
|
5,389
|
5,114
|
4,869
|
5%
|
11%
|
|
5
|
-
|
931
|
n/m
|
-99%
|
|
5,383
|
5,114
|
3,938
|
5%
|
37%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
(4,710)
|
(4,620)
|
(3,617)
|
2%
|
30%
|
|
(5)
|
-
|
4
|
n/m
|
-239%
|
|
(4,704)
|
(4,620)
|
(3,621)
|
2%
|
30%
|
less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity based
compensation
|
|
424
|
316
|
595
|
34%
|
-29%
|
|
-
|
-
|
-
|
n/m
|
n/m
|
|
424
|
316
|
595
|
34%
|
-29%
|
Depreciation and
amortization
|
306
|
276
|
173
|
11%
|
77%
|
|
-
|
-
|
54
|
n/m
|
-100%
|
|
306
|
276
|
118
|
11%
|
159%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
(3,980)
|
(4,028)
|
(2,850)
|
-1%
|
40%
|
|
(5)
|
-
|
58
|
n/m
|
-109%
|
n/m
|
(3,974)
|
(4,028)
|
(2,908)
|
-1%
|
37%
|
|
|
For the three
months ended
|
|
|
|
|
September 30,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
|
QoQ
|
YoY
|
Net Income /
(Loss)
|
|
|
1,409,000
|
|
$
|
(8,098,000)
|
|
$
|
21,271,000
|
|
n/m
|
-93%
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
n/m
|
n/m
|
Equity based
compensation
|
|
|
424,000
|
|
|
316,000
|
|
|
595,000
|
|
34%
|
-29%
|
Interest (income)
expense
|
|
|
108,000
|
|
|
183,000
|
|
|
938,000
|
|
-41%
|
-88%
|
Depreciation and
amortization
|
|
|
306,000
|
|
|
276,000
|
|
|
173,000
|
|
11%
|
77%
|
Change in Fair Value
of Warrant Liability
|
|
|
(6,227,000)
|
|
|
2,876,000
|
|
|
(1,839,000)
|
|
n/m
|
239%
|
Financing
Costs
|
|
|
-
|
|
|
342,000
|
|
|
(11,000)
|
|
-100%
|
-100%
|
Gain on
Sale
|
|
|
-
|
|
|
77,000
|
|
|
(23,978,000)
|
|
-100%
|
-100%
|
Other (income)/
expense
|
|
|
-
|
|
|
-
|
|
|
1,000
|
|
n/m
|
-100%
|
Adjusted
EBITDA
|
|
$
|
(3,980,000)
|
|
$
|
(4,028,000)
|
|
$
|
(2,850,000)
|
|
1%
|
-40%
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/srax-reports-q3-2019-vertical-sales-increase-17-year-over-year-and-net-income-of-1-4-million-300958082.html
SOURCE SRAX