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14.11.2017 22:10
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SRAX Reports Third Quarter 2017 Financial Results
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PR Newswire
LOS ANGELES, Nov. 14, 2017
LOS ANGELES, Nov. 14, 2017 /PRNewswire/ -- Social Reality, Inc. (Nasdaq: SRAX), a digital marketing and data management platform delivering the tools to reach and reveal valuable audiences, reported total revenue of $5.6 million, operating loss of $560,300, GAAP net loss of $4.1 million, which includes a non-cash charge of $2.9 million for accretion related to warrants, and Adjusted EBITDA loss of $93,000 for the third quarter 2017.
"The third quarter of 2017 demonstrated the successful implementation of a strategic transformation that has set SRAX up for long-term growth," stated SRAX's CEO and Chairman Christopher Miglino. "In the last twelve months, we uplisted to NASDAQ and cleaned up our balance sheet as well as significantly increased gross margins, reduced operating costs, and improved our key metric, Adjusted EBITDA. In the third quarter, we enhanced our competitive advantage in real-time bidding (RTB) and targeting by acquiring additional technology. Leveraging our successful healthcare model, we continued to diversify into more verticals such as sports and automotive.
"Additionally, we continue to develop cutting edge technologies that have the opportunity to transform the marketing industry. We unveiled our plans around BIGtoken, our Blockchain Identification Graph platform. We believe our BIGtoken platform will revolutionize data sales by offering consumers choice, transparency and compensation for their data, and, consequently, markedly change the way that data is bought and sold."
Third Quarter 2017 Financial Results:
- Gross revenue was $5.6 million, compared to $9.5 million in the third quarter of 2016, which included revenue from a large, non-recurring SRAX Reach customer. This decrease was partially offset by an increase in revenue from SRAX buy-side and sell-side clients as well as continuing growth in SRAXmd.
- Gross profit was $3.1 million, compared to $2.5 million in the third quarter of 2016. Gross margin was 56%, compared to 26% in the third quarter of 2016, reflecting the benefit from reduced low-margin revenue.
- Operating expenses were $3.7 million, compared to $3.9 million in the third quarter of 2016, reflecting first quarter 2017 cost management measures.
- Operating loss was $560,000, improving compared to an operating loss of $1.3 million in the third quarter of 2016.
- Interest expense was reduced to $619,000, compared to $1.1 million in the third quarter of 2016. The company also recorded $2.9 million in non-cash expenses related to the accretion of warrants. Total other expense was $3.5 million, compared to $1.1 million in the third quarter of 2016, which did not have expenses related to the accretion of warrants.
- Net loss was $4.1 million, which includes $2.9 million in non-cash expenses related to the accretion of warrants, compared to $2.4 million in the third quarter of 2016.
- Adjusted EBITDA loss was $93,000, compared to $732,000 in the third quarter of 2016.
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, and certain additional one-time expenses. It is not intended to represent a measure of performance in accordance with accounting principles generally accepted in the United States (GAAP). A detailed description and reconciliation of EBITDA and management's reasons for using this measure is set forth at the end of this press release.
Other Recent Corporate Highlights:
- Acquired additional demand side platform (DSP) technology from OpenDSP with unique and complementary RTB and targeting capabilities.
- Launched a new vertical offering, SRAXfan, designed to reach and reveal valuable sports fan audiences.
- Engaged financial advisors to explore strategic alternatives for the SRAXmd business including spinning off the business into its own public company, strategic acquisitions or a variety of other possible transactions.
- Held the SRAX Investor and Analyst Day in Mexicali, Mexico, to tour the facility,
- Received recognition as one of Deloitte 2017 North America Technology Fast 500.
Also in October, the company entered into a definitive securities purchase agreement with existing investors for the sale of an aggregate of approximately $5.2 million in principal amount of 12.5% Secured Convertible Debentures due on April 21, 2020, and 863,365 Series A Warrants to purchase Class A common stock with a 5-year term. The Debentures will be secured pari passu with the investors' prior debentures issued in the company's April 2017 offering. The Debentures and Warrants are initially convertible and exercisable at $3.00 per share subject to anti-dilution protection.
2017 Guidance:
SRAX continues to manage the business to optimize gross margin: while it may impact revenue, the company expects benefits gross margin and Adjusted EBITDA.
- Management expects 2017 gross margin to exceed 50%, compared to 35% in 2016.
- Management expects SRAX will generate positive Adjusted EBITDA for the second half of 2017 and to be breakeven or better for the full year 2017, up from an Adjusted EBITDA loss of $1.1 million in 2016.
Conference Call & Slide Presentation
Management will review the results on a conference call with a live question and answer session today, November 14, 2017, at 4:30 p.m. ET. To access the call, please use passcode 1119213:
- If calling from the United States or Canada, please dial (866) 791-6248 to access the live call and (844) 512-2921 for the replay available until November 22, 2017.
- If calling internationally, please dial (719) 325-4929 to access the live call and (412) 317-6671 for the replay.
- The call will be webcast over the internet and accessible at the Company's website at http://srax.com/investors/ for at least 90 days. Investors may also download the slides from the website.
About SRAX
SRAX (Social Reality, Inc.; NASDAQ: SRAX) is a digital marketing and data management platform delivering the tools to reach and reveal valuable audiences. SRAX's machine-learning technology analyzes marketing data to identify brands and content owners' core consumers and their characteristics across marketing channels. Through an omnichannel approach that integrates all aspects of the advertising experience into one platform, SRAX discovers new and measurable opportunities that amplify campaign performance and maximize profits. For more information on how SRAX delivers a digital competitive advantage to surpass today's marketing challenges, 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, all as set forth in our Annual Report on Form 10-K for the year ended December 31, 2016, 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, LHA Investor Relations, +1 415 433 3777, srax@lhai.com
| SOCIAL REALITY, INC. | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| | |||||
| | September 30, | | December 31, | ||
| | 2017 | | 2016 | ||
| | (Unaudited) | | | ||
| Assets | | | | ||
| | | | | ||
| Current assets: | | | | ||
| Cash and cash equivalents | $ | 216,409 | | $ | 1,048,762 |
| Accounts receivable, net | | 7,196,915 | | | 8,411,019 |
| Prepaid expenses | | 541,510 | | | 332,503 |
| Other current assets | | 6,898 | | | 6,488 |
| Total current assets | | 7,961,732 | | | 9,798,772 |
| | | | | | |
| Property and equipment, net of accumulated depreciation | | 138,539 | | | 55,492 |
| Goodwill | | 15,644,957 | | | 15,644,957 |
| Intangibles - net | | 1,609,228 | | | 1,365,241 |
| Other assets | | 21,488 | | | 34,659 |
| | | | | | |
| Total assets | $ | 25,375,944 | | $ | 26,899,121 |
| | | | | | |
| Liabilities and stockholders' equity | | | | | |
| | | | | | |
| Current liabilities: | | | | | |
| Accounts payable and accrued expenses | $ | 12,434,810 | | $ | 13,156,081 |
| Note payable, net of unamortized costs | | — | | | 3,418,788 |
| Unearned revenue | | 67,516 | | | — |
| Put warrant liability | | 757,476 | | | — |
| Debenture warrant liability | | 1,615,844 | | | — |
| Leapfrog warrant liability | | 673,416 | | | — |
| Debenture conversion liability | | 1,936,752 | | | — |
| Put liability | | 1,551,323 | | | 1,500,000 |
| Total current liabilities | | 19,037,137 | | | 18,074,869 |
| | | | | | |
| Secured convertible debentures, net | | 2,092,798 | | | — |
| Total liabilities | | 21,129,935 | | | 18,074,869 |
| | | | | | |
| Commitments and contingencies (Note 13) | | — | | | — |
| | | | | | |
| Stockholders' equity Werbung Mehr Nachrichten zur Social Reality Aktie kostenlos abonnieren
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