SRAX, Inc.

SRAX did not report quarterly revenue, EPS, or gross margin on this call because the audited financials were still pending. It did report 2021 bookings of $46.1 million, Q1 2022 bookings of $15.6 million versus $16.5 million in Q4, and around 278 issuers signed to Sequire at year-end. Management reaffirmed Q1 revenue guidance of $11.5 million and raised full-year revenue guidance to $47 million-$49 million. Chris Miglino also said the company had about 4.5 million warrants expire in January, leaving about 33.4 million fully diluted shares outstanding, and that exercising the remaining 5.3 million warrants could bring in about $16 million of cash.

Chris Miglino framed SRAX as a platform business serving public companies through Sequire, LD Micro, virtual conference tools, and an investor community. He said 2021 was a “banner year,” highlighted accelerating bookings into 2022, and pointed to new product launches like Deal Center and an expanded Virtual Events 1x1 platform. His tone was upbeat on demand and product momentum, but he was also candid that late filings were unacceptable and said the company was working to cleanly separate BIGtoken so Sequire’s performance is easier to see.

Mike Malone said the annual report delay was driven by the deconsolidation of BIGtoken, including audit procedures and valuation work around SRAX’s remaining equity investment. He said the separation should make SRAX’s financials “much easier to understand going forward” because they will better highlight the Sequire business. On capital structure, management discussed the January expiration of about 4.5 million warrants, the remaining 5.3 million warrants, and the possibility of about $16 million of additional cash if those warrants are exercised. The company declined to provide cash and securities balances until the filing is complete.

Analysts focused on what could keep SRAX from exceeding $50 million of revenue in 2022, and management said it would require a significant decline in bookings; they added that strong Q1 and Q2 bookings should support the outlook. Questions also centered on renewal/churn, where Chris said Sequire renewal is still around 87%, and on the growth drivers, which he attributed to both market volatility and a larger, more experienced sales team. Management said the sales force grew from about five people in mid-2021 to around 10 including the founders, and that the company plans to hold staffing roughly steady for the next 12 months. Analysts also pressed on BIGtoken and warrant exercise prices, with management saying the April warrants are mostly at $3 and the fall warrants average around $3.75.