SRAX(US:SRAX)2023-08-28 20:05Financial Performance - Total revenues for Q2 2022 were $7.722 million, a 7.9% increase from $7.158 million in Q2 2021[15] - Net loss for Q2 2022 was $23.030 million, compared to a net loss of $5.740 million in Q2 2021, representing a significant increase in losses[15] - Basic and diluted loss per share for continuing operations was $(0.88) in Q2 2022, compared to $(0.17) in Q2 2021[15] - Total costs and expenses for Q2 2022 were $7.333 million, up from $6.242 million in Q2 2021, reflecting an increase of 17.5%[15] - Net loss for the six months ended June 30, 2022, was $19.3 million, compared to a net loss of $16.8 million for the same period in 2021[20] Assets and Liabilities - Total current assets decreased to $6.556 million as of June 30, 2022, down from $22.985 million at the end of 2021, a decline of approximately 71.5%[13] - Total liabilities increased to $32.199 million as of June 30, 2022, compared to $22.930 million at the end of 2021, an increase of about 40.5%[13] - The company’s accumulated deficit increased to $(49.657 million) as of June 30, 2022, compared to $(30.355 million) at the end of 2021[13] - The company had outstanding borrowings amounting to approximately $3,817,000, an increase from $633,000 as of December 31, 2021[89] - The Company has a liability of $613,000 recorded in other current liabilities related to an agreement with an institutional investor for the sale of marketable securities[90] Cash Flow and Reserves - The company had cash reserves of $260,000 as of June 30, 2022, a decrease from $1.348 million at the end of 2021[13] - Cash flows from operating activities resulted in a net cash used of $7.2 million for the six months ended June 30, 2022, compared to $12.7 million for the same period in 2021[20] - The company's cash at the end of the period was $260,000, a significant decrease from $10,060,000 at the end of June 30, 2021[22] - As of June 30, 2022, the company reported a net decrease in cash from continuing operations of $1,088,000, compared to an increase of $7,680,000 in the same period of 2021[22] Marketable Securities - As of June 30, 2022, the company had marketable securities valued at approximately $22.1 million, up from $15.6 million as of December 31, 2021[44] - The fair value of marketable securities received for revenue contracts was $18,106,000 for the six months ended June 30, 2022, compared to $18,654,000 in 2021[22] - The Company recorded a realized loss of $899,000 from the sale of marketable securities during the six months ended June 30, 2022, with sales proceeds of approximately $426,000 against a cost basis of approximately $1,326,000[86] Impairments and Write-offs - The company reported a significant impairment of goodwill amounting to $10.200 million in Q2 2022[15] - The company incurred an impairment of $10,200,000 to goodwill and $1,481,000 to intangible assets for the six months ended June 30, 2022[53] - The Company recorded a loss of approximately $10.7 million from the deconsolidation of BIGToken, resulting from a merger transaction that reduced ownership from 66% to approximately 4.99%[74] Revenue Sources - The Company generates revenue primarily from its Sequire SaaS platform and LD Micro subsidiary, with Sequire SaaS platform revenue including licensing subscriptions, managed services, and ancillary data[55] - Sequire platform revenue for Q2 2022 was $6,420,000, a slight decrease of 0.97% compared to $6,483,000 in Q2 2021, while total revenue increased to $7,722,000 from $7,158,000, representing an 7.87% growth year-over-year[134] - Customer securities revenue for the first half of 2022 was $12,101,000, up 40.5% from $8,626,000 in the same period of 2021, while cash revenue decreased to $3,120,000 from $3,449,000, a decline of 9.5%[134] Capital Raising and Financing - The company anticipates raising additional capital through private and public sales of equity or debt securities[32] - The Company issued $16,101,000 in principal amount of Original Issue Discount Senior Secured Convertible Debentures for a net proceeds of approximately $9,100,000 after deducting fees and expenses[91] - The Debentures pay interest at a rate of 12.0% per annum, with amortization payments required after six months from issuance[92] - The Company entered into agreements to borrow against future receipts totaling $4,170,000 for net proceeds of $3,044,000 during the six months ended June 30, 2022[88] Stock and Equity Transactions - The Company approved a share repurchase program allowing up to $10,000,000 for Class A Common Stock repurchases[104] - In 2021, the Company repurchased 155,000 shares for a total cost of $793,000, with $9.2 million remaining for future repurchases as of June 30, 2022[105] - The Company issued a one-time dividend of 36,462,417 shares of Series A Preferred Stock to certain Qualified Recipients[112] - The Company had approximately 228,000 shares of Class A Common Stock reserved for issuance under equity compensation plans[115] Business Operations - The Company operates a unique SaaS platform, Sequire, which provides features for issuers to track shareholder behaviors and trends[31] - The Company has two business units, including a SaaS platform for data analysis and targeted marketing solutions[133] - The Company established an Advisory Board and granted 500,000 shares of common stock to its members as compensation for their services[173][174]