Westlake Village, Dec. 18, 2023 (GLOBE NEWSWIRE) -- Dear Shareholders,
As I write to you today, I do so with a sense of deep reflection on the year that has passed. It’s been a period that tested our resilience. I want to express my sincere regret for the concerns and frustrations you may have experienced as a result of our stock price.
Addressing Our Challenges Head-On
Our delisting from the NASDAQ market was a moment for serious introspection. Looking back, there were areas where we should have been more proactive, especially as it relates to our accounting team's leadership and the complexities of the accounting for our business. Bringing in new experts was a turning point for the Company, providing clarity and direction that we were previously missing.
Restructuring for a Stronger Tomorrow
This change in leadership has provided new insights that enabled us to improve our business model and become more efficient. We’ve streamlined our operations, focusing on what we do best while also reducing our workforce resulting in a team that’s more productive and effective. Our sales approach has also evolved, now powered by technology that enhances our ability to connect with and serve our clients effectively with a smaller sales and marketing team. We have reduced our team over the past year, from close to 160 people to just over 20, and our operations are currently more efficient than ever.
Financial Health and Transparency
The audit for our 2022 results is currently being completed and I am optimistic about the results. 2022 was a challenging year from a cash flow perspective, as we transitioned from customers paying with stock to only accepting cash as payment for our services, magnified by our inability to quickly sell our marketable securities. The financials during 2022 had significant non-cash adjustments to goodwill and the value of the securities held on our balance sheet. However, I encourage you to review our operating income – a metric that reflects the true operating performance of our business. We expect it to be positive in 2022 and positive for the first 9 months of 2023.
The Road Ahead for Marketable Securities
The market’s volatility has indeed impacted our securities portfolio. We're taking proactive steps to manage and maximize the value of these assets. While it’s a complex and time-intensive process, we are committed to maximizing shareholder value. The current value of our rights related to our contracts is more than $35M. While we realize that it will take time to realize this value, we are working to maximize the value of these assets.
Refocusing Our Core Business
Our focus now is on growing our SEQUIRE platform and expanding our client base. We have a clear goal of reaching 300 cash-paying clients in the next few years. Also, our upcoming investor conference in Puerto Rico is an excellent opportunity for us to connect and discuss our plans. I hope to see many of you there, you can sign up here: puertorico.srax.com
Navigating Stock Trading Challenges
The shift to the OTC Expert Market has brought its own set of challenges, particularly in stock trading. We’re working hard to address these issues and appreciate your patience and support as we work through this phase. Once the audits are completed and current, the company will transition to the regular OTC, and investors will be able to buy the stock again, something that not many have been able to do.
I understand how frustrating the decline in the value of your position is but your support during these times has been invaluable. It’s this support that drives us to improve and build a stronger, more stable SRAX and I appreciate the calls for advice and input. I am confident that our current path will lead us to a more valuable company and I look forward to keeping you updated on our progress.
Christopher Miglino
Founder and CEO
SRAX, Inc., a technology company, focused on enhancing communications between public companies and their shareholders and investors in the United States. The company offers Sequire, a Saas platform that allows issuers to track their shareholders' behaviors and trends, then use data-driven insights to engage with shareholders across marketing channels. It also organizes and hosts investor conferences within the micro and small- cap markets. The company markets and sells its services through its in-house sales and marketing team. The company was formerly known as Social Reality, Inc. and changed its name to SRAX, Inc. in August 2019. SRAX, Inc. was founded in 2009 and is headquartered in Westlake Village, California.
Cautionary Statement Regarding Forward-Looking Information:
This news release contains forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future, not past, events and may often be identified by words such as expect, anticipate, intend, plan, believe, seek or will. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Specific risks and uncertainties that could cause our actual results to differ materially from those expressed in our forward-looking statements include risks inherent in our business, and our need for future capital. Actual results may differ materially from the results anticipated in these forward-looking statements. Additional information on potential factors that could affect our results and other risks and uncertainties are detailed from time to time in SRAX's periodic reports filed with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year ended December 31, 2021, its Quarterly Reports on Form 10-Q as well as and in other reports filed with the SEC. We do not assume any obligation to update any forward-looking statements.
Contact
Investors@srax.com
