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 MiglinoFounder 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
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