SRAX says focus on growing SEQUIRE platform, expanding client base

In a letter to shareholders, CEO Christopher Miglino wrote, in part, “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.”