SRAX Reports 46.5% Revenue Decline and $2.6 Million Net Income in Q1 2023

SRAX, Inc. reported its financial results for the first quarter of 2023, revealing a significant decline in revenue and a net income of $2.6 million. This represents a decrease of approximately 29.5% compared to the $3.7 million net income reported in the same period last year. The company's total revenue for the quarter was $4.0 million, down 46.5% from $7.5 million in Q1 2022. The decline in revenue was primarily attributed to the company's transition from accepting marketable securities as payment to a cash-only model, which has slowed customer acquisition.

In terms of operational changes, SRAX completed the divestiture of its subsidiary, LD Micro, Inc., in March 2023, which contributed to a gain of $594,000 recognized in other income. The company also acquired assets from DNA Holdings, LLC, for $1.3 million, which included cash and digital assets. As of March 31, 2023, SRAX had 29,150,262 shares of Class A common stock outstanding, reflecting an increase from the previous quarter.

The company's financial position showed a total asset value of $14.5 million, down from $18.1 million at the end of 2022. Current liabilities decreased significantly to $14.2 million from $21.7 million, primarily due to a reduction in deferred revenue and accounts payable. However, SRAX reported a stockholders' deficit of $5.3 million, an improvement from $9.2 million at the end of the previous fiscal year, indicating ongoing challenges in achieving profitability.

Looking ahead, SRAX anticipates the need for additional capital to fund its operations, as it has historically relied on the sale of marketable securities for liquidity. The company is actively exploring financing options but faces challenges following its delisting from NASDAQ, which may hinder its ability to raise funds. Management has expressed concerns about the company's ability to continue as a going concern if it cannot secure the necessary funding to meet its operational needs.