SRAX SHAREHOLDER LETTER

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.