RESEARCH TRIANGLE PARK, NC, Nov. 18, 2020 — Data443 Risk Mitigation, Inc. (“Data443” or the “Company”) (OTCPK: ATDS), a leading data security and privacy software company for ALL THINGS DATA SECURITY™, is pleased to announce results for its third quarter and nine months ended September 30, 2020, with continued accelerated growth in all facets of the business. The Company filed its quarterly report on Form 10-Q with the Securities & Exchange Commission on Monday, November 16, 2020, which can be found at:
https://www.sec.gov/Archives/edgar/data/1068689/000149315220021394/form10-q.htm
MANAGEMENT COMMENTARY
Jason Remillard, CEO of Data443, commented, “We are extremely pleased with our third quarter and nine-month results, especially given the unprecedented conditions throughout the year. Despite these challenges, Data443 continues to adapt and focus on improving and enhancing all facets of our business, strengthening our positioning in the marketplace, and growing our service offerings to meet the rapidly changing needs of our customers.”
“We see this positive performance as being driven by a number of factors, including meeting the demand of our clients to meet the enhanced data compliance issues they face due to the abundance of remote working environments. In addition, the rapidly growing regulatory environment in California (an influential proxy for the rest of the United States), continues to escalate the importance of data compliance for SMEs, requiring our highly sophisticated solutions. The results for the quarter also demonstrate our ability to successfully continue to address this demand, while making strategic acquisitions and incorporating these technologies within our growing stack. All of this, combined with our initiatives to strengthen our sales and marketing efforts, led to our strong operational performance during the quarter.”
“I’d be remiss if I didn’t mention our strong customer retention, which is extremely close to 100 percent, as well as our expanding impressive customer base. We have continued to deliver the high level of customer service that is essential to building brand loyalty, ensuring ‘Data443’ is the answer to the challenges posed by our customers. We believe this has helped drive referrals and word-of-mouth demand, and we look forward to building on this momentum. We will be announcing some major new customers in the next few weeks.”
“In closing, I would like to remind everyone to join us tomorrow for our Business Update Call, where I will outline our plans for the rest of this year and our fiscal 2021.”
FINANCIAL HIGHLIGHTS FOR THE THIRD QUARTER OF 2020 AND YEAR-TO-DATE:
- Nearly $3,000,000 of toxic convertible debt paid-off or converted 9-months ended and counting
- Paid down over $500,000 in acquisition-related notes in cash
- Company historic quarterly record bookings of $835,000
- Best revenue quarter in Company’s history
- Reduction of G&A expenses of 35%
- Deferred revenues continue to increase, this quarter up 21%
- Net reduction of debt increased equity by $12,500,000
- Reached shareholder-friendly forbearance agreements for outstanding convertible notes
OPERATIONAL HIGHLIGHTS FOR THE THIRD QUARTER OF 2020 AND YEAR-TO-DATE:
- Completed Payments to Modevity, LLC for the ARALOC™ platform, the secure private data storage, protection, and enablement platform
- Released Data443 Chat History Scanner, the latest advance in our cloud Global Privacy Manager product line
- Secured contract with the NFL’s Pittsburgh Steelers to provide the ARALOC™ Secure Sports Management platform
- Welcomed Mr. Omkhar Arasaratnam, cybersecurity expert and strategic consultant to venture capitalists, to our Advisory Board
- Completed the acquisition of SAAS data analytics and content migration company – FileFacets®
- Completed the acquisition of Silicon Valley based SAAS data access control & SSO company, Resilient Network Systems
- Completed the acquisition of IntellyWP, an Italy-based developer that produces WordPress plug-ins that enhance the overall user experience for webmaster and end users
- Released enhancement of flagship data transfer, transformation, and delivery product, DataExpress®, which addresses market need for two factor authentication services
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020
- Recognized $700,000 of revenue during the three months ended September 30, 2020, compared to $628,000 during the three months ended September 30, 2019.
- Net billings for the three months ended September 30, 2020 of $835,000, compared to $1,129,000 in the prior year period.
- Deferred revenues were $1,469,000 as of September 30, 2020, an increase of $515,000 from $954,000 as of December 31, 2019.
- General and administrative expenses for the three months ended September 30, 2020 amounted to $858,000, as compared to $1,328,000 for the three months ended September 30, 2019, which is a decrease of $470,000, or 35%,
- Net loss of $1,500,000 for the three months ended September 30, 2020, compared to $3,196,000 for the three months ended September 30, 2019. The net loss for the three months was mainly derived from a loss on change in fair value of derivative liability of $420,000, associated with convertible notes payable and gross margins of $592,000, offset in part by general and administrative, and sales and marketing expenses incurred.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020
- $1,644,000 of revenue during the nine months ended September 30, 2020, compared to $1,129,000 of revenue during the nine months ended September 30, 2019.
- Net billings for the nine months ended September 30, 2020 of $2,370,000, compared to $2,066,000 in the prior year period.
- General and administrative expenses for the nine months ended September 30, 2020 of $3,950,000, compared to $3,200,000 for the nine months ended September 30, 2019, which is an increase of $749,000, or 23%.
- Sales and marketing expense for the nine months ended September 30, 2020 amounted to $151,000, compared to $461,000 for the nine months ended September 30, 2019, which is a decrease of $310,000, or 67%.
- The net loss for the nine months ended September 30, 2020 was $14,254,000 as compared to a net income of $4,027,000 for the nine months ended September 30, 2019. The net loss for the nine months ended September 30, 2020 was mainly derived from a loss on change in fair value of derivative liability of $420,000 and $9,698,000, respectively, associated with convertible notes payable and gross margins of $592,000 and $1,482,000, respectively, offset in part by general and administrative, and sales and marketing expenses incurred. The net gain for the nine months ended September 30, 2019 was primarily a result of a gain on change in fair value of derivative liability of $7,267,000, offset in part by an operating loss of $2,623,000 by increased general and administrative costs, and sales and marketing expenses incurred.
BUSINESS UPDATE CONFERENCE CALL
Data443 will hold a Business Update Conference Call and Webcast on Thursday, November 19, 2020 at 4:30pm ET.
Investors and other interested parties may submit their questions ahead of time by emailing Investor Relations at ir@data443.com.
Online registration is available at: https://info.data443.com/2020q3-business-update
About Data443 Risk Mitigation, Inc.
Data443 Risk Mitigation, Inc. (OTCPK: ATDS), is the de facto industry leader in Data Privacy Solutions for All Things Data Security™, providing software and services to enable secure data across local devices, network, cloud, and databases, at rest and in flight. Its suite of products and services is highlighted by: (i) ARALOC™, which is a market leading secure, cloud-based platform for the management, protection and distribution of digital content to the desktop and mobile devices, which protects an organization’s confidential content and intellectual property assets from leakage – malicious or accidental – without impacting collaboration between all stakeholders; (ii) DATAEXPRESS®, the leading data transport, transformation and delivery product trusted by leading financial organizations worldwide; (iii) ArcMail™, which is a leading provider of simple, secure and cost-effective email and enterprise archiving and management solutions; (iv) ClassiDocs® the Company’s award-winning data classification and governance technology, which supports CCPA, LGPD, and GDPR compliance; (v) ClassiDocs™ for Blockchain, which provides an active implementation for the Ripple XRP that protects blockchain transactions from inadvertent disclosure and data leaks; (vi) Data443® Global Privacy Manager, the privacy compliance and consumer loss mitigation platform which is integrated with ClassiDocs™ to do the delivery portions of GDPR and CCPA as well as process Data Privacy Access Requests – removal request – with inventory by ClassiDocs™; (vii) Resilient AccessTM, which enables fine-grained access controls across myriad platforms at scale for internal client systems and commercial public cloud platforms like Salesforce, Box.Net, Google G Suite, Microsoft OneDrive and others; (viii) Data443™ Chat History Scanner, which scans chat messages for Compliance, Security, PII, PI, PCI & custom keywords; (ix) the CCPA Framework WordPress plugin, which enables organizations of all sizes to comply with the CCPA privacy framework; (x) FileFacets™, a Software-as-a-Service (SaaS) platform that performs sophisticated data discovery and content search of structured and unstructured data within corporate networks, servers, content management systems, email, desktops and laptops; (xi) the GDPR Framework WordPress plugin, with over 30,000 active users and over 400,000 downloads it enables organizations of all sizes to comply with the GDPR and other privacy frameworks; and (xii) IntellyWP, a leading purveyor of user experience enhancement products for webmasters for the world’s largest content management platform, WordPress. For more information, please visit http://www.data443.com.
Forward-Looking Statements
The statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursuant,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements. The statements in this press release that are not historical statements, including statements regarding Data443’s plans, objectives, future opportunities for Data443’s services, future financial performance and operating results and any other statements regarding Data443’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts, are forward-looking statements within the meaning of the federal securities laws. These statements are not guarantees of future performance and are subject to numerous risks, uncertainties, and assumptions, many of which are beyond Data443’s control, and which could cause actual results to differ materially from the results expressed or implied by the statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict, and include, without limitation, results of litigation, settlements and investigations; actions by third parties, including governmental agencies; volatility in customer spending; global economic conditions; ability to hire and retain personnel; loss of, or reduction in business with, key customers; difficulty with growth and integration of acquisitions; product liability; cybersecurity risk; anti-takeover measures in our charter documents; and, the uncertainties created by the ongoing outbreak of a respiratory illness caused by the 2019 novel coronavirus that was recently named by the World Health Organization as COVID-19. These and other important risk factors are described more fully in our reports and other documents filed with the Securities and Exchange Commission (“the SEC”), including under (i) “Part I, Item 1A. Risk Factors”, in our Registration Statement on Form 10 filed with the SEC on January 11, 2019 and amended on April 24, 2019; (ii) “Part I, Item 1A. Risk Factors”, in our Annual Report on Form 10-K filed with the SEC on 17 April 2020; and, (iii) subsequent filings. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. Except as otherwise required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.
The Data443™ logo, ALL THINGS DATA SECURITY™, ClassiDocs™ logo, ARALOC™ logo and DATAEXPRESS® are registered trademarks of Data443 Risk Mitigation, Inc.
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Investor Relations Contact:
Matthew Abenante
ir@data443.com
919.858.6542
