RESEARCH TRIANGLE PARK, NC, November 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 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
///***ClassiDocs™ Classification: PUBLIC ***///
