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Research Triangle Park, NC, Nov. 15, 2022 (GLOBE NEWSWIRE) -- Data443 Risk Mitigation, Inc. (“Data443”) (OTCPK: ATDS), a data security and privacy software company for ALL THINGS DATA SECURITY, today announced operating results for the third quarter and first nine months ended September 30, 2022.
Business Accomplishments and Highlights for the First Nine Months of 2022:
Acquisitions
Contracts
Product Updates
Management Commentary:
Data443 CEO & Founder Jason Remillard observed, “Our results for the third quarter came in largely as expected, and we continue to see high revenue customer retention amidst extremely challenging economic conditions. We continue to focus on realigning our current customer relationships to a subscription and monthly recurring revenue model. While this has affected straight line revenue growth year-over-year, our increased and growing deferred revenues, diverse revenue base, and increased analyst attention all demonstrate the strong momentum of our business.”
“Looking ahead, we anticipate ending 2022 on a high note as we continue to work and deliver on renewals and net new opportunities with customers. We continue to expand the adoption of our product sets in some of the world’s largest organizations, supporting business critical data in flight and at rest, in the cloud or on premises. I am confident that Data443 is well positioned to make the most of the substantial market opportunity before us, continuing our mission: Toorganize the world’sinformationby identifying and protecting all sensitive data regardless of location, platform,or format,” concluded Mr. Remillard.
Third Quarter 2022 Financial Highlights:
Total revenues were $916,172 during the three months ended September 30, 2022, compared to $1,495,059 of revenue for the three months ended September 30, 2021, a decrease of 39%. The decrease in revenue in the second quarter was primarily due to our ongoing shift for some products from one-time sales perpetual licenses with annual maintenance contracts to time-based subscriptions with multiyear upfront payments; this shift resulted in fewer customers paying for subscriptions or renewals in the quarter.
General and administrative expenses for the quarter ended September 30, 2022, were $1,579,529, compared to $1,065,619 for the quarter ended September 30, 2021, an increase of 48%. The increase in general and administrative expense primarily consisted of management costs, costs to integrate assets we acquired and to expand sales, product enhancements, audit and review fees, filing fees, professional fees, and other expenses related to SEC reporting, including the re-classification of sales-related management expenses, in connection with the projected growth of our business. Additionally, we continue to incur specific one-time costs in relation to our planned Nasdaq Capital Markets uplist, additional financing activities and related functions, and an increase in other professional service fees.
The net loss for the quarter ended September 30, 2022 was $1,582,720, compared to a loss of $974,124 for the quarter ended September 30, 2021 it was mainly derived from an operating loss of $786,663, and interest expense of $796,057. The net loss for the quarter ended September 30, 2021 was mainly derived from an operating income of $195,985, interest expense of $1,101,910 and loss on change in fair value of derivative liability of $68,199.
Financial Highlights for the Nine Months Ended September 30, 2022:
Total revenues were $2,279,677 during the nine months ended September 30, 2022, compared to $3,095,279 of revenue for the nine months ended September 30, 2021. The decrease in revenue for the nine months ended September 30, 2022 was primarily due to increased pull-through of deals in Q4 of 2021 – both by the Company and our customers who took advantage of prepaid multi-year discounts and also took advantage of multi-year commitments to our SaaS products and other software product offerings.
Total deferred revenues were $2,652,382 as of September 30, 2022, compared with $1,608,596 of deferred revenues as of December 31, 2021 - representing an increase of 65%.
General and administrative expenses for the nine months ended September 30, 2022 were $4,669,311, compared to $3,810,580 for the nine months ended September 30, 2021, an increase of 22%. The increase in general and administrative expenses primarily consisted of management costs, costs to integrate assets we acquired and to expand sales, product enhancements, audit and review fees, filing fees, professional fees, and other expenses related to SEC reporting, including the reclassification of sales-related management expenses, in connection with the projected growth of our business. Additionally, we continue to incur specific one-time costs in relation to our planned uplist to the Nasdaq Capital Markets, additional financing activities, and related functions.
The net loss for the nine months ended September 30, 2022, was $5,862,251 compared to a loss of $4,695,776 for the nine months ended September 30, 2021. It was mainly derived from an operating loss of $2,971,242, and interest expense of $2,833,126. The net loss for the nine months ended September 30, 2021 was mainly derived from a loss on change in fair value of derivative liability of $431,853 and interest expense of $2,678,198 associated with convertible notes payable and convertible preferred stock, and gross margins of $1,919,028 and $2,687,175, offset in part by general and administrative, and sales and marketing expenses incurred.
About Data443 Risk Mitigation, Inc.
Data443 Risk Mitigation, Inc. (OTC: ATDS) provides software and services to enable secure data across devices and databases, at rest and in flight/in transit, locally, on a network, or in the cloud. We are All Things Data Security™. With over 10,000 customers in over 100 countries, Data443 provides a modern approach to data governance and security by identifying and protecting all sensitive data regardless of location, platform, or format. Our framework helps customers prioritize risk, identify security gaps, and implement effective data protection and privacy management strategies.
Forward-Looking Statements
This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by use of terms such as “expect”, “believe”, “anticipate”, “may”, “could”, “will”, “should”, “plan”, “project,” “intend,” “estimate,” “predict,” “potential,” “pursuant,” “target,” “continue,” or the negative of these words or other comparable terminology. 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, are forward-looking statements. These statements are not guarantees of future performance and are subject to numerous risks, uncertainties, and assumptions, many of which are difficult to predict or are beyond Data443’s control. These risks, uncertainties, and assumptions could cause actual results to differ materially from the results expressed or implied by the statements. They may relate to the outcome of litigation, settlements and investigations, actions by third parties, including governmental agencies, volatility in customer spending, global economic conditions, inability 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 global health issues, such as the ongoing outbreak of COVID, and political unrest and conflict, such as the invasion of Ukraine by Russia. 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 in Part I, Item 1A of our Annual Report on Form 10-K filed with the SEC on March 31, 2022 and our subsequent filings with the SEC. 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.
“DATA443” is a registered trademark of Data443 Risk Mitigation, Inc.
All product names, trademarks and registered trademarks are property of their respective owners. All company, product and service names used in this press release are for identification purposes only. Use of these names, trademarks and brands does not imply endorsement.
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Investor Relations Contact:
Matthew Abenante
ir@data443.com
919.858.6542