Data433 Risk Mitigations, Inc. Files For NASDAQ Uplist; Planned Catalysts And Capital Restructure Could Fuel A Rally

March 08 07:20 2021

Although investors don’t like reverse splits, when they are executed with an end-game in mind, the results can outweigh the cause for concern. That could soon be the case for Data433 Risk Mitigations, Inc. (OTC Pink: ATDS), who announced a planned reverse split of its shares to earn a listing on the NASDAQ market. While the transaction itself does not change shareholders’ equity, the stigma associated with an R/S often causes shareholders to overreact, sell shares, and ultimately turn on the company itself. That need not be the case for investors in ATDS, especially with the company reporting record revenues and its highest booking rate ever in its third-quarter. Instead, investors may want to evaluate the long-term opportunity.

Data443 Risk Mitigation, Inc. has done an excellent job transforming itself into a one-stop-shop that offers leading Data Privacy Solutions for All Things Data Security™. That change not only makes them a comprehensive provider of diversified services, but it also positions them to target massive market opportunities through business, individual, and government market demand. And not only is ATDS diversified from a product perspective, but it is also positioned well to maximize opportunities in multiple market segments.

Moreover, having product depth and segment diversification can be a game-changer for the company. And by having an ability to build tailored software and services solutions that enable clients to facilitate secure data transfer across local devices, networks, the cloud, and/or databases, the opportunity for organic growth through client development rather than product development is already in place. Many companies that are 10X the size of Data433 often can’t make the same claim.

And proving that it is on the right track, Data433 reported record-setting revenues in its Q3 update. Better still, since that report was made, ATDS said it has eliminated its convertible and toxic debt, commenced filings to uplist to the NASDAQ markets, and completed an acquisition in February that adds more depth to its product arsenal. Thus, it’s hard to argue that the company is not firing on all cylinders.

Results are plain to see. 

Video Link: https://www.youtube.com/embed/MGus0jcli9s

Data433 In Growth Mode

Most recently, Data433 acquired all rights to the data archiving platform, ArcMail, a pioneer and leader in the enterprise information and email archiving market. Like its other acquisitions, ArcMail is expected to be immediately accretive to its operations and capitalizes on ArcMail’s expertise to offer customers an extensive choice of cost-effective, easy-to-use archiving solutions. The ArcMail acquisition adds to an impressive product portfolio that is also being leveraged to create shareholder value.

In fact, ArcMail is only one piece of a growing arsenal of leading products and services. Other products include ARALOC™, its market-leading, secure, cloud-based platform for managing, protecting, and distributing digital content to desktop and mobile devices. And like its other products and services, it has a global addressable market well into the hundreds of millions. 

Additional Data433 products include DATAEXPRESS®, the leading data transport, transformation, and delivery product trusted by leading financial organizations worldwide. Its ClassiDocs® is an award-winning data classification and governance technology, which supports CCPA, LGPD, and GDPR compliance. And its ClassiDocs™ for Blockchain provides an active implementation for the Ripple XRP token that protects transactions from inadvertent disclosure and data leaks. Each of these products and services can generate massive value over the long term, especially with security remaining a critical concern as part of the digital revolution. Moreover, Data433’s presence in multiple market segments also brings numerous shots on goal for success and helps facilitate a strong competitive presence in high-dollar markets. 

Leveraging other market opportunities, the company is marketing Data443™ Global Privacy Manager™, a privacy compliance, and consumer loss mitigation platform. They also offer Resilient Access™, a leading product that enables fine-grained access controls across numerous platforms for internal client systems and commercial, public cloud platforms like Salesforce, Google G Suite, and Microsoft OneDrive. And while those are valuable markets, they are also targeting sales from another massive market- SaaS.

A considerable opportunity can be exploited by ATDS targeting the booming Software-as-a-Service (SaaS) market with FileFacets®. FileFacets® is a platform that performs sophisticated data discovery and content search within corporate networks, servers, content management systems, email, desktops, and laptops. It’s an essential user-based product, and Data433 can capitalize on its high demand. Keep in mind that the company is coming off of a record-setting Q3 and had momentum going into Q4. Those results (Q4), which are expected in the next two weeks, could confirm our thesis- ATDS deserves more respect and investor attention. Remember, too, another report of record-setting revenues is expected. 

That’s an important consideration and should throw shade on the expected capital restructure. Record-setting numbers often have an extremely positive effect on share prices.

Record Revenues Trump All

An old saying in the investment world is that “news trumps all.” It should go a step further by saying, “record-revenues trump all.” Admittedly, not all record revenues translate into a net profit, but many hundreds of companies trade on forward-looking guidance and are rewarded with price targets that can be exponentially higher than current values. An argument can be made that ATDS deserves some blue-sky valuation, especially when considering that its product and services portfolio can compete with even the most prominent players in the sector. And to support the “blue sky” premium, Data433 is delivering its part. 

In fact, not only did Data433 post record-setting revenues in its third quarter, but they also eliminated $10 million in derivative liabilities and reduced expenses by 35% in that same period. Those accomplishments change the company’s capital position dramatically, and from an accounting perspective, it could help accelerate positive EBITDA or even bottom-line EPS. That may sound far off until reading about its other Q3 accomplishments. 

Also, in Q3, the company reported an increase in shareholders’ equity of $12.5 million, paid down roughly $500,000 in acquisition debt, and recorded its highest quarterly bookings ever. Thus, despite how the markets are treating almost every small-cap stock right now, investors can’t deny that Data433 is growing its company. Moreover, as the company makes new deals, they each tend to be immediately accretive to cash flow which should fuel consecutive record-setting quarters. 

Remember, too, the growth at Data433 is happening during one of the most unprecedented and challenging periods of commerce in the past fifty years. A recovering economy could be a transformational time for Data433 as well. 

To that end, despite the ongoing pandemic, Data433 is not slowing down its efforts to grow its business, and its recent performance suggests that the best is yet to come. And by targeting a data security market in hyper-growth mode and likely to stay that way for decades, Data433 may be in its best position ever to capitalize on near and long-term business opportunities. 

Investors have a choice. They can evaluate the Q3 data and trade ahead of an expected record-setting Q4…or, they can wait until Q4 financials get released and potentially find themselves chasing the stock higher. With less than two weeks to go until Q4 results are published, the option is straightforward. Buy on weakness or buy on expected strength. The better option may be the former.

 

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