SRAX - Earnings call transcript Q2 2018

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Operator

Greetings and welcome to the SRAX Second Quarter 2018 Results Conference. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Investor LHA of Chapman Relations. Kirsten may Thank you, you begin.

Kirsten Chapman

the welcome review the the morning, SRAX’s conference will to you I’d available financial then call. will Christopher open metrics, for Chris CEO, highlights, today With to questions. quarterly everyone. are and like all on is CFO, SRAX’s and and call Company’s being of management Hannan. at J.P. from is call srax.com/investors. us Good This webcast website second quarter J.P. Miglino; Miglino the will discuss Chris XXXX

over relate turn the contain management, I be to believe, anticipate, Before like they which to involve estimate, this to SRAX will, as remind statements that expressions time. SRAX. forward-looking are call differ by indicated may to call that cause enable, I similar and words the expect, could, this and from project would risks actual cautioned statements at that by could you all intend, forward-looking potential, uncertainties may results anticipated Investors those should,

addition, at described the be risks can SRAX’s which SEC, public filings reviewed with In more in are www.sec.gov. fully other

a Finally, results. non-GAAP in from SRAX please management stock-based Miglino. today’s on one-time Chris excludes other now expenses Please financial measures refer pleasure compensation CEO, and to to my non-GAAP for its performance call which GAAP to refer GAAP is make It items that will note to measures full SRAX’s its certain release call reconciliation of SRAX’s comparable turn press measures. to the financial most Chris? over the

Christopher Miglino

I’d a and on future be exciting the are We may you all Kirsten. our us Good us. for joining with you excited conference like one we bright what see shareholders thank SRAX’s you, that support. everyone. for of SRAX Thank most your journey to for are for Thank afternoon, calls to-date. today

outlined the the executing are our significant today, initiatives. have past; national we review that and transformational in We strategy I’ll

verticals; to sell and four then, the consumer-powered second, where and of BIGtoken.com of data. our marketplace finally, of sale data access the development their development verify First, the other our SRAXmd; own, people

the let’s Xth. SRAXmd August on review closed Now, sale that

and and models. First, we’ve proven valuable, verticals SRAXmd data our verticals. our have very The has of we in to other proven strategy be similar that built monetizing data building

As million, we our received of end day, year including a embarked most total know, sale the of business At including a the you components. last monetizing of of SRAXmd the three on to consideration lot $XX.X bids. and amounted of number interest, the

to an less rate $XX.X million of out fees term XXXX, that up based third, ownership a by through additional entity, near on transaction’s significantly the quarterly MD gross interest December sale achieving stake that $XX is of the earn carry week; new we First compounded $X providing shares an in XX and second was most cash, million return; X% threshold was received million the in until MD entity. acquiring the preferred last profit in and XX%

perspective, Capital, has business, the this investors And we’ve previously own grow. firm of great are maintained that in a with it accomplished we $XX investments and that right owns at if its has times. earn-out return. in investment. along United our and $XXX initiatives. years the States has the cash flourish has to upside the we then the invest to the other now in investment we SRAXmd on employees a foothold business. that additional with for our equity receive the our entity the needed people chance standalone team million, sale business, Logistically, MD as a institutional XX history the now To can taking healthcare private the time, any MD and SRAX of long and SRAXmd believe next sold be those with has would solid in our of in many to our is great we XX interest for give Mexico. built speaking, will an Halyard remaining controlling now companies Halyard a MD two interest, to stake use the with the level acquiring excited the and to a million top development vertical. selling development holding While after sale in attention, on ability about in left a XX for office

engineers part share We transaction. to as continue innovations. Mexicali, the collaboration will members repurchase to that team a of SRAXmd especially part took continue and in office the among However, space, had foster share

part shares that including former options. repurchased we the As employees’ XXX,XXX,XXX equities, transaction, of and XXX,XXX

we result, further initiatives outstanding without count other diluting development reduced of X% a by funded shareholders. our share approximately SRAX existing As and

SRAX the core onto Now, business.

similar In automotive, not being initiatives. verticals, we graph, focus to of as our attention valuations SRAXmd. my XXX% and identification in our four valuation packaged well-capitalized, sports social if And could in achieve blockchain our we revenue media, and have the our opinion a greatest of can growth BIGtoken.com goods, believe These development, various ultimately stages of on addition all greater each of and now consumer initiatives. are could potential

in to-date, talk really team working at and been SRAXshopper. leader. than was we’ve coming SRAXmd. we and business much XXXX, In It’s experts began greater our the our new expand broaden lower as about vertical important profitable let’s reduce has and well revenue been highest to as to XXXX, is our shopper margins. First, eliminate less revenue-producing In in that SRAXshopper some note, oldest shopper to vertical sales fact

shopper experience are executing profitable revenue of who with decade We and are years to focused digital on drive George his team welcome excited strategies. key strategies the of Stella, majority President He digital last to Vice media growth. of spent the SRAXshopper, XX

shoppers tools targeting advertisers drive of layering and transparency of at while a ways. potential tools, media discovery buying across a BIGtoken.com list, amplifying tracking to list As devices and our SRAXshopper to shopper targets synergies multiple sources. shopper positions marketing online technology automates and digital very ad including tremendous single, characteristics, differentiator verified The innovative sales key all to between a top to of their and message are BIGtoken.com’s and proven verified reminder, shoppers’ stack visiting believe in and data launched CPG On data SRAXshopper compelling. offline increase shopping for media and with enable growth social attribution. by of shoppers very, marketing inventory video the recently marketers retailers shopper reaching unique the offer in We unit SRAXshopper the and shopper. shoppers

Social get to launch in social Social. determines audiences channels. intelligent the are SRAX automatically results manage, budget one engine location marketing media to while from consistent users media users messages data is tool and our for from to enables dollars Social social rest. measure Social dashboard. they across spend enables many central SRAX media able to social spend for clients Second to SRAX one best way programs best to agencies the The view, grow, media set Users multiple a social and brand. want does media brands the SRAX push campaign engagement to the is multichannel the that the and artificial social month all targeted

development, improve natural our of phase continually next language we as the offering. introducing generation are we For

leveraging are to fact, businesses, improve In we in our performance. of intelligence SRAX artificial for all deployed Social

usable meaningful algorithm proprietary of that with part segments. specifically user analytics each data creates and This implementing marketable our cohort that of are learning, benefits behavior of data products. a thousands We generates clustering deep

targets intelligent and through and tools target dealerships, building both, SRAXauto’s identifies shows buyers SRAXauto. audience that to is auto on home road desktop on or purchase. mobile dealers and enable Third of at intenders precision stack the highly auto auto to reach at manufacturers and engaged

To-date, this with Direct, vertical fans agency offerings include CarTRAX develop locations, fourth enables StadiumTRAX, at develop are the DealerTRAX, and to events ShowTRAX, this Loyalty, We brands concerts. are is bars, gathering CarTRAX, r restaurants, key home, Lease&LoanTRAX. key connect continuing live universities, roadmap. tools offerings stadium such SRAXfan continuing TestDriveTRAX, during FanTRAX, SportsViewTRAX. or The out-of-home and SRAXfan. roadmap. also To-date, we at or And and as include sporting to CarTRAX

BIGtoken.com. not least, let’s but last review Now,

the BIGtoken.com data. goals, has data verified serve through to message their audiences. is system their other a our consumer consumers XX as data access third-party to serve users, the is data compensation distribution vertical. management reach will brands to we James in everyone will at beta about will when finally just and President create A manage provides we to will space with Stewart, internet Last people. full that huge and are believe we’ll to own seeking that and as to and provide the we’ve access and staffing and with competitive and and verticals advantage also learn launch verified consumers of We consumer empowerment, a audiences The better David of potential. better data our agencies, billion-dollar over of meet which a reach our manage rate. system ability revenue This sales weeks. to engineers media transparent, growth consumer experience in our access reach in our to advertisers data of XXX,XXX and revenue by more security be and week, Business of us transparency earn of To transparent September well been first data. media greater partner applications run He will choice, We developing Development. and evangelize undertaking few lead verified in efforts consumer DJ digital named data Vice accretive and to the this circle, million with allowing we years a ecosystem, sales. companies, and even The at to the beginning provide $XX ownership has

quarter, a X and number well with users ability Last checking free participating and points connecting XX,XXX tester we testers experience for Rewardable locations wins for improving your in as exciting will public top beta one improving a we gamification experience, include win are of our announced surveys, BIGtoken.com’s rewarded Bitcoins respectively. BIGtoken.com. second in accepted on the be more. through online social of two rewards over to Bitcoin actions registering enhanced third developer’s During for actions. contest highest and The week, period. groups account which their build six-week and user accounts, BIGtoken.com, into place waitlist while answering consumers,

timeframe. testing series of team within of a challenges As so are include actions, beta a also various specific complete all important, where and must team the engagements will gamifications members therefore

teams’ to individually, to assessed promise the our they out shareholders. earn make vertical and promise fulfilled more BIGtoken now, we through good monetize existing are the points can MD We to users dividend our activities. While our to on plan

let’s us have place On an identified grown now, before implementing by the completed. the everything we way And XX% plan. ready will dilute allow did the us transaction XX%. key team our to our MD not sales discuss now in and non-dilution. key by sales getting our We’ve over months, wasn’t six these but on and goal. shareholders to additional in management, the sales a put are that hires included We operating execute we’ve in further to help past it. infrastructure us It achieve hires did this could been was that we business we easy front, have grow That and

that over financial to J.P. have with it we these grow And capital to turn to Now that, for verticals, going the do call quickly. the I’ll review. we are the

J.P. Hannan

the Thanks, of revenue the the year was revenue results period of in versus gross million. Chris. $X.X $X.X to comparable going I’m million XXXX. quarter review second for gross Total prior

our since was last while we gross year-over-year, by revenue focus on profit year the increased have about refocus strategic Now, slightly, driven telling been profitability measures. to total you business lower

debt quarter both result, the $XXX,XXX our that’s of which due QX at quarter and our Operating driven is the that This the and $XXX,XXX quarter is in for of fees SRAXmd mid-XX% million, As in by noncash now range. consulting higher financing. product to BIGtoken.com, of in expense further. ongoing XXXX of level $X.X from performing XX% and in is a XXXX, compared the in averages up second primarily compared XX% was margin above and the in to onetime, Interest expense historical necessary debenture those was stock resulted both paid from million the $X.X in quarter the well in to grow gross headcount to increased XXXX total of October revenue groups to XXXX. was additions quarter second

coupon our the We end onetime securities That cash XXXX. was XX. past in come registration carry effective balance and The May on Those penalty XXXX due current for ultimately debentures. a was filing payments debentures to of of debt $XXX,XXX quarter approximately this convertible underlying total of at XX.X% the million. $X.X April the S-X acceptance of related interest registration also for of during statement of quarter delayed incurred

loss compared as total of of Our EBITDA second in share of of to was a a in the per share $XXX,XXX or XXX,XXX second was EBITDA the net quarter adjusted loss under $X.XX compared to for quarter just $X.XX loss quarter or of Adjusted the $X million loss $XXX,XXX XXXX. XXXX. gain per

ago noncash as to adopt that some review financials late back versus XXXX. new chose related of early issued you in year the in want retrospective at resulted XXXX. as issuances to we filing, guidance XX-K period, our discussed out a was warrant last treatment previously This I Now, adjustments to ones necessary accounting adoption X, to numbers our from point that we in to January released length published our

saw such, our do As the numbers those QX you comparable in earnings match release. exactly XXXX to not

and and of or group $X.X of $XX,XXX in detailed advertising balance revenue. half utilize of state lower ended SRAXmd legacy general liquidity XX-Q highly products. approximately of just of can our full compared under today. December reflects results like since the repurchase levels Since More comprised outlined be to are is nature the the generation comprised with quarter XX-Quarter, last presenting this as of group. lower our experiencing EBITDA. SRAXmd you XX, million a half collections are in in after adjusted to However, transaction the though, period highly than SRAXmd some everyone, year-to-date review revenue quickly none end, XX% be advertising XXXX, adjustments sales remind filed revenue. $XX XX% to the we year to also our our you of typically also as warrant bridge non-cash of those results the found million just seasonality results stronger of total benefit contribution SRAXmd million year at of business accounting of or any quarter cash in for fully these the and in the $X third and equivalents half this income SRAX product XXXX. adjustments inclusive the much begin SRAX or give that I to included with revenue quarter Again, To first later XXXX that warrants. total In year, first we’ll operating in second product our some the in numbers closed perspective been is reporting. seasonal and we’ve dilutive the I’d without the cash operating We late affected cash A

profile enhanced week liquidity the Our greatly was last with from MD the proceeds received transaction.

of utilized the Approximately quickly the gross at in investment transaction SRAXmd very breakdown legal from $X.X and million $XX.X million down and received closing to Now, was proceeds related from summary paid We proceeds transaction. we at in a fees expenses the received banking closing. sale.

of through this to agreement was should this advances to these verticals. adjustments. termination repay purposes investments from in repayment. was April $X held indemnities in date. make The and due the was transaction from other million receive as retained we operating renewed the something various be line bonus completion for SRAX. past $X escrow compensation with working out on will successful call. SRAX approximately FastPay And options for million well product earlier accounts potential million these million the existing The under general transaction are utilized from which million after outflows, paid to Approximately taken at use the in unforeseen for final that million arises, to a employees utilized later strategic receivable a $X Approximately $XX Just remains back Chris for exiting capital employees and repurchase and as net amounts paychecks if FastPay cash of this line all as against referenced we Partners. was Approximately available SRAXmd $X $X utilized and shares our previously

mentioned, gross Chris year-end. could performance million hitting we SRAXmd $X by receive another As upto profit targets

common Finally, as were XX.X of there shares million approximately June XX, XXXX, outstanding.

call the turn to like to I’d Chris. that, with Now, back

Christopher Miglino

Overall, monetize we then worked SRAXmd. and build Thanks, to diligently J.P. hard

and sale to many stages engineers can future diversify giving quality and and users are rich opportunity that SRAXmd. turn and marketing we well-positioned and will the we is verticals, the enjoy with the strategy. believe where with portfolio still companies web to potential with valuation believe four various call advertisers and product Frankly with BIGtoken.com through and remaining for over the than also similar solution in pleased And outcome so drive our addition our our the demonstrates provides ability like privacy upside. We’re control reward Further, development benefit BIGtoken.com. to the a to experts of to I’d our our to that of operator We more monetize or creating sales to invest and by more platform. greater proceeds data. their transparency the of drive value. BIGtoken in And The our to to obtain we this data is issues, consumers shareholder now Q&A. ecosystem hire

Operator

of [Operator the with comes Chardan Jim McIlree with Instructions] first your question line Please Our from proceed Capital. question.

Jim McIlree

Good the about, information forma talked XX-Q. being guys. you Thanks. I morning, pro think, in J.P.,

want I it talking forma a So, would to pro just pro forma? just sure or a make you’re full be revenue about

J.P. Hannan

Revenue and EBITDA contribution.

But the is they segments, to P&L with not businesses, don’t discrete have the run interest core in elements. are independent we’ve full keep we’ve Something depreciation discernible operating given way et mind cetera. you they these

that see So, contribution was. what you profit could

Jim McIlree

the at without give of and first Okay. were Can MD? what a you expenses operating half, ballpark least in QX

J.P. Hannan

was year of Revenue XX% say of total revenue and the about million in the was load expense for half driven. the year. was Yes. the -- MD first I the Total of caveat, of the -- MD $X.X first half

tends more frontloaded the than of seasonality business products. is this Now, and to a much MD other in there be lot

that So, I wouldn’t extrapolate just out.

and was [Ph] XX% year previous revenue through remarks, lower, prepared the MD my in even mentioned of the I As XX%.

Jim McIlree

Thanks Chris what then, from easy reminder. that Are talking to for just the XX%, going expenses, the we about and about I increase that levels, What there. we are both talked you it about increases forward, current is talk operating talking? or And expense investment increased operating think XX% XX%, are?

J.P. Hannan

the largest in business to resources Interestingly, growth. been with to trying growth ramp dedicated it support more that MD of over area as provide year last been expenses the revenue we’ve in and the operating has

running $X.X out, the about or extract the and that a business the X.X allocated half added first lines. business we about current year of estimated general out is standard the of the about its overhead rest the expenses which of this So, was million a million core corporate and amongst that product to for different the BIGtoken. We $X applicable year, just in total $X in alone million

Jim McIlree

to trying the spend have driven going amount an you I’m will generate there’s of element get? Does X And that to increases forward, results that you’re the expenses operating trying to sense? or if that to understand make be results dollars even

Christopher Miglino

It will a sales will Jim, it of be activity. be Jim sales, sales, lot -- oriented

it’s we as to additional very there. a team to wise need. close sales members. scale substantial the of a So, amount out what new we we’re with perspective, addition team And to going -- don’t scale technology Infrastructure from see start I

J.P. Hannan

going So, driven, I I money not success is not certain to revenues. it driven. if you’re at it’s a they are sales bringing not but mean extent, completely success keep in the throwing to mean,

Jim McIlree

Correct.

Christopher Miglino

of by management the end the outside we the growing within team XX business. people the job look sales year, we’ve to the And that’s of hopefully this somewhere organization. very XX amazing an team hired sales of good sales a be done And to around MD

Jim McIlree

ex-MD? many how there again, now And are

Christopher Miglino

there around now, is XX. Right

Jim McIlree

ICO to for Okay. contemplated you BIGtoken, the is talk about potential occur? still Chris, can an that for

Christopher Miglino

it that share. before the phenomenon. ICO with statement doing of is as were of kind BIGtoken But, registration being the They this up wanted that unique to that what with the way they a on structured is held So, preferred And left registration things one the BIGtoken SEC. we comfortable front the effective. the get word is going is statement a

Reality, in which we’re So, revenue subsidiary putting that a share BIGtoken, of BIGtoken wholly-owned rights Inc. is the is Inc. what we’re a have on will to doing place Social of preferred

through once in expenses able we’re place, that handle BIGtoken. within non-dilutive in offering now. BIGtoken, of And we Inc. the is that will So, be will do all the then, process working that to a of

escrow have fact, BIGtoken, for In accredited from in Inc. investments already we some today. investors

complete when to ICO other that shareholders the Inc. with So, for we’ll But, be preferred you anything do parent. any that. an non-dilutive too share BIGtoken, people look And coin it to confuses in or base connoted we trades cryptocurrency will an cryptocurrency the that on some the say like exchange the ICO, of because changes. that is within

we planning those of not list Our cryptocurrency -- any are doing on BIGtoken what with will exchanges. on

to is Our national and on actually a have list trade goal it exchange.

Jim McIlree

Thank more, Okay. couple And just That’s I helpful. you. a if might.

that piece preferred that way? you any convertible paper are of getting So, in is in this MD,

Christopher Miglino

It’s It’s the just not sale. upon convertible.

preferred So, we have rights.

So, it out paid back distributions quarterly if actually sold today year back less it, the and then, before of we the sale increases they piece to get shareholders. that will the a would the compounded we for for amount rest X% And happens. they what got than until get our

So, the sold for say, X% to two million get for sold be two an would they interest. back of another years $XX in plus in it they could amount money, if if we compounded you -- it sure

another million whatever plus line, flat million, $X.X be just back it’d So, was you $XX.X get compound.

Jim McIlree

correct? payment. PIC Is a that that’s And

Christopher Miglino

Correct.

Jim McIlree

And my last one.

earn-out, paid? get know I December would XXst when But, it’s So, results. the based that

J.P. Hannan

Surely audit next complete [multiple after is of part an in year? reconciled early speakers]

Jim McIlree

Okay.

the good on of to all we audits and So, wait have stuff. that

Okay, everything. great. good luck the deal, congratulations on Well, and with

Operator

question comes David Research. Lavigne question. Trickle Please with next Our your of proceed line from with the

David Lavigne

Hi, guys.

for I on obviously, milestone levels, Company. I the great event First, to variety think a It’s really a of see think. congratulations,

just something a that all? you at on you there? that you they piggyback reasonable have mean, -- the but comment kind reasonable little performance But, assuming question the out is that feel on last can’t a kind a bit. Can this, SRAXmd of that that on far is it’s number you -- -- answered something chance of it’s really get of to kind you know have I not So, there achieving. I’m of the so I

Christopher Miglino

the were So, the year we from the numbers, were earn-out. -- million signed hitting of away without the to giving of we $X the remainder specific for start transactions

David Lavigne

Okay.

So, it’s doable…

Christopher Miglino

it’s continues then after in at a Definitely, that. doable. to Yes, and it certain grow kicks level

David Lavigne

Okay.

another on So, question I the verticals. have

thing. sense in even further sort sit a of you’ve of that operational, are forward But, path terms verticals of stages? I’m us just for are technically or fully of just these you So, of standpoint a sold through verticals how get of basically roll idea marketing of all looks may out trying assuming now they of what give revenues the to they gone can all how or start are into list and verticals, sort different when sales going mode we to sound, are and kind they these are and I’m the verticals in of And be to maybe some an today, development, they where ahead, these they others. like are from just can may than those? and contributing

Christopher Miglino

we and that’s most -- revenue where been been was when for SRAXshopper it’s time, that $XX $XX million marketing. of did going years million, the on million largest that revenue CPG On $X ago, We of -- obviously from couple was our in a coming a did MD shopper-based generator. long

three those enhanced MD similar products but that and viable where the we’ve be market. and have So, of all are tools been inside being was improved to to are years at we’ve ago. On they that continuing time built completed sold, to beginning SRAXauto, over offering the the

when So, MD, sales a $X there three million. ago was of MD was around time at years

now. of we the been so, taking all Both those And there has but say, are the I’d at X On team SRAXfan. to over tech for kind it really enhanced artificial with with finished intelligence being we’re the the or six the beginning. mechanisms And added again SRAX the and is the last, that technology months X now. Social, months. it’s at around of to now, five and sales fan the beginning of product, But, same so market is

starting it’s that’s by recognize and today, we to our as So, sold sales revenue being team speak.

revenues not going least until as far platform As the BIGtoken at itself. then XXX,XXX I’d hit, say, have inside is participants to we

David Lavigne

Okay.

Christopher Miglino

give understand that start there every of so number the And I we that with key BIGtoken, where can platform? consumers out that for will metric would guys sign-ups you signing we will to have for be sit quarter within you a is

David Lavigne

to this to right. I of And Did XXX,XXX $XX million roughly equates say you I just users got so revenue? wanted make worth sure

Christopher Miglino

Correct.

David Lavigne

Okay.

Christopher Miglino

rate. a run On

David Lavigne

The last able to piece, piece or maybe just are just do maybe there? likely that’s capability an off? it or something you inclination is something that with to do question. One is going paper is remaining debt that some stay or that you even Can you -- have pay that of do or to to

J.P. Hannan

call There is premium… a

Christopher Miglino

oh, We can -- J.P. please,

J.P. Hannan

then, on there premium have be call warrant issuances Okay. additional some We a And with take it is out. somewhere There to associated take that. that and made. it depending are XX% when pay would we can’t out. But, between XX%

to that. dilutive it’s do So,

now, [indiscernible] are So, in for It we it leaving on it. place. going to

David Lavigne

Okay, great. fellows. Thanks,

Christopher Miglino

see that’s as mention people debt there important I to out debt. is Dave, that you one think less previously, what of today substantially is remaining thing And on what was the than converted that

So, chance... is there still

David Lavigne

get the mean Yes. outcome. I that,

great. Okay, Thanks.

Operator

with Our question. Ainbinder of next question the proceed WestPark comes Capital. with from Robert Please your line

Robert Ainbinder

Hey, guys.

me let First, I apologize. am car my right driving now.

So, little is I apologize. if a background noise, there

And to I executing of $XX,XXX want the for for MD, you’ve able there discounted business just and your In good quarter, me over was the let cash be never to about the team, the for shareholders in dilution, say opportunity Company this believe of the years, to obviously because important cash. had plan. extremely really Chris, the it position. end sale my and I First, at because wasn’t -- the analyzing was execute congratulate is to really on believe potential you and on that there the I that

Christopher Miglino

a us correct, there mean, don’t risky dilution a dollar. calling, to --, money than in the to to sheet And add never we I we take any learned transaction We’ve it all get any do just time. was gutsy had on -- trying more think definitely pulled We’ve to of get given I me know, numbers the if Yes. people and didn’t move I serve ever declined million to and have stretch additional to at we and bank certainly more my balance $X off do. the But, to it’s out our shareholders. move.

are about we So, happy that.

Robert Ainbinder

I say, a are to we As appreciative. have shareholder,

obviously So, for executing congratulations all us. of very on It’s transaction. this good

percentage question of repurchase? the is repurchase What follow-up of want that? make sure actually that I shares transaction. to exists overall shares within reduction kind with announced I you is, the Another just of What understand that the outstanding

Christopher Miglino

So, total X% outstanding. it’s around of the reduction shares

So, of something, the million bit by the the X.X X.X number than that at it’s end million, another J.P. little gave of reduce that shares. call, XX out more

And So, the of from took substantial the employees money. that we it’s the other amount in out were options a shares.

And didn’t So, also market. those would options hit have that the happen. we want to

thought and those So, the out took we thing best was that to we do.

almost we the it’s if essentially have those took that shares it So, of like almost on XXX,XXX was out -- converted had option -- you were market. side, would the shares

Robert Ainbinder

-- is there vertical? of do And and are to assess division the I’m verticals excitement after I’m for really to just to understand potential market lot valuation and is I the of the for going that the that be this BIGtoken the for platform particular, and and advertising you now trying are working now, really that how going trying potential consumers. mean, that you in on. the the access I think So, around, is one a value that you

Christopher Miglino

a we creates living every and from order The company advertising time. over providing have internet other infrastructure the challenge to is insertion And insertion that order. the platforms technological that BIGtoken equity that has are

to an purely being ongoing will instead into order the creating order on a tap us an basis, be having and order. order something to provider, tap that insertion So, insertion insertion advertising insertion we’re community into of to will without to go able

do and said we billion-dollar -- that what can are on I that truly we that consumers the when the believe be truly platform are successful that the platform we I the this shareholders And engaged of vertical, itself. if data So, value can business. BIGtoken think first inside our to accomplishing and also will of biggest be there, earlier will think the with tremendous our piece provide to we that

Robert Ainbinder

Exciting stuff.

this -- beta looking tester. I’m be I’ll Okay. on and forward a to the as launch to there

just question regarding Another BIGtoken.

so thinking BIGtoken giving you’re there them? You the That’s dividend potential, SRAX dividend. be shareholders talked and common existing could a about about as to for

Christopher Miglino

sold two of there that made year. that So, BIGtoken. MD a and getting promises do we was dividend asset, One last is the other to and was monetizing

coming your that’s So, way.

Robert Ainbinder

Okay.

So, come? form the talked dividend how would you that in preferreds the about, would be of that is the

Christopher Miglino

for a share be coming Correct. that Yes, going that’s to be your will preferred way BIGtoken.

in SRAX, own a of every share for be will that you to shares. ratio So, receiving BIGtoken you

Robert Ainbinder

definitely Fantastic. Well, It again, execute congratulations once you this complete boldly and I’m was a on very executing. move. transaction. very, see to And

all very good it’s for you the Thank much. of shareholders. think I so

Operator

Thank you.

Please Our [ph] line Anthony, of next your private question. the question investor. proceed comes from with

Unidentified Analyst

Chris, could bit nice through Hey, job. I’m you dividend. the if walk confused -- little on just us a the just a as shareholder, on BIGtoken

traditional dividend a be it would a So, not dividend as this will base? traditional within x distributed be -- traditional

Christopher Miglino

Correct.

Unidentified Analyst

a is way registration in process. completed? to Are the you I’m you registration understand in are getting going this going the the it’s certain being or are preferred to are that okay, stock be to -- to preferred And words, trying you date? you right other what where In or issuing before the share getting? a to the own a guess, by have the you so, share? completed words, other I to subsequent registration Is

Christopher Miglino

Before.

share. converts it of the get registration you to So, -- preferred right non-transferable And get itself. will a preferred upon share right you’ll a

Unidentified Analyst

is So, obviously timing wait to could be -- do at for no correct? that there registration to that. have time, you don’t So, on any

you You whenever appropriate Board that? -- do is when the can feels

Christopher Miglino

the law been in great little busy on. have working a job with a we boutique are a does things are that we And other some fantastic of It’s use firm. that They law -- us. we a firm for Correct. now, a smaller

happening. a now they’ve a six transaction, little of for after probably rest So, months that is this was that intense gotten bit period, which

Unidentified Analyst

will right, to Where in mean, sort the longer in since November? trying registration guys that Is -- are since handicap how last any register question. is there have been in this when this about of of you terms take? to I final token? And process -- You there much

Christopher Miglino

is that confidentially there. think I being done mean, I No. everything

I’d So, about that. not rather details talk of

are about in SEC the from one I talking to think just about we we get it. details, anytime is the get that going question that that there more

that done. So, it forward. on a get we’re I model we to to are think think path just know going take diligently a I working will be And creating companies what that can other

Operator

Please with question. Our from your proceed [ph] line Jonathan WestPark Mark next of the comes question Capital. with

Unidentified Analyst

great But, you questions answered of back, of it, what got cost basis Bob the my stock on was Obviously, job. Most questions everyone most said my the on were bought Congratulations that? -- sale. the answered. on that

Christopher Miglino

the $X.XX to a back bought trading bit We that -- higher. back, When it it was we a buy stock was at share. little agreed

deal the So, XXX,XXX market paid the little cut But, the mean, buy if that to bit probably shares, than market X where you’d to and go more drive into I the bucks. buy back, a today try you stock we to was.

it good think stock. a was we for So, pay price the to

Unidentified Analyst

about the obviously, about proceeds you with all? special buyback thinking will the the the MD, talking at And dividend, are be company company from

Unidentified Company Representative

the relates any where evaluating is So, we up like in And the a more existing from right, that BIGtoken. dilutive definitely have, any earn-out million And to -- to so to also with have we’re that comes in to take from if whether that’s for more And more warrants. more we if the how lot that money back the earn-out, the and take much off stock do can Board I and where then end said, cash goes, you shareholders, offering the much any in. P&L, price just almost capital, it we not associated don’t BIGtoken, we -- depending the money of that of non-dilutive shift that with certainly, did that. include almost the do shares, XXX,XXX, additional how you on X comes expenses need we and we we

that those are now. we’re things evaluating right So,

Unidentified Analyst

appreciate, and But, because mean, interest. I future. job. market I best of we’ll I would look kind news is all the the disconnects the that’s Okay. right, of And price, forward in ridiculous, great Thanks. everyone’s to think this at

Operator

from comes Frederick Please Instructions] your question. proceed question with Fincom the Investment Lacy Our of Partners. line with next [Operator

Frederick Lacy

much NOL? your covered I’m the million $XX by how in of is wondering cash

J.P. Hannan

bit Well the work of that’s next -- month. around do taxes we’ve got to couple quite over the of a a

million We of the or the We’ll by some this NOL. company. old so have year. inception got if are to ownership about $X of also from generate We’ve NOL what to see analysis do restricted changes any current additional

portion now give as that can’t what tactical. be I guidance any right of you to will So,

Frederick Lacy

Fair on. There’s enough. a lot going

you advertisers. kind who So, balance going It’s making a with how Speakers] to [Multiple are direct-to-consumer, I’m big customer… between of wondering and going that you’re your partners difference to manage primary process? How the customers. BIGtoken

Christopher Miglino

Yes.

two So, there within world, is the BIGtoken customers.

living. You themselves. agency in. consumer and It’s in, just them have customer looking around the are has so on guidance the certain do we on remember few from for brands is -- over what we’ve to That’s opted and had are important really of good very say in that everything beta. as they -- the quarters. we’ll they brand consumers up front. that tremendous becomes next that’s to world I participate asking that just that in want the have And with signing the That to sign is we a that that remember, is secondly, can market that biggest out some at the time hit to importantly you that agencies short to consumer are provide consumers said, coming people they’re up for converting And from mean, we’re and And been the for you that going advertising consumer where to who the of people going in I’m number source opted you know success data me, verified start data. the confident the there we’ve to have Then, privacy our the activities. we’re and having the the data into the goals for a directly buying in

brand a that hire indicator, our comes of and that and drive when to to because in to So, engagement, area. we they services drive utilizes have expertise other performance us do some awareness us type

engaged at. hire an is direct-to-consumer us different, activity. party seem might that game. outside what direct-to-consumer initiative it we we very in help are marketing while consumers to are don’t drive the have good That’s a digital take to to So, an to execute We

the cost, would at and and to executing doing understand good we the at are what doing the fraction it pay have the process, us can like understand good we it. everything are at cost on do involved a of do it it across across We social understand else internet, we somebody campaign, media, a to We we in a mobile versus company native.

Frederick Lacy

been evidence you do because you’ve That’s there’s deserved. And a of kind it, thing correlation. of able of one growth. now interesting that like understand that the the if is be respect investors perhaps some And showing getting I you’ve eyeball to start might can saying, start think you

Christopher Miglino

Yes.

from something I infrastructure into well. advertisers are place the the selling advertising key the out also, that’s selling numbers in That consumers the and infrastructure is that to is concept the growth, giving exist into would ecosystems this we team data is think going make have advertising be as ability The ability have those that that important. the that their key that the within unique. own there, But happen. sales years. we is that of marketplace is to out without to the ecosystem fall data death that the in to the we turn have very sales you to in And very, to that big

Frederick Lacy

press start any [ph] data? there to you me of major with how you now rock begin should I delivering a a an kind out enormous are using amount able seems piggyback there this be any feed people. mean, and to a so there of in way. off transact way low This they piggyback? XX Facebook -- to leverage of come way what’s generate from along kind can is the -- offering Is you whole of the enormous some years, It in and been knows, hyping company - I’ve far delivering up is just in any and consumer the bunch have can forward, never their releases company. of that profile it sell Is sort step a know the results. do by I that get of market? very transactions of attention not really pay this way to should and of amount seen solid everybody the there press out and press to of with a about Is

Christopher Miglino

Yes.

week we and once think, to are that been We’ve the beta beta abundance to we really I later, is continue there. out a will of have few there once is think to we actually going to the -- working can that news And the in an that’s out it. bring going marketplace, launched when data -- we do solid and the product think better market will all we and product it’s is is on very around And a suited out hard fantastic. consumers get of this in flow it. for be

Frederick Lacy

Thanks. forward. again. Congratulations looking I’ll Okay. be

Operator

end allotted for the questions. turn Ladies you. and the comments. will floor Thank have I for to gentlemen, to we come Mr. Miglino any final our back of

Christopher Miglino

support really the you the . from We investors. very all appreciate much, Thank

talk detailed if more are and models you, to future. detail interest myself have so, any out what more for can you J.P., and about calls of you to with an or plans have the doing walk reach through our that are in We you you to happy do we to the in different

So, the support. appreciate and thank you again

Operator

teleconference. you. concludes This today’s Thank

you You your your time. at lines Thank may disconnect this for participation.

SRAX (SRAX) 14 Aug 182018 Q2 Earnings call transcript