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Edited Transcript of SRAX earnings conference call or presentation 13-Nov-19 9:30pm GMT

Q3 2019 SRAX Inc Earnings Call

LOS ANGELES Nov 29, 2019 (Thomson StreetEvents) -- Edited Transcript of SRAX Inc earnings conference call or presentation Wednesday, November 13, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Christopher Miglino

SRAX, Inc. - Co-Founder, Chairman, CEO & President

* George Stella

SRAX, Inc. - VP of SRAX Shopper

* Kristoffer E. Nelson

SRAX, Inc. - COO & Director

* Michael Thomas Malone

SRAX, Inc. - CFO

* Rick McCrady

SRAX, Inc. - VP of Research Sales

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Conference Call Participants

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* James Patrick McIlree

Chardan Capital Markets, LLC, Research Division - Senior Research Analyst of Industrial and Consumer Technology

* Michael Roy Crawford

B. Riley FBR, Inc., Research Division - Senior MD, Co-Head of The Discovery Group & Senior Analyst

* Kirsten F. Chapman

Lippert/Heilshorn & Associates, Inc. - MD and Principal

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Presentation

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Operator [1]

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Greetings, and welcome to the SRAX Third Quarter 2019 Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce Kirsten Chapman, LHA Investor Relations. Thank you. Please begin.

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Kirsten F. Chapman, Lippert/Heilshorn & Associates, Inc. - MD and Principal [2]

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Thank you, operator. Good afternoon, everyone. I'd like to welcome you all to the SRAX' Third Quarter 2019 Conference Call. This call is being webcast at srax.com/investors. With us today from management are SRAX CEO, Christopher Miglino; COO, Kristoffer Nelson; VP of Brands and Shopper Marketing, George Stella; VP of Research Sales, Rick McCrady; and CFO, Michael Malone.

Chris Miglino will give an overview of the quarter; Chris Nelson, George Stella, Rick McCrady will provide detail on BIGtoken and the verticals; and Mike Malone will review the financials; then turn the call back to Chris Miglino for closing remarks; then I will open the call for questions.

Before I turn the call to management, I'd like to remind you that this call may contain forward-looking statements which could be indicated by the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project and similar expressions as they relate to SRAX. Investors are cautioned that all forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those anticipated at SRAX at this time. In addition, other risks are more fully described in SRAX public filings with the U.S. SEC, which can be reviewed at www.sec.gov.

Finally, please make note that on today's call, management will refer to certain non-GAAP financial measures. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, noncash equity-based compensation and changes in fair value of derivatives and warrant liabilities and certain additional onetime charges. Please note, third quarter 2018 results include SRAXmd and Reach, which were discontinued products prior to the third quarter 2019. Please refer to SRAX' press release for a full reconciliation of its non-GAAP performance measures to the most comparable GAAP financial measures.

Now it is my pleasure to turn the call over to SRAX CEO, Chris Miglino. Please go ahead, Chris.

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [3]

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Thank you, Kirsten. Good afternoon, everyone. Thank you for joining us today. While delivering on our plans to expand our global footprint of our BIGtoken platform and beginning the monetization of this platform, this quarter, we reported vertical revenue growth of 17% over the same period of last year and net income of $1.4 million.

For those of you that are new to our story, SRAX is at the epicenter of consumer privacy and data ownership through our BIGtoken platform, and focused on creating specific data sets around highly valuable verticals. Our business is broken into 3 areas: SRAX IR. SRAX IR enables publicly traded companies to understand key investor data points. This allows them to plan communication and outreach strategies. Our core platform enables brands to create unique data sets in specific marketing areas, such as shopper marketing and luxury consumer.

And lastly, BIGtoken. BIGtoken enables consumers to own their own data and is helping us revolutionize the way data is purchased and used by marketers. BIGtoken is expanding in reach and scope. The subscriber base has grown to 16.3 million users with minimal marketing spend.

New initiatives, including BIG Research and BIG Rewards, which we will talk more about later, have added Procter & Gamble, Sun-Maid and Kraft to our customer list. We're implementing initiatives to scale user growth and launch additional offerings. For example, brands can use consumer insights from BIG Research to construct unique data segments. We spent the past 2 quarters, integrating our platforms and realigning the sales process. BIGtoken's initial viral growth highlighted synergistic opportunities among our digital assets as well as areas of improvement. Now we're leveraging the commonalities among the platforms and all areas are gaining traction.

As such, during the fourth quarter, we expect to accelerate revenue growth, driven by brands activating our BIGtoken platform and vertical platforms to engage with consumers complemented by increasing adoption of SRAX IR.

Now let's review SRAX IR. SRAX IR helps CEOs and CFOs who are looking to identify, manage and communicate with their investor base in a way that has never been done before. To accelerate growth, we've built a reseller program. To date, we've signed 20 resellers who are helping us reach out to our target market. We're excited to announce that 32 customers have signed up for recurring revenue licenses. In the quarter, we launched a few very notable advancements. We added the ability for issuers of stock to append e-mails, phone numbers and social and media accounts to their investor list. We also added the ability for companies to e-mail to their investors right in our platform. We also added what we call the situation room, which allows for users to see detailed data on the company's stock trading activity.

We're also providing the ability to target ads to the user base of a company. For example, public companies in proxy battles are utilizing SRAX IR to accurately identify voters, deliver compelling messaging and fight activist investors. We also added the functionality that allows issuers to see institutional trading on a daily basis instead of waiting for those parties to file their holdings. Our SRAX IR and the data set it produces are complementary to our other data sales. We've been in discussions with several clients to leverage SRAX IR data to market to specific segments, and our subscribing companies can choose to participate, turning their shareholder base into a revenue stream. We're excited about SRAX IR and its growing recurring revenue stream. We believe this recurring revenue that did not exist last year will provide a substantial basis going forward.

Now back to BIGtoken for a moment. The amount of news that's focused on consumer privacy and data is substantial. There's rarely a week that goes by that does not have a significant story on changes in this space. We're very well positioned in this area and believe that we are leading in the space.

With that said, I'll turn the call over to Kristoffer Nelson to discuss our new initiatives in BIGtoken.

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Kristoffer E. Nelson, SRAX, Inc. - COO & Director [4]

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Thank you, Chris. BIGtoken is leading our organization, and we have reached a point where our platforms have created synergies as they are driving deals for each other. Along with meaningful growth in the U.S., both commercially and in user engagement, we expanded globally. We are now listed in the top 100 applications in different categories in the App Store in Google Play in many countries, including Brazil, Indonesia, Italy and the Philippines.

We continue to further our meaningful and strategic footprint in South Asia, which is the world's fastest-growing ad market. We partnered with ZAPGroup, one of the largest point-of-sale retail loyalty programs in the Philippines. And we introduced BIGtoken in 28 member countries of the European Union. BIGtoken's opt-in user-controlled data set is a perfect remedy to GDPR's significant impact on advertising in the region.

Finally, we announced plans to launch BIGtoken India in partnership with the Yash Birla Group, one of India's largest conglomerates. Further, during the quarter, we launched a feature that enables users to donate to nonprofits with 4 amazing partners: American Heart Association, HealthCorps, The ALS Association and Keep a Child Alive have all joined. Already, users from over 20 countries have donated to these organizations. In extending our scope, the BIGtoken platform is positioned to generate revenue in 3 ways: first, placing BIGtoken users in advertising targeting segments that enables advertisers to deliver messages to consumers across all digital platforms like Facebook and Amazon, on websites and applications, and while they watch videos on YouTube and connected TVs. The opportunities to monetize BIGtoken users across the digital universe is vast. Second, through research panels that can -- that are created on the BIGtoken platform, we call BIG Research. We have tackled the research business in a significant way. And two, by bringing in 2 industry leaders during the quarter, including Rick McCrady, we will be hearing from shortly. Along with these key hires, we have signed deals with 2 of the largest research platforms. And last, offer reward activations in the BIGtoken application for certain consumer good products that we call BIG Rewards.

I'd like to take a quick moment to dig a little deeper into our launch of BIG Rewards. Enabling marketers to engage BIGtoken members in brand research and exclusive offer redemption at specific retailers. BIG Rewards activated 3 major CPG brands at the end of Q3 and the beginning of Q4, with more brands starting programs now. These programs often include promotional media spend that both create additional revenue for the organization while driving new users to the BIGtoken application.

Our Shopper vertical pioneered this innovation with branded clients and have greatly leveraged the BIGtoken platform to grow these opportunities.

And because of that, I'm excited to turn the call over to George Stella to discuss the great work he has done on leveraging BIGtoken to grow SRAX Shopper and more details on the development of our offering, BIG Rewards. George will then turn the call over to Rick McCrady to talk about our newest initiatives leveraging the BIGtoken platform, BIG Research.

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George Stella, SRAX, Inc. - VP of SRAX Shopper [5]

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Thanks, Chris. Some of you may remember me from previous calls, I'm George Stella, Vice President for Brands and Shopper Marketing. I've been in the digital media space for over 20 years, and I've been at SRAX for 2 years now. Current market conditions are creating massive shifts in the digital media landscape right now. Consumers are awakening to their online privacy and the value exchange that exists for their personal information. Privacy regulations are happening fast now with California or CCPA and other states taking hold, and these conditions are creating a competitive advantage for us because big brands are moving to find solutions that their legacy partners can no longer address.

Another competitive advantage exists for us because the nature of BIGtoken enables us to give brands a 360-degree view across a consumer's journey that's more robust than what the legacy data systems can provide. And because of these factors, we're seeing a sudden onset of adoption from the world's biggest brands. We've begun to realize the potential of the BIGtoken platform. During the quarter, we launched, as Chris mentioned, BIG Rewards inside the BIGtoken app, which is a branded action that drives cash back offers when a consumer answers questions and buys a brand's items at a retailer. The brand gets verified purchases and the valuable data and insights that come from the questions and receipt uploads. BIG Rewards is also now in the conversation with major advertisers outside of the CPG vertical to create all kinds of branded actions in the app.

If you go into BIG Rewards now, you'll see some of the biggest brands in the world adopting the solution like Kraft, P&G and Sun-Maid. It's important to understand that these brands required a ton of work and lots of diligence around the vetting process. And through that process, these brands have all identified that BIGtoken is providing solutions that their current legacy partners can't do. These brands are identifying us as a next-generation solution provider as the market conditions cause most of our competitors to quickly become legacy.

The next evolution of BIGtoken as it relates to brand and digital media is already starting to take hold. This has to do with the platform's ability to take a brand from end-to-end in the digital media cycle by creating data-driven insights for planning, audience creation all the way through activation and ultimately, sales and other results-based attribution measurement. One more important note, through this type of insights work, we discovered that well over half of the U.S. user base in BIGtoken is opting out of legacy data systems and have high privacy settings in platforms like Google and Facebook. This sets up opportunities for brands to find incremental reach through our platform that they would otherwise have a difficult time reaching.

I will now turn the call over to Rick McCrady to talk about our opportunities in market research. Rick?

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Rick McCrady, SRAX, Inc. - VP of Research Sales [6]

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Thanks, George. My name is Rick McCrady, and as Chris mentioned, I was brought on this summer to build a research offering on the BIGtoken platform. Previously, I was one of the early hires at e-Rewards, back when it was an advertising channel to build a sales vision. During my time at e-Rewards, we transitioned the company to a market research panel company, and along the way I helped integrate the Research Now acquisition and build a $45 million division. I see a better opportunity here at BIG Research. With one of the largest mobile subscriber bases in the industry, we are very well positioned to capture market share of the $2 billion market research space and make an impact for the big brands looking to understand their customers.

First, BIGtoken has the biggest mobile audience available and a global reach to do multi-country studies, which is important to the big global brands. The BIGtoken platform can immediately scale consumer population-targeted opt-in research panels with thousands of participants. Second, we have a unique way to verify the respondents. The system we use to analyze accuracy and relevancy of a data point for media targeting will solve the accuracy problems giving BIGtoken research a very high level of certainty and confidence as well as a competitive advantage. Finally, we have a very responsive and engaged panel. To help us enter the research ecosystem, we are partnering with some top market research firms, firms with established bases of leading brands as customers, including many of the Fortune 500 companies. Through these partnerships, we will have access to their customer base and their technology, which will enable us to provide a consistent monthly recurring revenue stream without having to increase our head count significantly. These large insights firms' customers will gain access to our 16 million audience of global users to help brands gain a well-rounded view of the customer.

Looking forward, we expect to establish similar relationships with additional leading insights firms and those talks are currently underway. In time, after we establish a baseline and establish a foothold in the industry, we plan to interact with the brands directly. The research space is going through an evolution as technology empowers the end clients and brands to do more research in-house. Right now, we are working on building our pipeline and expect to see traction in the first quarter of next year.

I will now turn the call over to Mike Malone for the financial review.

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Michael Thomas Malone, SRAX, Inc. - CFO [7]

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Thanks, Rick. Before I review our operating results for the third quarter, I'd like to point out that this will be the last quarter in which we report our prior year comparables, excluding SRAXmd product line, in which we sold a controlling interest in the third quarter of 2018.

Now moving into the third quarter results. Total revenue was $1 million compared to $904,000 in the second quarter of 2019 and $2 million in the same quarter of the prior year. Excluding SRAXmd and Reach, which were sold or discontinued, respectively, sales grew 11% compared to the second quarter 2019 and 17% compared to the third quarter of 2018. Gross margin was 68% compared to 55% in the second quarter of 2019. The increase in margin is attributable to favorable contracts that we wrote in the quarter. As we scale, we expect margins to level out closer to 50% to 60%.

Operating expenses were $5.5 million, which includes a $772,000 provision for future BIGtoken point redemptions compared to $5.1 million in the second quarter 2019, which included a similar BIGtoken point redemption provision of $187,000.

Q3 2019 net income of $1.4 million, which includes a benefit of $6.2 million related to a noncash warrant valuation adjustment. This compares to 2Q 2019 net loss of $8.1 million, which includes a charge of $2.9 million related to a noncash warrant valuation adjustment. Adjusted EBITDA loss was $4 million compared to a loss of $4 million in the second quarter of 2019.

Now moving to our balance sheet. During the quarter, we raised $5.5 million through a registered direct offering. As of September 30, 2019, in addition to being debt free, cash and cash equivalents on hand were $2.8 million. At September 30, 2019, there were approximately 13.9 million shares outstanding compared to 9.9 million shares as of September 30, 2018.

We remain confident in our growth prospects across our verticals in BIGtoken as the demand for data insights continues to increase. For the fourth quarter of 2019, we expect revenues between $1.5 million and $2.2 million with gross margins between 50% and 60%.

And with that, I'd like to turn the call back to Chris.

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [8]

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Thanks, Mike. In summary, we're excited about the work we're doing to build the most valuable opted-in data sets in the world. Each of our platforms has multiple revenue drivers. In SRAX IR, we plan to sell an additional -- sell additional licenses to issuers looking to reach their shareholder base, which is a recurring revenue stream; use the platform for more proxy solicitation, which would be project revenue; and initiate targeted investor advertising for brands. In BIGtoken, we plan to increase our data segments, advertising for brands, provide more opportunities for brands to offer rewards or coupons through BIG Rewards and develop BIG Research or research panels for brands to gain customer insights.

Finally, in our verticals, we will continue to sell specific data sets to an increasing number of brands, and we have begun to leverage BIGtoken and SRAX IR or build crossover for sales in our verticals. We spent the past few quarters integrating our platforms and realigning the sales process and are now well positioned for growth. Looking ahead, we expect to accelerate revenue by engaging with big brands across all 3 of our platforms.

Before I open the call to questions, I'd like to note that you can see us at a few investor events. Tomorrow, we'll be at the Trickle Research, Trickle Rocky Mountain MicroCap Conference in Denver, Colorado. In December, we'll be at the LD Micro event in Bel Air.

I'd like to now turn the call over to the operator for Q&A.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Mike Crawford with B. Riley FBR.

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Michael Roy Crawford, B. Riley FBR, Inc., Research Division - Senior MD, Co-Head of The Discovery Group & Senior Analyst [2]

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Chris, regarding the BIG Research initiative, are these panels going to be? Or are they being conducted worldwide? Or is it U.S.-concentrated at first?

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [3]

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No, it's worldwide. So we're actually finding that there's more need in -- outside the United States, and so we're integrating across the world. So it's a great opportunity. There's -- similar to the segment business, where Southeast Asia is the fastest-growing digital advertising market and they need sources of consumer data, we're finding the same thing to be true for the research space.

Not to say that there's not opportunity in the United States, there's significant opportunity in the United States, but the opportunities are worldwide for research. And the companies that Rick mentioned that we've cut deals with are worldwide organizations and have demand for research all over the world.

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Michael Roy Crawford, B. Riley FBR, Inc., Research Division - Senior MD, Co-Head of The Discovery Group & Senior Analyst [4]

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Okay. Great. And then on the BIG Rewards, it's been over a month, I think, since your initial, I guess, offers for these brands. What can you say about the results and participation of the user base regarding these promotions?

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [5]

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So we've -- we can't give any data about the individual users, but I can tell you that they're going well. As you can see, if you're inside the app, we have returning customers. There's -- big brands are entering into their next round of offerings in the platform. So not just a once-and-done kind of thing. And we're having a lot of success and customers are really happy, and we're setting things up really well for 2020.

And I mean -- and this is just a validation for the platform as well. I mean you have the biggest brands in the world, you got Procter & Gamble, you have Kraft, you have Sun-Maid. We have a bunch of others that you'll start seeing that are popping in there. And these marketers have spent an enormous amount of time reviewing the platform, evaluating the platform, and it has been a very long sales cycle in getting them integrated into the platform. It's not something that has happened quickly. So it's the fact that they're on there is a validation of the platform itself and the quality of the data.

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Michael Roy Crawford, B. Riley FBR, Inc., Research Division - Senior MD, Co-Head of The Discovery Group & Senior Analyst [6]

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Okay. Great. And then I know you can't give or don't want to give specific information regarding the 16.3 million users. But just in general, can you talk a little bit about how that's broken up between North America, Europe, Asia? Or where there might be new, I don't know, shoots of growth?

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [7]

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Yes. There -- every once in a while, we start to see new growth in a certain region and then we'll start to look for opportunity in those markets for partners. Certainly, in the United States, in order to get the attention of the brands that we have, there's been enough consumers in North America to be able to accomplish that or just in the United States alone. So we have what it takes to attract and keep the marketers involved. And I think as we continue to grow the network, which is really the next phase, so we went through this initial phase of this massive growth on the system. Growth then slowed, but when you say slowed, we're -- now we're getting anywhere from 3,000 to 10,000 people a day, which any other application would be happy to be doing without any marketing initiative whatsoever. Then now we have the opportunity to cut marketing deals with third parties, which we've done a bunch of them, and a lot of those are about to launch.

So we took the time to stabilize the platform, get it up and running in order to launch in Europe. It was a big undertaking because we had to have servers in every single country in the European Union for the privacy laws that are prevalent in Europe. And now we're ready to start implementing many of the marketing opportunities that we've put into place. So you'll start to see things that are going to appear in the application, where consumers are going to start to be able to use their points for different initiatives, music streaming, video streaming, different things of the sort. Similar to what we just launched, the ability for consumers to make their donations to the American Heart Association, to ALS. And so anybody that wants to donate their points with inside BIGtoken to those nonprofit organizations, you can go in there and make those donations now. So...

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Operator [8]

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(Operator Instructions) Our next question comes from the line of Jim McIlree with Chardan Capital.

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James Patrick McIlree, Chardan Capital Markets, LLC, Research Division - Senior Research Analyst of Industrial and Consumer Technology [9]

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Chris, when you -- when I open my BIGtoken app and I'm looking at these surveys, those are the surveys that are just targeted to me specifically, right?

I mean I'm not seeing all of them that you guys have engaged with, is that correct?

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [10]

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It depends how you ask...

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Kristoffer E. Nelson, SRAX, Inc. - COO & Director [11]

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Go ahead, Chris.

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [12]

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It depends how you answer an initial question. So inside the survey, you'll be asked a question about whether or not you shop at certain types of stores. And if you answer no to that, then you're not going to get any follow-up questions that pertain to that particular issue. But if you answered yes to that question, or in some cases, it's no is the answer that gets you more questions, then we'll have a string of questions that follow up. So there's follow-up questions based on how you answer initial questions.

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James Patrick McIlree, Chardan Capital Markets, LLC, Research Division - Senior Research Analyst of Industrial and Consumer Technology [13]

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Right. I think I'm referring to something a little bit different, like those Sun-Maid and P&G panel surveys, I think you're calling them. I'm just wondering...

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [14]

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BIG Rewards.

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James Patrick McIlree, Chardan Capital Markets, LLC, Research Division - Senior Research Analyst of Industrial and Consumer Technology [15]

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I'm just -- yes, I'm just wondering, I'm not seeing all of those, so I'm just seeing a subset of those. Because it sounds like in the -- in your answer to Mike's question, that you're doing a lot of these internationally as well. So you're targeting specific user groups -- or the brand is targeting specific user groups for these questions about how much they buy McCafe at Walmart.

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [16]

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Right. So research is broken into 2 separate areas. There's BIG Rewards, where you need to answer a survey and then engage in buying a product, and that's what you're talking about. And then there's also just regular surveys, where you don't have to engage and buy a product either. So the business that is engaged in just answering surveys is internationally. So that's -- they want to find out information about those consumers, their interest and things of the sort. But we're not targeting Southeast Asia with a Walmart activity, right? So it's -- that's very limited to the United States.

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James Patrick McIlree, Chardan Capital Markets, LLC, Research Division - Senior Research Analyst of Industrial and Consumer Technology [17]

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And I know this is a difficult question to answer because things are changing rapidly. But I mean, just if you ballparked it, if you had your guess today about what 2020 revenue -- not that level of revenue, but where most of the revenue would be coming from in 2020 for BIGtoken, would it be research, would it be the normal targeted advertising, would it be something else? I mean just -- can you just kind of where you think the business is heading for next year?

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [18]

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Yes. We're finding it to be a hybrid between a mix of those 3, right? So when -- even though there are 3 different products, marketers like these P&G campaigns and these Kraft campaigns that you see inside the platform, also have a substantial amount of media that are associated with them.

So there's media that are driving consumers to a landing page. For example, on the campaign that's on there for Procter & Gamble, if you engage with it, you'd see that you landed on a -- you'd see an ad on the Internet, it would -- yes, talking about how Procter & Gamble cares about your privacy, you click on it, you go to a landing page that explains about their interest in the area and then driving you to buy a product and get a discount on that product. So that is a combination of all 3 of those, it's the segments that we're using to target, it's research on finding out what they think about these products and it's engaging the consumer with an incentive to buy the products. So we're finding that the -- when we're selling to the marketers, they're buying kind of the whole thing.

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James Patrick McIlree, Chardan Capital Markets, LLC, Research Division - Senior Research Analyst of Industrial and Consumer Technology [19]

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Got it. Okay. And then my final question is, again, just focusing on BIGtoken, and just focusing on the human resource aspect of it. Do you have the right number of people that you need? And do you have the right people in -- within that? So do you need -- do you have the right number, but you just need different? Or do you just need a whole lot more or a little bit more in order to build out BIGtoken?

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [20]

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You mean -- do you mean from a technologically perspective, an internal perspective? Or do you mean from consumers joining the platform?

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James Patrick McIlree, Chardan Capital Markets, LLC, Research Division - Senior Research Analyst of Industrial and Consumer Technology [21]

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I'm talking more about the sales and marketing. I'm speaking mostly on the sales and marketing side, a little bit on the tech side, but I'm focusing more on the sales and marketing. Do you have enough salesmen, do you have the right salesmen?

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [22]

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Yes. So on the -- what we found over the year was that there was a few salespeople within the organization that were very engaged with the BIGtoken platform. And those individuals started bringing in a lot of opportunity into the company and were bringing in a lot of big brands. And to our detriment, we made the mistake that a lot of the other salespeople understood it as well as they did. And we were, I think, late to the game in providing our other salespeople the appropriate training that they needed in order to fully understand the offering and bring it out to their clients. So we've subsequently rectified that situation and we've provided substantial training to all of our salespeople. And now we're finding that all of our salespeople are bringing in opportunities around BIGtoken, and BIGtoken is becoming the biggest story that they're using to sell into their customers.

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James Patrick McIlree, Chardan Capital Markets, LLC, Research Division - Senior Research Analyst of Industrial and Consumer Technology [23]

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Got it. Okay. And for that ...

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [24]

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So does that mean -- I mean, I think we have -- I was going to say, I think we have a great group of people selling there. We made some adjustments on the sales side of the business in the last quarter. So we let some people go that hadn't been selling and hadn't been meeting the criteria, and we'll look for additional people. We've been approached by a few other really high-end data sellers that see what we're doing and are excited by the opportunity.

So not to say that we wouldn't expand that piece of it. But I think we're well positioned right now with the team on the sales side.

On the tech side, I think we're well positioned as well. The team has done a good job in getting the product to market. Obviously, getting the amount of -- the type of growth that we got when we did was quite overwhelming for any organization, and they did a good job in managing that process. So as we continue to scale, I think that now that the opportunity and the customer base is in place that they can start working on the -- each of these new opportunities that we have in front of us. And we're finding a lot of the opportunities that are in front of us are very cookie-cutter, like BIG Rewards, everybody's in there. The research project that is -- that you'll see launched here soon, that's do it once and then we can sell in many, many different times. And then the segment data, do it once, sell it many, many different times. So the tech team is ready and able to go.

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Operator [25]

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We have reached the end of our question-and-answer session. Allow me to hand the floor back over to Mr. Miglino for closing remarks.

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Christopher Miglino, SRAX, Inc. - Co-Founder, Chairman, CEO & President [26]

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Thanks for joining us today. I appreciate it. If anybody has any further questions or want to get in touch, please do so, and I'd be happy to answer any information they have. Keep -- I'd encourage you to join the BIGtoken platform, if you haven't already done so. And if you haven't already gotten a demo of our SRAX IR platform and know any issuers that might benefit from seeing who is selling their stock, we would be very interested in hearing about that. Thank you very much.

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Operator [27]

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Thank you. This concludes today's conference. You may disconnect your lines at this time, and have a wonderful day.