Embed Size (px)
Citation preview
Building the tools to unlock the value of data
Nasdaq: SRAXNasdaq: SRAX
Q4 2017
As of April 3, 2018
This presentation contains "forward-looking statements" within the meaning of the “safe-harbor” provisions of the private securities litigation reform act of 1995. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ than those projected. Such forward-looking information and statements are based on the current estimates and projections of the Company or assumptions based on information currently available to the Company. Such statements involve known and unknown risks, including but not limited to those risks identified in our filings with the Securities and Exchange Commission, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including changes from anticipated levels of revenues, future national or regional economic and competitive conditions, difficulties in developing the Company’s technology platforms, retaining and expanding the Company’s customer base, fluctuations in consumer spending on the Company’s products and other factors. Accordingly, although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company has no obligation to update the forward-looking information contained in this presentation. Any forward-looking statements or information in this presentation speak only as at the date of this presentation.
As previously disclosed in October 2017, the Company engaged outside advisors to review strategic alternatives for SRAXmd. As a result, in late 2017, the Company commenced an auction process with regard to the SRAXmd assets. Management believes that it is now entering the final stages of the auction process. Although management is optimistic regarding the successful completion of the auction process, there can be no assurances that the process will be completed, will be successful, or that if such process is completed, that it will be on favorable terms.
Safe Harbor Statement
2Nasdaq: SRAX
About SRAX
SOCIAL
AD TECHBLOCKCHAIN
SRAX is a digital marketing and consumer data management and distribution technology platform company. SRAX's technology delivers the tools to unlock data to reveal brands and content owners' core consumers and their characteristics across marketing channels. Through its blockchain identification graph technology platform, BIG (www.bigtoken.com), SRAX is also developing a consumer-powered data marketplace where people will own and sell access to their data thereby providing everyone in the Internet ecosystem transparency, choice and compensation. SRAX's technology and tools deliver a digital competitive advantage for brands in the healthcare, CPG, automotive, sports and lifestyle verticals by integrating all aspects of the advertising experience, including verified consumer participation, into one platform.
3Nasdaq: SRAX
AD
AD
4
What are we good at?
- Crypto Currency
Identifying issues that can be solved with unique technology
5
Identify value in each of our business units.
Continue to grow our sales infrastructure
Launch blockchain technology
Growth Strategy
6Nasdaq: SRAX
bigtoken.com
Blockchain Identification Graph
7
Last year advertisers and marketers spent $130 billionon consumer data.
“Double-Digit Growth Forecast for the Worldwide Big Data and Business Analytics Market Through 2020 Led by Banking and Manufacturing Investments, According to IDC.” International Data Corporation, 3 October 2016, https://www.idc.com/getdoc.jsp?containerId=prUS41826116.
1
1
8
The advertising life cycle begins and ends with the consumer. Yet consumers are the most disempowered actor in the ecosystem.
9
WE ARE VALUABLE.
WE DESERVE TRANSPARENCY,CHOICE AND FREEDOM.
10
MEET
IT’S TIME TO TAKE BACK OUR DATA AND WITH IT THE RIGHT TO OWN OUR PREFERENCES, PASSIONS, HISTORY AND RELATIONSHIPS.
BIG
11
You decide what of your personal data is shared, what of your personal data is bought and who buys it.
You choose the data BIGapp collects.
You are rewarded with BIGtokens for opting in.
You work with the community (BIGosg) to determine how the data is used and who accesses it.
You block the ads and advertisers you don’t like while giving props to those you do.
You see who is using your data and what ads have been served to you.
You are rewarded again with more BIGtokens when your data is purchased.
How it works
12
How revolutionizes the system
Website 1
Website 2
Website 3
Consumer
Data Market
DSP / Exchange
Data is bought in exchange and
paired with ad media
Media Buyer
WebsiteAd
Consumer produces data through his or her online actions. This datais associated with BIGid generated for each consumer
Production:
Consumer accessesBIG platform throughBIGapp. BIGapp agrregates consumers’personal data.Consumer decideswhat data is shared.
Choice:
Consumer earnsBIGtokens forsharing data.
Benefit to Consumer:
Data is collected and stored with device IDs, IP addresses, and cookie pools based on consumeropt in. BIGosg determines what appsintegrate with theconsumer data graph andhow the data can be used.
Opted-inCollection:
Media buyerspurchasethe data.
Purchase:
Media buyers usepurchased data toserve ads to theconsumer.
Targeting:
Consumer not onlyearns BIGtokens,but knows who bought the data andhow it was used.
Benefit toConsumer:
id
based on consumer opt in
Datacollectionapp
Data storedin BIG
Consumerearns
BIGtokendetermines use
cases andintegrations
osg
Consumer shares in data
purchase
13
Basic Info
Undergraduate Degree x
xx
Demographic > Education > Undergraduate Degree
RentersDemographic > Housing Attributes > Renters
Tweens/Teenagers (11-18)Demographic > Family Composition > Children in Household>Yes
SingleDemographic > Marital Status > Single
High School DiplomaDemographic > Education > High School Diploma
Basic Info
Vocational or Technical School x
xx
Demographic>Education>Vocational or Technical School
InfantsDemographic > Family Composition>Children in Household>Yes
Some CollegeDemographic > Education>Some College
Greater than $250,000Demographic > Financial Attributes>Estiimated Household Income
Demographic > Age>65 & Older
Basic Info
$75,000-$99,999 x
xxx
Demographic>Financial Attributes>Estimated Household Income
Single FamilyDemographic>Housing Attributes>Property Type>Single Family
7+ YearsDemographic>Housing Attributes>Length of Residence>7+Years
SpanishDemographic>Languate>Spanish
Current StudentDemographic>Education>Current Student
Basic Info
San Francisco-Oakland-Fremont xGeographic>IP based>United States>California>San Francisco-Oa
ChromeDevice Data>Browser>Chrome
Version 10.xDevice Data>Operating System>Mac>Version 10.x
ComputerDevice Data>Type>Computer
EnglishDevice Data>Browser Language>English
Basic Info
35-39
x
xDemographic>Age>30-39>35-39
Home OwnersDemographic>Housing Attributes>Home Owners
NoDemographic>Family Compostion>Children in Household>No
Los Angeles-Long Beach-Santa AnaGeographic>Self-Declared>United States>California>Los Angeles
$60,000-$74,999Demographic>Financial Attributes>Estimated Household Income
Basic Info
Mortgage x
x
x
Demographic>Financial Attributes>Credit&Debt>Mortgage
Credit Card HolderDemographic>Financial Attributes>Credit&Debt>Credit Card Hold
Children (6-10) Demographic > Family Composition > Children in Household>Yes
MarriedDemographic>Marital Status>Married
Not MarriedDemographic>Marital Status>Not Married
Data collection after BIG
BIG Data SetData on Kris Nelson is verified and correct.
Data collection before BIG
Kris NelsonDemographic
Oracle Data SetMore than 50% of data on Kris Nelson
is incorrect.
How BIG revolutionizes data collection
Age
Location
Household Income
Homeowner
Transparent to consumer
Consumer is compensated
100% verified by consumer- high accuracy
Not transparent to consumer
Consumer is not compensated
Consumer does not participate in relationship: not opted-in or veri�ed
OpData is innacurate and unveri�ed
Consumer opted-in 3rd party systems like social networks will further verify data
14
Third-Party Apps
Platform: An open source platform created by consumer choice and operated by a community of participants.
Desktop Account Web App
Social Account Integration
Loyalty Program Integration
Frequent Surveys and Updates
Add Family Members / Household
Third-Party Apps
BIG Open Source Governance (OSG)
osg
app
Blockchain Identification Graph
15
ICOs in 2017
Total Raised: Approximately 3 BillionTotal Number of ICOs: 139
Top Ten ICOs of 2017
Position Project Total Raised
1234567891011
FileCoinTezosEOS Stage 1BncorStatusTenXMobileGOSonmoAeternityMonethaBasic Attention Token
$257,000,000$232,319,985$185,000,000$153,000,000
$90,000,000$64,000,000$53,069,235$42,000,000$36,960,594$36,600,000$35,000,000
Cryptocurrency ICO Status 2017
* In some cases total raised includes ICO and pre-sale value.
$800,000,000
$700,000,000
$600,000,000
$500,000,000
$400,000,000
$300,000,000
$200,000,000
$100,000,0
$0
Jan Feb May Apr May Jun Jul Aug Sep Oct Nov Dec
Source: coinschedule.com, September 2017
*
16
ICOs in 2017
ICOs by Category 2017
• In 2017, Commerce & Advertising ICOs produced over $46 million.
• A single ICO, the Basic Attention Token (BAT), was responsible for $35 million of the total Commerce & Advertising value.
• The Commerce & Advertising sector is currently underdeveloped and therefore ready for significantly more ICO activity.
Source: coinschedule.com, September 2017
2.2%
Out of these categories, Commerce & Advertising represents a notable share of the market and has demonstrated potential for growth.
Financial Highlights
$178k Q4 2017 net income, improved from a net loss of $1.3M in Q4 2016.
$1.2M Q4 2017 Adjusted EBITDA gain, improved from $581k in Q4 2016.
$1.0M in cash and cash equivalents at Dec. 31, 2017, compared to $216k at Sept. 30, 2017 and $1.0M at Dec. 31, 2016.
$1.1M in working capital at Dec. 31, 2017, improved from $(8.3)M at Dec. 31, 2016.
$23.3M gross revenue in 2017, compared to $35.8M in 2016.
$14.3M gross profit in 2017, increased from $12.5M in 2016.
60% gross margin in 2017, up from 35% in 2016.
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, and certain additional one-time expenses. It is not intended to represent a measure of performance in accordance with accounting principles generally accepted in the United States (GAAP). A detailed description and reconciliation of EBITDA and management's reasons for using this measure is in the Q4 2017 press release issued on April 2, 2018.
SRAX Gross Margin
2015 2016 2017
54%41%
60%
17
$3.8M loss from operations in 2017, decreased from $4.8M in 2016.
$6.7M net loss in 2017, compared to 2016 net loss of $4.2M including a $3.7M benefit from a contingent consideration write-off.
$382k Adjusted EBITDA loss in 2017, improved from Adjusted EBITDA loss of $1.1M in 2016.
1
1
18
SRAXmd
As announced in Oct. 2017, SRAX has been evaluating options to monetize SRAXmd. The response was larger than expected and, therefore, SRAX conducted several bid rounds. Management believes it is in the final stages of the auction process and is working toward closing the transaction, but as stated earlier there are no guarantees.
patients in real-time, integrated into the content they are already consuming on their devices, across thousands of sites and apps. We offer more scale and efficiency targeting HCPs and patients outside of medical content - with 3x higher engagement rates vs medical content.
Pursuing Strategic Alternatives
The digital marketing and data management platform creates opportunities to generate short- and long-term shareholder value
Using software-as-a-service (SaaS) to capture rapidly growing, fragmented RTB and Social Media market
Generating recurring revenue streams from product suite utilizing core technologies
Expanding presence with mid-size agencies servicing various verticals – each of which could evolve into a standalone business – healthcare, automotive, sports, consumer goods & appliances, entertainment, finance, food, telecom, travel, and charity
Driving adoption of proprietary software that turns data from multiple sources into quantifiable results optimizing campaigns and converts online ad to offline engagements and sales uplift
Improving gross margin and Adjusted EBITDA performance by focusing on high-margin revenue
Investment Rationale
Nasdaq: SRAX
Developing cutting edge blockchain identification graph technology named BIG Platform, which is anticipated to be a consumer-first data management and distribution system.
19
20
APPENDIX
21
CEO and Co-Founder
CHRIS MIGLINO
DUSTIN SUCHTER
CTO
KRISTOFFER NELSON
COO
VLADI DELSOGLIOCCO
J.P Hannan
CFO
Management with Proven Track Record
Nasdaq: SRAX
I follow an intrinsic desire to express myself through the manipulation of forms and thoughts, ideas and emotions. I studied Media Design and worked in several cool media companies, then started working at Social Reality. Teaching Interactive Design at the Art Center of Pasadena allows me to enter one of the pinnacles of American design.
Chris has spent the past 20 years working in the digital advertising space and has successfully launched and sold 2 internet companies. Both of these companies were sold to publicly traded companies on the NASDAQ. He has a detailed understanding of how technology interacts with brands.
Kris oversees sales operations, marketing, network management and growth, strategic partnerships, and organization development.He brings more than 10 years of executive experience and a diverse background in business development, sales management, and organization development to Social Reality.
Hundreds of millions of users served and dollars earned, billions of impressions served over 15+ years with scalable infrastructures and online advertising; Inktomi & Yahoo! alumni; B.S. Mathematics of Computation, UCLA.
J.P. is responsible for all accounting, finance, andinvestor relations activities for Social Reality. He has spent 20+ years as a CFO in private and publicly-held media companies.
22
Stock Symbol SRAX (NASDAQ)
Price April 3, 2018 $4.11
411k
$41.5M
$3.75 - $4.35
10.1M
5.8M
Price & volume quotes from Nasdaq and other reliable sources
Avg. Daily Volume (90 days)
Market Cap as of April 3, 2018
52 - Week Range
Shares Outstanding (per 4/2/2018 10-K)
Float¹
Market Snapshot
Nasdaq: SRAX
¹Per Yahoo!Finance
523
¹ Warrant exercises range from $3.00 to $6.45 with a weighted average strike of $5.09.² Employee options range from $6.97 to $7.26 with a weighted average strike of $6.97.
Shares
Total Current Shares Outstanding
As of April 3, 2018
Options²
Stock Awards
Warrants¹
Fully Diluted Shares (as reported)
10,089,788
409,300
13,038,792
Total Potential and Fully Diluted Shares 15,333,792
2,485,005
54,699
Potential Shares ($6,885,000 debentures @$3.00) 2,295,000
Capitalization Table
Nasdaq: SRAX
