Morgan-Lea Fogg: This is our Safe Harbor statement. This presentation contains certain forward-looking statements that are based upon current expectations and involve certain risks and certainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as anticipate, plan, will, intend, believe or expect or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including, without limitation, statements made with respect to expectations of our ability to increase our revenues, satisfy our obligations as they become due, report profitable operations and other risks and uncertainties as set forth on Form 10-K for the year ended December 31, 2020 and our subsequent quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission. All forward-looking statements involve significant risks and uncertainties and could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of SRAX and are difficult to predict. SRAX undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Now I turn to SRAX CEO, Chris Miglino.
Chris Miglino: Thanks, Morgan. Thanks everybody for joining us here today. As many of you know, SRAX is in the business of building products that are tools that help public companies thrive. We do that through a few different mechanisms. We do that through our Sequire SaaS platform, which is a tool that allows public companies to understand a variety of different things about their investors, both retail and institutional and manages a variety of different things that are important for public companies, employee options, warrants that they might have in the company, their cap table in general, allows them to manage everything that has to do with the day-to-day activity of being a public company as it relates to the stock in that company. We then complement that with two other pieces of our business. We own the largest microcap conference in the country. We throw that in person twice a year called LD Micro. The next one is coming up here in June. And then we have the virtual element of that. We’ve written some virtual software that allows us to run virtual conferences, not only for ourselves, but we license then our software out to other banks that are out there to run their conferences. So we have many, many different banks that are licensing our software to run their virtual conferences. And then around all of this, we have built the investor community. So we have a database inside this ecosystem of companies that represents a significant amount of shareholders. And we’re building community around those shareholders, giving them news and information and education so that they can become better investors and better educated in the market itself. 2021 was a banner year for us. We did $46.1 million in bookings for the year, not revenue, but we booked $46 million worth of contracts in 2021. So it was a very solid year, and we’re accelerating that pace into 2022. We ended the year with around 278 issuers that had signed up for the Sequire platform. We’re reaffirming our guidance for Q1 of $11.5 million, which is a number that we gave out recently, but we’re increasing our full year revenue guidance from $45 million to $47 million to $47 million to $49 million. And we are comfortable doing that because we are seeing an acceleration in the bookings that we’re having within the organization. So now I’d like to turn over the call to Mike Malone, our CFO, to give you a little bit of an update on where we are with the filing.
Mike Malone: Thank you, Chris. As many of you know, last week, we filed an extension to file our annual report. The delays causing the extension are the result of complexities related to the deconsolidation of BIGtoken in the fourth quarter, specifically procedures related to the review and audit of the financial statements that we were required to incorporate within ours as well as the valuation of our remaining equity investment with BIGtoken have caused overall delays in the completion of our audit work. We are working diligently to complete these items accurately and expeditiously. As a result of the deconsolidation of BIGtoken, our financials will be much easier to understand going forward. They will be highlighting the true value of our Sequire business. And with that, I’d like to turn the call back to Chris.
Chris Miglino: Thanks Mike. There is no excuse for us not to have our financials filed on time. And we are doing everything we can, working 24/7 over here to get that done. Some of the stuff that we are working on has been very complex. And we hope that after BIGtoken is separated fully out of the ecosystem of Sequire that this makes it much easier to understand Sequire and SRAX as a business going forward. So we appreciate your patience. We understand that nobody likes to see things filed late, including us, and hope to have these filed on time in the future. And we’ll have another call once this is done and finished that will outline the exact numbers. But before we get there, I just want to give you a little bit of a preview into the Sequire bookings because Q1 we saw another significant booking period. We did $15.6 million in bookings in Q1, which is a pretty solid number considering it’s a little bit down from Q4. We did $16.5 million, but Q4 was an amazing quarter. This is well above what we had anticipated that we would do for Q1, so that’s why we are comfortable in increasing our guidance for the year because we have insight. And obviously, the sooner in the year that we’re closing this business up, the more impact it has in 2022. So we are really excited about this, and the sales team has grown. We have hired up around the sales team, and they have a lot of business in the pipeline. So things are looking good on the bookings side. We added around 24 new subscribers to the platform in between Q4 and Q1. So the number of subscribers continues to increase. So hopefully, we can keep pace with that. I want to talk a little bit about our share structure. We had around 4.5 million warrants that expired in January of this year. So we were able to subtract around $4.5 million worth of warrants out of our cap table. So, on a fully diluted basis now we are looking at around 33.4 million shares outstanding for the company. If all of those warrants come in that make up that share structure, which would be a total of 5.3 million warrants, then you’re looking at around $16 million that would come into the company in additional cash. So you have in April, this month, you have around 1.4 million warrants that expire in April. And then the next big chunk of warrants, expire in October of 3.7 million. Again, collectively, if all of those were to get exercised it would generate another $16 million in capital for the company. As of the end of the year, we had 153 employees within the organization. We’re starting to see people getting back together. We are starting to get the team back together. And we had an offsite in February where the entire product team and engineering team spent a week of planning for the year. And it’s great to have everybody back in one location and collaborating with each other. We saw a big increase in the institutional ownership. We had projected around 8.1 million for Q4. We did see that, have around 8.1 million shares owned by institutional owners, and that’s a significant increase over the 600,000 shares a little bit more than a year ago. So we’ve seen a constant increase here in the number of institutional shareholders. So we think that’s fantastic. We have a couple of new features that we added in the fourth quarter that we’re announcing right now. We have a product that’s called the Deal Center. And the Deal Center allows the issuers to track the movement of specific financings that they do. So historically, what’s happened inside of financings or any type of stock surveillance is that companies would be focused on 13Fs, 13Gs that are filed by different hedge funds or different institutional investors. We have built the Deal Center as a tool that allows for the issuer to track exactly where shares move whenever a transaction is being done, whether that’s a common share or a warrant exercise or a convertible debt or any type of financing that happens within the organization, you would build that transaction within our system. And then the system will then track where those shares move, and we’ve built AI to understand if those specific institutions or investors are selling their shares over time. And then we’ve created predictive analytics based on previous habits about what the most likely this investor is likely to do. So historically, we’ve seen that this investor sells after they invest in a transaction. We’ve seen that they sell over the first 6 months or the first 12 months or the first month or this amount of volume per quarter. And then we’re applying that to the entire deal and then it allows us then to keep track of where exactly everything is moving. Now in addition to just tracking where they are moving. It also helps issuers when they give certain rights to specific investors. So let’s say you enter into a transaction but you have a reset clause in either a warrant or a reset clause in your convertible debt or in a common stock issuance. Keeping track of all of those different instances and contractual obligations that an issuer has is very difficult to do. We’ve built the system so that it can then track all of these different resets and ratchets that happen within these deals if they do exist, so that they automatically get brought to the attention of management while they are entering into a new transaction and gives them the financial ramifications of having reset the price of any of these instruments, any of these securities that are out there. So this is, we’ve been working on the Deal Center for a really long time. And it is probably one of the coolest things that we’ve ever built. It is going to be, I believe, instrumental in helping public companies understand their cap tables and where shares are moving. So the team did a fantastic job on working on this, and we look forward to launching it to our clients. The next thing we did in the fourth quarter was we launched the Virtual Events 1x1 Platform in our system. So historically, we built the Virtual Events Platform, but the 1x1 feature was very limited. Now we’ve expanded on that 1x1 feature. We’ve given it the ability to do all kinds of statistical analysis about who’s visiting what companies, how long they are watching presentations, how long they are staying in the presentation, is there any type of crossover between the different companies that they are watching, so a lot of tools that are very valuable in understanding things about the investors that are watching these events. And also we’ve built in additional functionality that is very helpful for the organizers of these 1x1 events. So these things are never finished and they are constantly evolving, but this update was a major milestone for our virtual 1x1 system. So we’re excited to launch this as well. So now we’d like to open it up for questions. I know that some of you wanted us to talk today about our Sequire only operating income numbers. But just with where the auditors are with everything getting pushed back because of all this BIGtoken stuff, we just want to get the go ahead and the approval from the auditors on the numbers before we share them with you guys. I think we will have those in short order. I don’t think it will be much longer. But I think that instead of trying to show something today that might have some even minor modifications on them, we don’t want to do that. And we want to just also out of respect for what the auditors are doing, make sure that they have given their approval for it and that they have given the go ahead to share that with you. And we had hoped to have that to you by today, but unfortunately, we don’t. And so I know some of the questions that you are going to want to ask are going to be around that specifically, but knowing that we don’t have those to share with you today. And we just really want, when we scheduled this call, we had hoped that we would have those numbers ready. And unfortunately, they are not. So if you have any questions that we can answer related to the things that we’ve already shared, then we will be happy to answer those questions.
A - Morgan-Lea Fogg: Great. Thank you, Chris. We do have a couple of questions. So we will go ahead and start with Mike Crawford from B. Riley. Mike, if you want to go ahead and perfect, we can see you.
Mike Crawford: Thanks, Morgan and thanks, Chris. So, well, one, the $15.6 million of Sequire bookings are fantastic in Q1. That’s the second highest ever. The trailing 12 months Sequire bookings are over $50 million. So what would prevent SRAX from generating over $50 million of revenue in ‘22?
Chris Miglino: We would have to see a significant decline in bookings between now and the end of the year in order for that to happen because we already have a good chunk of that already in place. And obviously, like I said earlier, everything that gets booked in Q1 has the full year to run versus everything. So if Q1 and Q2 are as strong as we think they are going to be, then that should not be an issue.
Mike Crawford: Okay. I guess I heard what you said about not being able to provide just Sequire level, more Sequire level information. So I won’t ask about that per se, but you did say you added 24 new subscribing companies during the quarter. Do you have a sense of repeat customers or churn?
Chris Miglino: Yes. So since we took those slides out of the presentation because they are part of the financial discussion, but we’re still at around an 87% renewal rate on everything. So that stayed kind of consistent. So we’re right there. So we’re seeing continued renewal from a lot of the clients as well as these new people joining into the platform.
Mike Crawford: And while the number of subscribing companies is important. Even more important is what kind of digital marketing services they are buying from SRAX. So is that a similar renewal rate in companies that have run those campaigns?
Chris Miglino: Yes. I don’t have that exact number, but we will be sure to have that for you in the next presentation when we do the final numbers. We will make sure we have that for you.
Mike Crawford: And I’ll just test one more that, are you allowed to say what your cash and security balances today or at the end of the quarter?
Chris Miglino: I just think that we, let’s just wait for that. With all this stuff with BIGtoken, like the process of getting this BIGtoken stuff unwound from SRAX literally push the audit by almost 4 weeks, like it was in-depth. We were waiting. We don’t control BIGtoken any longer and we needed information from BIGtoken. We’re pushing hard to not need to wait for information from BIGtoken. And so it’s just, it’s been a big overhang on getting all that done. So not that we don’t know what that number is, it’s just that we’d rather share it when we have everything finished, if you don’t mind.
Mike Crawford: Okay. And then I’m almost done. First, I want to thank you guys for hosting our B. Riley Securities Virtual Esports Investor Day today and the 1x1 platform worked great.
Chris Miglino: Thank you.
Mike Crawford: And just a final question from me is regarding BIGtoken. You have converted your securities into preferred with where you can hold a maximum of 4.9% of the common at any given time. So what steps need to occur for you to be able to sell some of the common that you hold in BIGtoken? That’s my final question. Thank you.
Chris Miglino: So they need to file an 8-K about their merger, and they need to file their 10-K. Once their 8-K and their 10-K are filed, then we would be able to participate just like everybody else in the market. But as you can imagine, the valuation of that piece of the business is something that’s been of issue, right? So if you just take it at its face value, it’s worth $194 million for SRAX. But in order to realize that, the price would have to stay here and it would take us 70 years at the existing volume to realize that value. So as you can imagine, this type of – putting that type of asset on the books could continue to create dramatic swings in the operating results for Sequire. So, if the stock was up $194 million and then down another $50 million and then up $20 million, I mean it would create unrealistic numbers inside the Sequire and SRAX P&L. So, that is what we are contending with is to provide realistic expectations about the true value of that asset so that it doesn’t mask the real value that Sequire is generating for its investors.
Mike Crawford: Alright. Thank you very much.
Chris Miglino: Thanks Mike.
Morgan-Lea Fogg: Thank you, Mike. Up next, we have Jon Hickman from Ladenburg, if you want to un-mute.
Jon Hickman: Okay. Thanks for taking my call or my questions. What happened, could you talk about the Q3 bookings from last year? It seems like they were down kind of bucking the trend there for the rest of the year. Was there something special about that quarter?
Chris Miglino: No. It was just, I think that quarter we just had a little bit of a pause in the summertime because it’s a little harder to get CEOs and head people on the phone in July and August. So, I think we saw maybe a little bit of seasonality there on closing up those transactions. And then I think you saw that come back into October, November, December, into the fourth quarter last year. And I think that’s why you saw a big jump also in the number in the fourth quarter, where we had our largest quarter ever in bookings.
Jon Hickman: And then going back to your slide about warrants, what’s the exercise price for the warrants that expire in April?
Chris Miglino: Most of them are at $3. The bulk of them are at $3.
Jon Hickman: And the ones in the fall?
Chris Miglino: The ones in the fall, I can get that to you. I think it’s around $3.75. I believe the – if you looked at the average of those, it’s around $3.75. Mike, do you know the answer to that?
Mike Malone: I am just pulling it up right now. But I think to your point, Chris, it’s about $3.75 on average.
Jon Hickman: So, theoretically, those, well, technically, they are in the money right now. And if the stock price stays the same, people would exercise rather than let those go, okay. I see, I think the rest of my questions were answered, except the ones that you can’t answer today. I will just pass it on to the next questioner.
Chris Miglino: Thank you very much Jon.
Morgan-Lea Fogg: Thanks Jon. Up next, we have Jim McIlree from Dawson James.
Jim McIlree: Yes. Thanks a lot. Chris, can you talk a little bit about the bookings? The increase in the past couple of quarters, you suggested that part of it is seasonal, but is there something else going on? Is there a function of how the market is moving or sales force increase or something else? What’s the driver?
Chris Miglino: Yes. When we had a hit in the market over the first quarter here, we saw an increase in the number of companies that were interested in our services. So, there is definitely, we didn’t know what that would look like because we have only been in the market during an uptrend and not a downtrend. So, I think that we are finding that both stocks moving up and also moving down are driving sales for the company. So, when you have stuff coming down, everybody wants to know who is selling their stock, who is holding the major positions. So, we have gotten a lot of new business because of that. And we have also increased our analyst team. We hired a Head of Capital Markets that is working with all of our customers to help them understand what’s going on within their individual stocks and helping them leverage the platform to its full extent so that they get the most out of it. So, is the increase in bookings due to the market moving one way or another? I think it has an impact. I think that – but also we have hired a lot of new salespeople that are now hitting their stride. They were new in the middle of last year and are now all contributing into the process. So – and they are no longer in the training process. They have been here at least six months plus and have a detailed understanding of everything and are doing a fantastic job in talking to all types of companies. So, I think that’s why we are seeing this continued increase in sales.
Jim McIlree: And can you share with us how many salespeople you had at the middle of last year versus what you have now?
Chris Miglino: Yes. At the middle of last year, I think we had like five, and we have added an additional five. So, we are close up to around 10 salespeople. That is including all of us that sell. And those additional salespeople are bringing in deals now, and they are starting to contribute to the process.
Jim McIlree: And is that sales force, is that going to be added to either significantly or modestly over the next 12 months?
Chris Miglino: I think everybody that we have either hired or are in discussions to hire right now, that’s it. And we are going to stay put with that for probably a 12-month period unless there is somebody amazing that comes to our attention. But I think at this point, we are set on what we are going to do.
Jim McIlree: Great. And my last one is, can you talk a little bit about listed versus non-listed business? I am not sure if you can talk about revenue, but if you can, that would be great. If you can’t, then how about bookings, listed versus non-listed bookings?
Chris Miglino: Well, our goal is to increase the number of listed companies significantly this year. That’s one of our key mandates for the year. So, the team is spending a lot of time calling on listed companies. But by no means are we shy or adverse to working with the smaller companies that were out there. We have been a smaller company ourselves and we understand what it’s like to be there. And we built this platform because of the things that we needed as a small public company. So, I don’t have the exact numbers for you here. But when we do our presentation, we will have the exact numbers for you, unless Mike has that at his fingertips. Mike, do you happen to have that by any chance?
Mike Malone: I don’t have the actual, the number, but I do know, Chris, as you were saying that there has been a – there certainly has been an uptick in the percentage of our overall bookings coming from listed companies in the first quarter. I think it’s around closer to 30%, 35% of the total. But I don’t – we will get you the exact numbers.
Jim McIlree: That’s great. Thanks a lot guys. And that’s it for me.
Chris Miglino: Alright. Thanks. Appreciate it.
Morgan-Lea Fogg: Awesome, everybody.
Chris Miglino: Let me just say, I hope when we get this BIGtoken thing squared away that the getting rid of that noise in the P&L is going to be so much better for us. And this will be the last quarter that we really have to contend with that issue, hopefully. So, we are working hard towards that and then going into the full year of 2022, we can just really focus on the benefit that Sequire is bringing to all the shareholders.
Morgan-Lea Fogg: Awesome. That concludes our call and questions for today. Thank you everybody for joining the SRAX call.
