Greetings, and welcome to SRAX's Third Quarter 2018 Results Conference Call. 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'd like to turn the call over to your host, Kirsten Chapman. Thank you, you may begin.

Good morning, everyone. I'd like to welcome all of you to SRAX's third quarter 2018 conference call. This call is being webcast and is available on the Web site at srax.com/investors. With us today from management are SRAX's CEO, Christopher Miglino; and CFO, J.P. Hannan. Chris will review the Company's quarterly highlights, J.P. will discuss the financial metrics, and then Chris will provide a summary and open the call for questions. Before I turn the call over to management, I would 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 may involve risks and uncertainties that could cause actual results to differ materially from those anticipated by SRAX at this time. In addition, other risks are more fully described in SRAX's public filings with the 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 measures in which SRAX excludes stock-based compensation expenses and other one-time items from its GAAP financial results. Please refer to SRAX's press release for a full reconciliation of its non-GAAP performance measures to the most comparable GAAP financial measures. It's now my pleasure to turn the call over to SRAX's CEO, Chris Miglino. Chris, please go ahead, sir.

Thank you, Kirsten. Good afternoon everyone. Thanks for joining us today. SRAX is executing our strategy to build specific datasets through three integrated areas of focus: Data Verticals, Social Media Data, and BIGtoken, our consumer data product. I'm excited to provide our third quarter updates. First, our financial highlights. For the third quarter, we continued to expand gross margins, which increased to 62% compared to 56% in Q3 of 2017, and we posted net income of $19.3 million. Consequently, our bottom line improved from a loss of $0.13 a share in Q3 2017, to earnings per share of $1.91 in Q3 2018. These results demonstrate the power of our business plan to build, optimize, and monetize offerings that solve data challenges for all actors in the digital advertising ecosystem. While it seems like a long time ago, we sold our healthcare business in August. We introduced SRAXmd in 2015. Over the course of three years, we enhanced the product, named SRAXmd, hired talented team members, and built a highly successful vertical that became a major contributor to revenue. This quarter, we sold SRAXmd for $52.5 million. This included $33.5 million in cash less the transaction fees, a $9 million earn-out, and $10 million in preferred shares, or approximately 31% of the new SRAXmd entity. This transaction structure enables us to keep some upside in the business we worked so hard to develop, while monetizing our healthcare efforts and begin investing in earnest in our other data-driven digital marketing solutions. We've been in the digital advertising business a long time, and we've seen the cycles, and we believe that it's the right time to monetize the MD business, while keeping an interest in that will allow us to participate in the upside. We believe that each of our verticals is worth as much, if not more, than the healthcare business that we just sold, and our goal is to demonstrate that to the financial community. Let's review our industry-specific data verticals first. As you know, we have a number of verticals. To grow, we are using the proceeds from the healthcare business to expand our sales and fund development. We are focusing on industries with the greatest opportunity for near-term return. As you may know, consumer packaged goods, or SRAXshopper is our oldest vertical, and we've continued to invest in both the sales and technology infrastructure for this vertical. Frankly, there's been a misconception about the revenue contribution from our verticals. SRAXshopper has been our largest vertical, not our healthcare business. While we eliminated some low margin business in 2017, to date, the SRAXshopper vertical has generated the most revenue for the company. We've leveraged from our SRAXshopper to build out our automotive vertical as well. With the technology and the team poised for success, SRAXshopper and SRAXauto are our highest priority in our vertical sector right now. Regarding our sales team, we started 2018 with six team members. This summer, while we were uncertain that the MD transaction would conclude, we took a risk and we hired quite a few sales reps and have built an amazing sales infrastructure. We now have 22 sales reps, and are on track to meet our goal of 30 by the end of this year. Our new team members include a VP of shopper, plus five dedicated shopper marketing specialists, one of whom is based in Bentonville, Arkansas, near Walmart's headquarters. Two auto experts, one in Detroit to serve the U.S. markets, and one in New York to serve the international market, a VP of business development specifically tasked to drive commercial adoption of BIGtoken, and a VP of SRAX Social specifically tasked with driving adoption of our SRAX Social platform. Ten-plus generalists, who spend that time focused on SRAX solutions. Typically it takes about three to four months for the team member to come up to speed; therefore we expect our expansion to significantly ramp revenue in 2019. This added to the increase in our expenses in this quarter, but we're seeing the benefits from this decision now. Regarding development, our tech team is amazing, and continues to expand in both our offices. As many of you know, we have a significant office in Mexico. Our Mexico office is up to 85 fulltime technology professionals. And in the U.S., our tech team has grown to 15 people. They're quite busy designing distinctive products for our verticals. We have a number of new technology offerings that our team is bringing to the market. We think they're cutting edge and are providing our team the tools they need to provide unique data that drive sales. In our social media category, we serve brands and agency working feverishly to improve their position in social media. We're continuing enhancing and evolving our offering. Our SRAX Social product automatically triggers additional advertising spend to enhance specific social advertising campaigns based on user-set rules and parameters. We have incorporated artificial intelligence to enable users to create rule to automatically allocate budget and payment amongst specific campaigns or client profiles. Our solutions allow for brands and agencies to pay once, and enables the system to optimize and spend the budget with the best possible results without human interaction. We recently hired a VP of social to lead our charge in this area, and we anticipate this business to flourish in 2019. On you BIGtoken front, many of you may have seen the 60 Minute segments this past week talking about how big data companies are stealing consumer data and benefiting from the sale of that data into the market. If you haven't see it, you should make sure go to 60 Minutes' site and watch the segment, it's a validation that what we are doing with BIGtoken and the market opportunity that exists for us here. For those new to SRAX, we're developing a consumer-powered data management and distribution system revolutionizing data by offering consumers choice, transparency, and compensation for their data. In this equation, both the consumer and the advertiser win. BIGtoken puts data back into the hands of the consumers, who can manage their digital data, and when they choose to share data, they earn rewards each time it is accessed by advertisers. To get compensated, consumers can answer questions and surveys, check into location, refer friends and family and can add social accounts. Advertise win as BIGtoken provides them with authenticated and verified consumer data. Basically we're solving the next run in evolution of advertising challenges. First, the marketplace was attacked by ad fraud and loss. Then ad viewability became an issue. Now advertisers demand that their ads are served to validated traffic and that their ads are seen. Now data accuracy is the limelight, and it's a huge problem for marketers. Did you know that 95% of marketers use personal data to form their strategy? Yet 64% don't fully understand where that data comes. BIGtoken uses multilayer verification for data accuracy, creates data security, and ensures data transparency to advertisers. We give marketers the security that the data that they are buying is provided from the consumer and that the consumer is giving them the right to that data. We're excited to announce this week that we launched the open beta for BIGtoken.com. This means that our big platform is solid, clearing, and surpassing the necessary feedback, scalability and security milestones to move from limited to open beta. We're pleased that we're able to very quickly move to open BIGtoken.com and invite the public to participate. Now we're focused on user growth through partnerships and integrations with e-commerce, digital media destinations, and loyalty programs through referral programs based on user incentives and through direct marketing and user acquisitions. If you have not already downloaded the application, you should go to the Play Store or the App Store and get it now. If you want to be on my team, you can use the code Go Big One. When we accumulate 10 million BIGtoken users, we believe our run rate will be around 400 million plus annually, while that's ways off our April 2019 goals to reach 500,000 BIGtoken users, which we believe will translate into around $1.5 million monthly. We have a good view into our 2019 pipeline, and that gives us confidence in our 2019 growth. We expect revenue between $20 million to $25 million with gross margins between 45% and 55% in 2019. And with that, I'll turn the call to J.P. for the financial review. J.P. Hannan: Thanks, Chris. As discussed, across our three product groups, we have multiple initiatives with significant revenue and appreciation upside potential. However, today we are a company in transition. While we're pleased our same-store sales increased and our gross margin improved year-over-year, our overall comparisons are overshadowed by the fact that we only own SRAXmd for 37 days in the third quarter of 2018, compared to 90 days in the third quarter of 2017. With that, I'll quickly review the results for our third quarter. Total gross revenue was $2 million versus $5.6 million in the comparable prior year period, and gross margin increased in the quarter to 62%, and that compares to 56% in Q3 of 2017. Our operating expenses were $4.9 million, compared to $3.7 million, which reflects our ongoing headcount additions particularly in sales where we're continuing to invest. Interest expense was $1.2 million, compared to $471,000 in the third quarter of 2017, this is due to higher levels of total debt resulting from October 2017, and enter financing, but subsequent to the end of last quarter, we elected to redeem these convertible debentures, which has not happened yet, but which will reduce our future expense obligation and potential dilution. Our gain on sales of assets was $24 million in the third quarter, and there was no comparison in the same year period. Net income was $19.3 million for a gain of $1.91 per share. This is resulting from our SRAXmd sale, and compares to a net loss year-ago of $1 million or $0.13 per share in the third quarter of 2017. Adjusted EBITDA loss was $2.8 million, compared to $93,000 in the in the third quarter of last year. And now if you review our financials versus the published edition a year ago, I want to point out quickly that as we discussed in our 10-K filing, at the end of last year, we chose to adopt the accounting guidance related to non-cash treatment of warrant issuances. That adoption resulted in necessary retrospective adjustments to previously issued numbers back to January 1 of 2017. As such, comparable numbers don't match exactly what you saw in our Q3 2017 earnings release, however, none of these adjustments affected operating income or adjusted EBITDA and bridge of all noncash adjustments for the one accounting is included in our 10-Q, which we filed later today. I would also like to remind everyone as you review the year-to-date numbers that advertising sales are highly seasonal in nature, and the fourth quarter is typically the strongest revenue-generating period of the year. Cash and cash equivalents were $14.4 million at September 30, 2018, compared to $1 million at the end of last year. In August, the company received $33.5 million in gross proceeds from the sale of SRAXmd, which I will breakdown for you now. Approximately $2.5 million was immediately paid out in transaction fees related to investment banking and legal expenses from the transaction. Under $1 million was held back in escrow for various indemnities, potential working capital adjustments. Unless something unforeseen arises we should receive these amounts at a later date. Approximately $2 million was utilized to repay advances previously taken against SRAXmd accounts receivable through our agreement with FastPay Partners. The FastPay line, as I recall, was renewed this past April, and the $4 million line remains available for use after this repayment. This reduced our debt amount for the same $2 million. Approximately $3 million was utilized to repurchase shares and options from exiting employees, and which reduced our shares outstanding approximately 5%. Approximately $4 million was paid to exiting employees as bonus compensation for successful completion of the transaction as well as final commissions, accrued vacation, pay check due to these employees on their departure from SRAX. The net of all these outflows, we retained approximately $21 million in cash from this transaction, which have been utilized for general operating purposes, and to make strategic investments in other SRAX product verticals. As Chris mentioned, we could receive up to another $9 million for SRAXmd hitting gross profit performance targets by year-end. At the end of September 30, 2018, there were approximately 10.2 million common shares outstanding. While regarding 2019, as Chris stated, we're very confident about our market opportunity and our growth strategy. For 2019, we expect revenue to be between $20 million and $25 million, and our gross margins to be between 45% and 55%. And now with that, I'd like to turn the call back to Chris.

Thanks, J.P. Our company transformation continues and the timing couldn't be better. Just this week 60 minutes at a program on consumer data management, Jeff Chester of the Center for Digital Democracy summed it up best by saying, "Americans have no control today about the information that's collected about them every second of their lives." People across the United States are joining the conversation. Apple CEO, Tim Cook has spoken in support for General Data Protection Regulation known as GDPR. In his presentation, Mr. Cook noted that Internet privacy laws saying, "Stockpiles of personal data serve only do enrich the companies that collect them." He continued by commenting on the theft of our data, "Our own information from everyday to the deeply personal is being weaponized against best with military efficiency. It is time for the rest of the world including my home country to follow," he concluded. BIGtoken is one part of the data management solution by providing the consumer power data marketplace, where people will own and sell access to their data, thereby providing everyone an Internet ecosystem transparency, choice, and competition. Clearly the need for data accuracy in advertising and data management is continuing to grow, increasing our market opportunity. In 2018, we started with only six sales people. We have accomplished a lot. When we start 2019, we will have at least 22 trained sales team members armed with enhanced products to expand our industry-specific data verticals and social media data solutions. Finally, we are driving BIGtoken user acquisition, targeting 500,000 users by the end of the first quarter, 2019. Overall, we continue to believe that the sum of our parts creates great synergies that will drive long-term shareholder value. Before I open the call to questions, I would like to note that you can see us at several investor events in the next couple of weeks. J.P. and I are in New York tomorrow. I'll participate in the disruptive potential of the blockchain panel at the D.A. Davidson E-Commerce Forum, and the Demystifying Digital panel at the Wells Fargo Media Forum 2018, in the afternoon. J.P. will be at the Wells Fargo event all day long. On the 29th, I'll be at the Benchmark Discovery One-on-One Conference, in Chicago. And then on December 4th, we'll at the LD Micro Event, in Los Angeles. I hope to see you at one of these events. I'd now like to turn the call over to the operator for Q&A.

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Jim McIlree with Chardan Capital. Please proceed with your question.

Thank you, and good afternoon. Chris and J.P., you had -- or Chris, I think you talked about 500,000 BIGtoken users by the end of Q1 next year.

Correct.

How much do you think it's going to cost you per user to get there? Do you have a sense for customer acquisition cost?

Well, everything that we've been doing so far has been going organic. If you've downloaded the app, you see the organic elements that are built in to the application, but we certainly do have that budgeted. We have ranges of what we're willing to pay to acquire customers, and we're going with more organic influencer type of stuff first, which you'll see a lot more news about here in the next forthcoming week.

So, to interpret that, it sounds like you're not going to be spending a lot on marketing dollars to get that 500,000 users, instead, you have other ways that you think you can get there efficiently. Am I interpreting that correctly?

What I'm saying is that I'm not going to give you the number that we're going to pay that we think is the number that's going to become the benchmark for which every sales person is going to start their negotiations with me, but we certainly have a lot of ways by which we think that the app will go viral, and we've seen the results of that in just the limited release that we've had out there, and even in the last few days when we've opened it up, the viral elements of the app have been doing fantastic.

Okay. And I think you've also said that that half-a-million subscriber number, you could do a million-and-a-half in revenue. So if I assume that you get there and you only do that million-and-a-half a month or six months, that would be about 40% of your projected revenue in 2019. I think my math is right, but is that -- yes, go ahead.

I'll let J.P. answer that. J.P. Hannan: Yes, I mean the growth of BIGtoken is really dependant on just capital allocation and capital resources, if we do external financing, but just given what we have right now, we are only projecting BIGtoken to do a small amount of revenue in the year. We could ramp that if we desired, it would just require us to spend more in marketing. As you said, right now based on the plan is to use internal resources as much as possible and spend as little as possible on the external [user generation] [ph].

But I think, Jim, the point being on that front that, in the guidance that we're giving, the numbers that we're taking from BIGtoken are not the million-and-a-half a month that we think we'll be doing, where the $20 million-plus that we'll be doing next year is coming from our other core businesses.

Got it…

If that revenue kicks in for BIGtoken then that will be upside to that.

All right. And can you help with the operating expenses base kind of on a pro forma basis, and by that I mean, of course, excluding MD, but also including the sales hires that you've made. So what's kind of a normalized OpEx going forward? J.P. Hannan: So we've been spending ex MD around 850 a month is sort of the normalized operating expense. Earlier in the year, MD was ramping expenses at a much higher rate than the rest of the business. As Chris said, we have some additional sales people we want to add, but we have -- most of that's now baked in.

And is most of that sales variable compensation, so the 850 a month is relatively stable and to the extent that the sales people are successful then that's how they get paid?

Yes, now that the team has ramped and they've aligned -- usually it takes three to six months for a sales person to really start generating revenue and commissions. But for the people we've been hiring and most at the end of last year and early this year, they're now starting to earn commission, and it'll be variable increases in line with the revenue generation they produce. Any future people we bring on will have to have that initial investment upfront.

Okay. So not to be obtuse, but I just want to make sure I understand it correctly. So that 850 a month does not include the extra sales people that you talked about earlier in the call, going from six to 22, and 30 by year-end? J.P. Hannan: Yes, I mean the 850 is the run rate right now, and that's what you'll see likely in Q4 through the balance of the year.

Okay, okay, great. So it is with the current increase that you already… J.P. Hannan: With the current -- that's correct.

Right, got it, got it. Okay.

The variable element of that is not very significant because a lot of them are new within the quarter.

Got it, okay. I will get back in line. Thanks a lot.

Thank you.

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

Hi, guys. How are you doing?

Hey, Dave, how are you?

Good. So, kind of along the same lines of the last question, can you give us some sense of just sort of the contribution; I know you can't give us the actual numbers. I'm just sort of wondering where some of these new verticals are in terms of really ramping into some sort of revenue generation. And I'm sort of thinking in terms of the guidance. If I know we have a seasonality issue towards the end of the year anyway, but I'm also looking at the guidance and thinking that it sort of looks like getting the ramp-ups and new pieces and some of those things, that a lot of that guidance probably is going to end up loaded to the backend of the year, but I guess just sort of curious what we can expect from maybe the newer vertical. I mean, you've talked a little bit about consumer packaging, but I'm kind of worrying about the other verticals, as where they're at in the cycle, I guess.

So, that's why we're trying to be clear about the shopper marketing element. In presentations that we've give, we showed in 2016 it was only $4 million from MD, and in 2017 it was only $8 million. So you had all the rest of that revenue from those years was coming mostly from our consumer packaged goods shopper marketing arm. So that piece of our business has had significant revenues in the past, and has surpassed that, which we've done in MD. What's changed there has been the margin profile, where we've gotten the margins back to a substantial number, and we've been able to create some technology that's enabling us to maintain some good margin as we grow that business. So, if you remember, we cut a lot of that shopper marketing business out when the margins started to decrease. But then as we build new tech we were able to maintain some really good margins in that business. So you'll continue to see that grow. We've hired a person that was at Walmart for 12 years. Just today, we hired somebody that was at P&G for, I think, 20 years. So we're really ramping up that team, and George Stella who's running that piece of the business is doing a fantastic job for us. On the automotive side, that's much newer, so that they're just starting to ramp into the fourth quarter and into next year. So the guidance we're giving is for 2019. So we have a look into the pipeline, and the people that we've hired in that area have been long-time automotive sellers, and they understand the market, and our tech team has been working with them to give them the tools they need. And now they're out at market selling products that we finished, so that one's at the beginning. And then SRAX Social, which is also at the beginning, but further along in the development cycle. And we have a lot of people that use SRAX social, but it's a free tool, but now we're adding in media buying capabilities into the platform so brand and agencies can start to use those tools in the platform. So that's a big push for us right now into 2019. Then just the generalists, the general sellers that are selling stuff that don't fit into those categories, they leverage our technology are -- that's really the biggest growth in the sales team that we've had, and we've done that by expanding regionally across the country. So we've hired sales reps all over the country to help us bring all of these tools to market.

Okay. So if I'm looking at one of these, the newer verticals, like let's just say SRAXauto. If I were to put that in the context of sort of what happened or what we know about SRAXmd, then it wouldn't be necessarily unreasonable to assume that SRAXauto may unfold at something like $4 million, then $8 million, then $12 million. I mean is that a reasonable expectation for a new vertical like that?

Yes, for sure. And I think that certainly within the shopper side as well. And next year, what we're going to start to do is we're going to break out the revenue for you guys. It didn't make sense to start to do it in the third quarter here or the fourth quarter, but starting in the first quarter of next year we'll break down the three different buckets of verticals, social, and BIGtoken.

Okay. And just one more question. With respect to the remaining sort of bonus on SRAXmd, I think that when you were at the conference you said that that bonus is not necessarily kind of an all-or-none thing. So it's certainly possible that you could end up getting $4 million of it or $5 million, not necessarily $9 million, but certainly something less than zero if you don't hit some numbers. Is that correct?

Yes, it starts at $2.5 million and scales up. But the interesting thing about that is the more we get on the earnout the more it hurts our 30% ownership in the business. So -- because we own 31% of that business, and in order for them to payout whatever they are paying out to us on the earnout side is going to have an impact on our ownership side. So that sword cuts both ways, right. So the more we get on the earnout the more debt that company takes on or however they end up financing that.

Okay, great. Thanks.

Now, remember one thing that we didn't mention, and I was thinking this when we were going through the calls, we still owned 31% of that business, which theoretically was, in the transaction value, was worth $10 million in a preferred position on that business. So -- and that doesn't sit on the balance sheet, you don't see that on the balance sheet.

I get it, okay. That's great. Thanks.

I just want to make sure we're clear on that. Thanks, Dave, appreciate it.

Our next question comes from Michael Kupinski with Noble Capital Markets. Please proceed with your question.

Thank you, and thanks for taking the questions. My question is really more of a 64,000-foot view. In terms of the GDPR, I was wondering if you can just talk a little bit about the implementation of that and what you have seen in terms of opportunities in Europe regarding their data privacy legislation and so forth. And then there are obviously some state efforts here on data privacy, like California, New Jersey, which poses some issues, it would seem, given that there may not be level playing fields to scale data platforms and things like that. And I was just wondering if you can updated us on legislation efforts in Congress regarding data privacy, and how things are moving along on that front, and whether or not those efforts are proceeding in a way that you would think that benefit you.

Yes, it's a great question, thanks. I think that over the last year, consumers have become much more aware about the value of their information. And in Europe, they've implemented the laws. Used to be that if they broke the laws in Europe the fees were nominal, now the fees are very substantial, and anybody that breaks these rules has to pay a percentage of their global revenue as a fine, so much so that it's a huge incentive to not break the law on this front. And these types of things are coming to the United States. Like you said, California is implementing rules around data privacy. There's lots of marketers that are initiating their own rules around data privacy, and where they're willing to buy data from. The real driving force behind all of this comes from the people that are spending the money. So if you're a big brand and you're spending a lot of money, you want to make sure you're buying stuff that is coming from consumers that have said, yes, you can market to me. If you're buying data from somebody that doesn't have the rights from those consumers you're putting yourself at risk and jeopardy. And so that is really moving the conversation along quickly, so the marketers are doing it. But I think that there's lots of legislation happening, lots of different people participating. I think it'll happen on -- I think you'll see laws that are similar in Europe move over to the United States. When you have the CEO of Apple making those kind of speeches and talking about these type of things, and really out there advocating for this, people listen, and it becomes in the limelight.

And certainly, Chris, I think Congress is trying to preempt a lot of these state efforts, right. So, do you have any viewpoint in terms of the legislation in Congress, whether or not it seems like it's going to go through, and if you have any timeline of whether or not how soon that might be passed, if you think it's going to be passed?

Our BIGtoken team has an analysis of all of the different initiatives, and I'll be happy to have them share that with you so we can have -- after the call, we'll have the team email you over so you can get a sense of what's going on, and who's pushing things forward.

That'll be great. Thanks, Chris. Appreciate it.

Thank you.

Our next question comes from Matthew Larson with National Securities. Please proceed with your question.

Okay. Hey, hi, Chris. How are you?

Good, Matt. Thank you.

Good, thanks. Some of my questions were answered or at least my enquiries. One was the fact that you still owned 31% of the SRAXmd, which is not necessarily accounted for in the balance sheet, at least in an obvious way, so. And I did some homework on the company that you sold it to, Halyard, who's had quite a bit of success in growing some of the investments they've made. So if it was purchased at $52 million, and if you can put some sort of higher level valuation on it, then the $15 million or $16 million that it represents currently could grow dramatically. What I didn't get is that if the incentive pay outs that has a max of $9 million and a minimum of $2.5 million, you said that that actually ironically would reduce the potential upside. Is that because that would come out of any potential open-ended upside you might be able to realize on the 31% beyond just a few millions dollars?

Yes, they'd have to finance that earn-out payment in some form or fashion. They have it set up for additional debt, I believe, but so whatever method they use to make a payment to us, would impact our other 31% that we own in the business, so…

So wouldn't it be just in a sense you're getting money back earlier than you would have later on whenever they monetize assuming they do the 69% that they purchased, is that kind of it, you're getting it now versus later because it's coming out of the pie I guess early, is that it?

It depends what the terms of financing are to get that money which I'm not privy to.

Got it. Okay. And would -- with a lot of the things you've covered about data privacy issues that are coming to the fore, I mean, you can barely pick up a paper and turn on TV, or look at a computer without you know, seeing more and more concern about that, you'd mentioned Europe is moving on, and the U.S. is likely to impose more penalties, and we've seen earlier from Mark Zuckerberg have to explain himself in front of the Senate. And it seems to be a bipartisan concern about all the big companies who may not be protecting data. Given that, would you consider SRAX's position -- your impression in seeing the need for people to have control of their data well before a lot of this came to light, would you consider SRAX a first mover in this area, and the advantages that go along with that? I mean, I can't think of any other company that is pursuing that business model of allowing people to take control of their data and compensating them for it.

Yes, certainly we've been at the forefront of this. We've been working on it for a lot longer than it's been in the news, and I think we had some really good vision about where it was going to go. And the team at SRAX has done a fantastic job in implementing what we thought would -- the market would deem to be important in this front. So it's kudos to the team that have strategically put this together, and they've -- we're positioned well at a time when this is a really important thing, and it needs to be solved, it will, it is being solved now. This is not going to go away. This is something that everybody will have to contend with. If you remember back to the bot time and back to the viewability in this business, when bots were going on, marketers demanded that get solved, and it did, and then they demanded that the viewability issue get solved where, you know, to make sure that people were seeing the ads, and the companies that sold those -- that created products that solve those solutions sold for billions of dollars. And they sold to the big players out there. So the market opportunity here is very significant. And I think that since we're at the forefront of this and paving the way, I think, we have a big advantage, and I think our infrastructure of our sales team and our infrastructure of all the pipes that we've built over the last 10 years are instrumental to this entire process. So it's not just trying to come up with an application that can help try to collect people's data, it's about taking that information and putting it in the marketplace in a way that we know it will be bought, and the relationships with the buyers to make it happen.

Okay. Yes, I mean I just think the timing, I mean, just from my observation, I've been trying to filter-through a universe of other investment opportunities if one wanted to get ahead of this. I mean just in -- personally I just feel that 10 years from now we will look back, and it will be kind of an odd conversation if somebody said, "Yes, can you believe people used to give away their data for free," and instead of being able to have some control over and be compensated for it. So I think the timing, I guess it's just -- you're in the sweet spot now, so it's a question of executing your business plan. I also just point out just as a side comment, I see that historically companies like Enron [ph] and a number of others have benefited last year when they ran up with the big run up in cryptocurrencies, and I see that they kind of crater today. And it didn't affect certainly your stock and some others. So maybe there will be a disconnect which would be good in the near-term because now people are beginning to maybe just appreciate your business modeling game plan and maybe not connected on a direct basis with just a whole euphoria about the whole cryptos select watching…

I think a lot of people understand that crypto doesn't necessarily mean blockchain at this point. In other words, there was a point where blockchain was associated just with crypto, but I think people are understanding that blockchain is a key infrastructure for the next evolution of the Internet, and really is where the Internet should have been in the first place, but it's getting there now, and there's amazing applications that are being built on the blockchain that will benefit all industries. And so, I think people, investors and the like are starting to see that it's something that's going to help all of their different opportunities out there, and trying to figure out how they can leverage it, and not worrying about this coin and that coin and this, you know, whatever the things might be, so…

Okay. Any other question I had was addressed earlier by some of the other callers. So I will let somebody else answer, I mean, ask a question, but thanks very much. Appreciate the information.

Thank you very much.

Our next question comes from Jim McIlree with Chardan Capital. Please proceed with your question.

Hi. Yes, thanks again. The redemption of the 12.5% converts is that coming out of cash on hand, or is there another facility that's replacing? J.P. Hannan: There will be another facility. We are finalizing that now. We can't give details yet, but I'd say there is going to be significant interest savings with that new facility [indiscernible] or any other -- and there is dilutive elements attached to it.

Okay. Okay, great, thank you. And then I think both of you have talked a little bit about seasonality in Q4 being the best quarter of the year historically. I know that when MD was growing, it kind of skewed results, but it seems like we're back to more of a normal environment. And so based on that, can you give us a range of what you think of that $20 million to $25 million comes from Q4? Is that -- you know, obviously it's more than 25% of that, but is it 50%, is it 40%, and I'm not asking for a mathematical precision, I'm just trying to get maybe your best guess. J.P. Hannan: No, understood. I mean I would -- keep in mind that guidance was towards full-year 2019, not a next 12-month guidance. Typically the way our revenue distributes as we do about 12%, 13% of the total year revenue in Q1, and then the other three quarters are generally pretty even. One of the nice things about shopper is it's less seasonal than others. And so that helps some of that out.

All right, perfect. Thanks a lot. J.P. Hannan: Sure.

[Operator Instructions] Our next question comes from Gus Rodrigo with WestPark Capital. Please proceed with your question.

Good afternoon, gentlemen. Thanks for taking the call. Congratulations on a fantastic quarter. My question is to Chris. Chris, everything sounds really great, sounds like you guys are firing on all cylinders over there. What do you think in your opinion might be the disconnect between the share price, and what the market is seeing and what you guys are actually doing?

I don't know. I don't know the answer of that. Maybe it has something to do with the debt that we're getting rid of right now possibly. It baffles me as well, but I've had this conversation with many, many people, and there's many different theories and ideas, but I know maybe -- I think somebody got short a long time ago. If you look, you have a 1.7 million, or now it's down to like 1.4 million shares short against this, and maybe they were thinking that we were going to have to raise some money. One thing that people -- we got down to less than a million dollars before we got this transaction done. We have a $4 million credit line that we have in place already. And when we did this deal, we also had vendor financing that got us up to around $5 million in accounts payable. So, we're able to string out vendors in this business for a long time. So there's a long road way for us even if we were down to zero money. So I don't know if there is a -- people ask me what the short thesis is, and maybe if that person is on the phone they can share that with us, but I don't know.

Okay, that's good enough. Just keep executing. All right, thank you so much. Appreciate it.

Thank you very much.

There are no further questions at this time. At this point, I'd like to turn the call back to Chris Miglino for closing comments.

Thanks everybody for being on the call. We appreciate it. We hope you keep following the story, and I hope everybody on the phone signs up for BIGtoken and get a sense of how that product works. And you can see why we're so excited about it. And keep your eyes open for a lot of activity around partnerships and different things that are going to grow the user base of BIGtoken. So, thank you very much.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.