Safe Harbor Statement - SRAX Reality Financing.pdf · Safe Harbor Statement ... video display...
Transcript of Safe Harbor Statement - SRAX Reality Financing.pdf · Safe Harbor Statement ... video display...
22
Safe Harbor Statement
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.
3
Executive SummarySocial Reality, Inc. (OTCQB: SCRI) is an internet advertising company that provides tools that automate the digital advertising market. The Company has built technologies and leveraged partner technologies that service socialmedia and real-time bidding (RTB) markets.
The Company's SRAX engine optimizes the buying and selling of digital advertising for both marketers and content owners. The SRAX Solution Platform connects with many of the industry top digital solutions with a proprietary layerof technology which optimizes the clients needs.
The Company’s experienced management team, led by Chris Miglino (founder and CEO) has shown strong growth and profitability in the growing social media and advertising industry.
A talented team that has started and sold multiple successful businesses, state of the art infrastructure and synergistic & accretive acquisitions are reasons for the explosive growth in 2015. FY2015 showed 492% revenue growth with $30.0 million in revenue and $2.9 million in adjusted EBITDA (see financial section of this presentation for more details).
Growth prospects are solid as the RTB industry is expected to grow at a 41% CAGR over the coming years. The Company is well positioned to increase its share of the market as its SRAX platform gains further market acceptance.
The Company is looking for a bridge financing of $2 million to pay down debt.
4
Bridge Financing
Structure:
Size:
Convertible Note
$2 Million
Issuer:
Use of Proceeds:
Timing of firm commitmentOffering:
Market Cap:
Social Reality (OTC:SCRI)
Pay down debt
November 2016
$37.58 million
Convertible Discount:
Interest:
20% of the next public financing
Quarterly 8% cash
5
2010
MAR
JUN
JAN
FEB
OCT
2011-2012
2013
3.0
2.0
5 Campaigns get created that lead to GroupAd
OCT SRAX gets created and SR website launches
NOVGroup Ad 3.0 Started/Improved
Social Reality goes public
Social Reality Start
Group Ad 1.0 gets created
Group Ad 2.0 gets created
2014
2015
Wish List
Catalogue
Video
GiftRegistry
MAR Group Ad 3.0 completed first apps launched
JUN
AUG
SEP
SRAX is upgraded and integrated with AppNexus / Yahoo / Open X
SRAX md is started and its website is created
MAYGroup Ad 3.0 goes public
SR acquires Spotlight Media and SRAX DI is created along with its website
NOV
Company History
SRAX CPG 1.0 is launched JUN
SR acquires STEEL MEDIA and secures $25 million in financing
FEB SraxApp and App Builder go live
6
ad
ad
video
display
mobile
Real-time bidding (RTB) refers to the means by which ad inventory is bought and sold on a per-impression basis, via programmatic instantaneous auction, similar to financial markets.
Programmatic ad buying and selling tools are driving digital ad sales in the U.S. This increase in automation is leading to less human-mediated, manual sales and more opportunities for ad tech specialists to gain a share of ad spending.
This year US digital display ad spending ($32.17B) is estimated to surpass search ad spending ($29.24B). Total digital ad spending in the US is estimated to reach $93.7 billion by 2019 (AOL). Globally, advertisers are expected to spend $36 billion on social media campaigns by 2017 (eMarketer).
Defining the Market
7
eMarketer
2013 2015 2017
$6.2
$9.0
$3.4
$16$14$12$10$8$6$4$2$0Sp
end
(in B
illio
ns)
2013 2015 2017
IDC
$6.9
$14.4
$3.1
100%
80%
60%
40%
20%
0%2013 2014E 2015E 2016E 2017E 2018E
Forecest: Share of DigitalRTB Programmatic (Non-RTB) Non-Programmatic
Defining the Programmatic Market
Growing Market & Huge Opportunity
RTB market size
US
Bill
ions
US Real-Time Bidding (RTB) DigitalAD spending
$0
$1
$2
$3
$4
$5
$6
$7
$14
2011 2012 2013 2014 2015 2016 2017
Forrester - Average prices in programmatic market double inthe next four years.
0.9
3.4
5.8
7.1
14.4
1.9
4.5Parks Associates - In four yearsprogrammatic will be 50% of thedisplay market.
“RTB will become the next de facto display online buying method.” - Heather way, Parks Associates.
8
9
According to eMarketer, advertisers will spend $35.98 billion globally on paid media to reach consumers on social networks
Growing Market & Huge Opportunity
Social Media market size
$60
$50
$40
$30
$20
$10
$02013
$4.94$7.71
$10.10 $12.67
$29.91
$15.15
$35.98
$23.68
$17.74
$11.36
2014 2015
North America
Worldwide
2016 2017
10
SRAX: Real Time Bidding (RTB) Management Platform for brands and publishers
One Simple Idea
The Core Platforms
01SRAX Social. Launch and manage digital mediaand consumer loyalty campaigns02SRAX MD. RTB solutions for pharma brandsand publishers03
Be a leader in the digital advertising space by providing the tools that improve performance for brands and publishers across all digital platforms
11
How Our Clients Use Our Platform
Brand 1
Custom BrandPlatform
% sales
% sales
% sales
Brand 2
Custom BrandPlatform
Brand 3
Custom BrandPlatform
SRAXCloud Platform
12
Target with ads
Build and maintain a datamanagement platform(DMP) of your consumers
in-store
Online
Find groups of consumersthat match the characteristics
of your identified shopper
Identifyyour realconsumers.
DMP
% Sales
% Sales
Our platform automates the discovery of your core consumers and their characteristics.Using these characteristics, the platform builds custom look-alike audiences. We thentarget amplified audiences for online and offline sales lift.
SRAX Customer Identification and Attribution
14
SRAXapp
Content automatically syncs from all selected platforms
Combine your blog,
all in one place
More opportunityfor your contentto be shared and seen
App Creation in 3 Simple Steps
Android & iOS
Monetize your audience by creating exclusive content
BANNER AD
15
Trading Desks
SRAX is building custom trad-ing desks for some of the larg-est brands and agencies in the world. Easy use for Agency Combina-tion of full service and self ser-vice portal Custom Data Inte-gration's. Display, mobile , video, social and native integrations.
A complete management tool to launch,distribute and optimize social and digitalmedia campaigns
GA Dashboard
GA Facebook App
Create and launch social media apps that captivate and engage consumers.
Web and mobile versions complete.
Easy to use for both large and smallbrands with pricing models that areapplicable to both.
Complete social loyalty integration.
SalesForce.com, Ebay, Amazon, Magento integration.
Brand influencer analitycs.
01
0203
0405
06
17
18
SRAXmd is a healthcare focused programmatic RTB exchange. We partner with leading medical content publishers, apps, associations and websites, to offer agencies and brands the ability to reach a verified audience of 500,000 healthcare professionals outside of traditional medical content.
SRAXmd has curated a large whitelist of 3,000+ domains that has been approved by med-legal and regulatory teams at Novartis, Janssen, Biogen and BMS, to name a few.
We have the ability to activate and engage consumers and patients on a global scale, within your targeted disease states. In 2015, we served ads for 75+ brands across 40 disease states. we can target physicians working with patients in specific disease states, from Multiple Myeloma to Rheumatoid Arthritis.
Healthcare Professionals
Consumer & Patient Targeting
20
Acquisitions
2014
September 8, 2014
Social Spotlight Media, founded byLaura Knapp in 2012, is a digitalmarketing and media relations agency, with a focus on lifestyleconsumer brands.
October 30, 2014
Steel Media provides digital advertisingservices and display, mobile, video andemail advertising inventory to both brandsand advertising agencies.
December 19, 2014
Five Delta is a managed advertising service that uses proprietary technologyand methods to optimize digitaladvertising for its customers.
21
Erin DeRuggeroheads up new productdevelopment and ideation for Social Reality, developing custom products and social engagement for Fortune 500 and 1000 consumer brands.
ERIN DERUGGIEROCIO and Co-Founder
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.
CEO and Co-Founder
Richard was the founder and CEO of digital advertising firm, Steel Media, Inc., which was acquired in 2014. He is a founding partner and former president of the Global Strategic Marketing Alliance and he also serves in a leadership role, advising the White House Business Council. He is an alumnus of Harvard Business School.
RICHARD STEELCHRIS MIGLINOPresident
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 Compu-tation, UCLA.
DUSTIN SUCHTERExecutive VP, Technology
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.
KRISTOFFER NELSONCOO
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 coolmedia companies, then started working at Social Reality. Teaching Interactive Designat the Art Center of Pasadena allows me to enter on of the pinnacles of American design.
VLADI DESOGLIOCreative DirectorRahul is responsible for overseeing the
Company’s corporate finance, accounting, investor relations and capital and financing strategies. He is a certified public accountant and received a B.S. in Business Administration from the University of Southern California and a Masters in Accountancy from the University of Arizona.
RAHUL TUMATICFO
23
Financial Overview
Six Months Ended June 30 For the Years Ended December 31
20152016 20142015
RevenueCost of Goods Sold
Gross Profit
Operating Expenses Operating Income/[Loss]
Interest Expense
Net Income/[Loss]
Net Income/[Loss] per share basicNet Income/[Loss] per share diluted
$14,782,857 $7,400,918
$7,381,939
$7,162,752
[$219,187]
$1,858,057
[$1,638,870]
[$0.06][$0.06]
$30,294,165 $14,407,363
$15,886,802
$14,834,766
$1,052,036
$3,775,945
[$2,723,909]
[$0.10]$27,073,550
$5,120,343$2,791,948
$2,328,395
$6,066,611
[$3,738,216]
$673,347
[$4,411,563]
[$0.20]$21,808,515
$14,718,746$9,443,370
$5,275,376
$7,230,691
[$2,625,315]
$1,647,634
[$528,453]
[$0.02][$0.01]
24
June 30 December 31
2016 2015
Total Current Assets
Plant & Equipment, Net
GoodwillOther IntangiblesPrepaid stock based compensationOther AssetsTotal Assets
Liabilities
Total Current LiabilitiesLong-Term Debt
Other LT LiabilitiesTotal Liabilities
Total Stockholders' EquityTotal Liabilities & Equity
$8,493,010
$43,936
$16,314,957 $1,611,744
$373,567$34,659
$26,871,873
$15,540,186 $7,455,758
--------------------$22,995,944
$3,875,929
$26,871,873
$9,355,607
$35,433
$15,644,957$1,431,979
$56,341$34,659
$26,558,976
$19,851,946$8,283,865
--------------------$20,383,373
$4,652,124
$25,035,497
Assets
Financial Overview
25
For theSix Months Ended
June 30
For theYears EndedDecember 31
(unaudited, in thousands)
Net income (loss)
Equity based compensation
Adjusted EBITDA
Interest expense
Adjusted net income (loss)
Depreciation and amortization
Reconciliation of Adjusted EBITDA to GAAP
*Non-GAAP adjusted EBITDA is a non-GAAP financial measure defined by us for the periods presented as GAAP net loss before interest expense, depreciation and amortization expense and stock-based compensation expense.
Plus:
2015 20142016 2015
$777
($984)
$1,648
$249
$193
Non-Routine items ($3,074)
($528)
$865
$1,094
$1,858
($774)
$10
($1,639)
$1,475
$2,938
$3,776
($1,249)
$411
($2,274)
$1,858
($1,886)
$673
($2,554)
$15
($4,412)
Adjusted EBITDA Growth
26
Market Snapshot
Stock Symbol : SCRI (OTCQB)
Price : $1.30 (08/17/16)
Price & volume quotes from Yahoo! Finance and other reliable sources
Avg. Daily Volume (90 day) 9,156
Market Cap : $39.9 Million
52 Week Range : $1.01 - $2.28
Shares Outstanding : 29.9 Million
Float : 14.9 Million
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 Compu-tation, UCLA.
27
Capitalization Table
Shares
Total Current Shares Outstanding
Options
Victory Park Warrants
Warrants
Unissued Share Awards
Total
29,977,925
2,204,000
661,669
7,251,347
2,900,000
42,994,941
(67%)
(5.1%)
(1.5%)
(16.9%)
(6.7%)
28
Management team with a proven track record of execution
Well-positioned in the multi-billion dollar markets for RTB and Social Media
Explosive growth: In FY 2015 Social Reality generated 492% year-over-yearrevenue growth
Value accretive acquisitions generate immediate and long-term growth(Steel Media, Social Spotlight Media, and Five Delta)
Secured $25 million in financing: $20 million credit from Victory Park Capital and $5 million from Siskey Capital, LLC and other existing investors for new equity
Suite of products that generates recurring revenue streams from core technologies
Investment Summary