Protagenic Therapeutics Inc (PTIX) 2011 Q2 法說會逐字稿

Welcome to the Atrinsic second-quarter earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation the conference will be open for questions. (Operator Instructions)

歡迎參加 Atrinsic 第二季度收益電話會議。在今天的演示過程中，各方都將處於僅聽模式。演講結束後，會議將開放提問。 （操作員說明）

I would now like to turn the conference over Landon Barretto. Please goes ahead, Landon.

現在我想把會議交給蘭登·巴雷托。請繼續，蘭登。

Good morning. Thank you all for joining us today. Welcome to Atrinsic Inc.'s June 30, 2011 second-quarter earnings conference call.

早上好。感謝大家今天加入我們。歡迎參加 Atrinsic Inc. 2011 年 6 月 30 日舉行的第二季度收益電話會議。

With me today are Stuart Goldfarb, Atrinsic's CEO; Tom Plotz, Chief Financial Officer; Ray Musci, Chief Operating Officer; and Sharon Siegel, Chief Marketing Officer.

今天與我在一起的有 Atrinsic 首席執行官斯圖爾特·戈德法布 (Stuart Goldfarb)；湯姆·普洛茨，首席財務官；雷·穆西 (Ray Musci)，首席運營官；和首席營銷官莎朗·西格爾。

In compliance with SEC requirements, I must read the following statement. Except for historical information, the matters discussed in the conference call are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements.

根據 SEC 的要求，我必須閱讀以下聲明。除歷史信息外，電話會議中討論的事項均為前瞻性陳述，存在某些風險和不確定性，可能導致實際結果與前瞻性陳述中所述的結果存在重大差異。

Factors that could cause results to differ materially are included in the Company's filings with the Securities and Exchange Commission. Forward-looking statements made during today's call are only made as of the date of this conference call and the Company undertakes no obligation to publicly publicly update such forward-looking statements to reflect subsequent events or circumstances. Mr. Goldfarb, please proceed.

可能導致結果出現重大差異的因素包含在公司向美國證券交易委員會提交的文件中。今天電話會議期間做出的前瞻性陳述僅截至本次電話會議之日作出，公司不承擔公開更新此類前瞻性陳述以反映後續事件或情況的義務。戈德法布先生，請繼續。

Thanks, Landon, good morning. I would like to thank everyone on the call for your continued interest and support for Atrinsic.

謝謝，蘭登，早上好。我要感謝參加電話會議的所有人對 Atrinsic 的持續關注和支持。

As many of you are aware, after a year and a half as a Board member of Atrinsic, I joined the Company as its CEO at the end of the second quarter on June 1. Before this time, I had been CEO of Bertelsmann Direct North America which is now known as Direct Brands for about 10 years.

你們很多人都知道，在擔任 Atrinsic 董事會成員一年半後，我於 6 月 1 日第二季度末加入公司擔任首席執行官。在此之前，我曾擔任 Bertelsmann Direct North 首席執行官美國現在被稱為Direct Brands 大約有10 年了。

I built that company into the world's largest direct marketer of music, DVDs and books, household brands such as BMG Music, Columbia House and Book of the Month Club. All of our businesses operated with subscription or membership type models. We served over 14 million members with revenues of over $1.2 billion.

我將該公司打造成全球最大的音樂、DVD 和書籍直銷商，以及 BMG Music、Columbia House 和 Book of the Month Club 等家喻戶曉的品牌。我們所有的業務都採用訂閱或會員類型的模式運營。我們為超過 1400 萬會員提供服務，收入超過 12 億美元。

Joining me today at Atrinsic is my Chief Marketing Officer Sharon Siegel who has worked with me for over 10 years formally as the Chief Marketing Officer at Bertelsmann Direct. We were also joined at Atrinsic by a team of highly talented customer acquisition and customer retention specialists who have worked with us for many, many years. Since joining the Company in June, we have begun developing a strategic and tactful plan for our various businesses.

今天加入 Atrinsic 的是我的首席營銷官 Sharon Siegel，她作為 Bertelsmann Direct 的首席營銷官與我共事了 10 多年。 Atrinsic 還加入了一支由才華橫溢的客戶獲取和客戶保留專家組成的團隊，他們與我們合作了很多年。自六月份加入公司以來，我們開始為我們的各項業務制定戰略和策略計劃。

Atrinsic has a number of strong assets. Atrinsic Interactive is one of the leading search marketing agencies.

Atrinsic 擁有許多強大的資產。 Atrinsic Interactive 是領先的搜索營銷機構之一。

It provides search engine optimization and marketing, brand protection, and affiliate sales and distribution for its many clients. Operating in a highly competitive environment, our team has experienced great success in July, adding a new major client, DirectBuy, while continuing to maintain and provide industry-leading service to its existing clients. This new client addition combined with improved volume from existing clients should allow Atrinsic Interactive to experience dramatic sales growth within the foreseeable future.

它為眾多客戶提供搜索引擎優化和營銷、品牌保護以及聯屬營銷和分銷服務。在競爭激烈的環境中運營，我們的團隊在 7 月份取得了巨大的成功，增加了新的主要客戶 DirectBuy，同時繼續為現有客戶維護和提供行業領先的服務。新客戶的增加加上現有客戶數量的增加，將使 Atrinsic Interactive 在可預見的未來實現銷售的大幅增長。

I believe that the opportunity for Kazaa has never been larger. The music industry is being turned upside down.

我相信 Kazaa 的機會從未如此之大。音樂產業正在發生天翻地覆的變化。

The era of streaming has begun led by advancing technology and changes in consumer behavior. Kazaa is one of only a handful of companies -- literally just a handful -- that have license agreements with the music labels that allow it to take advantage of this opportunity.

在技​​術進步和消費者行為變化的引領下，流媒體時代已經開始。 Kazaa 是少數幾家與音樂唱片公司簽訂許可協議的公司之一（實際上只是少數），使其能夠利用這一機會。

Our team brings years of successful experience in building mass market subscription businesses particularly in the music and entertainment areas and we intend to do so here. Sharon and the marketing group have a long-standing and consistent track record of profitably acquiring and retaining millions of new subscribers each year.

我們的團隊在建立大眾市場訂閱業務方面擁有多年的成功經驗，特別是在音樂和娛樂領域，我們打算在這裡這樣做。莎倫和營銷團隊在每年獲取和留住數百萬新用戶方面有著長期且一致的記錄。

Kazaa was a pioneer in digital music with a new strategic and tactical focus. Kazaa will move forward as a leader.

Kazaa 是數字音樂領域的先驅，擁有新的戰略和戰術重點。 Kazaa 將作為領導者繼續前進。

Kazaa will become Atrinsic's principal focus going forward. We are in the midst of improving the Kazaa product and customer experience. We will always be vigilant in making improvements there.

Kazaa 將成為 Atrinsic 未來的主要關注點。我們正在改進 Kazaa 產品和客戶體驗。我們將始終保持警惕，在那裡進行改進。

Our subscription pricing for new customers is now at parity with our competitors at $9.99 per month. We've made a number of improvements to our website to improve the customer experience, increase customer retention and make Kazaa more usable and intuitive.

我們的新客戶訂閱價格現在與競爭對手持平，為每月 9.99 美元。我們對網站進行了多項改進，以改善客戶體驗、提高客戶保留率並使 Kazaa 更易用、更直觀。

Since the beginning of the second quarter, we have had eight new releases, each with improvements and upgrades for our website. In the near future, our best-of-breed iPhone application will be available in the iTunes store.

自第二季度初以來，我們已經發布了八個新版本，每個版本都對我們的網站進行了改進和升級。在不久的將來，我們同類最佳的 iPhone 應用程序將在 iTunes 商店中提供。

Planning and development of an app for Android devices is well underway. Also, in the near future, we will be adding millions of tracks from thousands of independent music labels, increasing our music library and offering to that of our competitors.

適用於 Android 設備的應用程序的規劃和開發正在順利進行。此外，在不久的將來，我們將添加來自數千個獨立音樂品牌的數百萬首曲目，增加我們的音樂庫並向我們的競爭對手提供音樂庫。

We will continue to innovate and develop our recommendation engine and our radio service as well as provide more personalization based on our customers' preferences. We will become much more focused on improving our social elements with a particular emphasis on providing easy tools and utilization for our Facebook members.

我們將繼續創新和開發我們的推薦引擎和廣播服務，並根據客戶的喜好提供更多個性化服務。我們將更加專注於改善我們的社交元素，特別強調為我們的 Facebook 會員提供簡單的工具和使用。

We are extremely focused on customer acquisition activities and in acquiring quality customers who will provide the Company with an acceptable return on investment. Our team is putting in place systems and models that will provide intelligence for us to make customer acquisition decisions and to test various new enrollment channels and methods. We have extraordinary experience in this area.

我們非常注重客戶獲取活動和獲取優質客戶，這些客戶將為公司帶來可接受的投資回報。我們的團隊正在建立系統和模型，為我們制定客戶獲取決策並測試各種新的註冊渠道和方法提供情報。我們在這一領域擁有非凡的經驗。

It is likely that Kazaa's present subscriber base will shrink from natural attrition before it starts to grow again. This is an intentional part of this resetting process.

Kazaa 目前的用戶群很可能會因自然流失而萎縮，然後再開始增長。這是此重置過程的有意部分。

Our team will also be extremely focused on customer retention activities. We believe we can significantly decrease the present rate of customer churn and significantly increase our customer lifetime going forward. We intend to invigorate the Kazaa brand and build Kazaa into a mass market subscription product.

我們的團隊還將非常關注客戶保留活動。我們相信，我們可以顯著降低目前的客戶流失率，並顯著延長未來的客戶生命週期。我們打算振興 Kazaa 品牌，並將 Kazaa 打造成大眾市場訂閱產品。

We are in the process of planning a number of operational improvements to the business that will make us more agile, more flexible, more responsive and more efficient. Going forward, we may use slightly different metrics and key performance indicators that will assist us and assist you in tracking our success and the achievement of our goals. We will be very clear about those with you next quarter.

我們正在計劃對業務進行多項運營改進，這將使我們更加敏捷、更加靈活、反應更靈敏、效率更高。展望未來，我們可能會使用略有不同的指標和關鍵績效指標，以幫助我們並幫助您跟踪我們的成功和目標的實現情況。我們將在下個季度與您明確這些內容。

In order to grow and invest in the Company in the way I have described, we will need additional capital. We are presently evaluating a number of options in this regard and we will keep our shareholders abreast of our progress.

為了以我所描述的方式發展和投資公司，我們將需要額外的資金。我們目前正在評估這方面的一些選擇，我們將讓股東了解我們的進展。

We remain fully committed to closing the Kazaa acquisition, fully integrating and transitioning its operational into Atrinsic and continuing its development and strong growth. Tom Plotts our CFO who's been with the Company for 4.5 years will be leaving Atrinsic in the coming weeks.

我們仍然完全致力於完成對 Kazaa 的收購，將其業務完全整合併過渡到 Atrinsic，並繼續其發展和強勁增長。我們的首席財務官 Tom Plotts 已在公司工作了 4.5 年，他將在未來幾週內離開 Atrinsic。

Tom has commuted to work at Atrinsic in New York from his Los Angeles home and would like to spend more time with his young family. Tom has been a tremendous asset to us. We wish him very well and we will miss him. I'd now like to turn the call over to Tom who will review our second-quarter financials.

Tom 從洛杉磯的家到紐約的 Atrinsic 上班，希望能有更多時間陪伴年輕的家人。湯姆對我們來說是一筆巨大的財富。我們祝愿他一切順利，我們會想念他的。我現在想把電話轉給湯姆，他將審查我們第二季度的財務狀況。

Thank you, Stuart. Good morning, everyone.

謝謝你，斯圖爾特。大家，早安。

You should have access to our earnings release and our Form 10-Q both of which were made available this morning. I intend to spend a couple minutes discussing some highlights from our second-quarter 2011 results and after my remarks; Stuart, Sharon, Ray and myself will be happy to respond to some of your questions.

您應該可以訪問我們今天早上發布的收益報告和 10-Q 表格。在我發言之後，我打算花幾分鐘時間討論 2011 年第二季度業績的一些要點；斯圖爾特、莎倫、雷和我本人將很樂意回答您的一些問題。

We made significant progress in three key areas in the second quarter. Firstly, we added experienced industry personnel and continued along our Kazaa product roadmap, making continued improvements to the Kazaa music service while maintaining a relatively constant level of Kazaa revenue on a year-over-year basis.

第二季度我們在三個關鍵領域取得了重大進展。首先，我們增加了經驗豐富的行業人員，並繼續沿著 Kazaa 產品路線圖，不斷改進 Kazaa 音樂服務，同時保持 Kazaa 收入同比相對穩定的水平。

Second, we continued to remove costs from our business and streamline our operational focus by curtailing and eliminating nonessential activities and reducing overhead. And third, efforts at restructuring and transforming our transactional services segment began to pay off in the second quarter. This quarter, the improvement is manifested in transactional services margin expansion. Next quarter, we expect this improvement in gross margin will be accompanied by topline revenue growth.

其次，我們通過減少和消除非必要活動以及減少管理費用，繼續降低業務成本並簡化我們的運營重點。第三，我們交易服務部門的重組和轉型努力在第二季度開始得到回報。本季度的改善體現在交易服務利潤率的擴張。下個季度，我們預計毛利率的改善將伴隨著營收的增長。

Our total revenues for the second quarter decreased to $6.3 million compared to $10.8 million in the year ago period. Second-quarter subscription revenue which includes revenue generated from our Kazaa digital music service which we jointly operate with Brilliant Digital Entertainment decreased to $3.5 million. As I indicated, quarterly Kazaa revenue was steady on a year-over-year basis and the subscription revenue drop-off was due to the de-emphasis and elimination of some of our legacy subscription services.

我們第二季度的總收入從去年同期的 1080 萬美元下降至 630 萬美元。第二季度訂閱收入（包括我們與 Brilliant Digital Entertainment 聯合運營的 Kazaa 數字音樂服務產生的收入）下降至 350 萬美元。正如我所指出的，Kazaa 季度收入同比穩定，訂閱收入下降是由於我們不再重視和取消一些舊訂閱服務。

Quarter over quarter transactional services revenue decreased to $2.8 million. This decrease was due to lower sales volumes from our existing search engine marketing clients offset by higher search engine optimization and Atrinsic affiliate network revenue.

交易服務收入環比下降至 280 萬美元。這一下降是由於我們現有搜索引擎營銷客戶的銷量下降，但被搜索引擎優化和 Atrinsic 聯屬網絡收入的提高所抵消。

Also keep in mind that during 2010 we began to eliminate unprofitable transactional services revenue lines and ceased most poorly performing lead generation activities which has had the effect of reducing transactional services revenue but has also resulted in an improvement in gross margins for this segment.

另請記住，2010 年期間，我們開始消除無利可圖的交易服務收入線，並停止了表現最差的潛在客戶開發活動，這雖然減少了交易服務收入，但也提高了該部門的毛利率。

Transactional services gross margin which we define as revenue after cost of media showed significant improvement on a year-over-year basis for both the three-month and six-month periods. Gross margin improved to 35% of transactional services revenue for the second quarter from 19% a year ago, reflecting our efforts to eliminate unprofitable or marginally profitable revenue lines.

交易服務毛利率（我們將其定義為扣除媒體成本後的收入）在三個月和六個月期間均同比顯著改善。第二季度毛利率佔交易服務收入的比例從一年前的 19% 提高到 35%，這反映出我們為消除無利可圖或微利盈利的收入線所做的努力。

Transactional services operating loss also improved on a year-over-year basis for the same reason, improving the segment operating loss to only $0.5 million in the second quarter versus an operating loss of $1.2 million a year ago. Atrinsic's operating expenses for the second quarter were $11.3 million compared with $15.3 million a year ago.

出於同樣的原因，交易服務運營虧損也同比有所改善，第二季度該部門的運營虧損僅為 50 萬美元，而一年前的運營虧損為 120 萬美元。 Atrinsic 第二季度的運營費用為 1,130 萬美元，而去年同期為 1,530 萬美元。

This $4 million decrease in operating expense was due to a decrease in cost of media which declined proportionately with the decrease in transactional services revenue but we are also successful in reducing general and administrative and other operating expense by 21% compared to the year ago period. Adjusted EBITDA for the second quarter was a loss of $4.8 million compared with a loss of $3.9 million for the year ago period.

運營費用減少 400 萬美元是由於媒體成本下降，媒體成本隨著交易服務收入的減少而相應下降，但與去年同期相比，我們還成功地將一般、行政和其他運營費用減少了 21%。第二季度調整後 EBITDA 虧損 480 萬美元，而去年同期虧損 390 萬美元。

Our net loss for the second quarter was $6.2 million compared with a loss of $4.5 million for the year ago period. During the quarter we had non-cash interest expense totaling $1.2 million.

我們第二季度的淨虧損為 620 萬美元，而去年同期的淨虧損為 450 萬美元。本季度我們的非現金利息支出總計 120 萬美元。

During the quarter we raised $5.3 million in a convertible note and warrant financing. As a result of the financing, the $5.8 million in original issue discount twelve-month convertible notes are booked net of debt discount as a current liability. We have also recorded a derivative liability representing the fair market value of the warrants and convertibility feature of the notes which we will mark to market each period until the warrants are exercised or notes converted or retired.

本季度我們通過可轉換票據和認股權證融資籌集了 530 萬美元。融資完成後，原發行貼現 12 個月可轉換票據的 580 萬美元扣除債務貼現後計入流動負債。我們還記錄了代表認股權證公平市場價值和票據可轉換特徵的衍生負債，我們將在每個時期根據市場進行標記，直到認股權證被行使或票據被轉換或註銷為止。

As of June 30, we had $2.3 million of cash and cash equivalents. Year to date we have spent $700,000 on capitalized application and software development for both Kazaa and for Atrinsic Interactive. In addition, we have incurred another $2.2 million of Kazaa product development expenditure year to date.

截至 6 月 30 日，我們擁有 230 萬美元的現金和現金等價物。今年迄今為止，我們已在 Kazaa 和 Atrinsic Interactive 的應用程序和軟件開發上花費了 700,000 美元。此外，今年迄今為止，我們還額外支出了 220 萬美元的 Kazaa 產品開發支出。

As Stuart indicated, we expect that the Kazaa acquisition will close once we have gained approval from our shareholders and upon the transfer of the Kazaa assets to us. We expect to issue an annual meeting proxy shortly which in addition to customary annual meeting matters, will include a stockholder proposal to approve the Kazaa transaction.

正如斯圖爾特所言，我們預計，一旦我們獲得股東的批准並將 Kazaa 資產轉讓給我們，對 Kazaa 的收購將會完成。我們預計很快將發布年度會議委託書，除了慣例年度會議事項外，還將包括批准 Kazaa 交易的股東提案。

As Stuart indicated earlier, and as discussed in our press release this morning, I am departing Atrinsic to pursue other opportunities. I have every confidence in the new management team at Atrinsic and will be here to help and assist in an orderly transition. Now we can open it up to questions.

正如斯圖爾特早些時候指出的，以及我們今天早上的新聞稿中所討論的，我將離開 Atrinsic 以尋求其他機會。我對 Atrinsic 的新管理團隊充滿信心，並將在這裡幫助和協助有序過渡。現在我們可以開放提問。

(Operator Instructions) Jack (inaudible) IPSA.

（操作員指示）傑克（聽不清）IPSA。

Quick question for you guys. You mentioned that the Apple app and the Android app will be coming out soon. Would you be able to give us a timeframe on when we could expect those? And the second part of the question is I believe Apple is charging a 30% fee of all revenue generated from the app. Is that true as well?

向你們快速提問。您提到Apple應用程序和Android應用程序即將推出。您能給我們一個時間表，說明我們何時可以期待這些嗎？問題的第二部分是，我相信蘋果正在收取該應用程序產生的所有收入的 30% 的費用。這也是真的嗎？

Sure, Jack. Hi, it's Stuart. First part of your question -- I will split into three questions. The Apple app, we are waiting on just a few matters to launch it. The app is fully developed. It is -- we will be announcing very, very shortly hopefully within weeks or a month, that will be in the App Store.

當然，傑克。嗨，我是斯圖爾特。你的問題的第一部分——我將分為三個問題。蘋果應用程序，我們正在等待一些事情來啟動它。該應用程序已完全開發。我們將非常非常快地宣布，希望在幾週或一個月內，這將出現在 App Store 中。

The app will be available to all of our customers that have an iPhone who are paying customers. We do not intend to sell it through the App Store.

該應用程序將可供所有擁有 iPhone 的付費客戶使用。我們不打算通過 App Store 出售它。

It will be available as a feature that our iPhone customers will be able to use. All of our smartphone customers -- so any customer that has an iPhone, Android device or any other smartphone that has a browser can access our service today even without that app through their browser.

它將作為我們的 iPhone 客戶能夠使用的一項功能提供。我們所有的智能手機客戶 - 因此任何擁有 iPhone、Android 設備或任何其他帶有瀏覽器的智能手機的客戶現在都可以通過瀏覽器訪問我們的服務，即使沒有該應用程序。

The app really is a fabulous product. We think that iPhone users will really enjoy the functionality and ease-of-use of it.

該應用程序確實是一個很棒的產品。我們認為 iPhone 用戶會真正喜歡它的功能和易用性。

We're very, very proud of it. With regard to the Android app where we are in stages of development on it, it's not as far advanced as the iPhone app, so that will take a bit longer. I would not expect to see that this next quarter. I hope I've answered your question.

我們對此感到非常非常自豪。至於我們正處於開發階段的 Android 應用程序，它不如 iPhone 應用程序先進，因此需要更長的時間。我預計下個季度不會出現這種情況。我希望我已經回答了你的問題。

Yes, just the follow-up was the revenue question. I thought I had read somewhere that Apple was charging a 30% fee (multiple speakers)

是的，接下來就是收入問題。我以為我在某處讀到過 Apple 收取 30% 的費用（多個發言者）

Yes, Apple is charging 30% of what's generated through the Apple Store. As I said, we're not charging for that app. So there's no charge for it. It is it available for free -- it will be available for free download through the app through the iTunes store.

是的，Apple 對通過 Apple Store 生成的商品收取 30% 的費用。正如我所說，我們不會對該應用程序收費。所以不需要付費。它是免費的 - 它將可以通過 iTunes 商店的應用程序免費下載。

If you want to use the app, you need to be a Kazaa subscriber though. You need to enter your user name and your password. (multiple speakers) customers can sign up -- yes?

如果您想使用該應用程序，您需要成為 Kazaa 訂閱者。您需要輸入您的用戶名和密碼。 （多個發言者）客戶可以註冊——是嗎？

Sorry, one quick follow-up. The Atrinsic company name, are you going to be changing that to Kazaa going forward also? I thought I read some talk about that?

抱歉，請快速跟進。 Atrinsic 公司名稱，您今後是否也將其更改為 Kazaa？我想我讀過一些關於這個的討論？

It's possible. It will be one of the matters we put to shareholder vote in our coming proxy statement.

這是可能的。這將是我們在即將發布的委託書中提交股東投票的事項之一。

(Operator Instructions) John Gilliam, Point Clear Capital Management.

（操作員指令）John Gilliam，Point Clear Capital Management。

There's been a great deal of talk about a Facebook music offering that will deeply integrate several of the on-demand music services. I usually see the names Spotify, Mogg mentioned in that context. I'm curious to know if Kazaa will be part of that.

人們對 Facebook 音樂產品進行了很多討論，該產品將深度整合多種點播音樂服務。我通常會看到 Spotify、Mogg 在這種情況下提到的名字。我很好奇 Kazaa 是否會參與其中。

Hi, John, thanks for calling. Of course we would welcome the opportunity to be part of whatever platform Facebook arrives at with music.

嗨，約翰，感謝您致電。當然，我們很高興有機會成為 Facebook 推出的任何音樂平台的一部分。

They haven't formally announced any such platform as far as I know. And we look forward to using all the tools Facebook has available for developers to use to incorporate social elements into our service.

據我所知，他們還沒有正式宣布任何此類平台。我們期待使用 Facebook 為開發人員提供的所有工具，將社交元素融入我們的服務中。

Okay, fair enough. Following the completion of the deal for Kazaa, assuming that it is completed, Kazaa -- will Atrinsic own any new patents or IP as a part of that deal?

好吧，很公平。 Kazaa 交易完成後，假設交易完成，Kazaa — Atrinsic 是否會擁有任何新專利或知識產權作為該交易的一部分？

Atrinsic is getting all the IP necessary to run the service as part of that deal. So that's IP that technically Atrinsic does not own today.

作為該交易的一部分，Atrinsic 將獲得運行該服務所需的所有 IP。因此，從技術上來說，這些 IP 目前並不屬於 Atrinsic 所擁有的。

There is a host of intellectual properties or patents, John, that Atrinsic would have license to particularly with the GFR that Brilliant owns.

約翰，Atrinsic 將擁有大量知識產權或專利，特別是 Brilliant 擁有的 GFR。

Okay. Some of your competitors have been aggressively pursuing deals with the carriers and actually more than the carriers, with the automotive manufacturers. I'm curious if part of our marketing program going forward, do you see Kazaa doing anything along those lines?

好的。您的一些競爭對手一直在積極尋求與運營商達成交易，實際上，不僅僅是與運營商達成交易，還與汽車製造商達成交易。我很好奇，作為我們未來營銷計劃的一部分，您是否認為 Kazaa 正在做類似的事情？

Going forward, we would like to be available to everyone at anytime on any device. So, the answer is yes in terms of what our priorities are. I guess we would put an Android priority before we would put a BMW car priority.

展望未來，我們希望每個人都可以隨時在任何設備上使用。因此，就我們的優先事項而言，答案是肯定的。我想我們會優先考慮 Android，然後再優先考慮 BMW 汽車。

Okay, gotcha. Can you give us an idea of how many subs Kazaa has today?

好吧，明白了。你能告訴我們 Kazaa 今天有多少替補嗎？

Tom?

湯姆？

Yes, we're tracking around 70,000 subs. Ending subscriber count around June 30 was around 70,000 subscribers.

是的，我們正在追踪大約 70,000 名訂閱者。 6 月 30 日左右的最終訂戶數量約為 70,000 名訂戶。

As of August 15 we're kind of running static there.

截至 8 月 15 日，我們的運行情況有些停滯。

I think as Stuart indicated, as we're resetting our marketing programs, you will probably expect to see a dip in the subscriber count.

我認為，正如斯圖爾特所指出的，隨著我們重新調整營銷計劃，您可能會看到訂戶數量有所下降。

Yes, yes, yes.

對對對。

The third quarter.

第三季度。

That's really what I was getting at, just trying to get an idea of what that trough might be and when you expect that -- I guess we are saying it would be in the third quarter. But where do you think that trough will probably fall?

這就是我真正想要表達的意思，只是想了解這個低谷可能是什麼，以及你預計的時間——我想我們說的是第三季度。但你認為這個低谷可能會落在哪裡？

We really don't know, Tom -- or John. We will make sure on this next call that we give you the right KPIs you need to measure us and that we need to measure us.

我們真的不知道，湯姆——或者約翰。我們將確保在下一次電話會議中為您提供衡量我們所需的正確 KPI，並且我們也需要衡量我們。

Focusing on a simple number of subscribers is not a healthy way to look at the future viability and growth of this business. Members come in all kinds of flavors and varieties and qualities.

關注簡單的訂戶數量並不是看待該業務未來生存能力和增長的健康方式。會員有各種口味、品種和品質。

We're going to need to look at churn rate and other things and put systems in place that allow us to really help you and us measure those things very, very successfully and granularly and we promise to do that.

我們需要考慮客戶流失率和其他因素，並建立適當的系統，使我們能夠真正幫助您和我們非常、非常成功和細緻地衡量這些因素，我們承諾做到這一點。

Fair enough. Can you give us an idea of -- and I know obviously a lot of it depends on the marketplace and the timing -- but an idea of what the capital raise will probably look like in terms of -- just if there's a range -- a target range that you're looking for in terms of amount of capital?

很公平。你能否給我們一個想法——我知道顯然這很大程度上取決於市場和時機——但是融資可能會是什麼樣子——只要有一個範圍——您正在尋找的資本金額目標範圍？

The only thing I can tell you in that regard is we need enough capital to really start growing this business in a strong and dynamic way.

在這方面我唯一能告訴你的是我們需要足夠的資金來真正開始以強大而充滿活力的方式發展這項業務。

Ballpark where do you feel that would be?

你覺得那會是哪裡？

We will let you know at the appropriate time.

我們會在適當的時候通知您。

Okay, given the new contract with DirectBuy, did you feel like the revenue for Atrinsic Interactive has troughed in this reported quarter?

好的，考慮到與 DirectBuy 的新合同，您是否認為 Atrinsic Interactive 的收入在本報告季度已觸底？

Has what?

有什麼？

Has troughed? Do you think this is a low? Would you expect revenue to be higher for Atrinsic Interactive going forward?

已經見底了嗎？你覺得這個低嗎？您預計 Atrinsic Interactive 未來的收入會更高嗎？

Significantly.

顯著地。

(Operator Instructions) Management, there are no further questions. Please proceed.

（操作員指示）管理人員，沒有其他問題了。請繼續。

Thanks very much again and we look forward to talking to all of you again next quarter. Thank you for your support.

再次非常感謝，我們期待下個季度再次與大家交談。感謝您的支持。

This concludes the Atrinsic second-quarter earnings conference call. Thank you for your participation. You may now disconnect.

Atrinsic 第二季度收益電話會議到此結束。感謝您的參與。您現在可以斷開連接。