Proxy Statement (definitive) (def 14a)

Date : 04/30/2019 @ 9:30PM
Source : Edgar (US Regulatory)
Stock : SRAX Inc (SRAX)
Quote : 1.55  0.0 (0.00%) @ 12:00PM

Proxy Statement (definitive) (def 14a)

 


UNITED STATES

SECURITIES AND EXCHANGE COMMSSION

Washington, D.C. 20549


SCHEDULE 14A


(RULE 14a-101)

SCHEDULE 14A INFORMATION


Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934



Filed by the Registrant

þ

Filed by a party other than the Registrant

o


Check the appropriate box:

o

Preliminary Proxy Statement

o

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

þ

Definitive Proxy Statement

o

Definitive Additional Materials

o

Soliciting Material Under Rule 14(a)(12)


[SRAX_14A001.JPG]


Social Reality, Inc.

(Name of Registrant as Specified in Its Charter)


 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)


Payment of Filing Fee (Check the appropriate box):

þ

No fee required.

o

Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

 

1.

Title of each class of securities to which transaction applies:

 

2.

Aggregate number of securities to which transaction applies:

 

3.

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

4.

Proposed maximum aggregate value of the transaction:

 

5.

Total fee paid:

o

Fee paid previously with preliminary materials.

o

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.  Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

1.

Amount Previously Paid:

 

2.

Form, Schedule or Registration Statement No.:

 

3.

Filing Party:

 

4.

Date Filed:






 



[SRAX_14A002.JPG]


Important Notice Regarding the Availability of Proxy Materials for the

Shareholder Meeting to be Held on June 26, 2019

The proxy statement and annual report to security holders are available at

https://www.iproxydirect.com/SRAX


NOTICE OF 2019 ANNUAL MEETING OF SHAREHOLDERS AND PROXY STATEMENT

____________________


TO BE HELD ON JUNE 26, 2019


We are hereby pleased to invite you to the 2019 annual meeting of shareholders (“Annual Meeting”) of Social Reality, Inc. on Wednesday, June 26, 2019 at our corporate headquarters at 456 Seaton Street, Los Angeles, CA 90013, beginning at 11:00 a.m. local time. Details regarding the business to be conducted at the Annual Meeting are described in the Notice of Internet Availability of Proxy Materials (“Notice”) you received in the mail and in this proxy statement (the “Proxy Statement”). The following summarizes the matters to be voted upon at the Annual Meeting:


 

1.

Election of six (6) members to the board of directors (“Board”) to serve for the following year or until their respective successors are appointed and qualified;

 

 

 

 

2.

Ratification of the appointment of RBSM LLP as our independent registered public accounting firm for 2019; and

 

 

 

 

3.

To transact such other business as may properly come before the Annual Meeting and any postponement(s) or adjournment(s) thereof.

 

 

 

Only shareholders of record as of the close of business on April 29, 2019 are entitled to receive notice of, to attend, and to vote at, the Annual Meeting.


We have elected to utilize the Securities and Exchange Commission’s (“SEC”) “notice and access” rules that allow issuers to furnish proxy materials to their shareholders on the Internet. The Company believes the “notice and access rules” allow it to provide you with the information you need while lowering the costs of delivery and reducing the environmental impact of the Annual Meeting. For further information, please see the section entitled Questions and Answers about the Proxy Materials and the Annual Meeting in this proxy statement.

 

Your vote is important. Whether you do or do not plan to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote over the internet, as well as by telephone, or, if you requested to receive printed proxy materials, by mailing a proxy or voting instruction card. Please review the instructions on each of your voting options described in this proxy statement, as well as in the Notice you received in the mail. 


Thank you for your ongoing support of, and continued interest in Social Reality. We look forward to seeing you at our Annual Meeting.


Sincerely,


/s/ Christopher Miglino

Christopher Miglino

Chairman and Chief Executive Officer

April 30, 2019







 


SOCIAL REALITY, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS


Time and Date

11:00 a.m. Pacific Time, on Wednesday, June 26, 2019.


Place

456 Seaton Street, Los Angeles, CA 90013.


Items of Business

(1)

 

To elect six (6) members to the Board to serve for the following year or until their respective successors are appointed and qualified.

 

 

 

 

 

(2)

 

To ratify the appointment of RBSM LLP as the Company’s independent registered public accounting firm for 2019.

 

 

 

 

 

(3)

 

To transact such other business as may properly come before the Annual Meeting and any postponement(s) or adjournment(s) thereof.


Adjournments and Postponements

Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed.


Record Date

You are entitled to vote only if you were a Social Reality, Inc. shareholder as of the close of business April 29, 2019 (“Record Date”).

 

 

Meeting Admission

You are entitled to attend the Annual Meeting only if you were a Social Reality shareholder as of the close of business on the Record Date or hold a valid proxy for the Annual Meeting. Since seating is limited, admission to the meeting will be on a first-come, first-served basis. You should be prepared to present photo identification for admittance. If you are not a stockholder of record but hold shares through a broker, bank, trustee, or nominee (i.e., in street name), you should provide proof of beneficial ownership as of the Record Date, such as your most recent account statement prior to the Record Date, a copy of the voting instruction form provided by your broker, bank, trustee, or nominee, or similar evidence of ownership.


If you do not provide photo identification or comply with the other procedures outlined above, you will not be admitted to the Annual Meeting. For security reasons, you and your bags will be subject to search prior to your admittance to the meeting. Please let us know if you plan to attend the meeting by marking the appropriate box on the enclosed proxy card, or, if you vote by telephone or over the internet, by indicating your plans when prompted.


The Annual Meeting will begin promptly at 11:00 a.m. Pacific Time. Check-in will begin at 10:00 a.m. local time, and you should allow ample time for the check-in procedures.

 

 

Voting

Your vote is very important. Whether or not you plan to attend the Annual Meeting, we encourage you to read this proxy statement and submit your proxy or voting instructions as soon as possible. For specific instructions on how to vote your shares, please refer to the instructions on the Notice of Internet Availability of Proxy Materials (“Notice”) you received in the mail, the section entitled Questions and Answers About the Proxy Materials and the Annual Meeting beginning on page 1 of this proxy statement or, if you requested to receive printed proxy materials, your enclosed proxy card. 


By order of the Board of Directors,


Christopher Miglino

Chairman of the Board

Chief Executive Officer







 


This notice of Annual Meeting and proxy statement and form of proxy are being distributed and made available on or about April 30, 2019.


In this proxy statement, the words “Social Reality,” “the Company,” “we,” “our,” “ours,” “us” and similar terms refer to Social Reality, Inc. and its consolidated subsidiaries, unless the context indicates otherwise.


* * * * *


IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS

 

This proxy statement and our 2018 Annual Report on Form 10-K for the fiscal year ended December 31, 2018, are available at https://www.iproxydirect.com/SRAX .



INCORPORATION BY REFERENCE

 

 

To the extent that this proxy statement has been or will be specifically incorporated by reference into any other filing of Social Reality under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (Exchange Act), the sections of this proxy statement titled “Report of the Audit Committee of the Board of Directors” (to the extent permitted by the rules of the U.S. Securities and Exchange Commission (“SEC”)) shall not be deemed to be so incorporated, unless specifically stated otherwise in such filing.









 


Stockholders Should Read the Entire Proxy Statement

Carefully Prior to Returning Their Proxies


PROXY STATEMENT

FOR

2019 ANNUAL MEETING OF SHAREHOLDERS


[SRAX_14A003.JPG]


General Information


We are providing this proxy statement to you as part of a solicitation by the board of directors (“Board of Directors” or “Board”) of Social Reality, Inc. for use at our 2019 Annual Meeting of Shareholders (“Annual Meeting”) and at any adjournment or postponement that may take place. We will hold our Annual Meeting on June 26, 2019 at 11:00 a.m. Pacific Time at our corporate headquarters located at 456 Seaton Street, Los Angeles, CA 90013. Only shareholders of record on April 29, 2019 (“Record Date”), are entitled to notice of and to vote at the meeting and at any adjournment or postponement that may take place.


We have elected to utilize the Securities and Exchange Commission’s “notice and access” rules that allow us to furnish proxy materials to our shareholders on the Internet. The Company believes the “notice and access rules” allows us to provide you with the information you need while lowering the costs of delivery and reducing the environmental impact of the Annual Meeting. For further information please see section entitled Questions and Answers about the Proxy Materials and the Annual Meeting in this proxy statement.

  

This notice of Annual Meeting and proxy statement and form of proxy are being distributed and made available on or about April 30, 2019. Unless the context otherwise requires, the terms "Social Reality," “the Company,” "us," "we," and "our" references Social Reality, Inc.

 

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS

AND THE ANNUAL MEETING

 

PROXY MATERIALS

 

1.

Why am I receiving these materials?

   

Our Board is providing these proxy materials to you in connection with our Annual Meeting for 2019, which will take place on June 26, 2019 at 11:00 a.m. Pacific Time at our corporate headquarters located at 456 Seaton Street, Los Angeles, CA 90013. As a shareholder, you are invited to attend the meeting and requested to vote on the items of business described in this proxy statement. This proxy statement includes information that we are required to provide to you under SEC rules and is designed to assist you in voting your shares.

 

2.

What is included in the proxy materials?

  

The proxy materials include:

 

 

·

Our proxy statement for the 2019 Annual Meeting of Shareholders;

 

·

Our 2018 Annual Report to Shareholders, which consists of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018; and

 

·

The proxy card or a voting instruction form for the Annual Meeting.

 

3.

What information is contained in these materials?

   

The information in this proxy statement relates to the proposals to be voted on at the Annual Meeting, the voting process, the compensation of our directors and most highly paid executive officers, corporate governance, and certain other required information.




1



 


4.

Why did I receive a notice in the mail regarding the internet availability of proxy materials instead of a full set of proxy materials?


In accordance with rules adopted by the SEC, we may furnish proxy materials, including this proxy statement and our 2018 Annual Report to our stockholders by providing notice and access to these documents on the internet instead of mailing printed copies. Most stockholders will not receive printed copies of the proxy materials unless they specifically request them. Instead, the Notice which is mailed to stockholders will instruct you as to how you may access and review all of the proxy materials on the internet. The Notice also instructs you as to how you may vote on the internet or telephonically. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting such materials in the Notice.


5.

How can I access the proxy materials over the internet?

   

The Notice will contain instructions on how to view our proxy materials for the Annual Meeting on the internet and vote your shares. Our proxy materials are also available on our website at www.srax.com and at https://www.iproxydirect.com/SRAX .

  

VOTING INFORMATION

 

6.

What items of business will be voted on at the Annual Meeting?

  

The items of business scheduled to be voted on at the Annual Meeting are:

 

 

·

The election of six (6) directors to our Board, to hold office until the annual meeting of shareholders in 2019, or until their successors are appointed and qualified.

 

·

The ratification of RBSM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.

 

·

To transact such other business as may properly come before the Annual Meeting and any postponement(s) or adjournment(s) thereof (See Question 21 below).

 

7.

How does the Board recommend that I vote on each of the matters?

   

Our Board recommends that you vote your shares:

 

 

·

FOR the director nominees; and

 

·

FOR the ratification of the appointment of RBSM LLP as our independent registered public accounting firm for the 2019 fiscal year.

 

8 .

What shares can I vote?

   

Each share of our Class A Common Stock issued and outstanding as of the close of business on the Record Date for the 2019 Annual Meeting is entitled to be voted on all items being voted on at the Annual Meeting. You may vote all shares owned by you as of the Record Date, including (i) shares held directly in your name as the shareholder of record, and (ii) shares held for you as the beneficial owner in street name through a broker, bank, trustee, or other nominee. On the Record Date, we had 12,327,842 shares of Class A Common Stock issued and outstanding.

 

9.

How many votes am I entitled to per share?

  

Each holder of shares of Class A Common Stock is entitled to one vote for each share of Class A Common Stock held as of the Record Date.

  

10.

What is the difference between holding shares as a shareholder of record and as a beneficial owner?

   

Most of our shareholders hold their shares through a stockbroker, bank or other nominee rather than directly in their own name. There are some important distinctions between shares held of record and those beneficially owned.

 



2



 


Shareholder of Record

 

If your shares are registered directly in your name with our transfer agent, Transfer Online , you are considered, with respect to those shares, the shareholder of record, and the Notice was sent directly to you by Social Reality. As the shareholder of record, you have the right to grant your voting proxy directly to Social Reality or to vote in person at the Annual Meeting. Social Reality has enclosed herewith a proxy card for you to use. You may also vote on the internet or by telephone, as below under the heading “How can I vote my shares without attending the Annual Meeting?” You may also vote on the internet or by telephone, as below under the heading “How can I vote my shares without attending the Annual Meeting?”

 

Beneficial Owner

 

If your shares are held in an account at a brokerage firm, bank, broker-dealer, trust, or other similar organization, like the vast majority of our shareholders, you are considered the beneficial owner of shares held in street name, and the Notice was forwarded to you by that organization. As the beneficial owner, you have the right to direct your broker, bank, trustee, or nominee how to vote your shares, and you are also invited to attend the Annual Meeting.

 

Since a beneficial owner is not the shareholder of record, you may not vote your shares in person at the Annual Meeting unless you obtain a “legal proxy” from the broker, bank, trustee, or nominee that holds your shares giving you the right to vote the shares at the meeting. If you do not wish to vote in person or you will not be attending the Annual Meeting, you may vote by proxy. You may vote by proxy over the internet or by telephone, as described below under the heading “How can I vote my shares without attending the Annual Meeting?”

 

11.

If I am a Shareholder of Record, how do I vote?

  

If you are a shareholder of record, there are four ways to vote:

 

 

·

In person . You may vote in person at the Annual Meeting by requesting a ballot from an usher when you arrive. You must bring valid picture identification such as a driver s license or passport and may be requested to provide proof of stock ownership as of the Record Date.

 

·

Via the Internet . You may vote by proxy via the Internet by following the instructions provided in the Notice.

 

·

By Telephone . You may vote by proxy by calling the toll free number found on the proxy card.

 

·

By Mail . You may vote by proxy by filling out the proxy card and returning it in the envelope provided.

 

12.

If I am a beneficial owner of shares held in street name, how do I vote?

  

If you are a beneficial owner of shares held in street name, there are four ways to vote:

 

 

·

In person . If you are a beneficial owner of shares held in street name and wish to vote in person at the Annual Meeting, you must obtain a legal proxy from the organization that holds your shares. A legal proxy is a written document that will authorize you to vote your shares held in street name at the Annual Meeting. Please contact the organization that holds your shares for instructions regarding obtaining a legal proxy.

 

You must bring a copy of the legal proxy to the Annual Meeting and ask for a ballot from an usher when you arrive. You must also bring valid picture identification such as a driver’s license or passport. In order for your vote to be counted, you must hand both the copy of the legal proxy and your completed ballot to an usher to be provided to the inspector of election.

  

 

·

Via the Internet . You may vote by proxy via the Internet by following the instructions found in the Notice. The availability of Internet voting may depend on the voting process of the organization that holds your shares.

 

·

By Telephone . You may vote by proxy by calling the toll free number found on the voting instruction form. The availability of telephone voting may depend on the voting process of the organization that holds your shares.

 

·

By Mail . You may vote by proxy by filling out the voting instruction form and returning it in the envelope provided.

 



3



 


13.

How are proxies voted?

  

All shares represented by valid proxies received prior to the taking of the vote at the Annual Meeting will be voted and, where a shareholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the shareholder’s instructions.

 

14.

What happens if I do not give specific voting instructions?

   

Shareholders of Record . If you are a shareholder of record and you:

 

 

·

Indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board; or

 

·

Sign and return a proxy card without giving specific voting instructions, then the person named as proxy holder, Christopher Miglino, will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting.

 

Beneficial Owners of Shares Held in Street Name . If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions then, under applicable rules, the organization that holds your shares may generally vote on “routine” matters but cannot vote on “non-routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.”

 

15.

Can I change my vote or revoke my proxy?

  

You can change your vote or revoke your proxy at any time before the final vote at the meeting. You can do this by casting a later proxy through any of the available methods described in the questions and answers. If you are a shareholder of record, you can also revoke your proxy by delivering a written notice of your revocation to our Corporate Secretary at our principal executive office at 456 Seaton St., Los Angeles, California 90013. If you are a beneficial owner, you can change your vote by submitting new voting instructions to your broker, bank, trustee, or nominee following the instructions they provided, or if you have obtained a legal proxy from your broker, bank, trustee, or nominee giving you the right to vote your shares, by attending the Annual Meeting and voting in person.

 

16.

How many shares must be present or represented to conduct business at the Annual Meeting?

  

The quorum requirement for holding the Annual Meeting and transacting business is that holders of one third (1/3) of the voting power of our Class A common stock as of the Record Date must be present in person or represented by proxy.  Both abstentions and broker non-votes (described below) are counted for the purpose of determining the presence of a quorum.

 

17.

How are votes counted?

  

In the election of directors (Proposal Number 1), you may vote “FOR” all or some of the nominees or your vote may be “WITHHELD” with respect to one or more of the nominees.

 

For the other items of business, you may vote “FOR,” “AGAINST,” or “ABSTAIN,” if you elect to “ABSTAIN,” the abstention has the same effect as a vote “AGAINST.”

 

If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. If no instructions are indicated, the shares will be voted as recommended by the Board.

 

18.

What is the voting requirement to approve each of the proposals?

  

In the election of directors (Proposal Number 1), the persons receiving the highest number of affirmative “FOR” votes at the Annual Meeting will be elected.

 

In the case of the following proposal, the affirmative “FOR” vote of the holders of a majority of the voting power of our common stock present in person or represented by proxy at the Annual Meeting and entitled to vote thereon is required for approval:

 

 

·

In the ratification of the appointment of RBSM LLP, as our independent registered public accounting firm for the fiscal year ending December 31, 2019 (Proposal Number 2).

   



4



 


If you hold shares beneficially in street name and do not provide your broker with voting instructions, your shares may constitute “broker non-votes.” Broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. These matters are referred to as “non-routine” matters. All of the matters scheduled to be voted on at the Annual Meeting are “non-routine,” except for the proposal to ratify the appointment of RBSM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.

 

19.

How do Broker Non-Votes and Abstentions Effect the Voting Results

  

With respect to the election of directors (Proposal Number 1), under plurality voting, broker non-votes and abstentions would have no effect on determining the nominees elected.

 

With respect to the ratification of RBSM LLP., (Proposal Number 2), shares that constitute broker non-votes are not considered votes cast on that proposal nor entitled to vote. Thus, broker non-votes will not affect the outcome of this matter, assuming that a quorum is obtained. Abstentions will have the same effect as a vote against.

 

Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present.

 

Please note that brokers may not vote your shares on the election of directors in the absence of your specific instructions. In order to minimize the number of broker non-votes, the Company encourages you to vote or to provide voting instructions with respect to each proposal to the organization that holds your shares by carefully following the instructions provided in the Notice or voting instruction form.

 

20.

Is cumulative voting permitted for the election of directors?

  

No. You may not cumulate your votes for the election of directors.

 

21.

Who is paying for this proxy solicitation?

   

The cost of preparing, assembling, printing and mailing this Proxy Statement and the accompanying proxy card, the Notice of Internet Availability, and the cost of soliciting proxies relating to the Annual Meeting, will be borne by the Company. The Company may request banks, brokers and other third parties to solicit their customers who beneficially own Common Stock listed of record in the name of such bank, broker or other third party, and the Company will reimburse such banks, brokers and third parties for their reasonable out-of-pocket expenses for such solicitations. The solicitation of proxies by mail may be supplemented by telephone, facsimile, Internet and personal solicitation by directors, officers and other employees of the Company, but no additional compensation will be paid to such individuals.

 

22.

What happens if additional matters are presented at the Annual Meeting?

  

Other than the two (2) items of business described in this proxy statement, we are not aware of any other business to be acted upon at the Annual Meeting. If you grant a proxy, the person named as proxy holder, Christopher Miglino will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting. If for any reason, the nominee is not available as a candidate for director, the person named as proxy holder will vote your proxy for such other candidate or candidates as may be nominated by the Board.

 

23.

Where can I find the voting results of the Annual Meeting?

  

We will announce preliminary voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K filed with the SEC within four business days after the Annual Meeting, which will also be available on our website.

 



5



 


ATTENDING THE ANNUAL MEETING

 

24.

How can I attend the Annual Meeting?

 

You are entitled to attend the Annual Meeting only if you were a Social Reality shareholder as of the Record Date or you hold a valid proxy for the Annual Meeting. Since seating is limited, admission to the meeting will be on a first-come, first-served basis. You must present photo identification for admittance. If you are not a shareholder of record but hold shares as a beneficial owner in street name, you must also provide proof of beneficial ownership as of the Record Date, such as your most recent account statements for the periods prior to and after April 29, 2019, a copy of the voting instruction form provided by your broker, bank, trustee, or nominee, or other similar evidence of ownership. If you do not provide photo identification or comply with the other procedures outlined above, you will not be admitted to the Annual Meeting. For security reasons, you and your bags will be subject to search prior to your admittance to the meeting. The meeting will begin promptly at 11:00 a.m. Pacific Time. Check-in will begin at 10:00 a.m. Pacific Time, and you should allow ample time for the check-in procedures.

 

25.

How can I vote my shares without attending the Annual Meeting?

  

Whether you hold shares directly as the shareholder of record or beneficially in street name, you may direct how your shares are voted without attending the Annual Meeting. If you are a shareholder of record, you may vote by proxy. You can vote by proxy over the internet by mail or telephone pursuant to instructions provided on the proxy card. If you hold shares beneficially in street name, you may also vote by proxy over the internet by telephone or mail by following the voting instruction form provided to you by your broker, bank, trustee, or nominee.

 

26.

Who will count the votes?

   

We will appoint one of our officers or employees present at the meeting to act as the inspector of elections for any votes cast at the meeting. Also, our transfer agent, or a third-party service provider will separately tabulate all votes FOR and AGAINST each matter, as well as all abstentions and broker non-votes and votes made through the internet, telephone or by proxy for by shareholders of record and beneficial owners.

 

27.

How can I contact Social Reality’s transfer agent?

   

Contact our transfer agent by either writing Transfer Online, Attn: Customer Service, 512 SE Salmon Street, Portland Oregon 97214, or by telephoning 503-227-2950.

 

SHAREHOLDER PROPOSALS, DIRECTOR NOMINATIONS, RELATED BYLAW PROVISIONS AND MISCELLANEOUS ITEMS

 

28.

What is the deadline to propose actions for consideration at next year’s Annual Meeting of shareholders or to nominate individuals to serve as directors?

  

Shareholder Proposals :

 

Shareholders may present proper proposals for inclusion in our proxy statement and for consideration at the next annual meeting of shareholders by submitting their proposals in writing to Social Reality’s Corporate Secretary in a timely manner. For a shareholder proposal to be considered for inclusion in our proxy statement for our 2020 Annual Meeting of Shareholders, the Corporate Secretary of Social Reality must receive the written proposal at our principal executive offices no later than 120 calendar days before the anniversary of the date of the definitive proxy statement filed for the 2019 Annual Meeting; provided, however, that in the event that we hold our 2020 Annual Meeting of shareholders more than 30 days before or after the one-year anniversary date of the 2019 Annual Meeting, the deadline is a reasonable time before we begin to print and send our 2020 notices for the 2020 Annual Meeting. Such proposals also must comply with any applicable SEC regulations regarding the inclusion of shareholder proposals in company-sponsored proxy materials. Proposals should be addressed to:

 

Social Reality, Inc.

Attn: Corporate Secretary

456 Seaton St.

Los Angeles, California 90013

 



6



 


Our bylaws also establish an advance notice procedure for shareholders who wish to present a proposal before an annual meeting of shareholders but do not intend for the proposal to be included in our proxy statement. Our bylaws provide that the only business that may be conducted at an annual meeting is business that is (1) specified in the notice of a meeting given by or at the direction of the Board, (2) otherwise properly brought before the meeting by or at the direction of the Board, or (3) a proper matter for shareholder action under the Delaware General Corporation Law that has been properly brought before the meeting by a shareholder entitled to vote at the annual meeting who has delivered timely written notice to our Corporate Secretary, which notice must contain the information specified in our bylaws. To be timely for our 2020 Annual Meeting of Shareholders, our Corporate Secretary must receive the written notice at our principal executive offices:

 

 

·

not earlier than the close of business on March 1, 2020, and

 

·

not later than the close of business on March 28, 2020.

 

In the event that we hold our 2020 Annual Meeting of shareholders more than 30 days before or after the one-year anniversary date of the 2019 Annual Meeting, then notice of a shareholder proposal that is not intended to be included in our proxy statement must be received not later than the close of business on the earlier of the following two dates:

 

 

·

the 10th day following the day on which notice of the meeting date is mailed, or

 

·

the 10th day following the day on which public disclosure of the meeting date is made.

 

If a shareholder who has notified us of his or her intention to present a proposal at an annual meeting does not appear to present his or her proposal at such meeting, we are not required to present the proposal for a vote at such meeting.

 

Nomination of Director Candidates:

 

You may propose director candidates for consideration by our Nominating and Corporate Governance Committee. Any such recommendations should include the nominee’s name and qualifications for membership on the Board, and should be directed to the Corporate Secretary of Social Reality at the address set forth above. For additional information regarding shareholder recommendations for director candidates, see “Directors, Executive Officers and Corporate Governance—Consideration of Director Nominees—Shareholder Nominations” on page 13 of this proxy statement.

 

In addition, our bylaws permit shareholders to nominate directors for election at an annual meeting of shareholders. To nominate a director, the shareholder must provide the information required by our bylaws. In addition, the shareholder must give timely notice to our Corporate Secretary in accordance with our bylaws, which, in general, require that the notice be received by our Corporate Secretary within the time period described above under “Shareholder Proposals” for shareholder proposals that are intended to be included in our proxy statement.


29.

How can I receive a copy of Social Reality’s Bylaws?

  

You may contact our Corporate Secretary at our principal executive offices for a copy of the relevant bylaw provisions regarding the requirements for making shareholder proposals and nominating director candidates.

 

30.

Where are the Company’s principal executive offices located and what is the Company’s main telephone number?

  

The Company’s principal executive offices are located at 456 Seaton St., Los Angeles, California 90013. The Company’s main telephone number is (323)-694-9800.

 

****






7



 


BENEFICIAL OWNERSHIP OF SHARES OF CLASS A COMMON STOCK


At April 25, 2019, we had 12,327,842 shares of Class A common stock issued and outstanding. The following table sets forth information known to us as of April 26, 2019 relating to the beneficial ownership of shares of our Class A common stock by:


 

·

each person who is known by us to be the beneficial owner of 5% or more of any class of our voting securities;

 

·

Each of our current directors and nominees;

 

·

each of our current named executive officers; and

 

·

all current named executive officers and directors as a group.


Beneficial ownership is determined according to the rules of the SEC. Beneficial ownership means that a person has or shares voting or investment power of a security and includes any securities that person or group has the right to acquire within 60 days after the measurement date. This table is based on information supplied by officers, directors and principal shareholders. Except as otherwise indicated, we believe that each of the beneficial owners of the common stock listed below, based on the information such beneficial owner has given to us, has sole investment and voting power with respect to such beneficial owner’s shares, except where community property laws may apply.


 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

Name and Address of Beneficial Owner(1)

 

Shares

 

 

Shares

Underlying

Convertible

Securities (2)

 

 

Total

 

 

Percent of

Class (2)

 

Directors and named Executive Officers

   

 

                      

  

 

 

                      

  

 

 

                      

  

 

 

                      

 

Christopher Miglino

 

 

927,575

 

 

 

 

 

 

927,575

 

 

 

7.52

%

Kristoffer Nelson

 

 

135,001

 

 

 

141,666

 

 

 

276,667

 

 

 

2.22

%

Joseph P. Hannan  (3)

 

 

 

 

 

20,833

 

 

 

20,833

 

 

 

*

 

Marc Savas

 

 

11,945

 

 

 

7,459

 

 

 

19,404

 

 

 

*

 

Malcolm CasSelle

 

 

65,946

 

 

 

5,059

 

 

 

71,005

 

 

 

*

 

Robert Jordan

 

 

6,510

 

 

 

5,059

 

 

 

11,569

 

 

 

*

 

Colleen DiClaudio

 

 

7,813

 

 

 

5,059

 

 

 

12,872

 

 

 

*

 

Michael Malone

 

 

1,292

 

 

 

8,333

 

 

 

9,625

 

 

 

*

 

All directors and executive officers as a group (8 persons)

 

 

1,156,082

 

 

 

193,468

 

 

 

1,349,550

 

 

 

10.78

%

Beneficial Owners of 5% or more

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

———————

*

Less than one percent.

 

(1)

Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. Unless otherwise indicated, the address of the beneficial owner is 456 Seaton St., Los Angeles, CA 90013.

(2)

Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants. There are 12,327,842 shares of Class A common stock issued and outstanding as of April 25, 2019.

(3)

Effective December 31, 2018, Mr. Hannan resigned as chief financial officer




8



 


DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


The names of our directors and executive officers and their ages, positions, and biographies as of April 25, 2019 (except as expressly stated) are set forth below. Our executive officers are appointed by, and serve at the discretion of the Board. There are no family relationships among any of our directors or executive officers.



Directors Standing for Re-election


Name

 

Age

 

Positions

 

Director Since

Christopher Miglino

 

50

 

Chairman of the Board, Chief Executive Officer, President

 

2010

Kristoffer Nelson

 

40

 

Chief Operating Officer, Director

 

2014

Mark Savas

 

50

 

Director

 

2012

Malcolm CasSelle

 

49

 

Director

 

2013

Robert Jordan

 

51

 

Director

 

2017

Colleen DiClaudio

    

40

 

Director

 

2017


Executive Officers (not serving on the Board)


Name

 

Age

 

Positions

 

Director Since

Michael Malone

 

37

 

Chief Financial Officer

 


The following is biographical information on the current members of our executive officers and board of directors who are standing for re-election:


Christopher Miglino . Since co-founding our company in April 2010, Mr. Miglino has served as our Chief Executive Officer and a member of our board of directors. He was appointed President of our company in January 2017. He also served as our Chief Financial Officer from April 2010 until November 2014, and as our principal financial and accounting officer since August 2015. Mr. Miglino, who has over 15 years of experience running various advertising companies, oversees all of our affairs. Some of the companies Mr. Miglino has helped launch programs for include Diet Coke, Bank of America, Nestle, General Mills, HBO, National Geographic, Target, Aflac, and Bayer. In addition, from August 2008 until March 2010, Mr. Miglino was CEO of the Lime Ad Network, a subsidiary of Gaiam, Inc. (Nasdaq: GAIA), where his responsibilities included management of interactive and innovative advertising programs for 250 green and socially conscious websites. Prior to that, from June 2004 until August 2008, Mr. Miglino was CEO of Conscious Enlightenment, where he oversaw their day to day operations in the publishing and advertising industry. From 2004 until 2008, Mr. Miglino served as a board member for Golden Bridge Yoga in Los Angeles, a studio that encompasses over 20,000 square feet of yoga spaces including a restaurant. Mr. Miglino's role as a co-founder of our company, his operational experience in our company as well as his professional experience in our business sector were factors considered by the Corporate Governance and Nominating Committee in recommending his re-election to the board.


Kristoffer Nelson . Mr. Nelson has served as an executive officer of our company since June 2012 and a member of our board of directors since September 2014. He has been employed by our company since September 2011, serving as Director of Business Development (September 2011 until January 2012), Executive Vice President Publisher Relations (January 2012 until June 2016) and President and Chief Revenue Officer, until being named to his current position in October 2014. Prior to joining our company, Mr. Nelson served as a project manager for Living Full Blast, Inc. from August 2009 until December 2010 and President of Krama Consulting & Development from January 2004 until August 2009. Mr. Nelson attended Kings College and Seminary, Van Nuys, California from 1998 until 2000 and West Los Angeles College from 2000 until 2003. He also attended the Leadership Institute of Seattle through Pacific Integral from 2006 until 2008. Mr. Nelson's significant operational experience in multiple aspects of our company coupled with his experience at Living Full Blast, Inc. and Krama Consulting & Development were factors considered by the Corporate Governance and Nominating Committee in recommending his re-election to the board.


Michael Malone , age 37, has served as our chief financial officer since January 2019.  Mr. Malone has over fourteen (14) years of experience in corporate finance in public and private companies. From 2014 until December 2018, he served as Vice President Finance of Westwood One, LLC, a subsidiary of Cumulus Media, Inc. (NYSE: “CMLS”), an audio broadcast network in New York. Prior to that, from January 2013 through June 2014, he served as Finance Director / Controller for Cumulus Media Network’, audio broadcast network in Georgia, until its merger with Westwood One, LLC. Prior to that from 2012 to 2013, he worked as Director of Internal Auditing of Cumulus Media from. He holds a BA in accounting from Monmouth College.



9



 


Marc Savas . Mr. Savas has been a member of our board of directors since January 2012. Mr. Savas has over 15 years of experience in management and sales consulting and six years of experience in real estate easement acquisitions. Since January 2007 he has served as CEO of Living Full Blast, Inc., overseeing business development and consulting for numerous companies and putting together sales teams for such companies. In addition, from January 1998 until January 2006, Mr. Savas was also CEO for Unfair Advantage Inc., where he conducted 118 management consulting projects, many of which were created using programs that his company had designed. Additionally, from January 2005 until January 2009, Mr. Savas was the national Vice President of Business Development for Connexion Technologies where he built national teams of qualified individuals to effectively secure easements from large real estate owners in order to build telecommunication systems through their properties. Mr. Savas' management consulting and operational experience were factors considered by the Corporate Governance and Nominating Committee in recommending his re-election to the board..


Malcolm CasSelle . Mr. CasSelle has been a member of our board of directors since August 2013. Mr. CasSelle is an entrepreneur and since August 2017 has served as President of Worldwide Asset eXchange (WAX), a utility token designed with functionalities to simplify digital item trading which is operated by Norris Services, LLC. Since August 2017 he has also served as Chief Information Officer of OPSkins, a marketplace for buying and selling digital items, including e-Sports digital merchandise which is managed by Norris Services, LLC. From February 2016 until August 2017 Mr. CasSelle was Chief Technology Officer and President of New Ventures at tronc, Inc. where he oversaw all digital operations and was responsible for leveraging data and technology to accelerate digital growth. Prior to tronc, Inc., he was Senior Vice President and General Manager, Digital Media of SeaChange International. He joined SeaChange International in 2015 as part of the company's acquisition of Timeline Labs, where he served as CEO. Previously, Mr. CasSelle led startups in the digital industry, including MediaPass, Xfire and Groupon's joint venture with Tencent in China. He has also been an active early stage investor in companies including Facebook, Zynga, and most recently Bitcoin-related companies. Mr. CasSelle received a B.S. in Computer Science from the Massachusetts Institute of Technology in 1991 and an M.S. in Computer Science from Stanford University in 1994. Mr. CasSelle's entrepreneurial background, knowledge of our market segment and experience as a Board member for other companies were factors considered by the Corporate Governance and Nominating Committee in recommending his election to the board.


Robert Jordan . Mr. Jordan has been a member of our board of directors since March 2017. He is a seasoned business executive who has spent the past 20 years acquiring, managing and divesting middle-market companies spanning a variety of industries. Since 2016 he has served as Chief Executive Officer of Yoi Corporation, a Los-Angeles-based company that provides software as a service (SaaS)-based mobile digital tools for line managers. In 2013, Mr. Jordan founded Tribeca Capital Partners LLC, a private investment holding company focused on acquiring and operating lower middle market companies. Immediately prior to founding Tribeca Capital Partners LLC, from 2003 to 2013 Mr. Jordan was Chief Executive Officer of KMS Software Company, LLC, a leading human capital management SaaS company which he successfully sold to SAP AG in April 2013. Prior to KMS, Mr. Jordan held chief executive officer roles at a number of companies across several industry sectors and senior management positions at both The Walt Disney Company and Pepsi-Cola Bottling Company. He received a BSBA from Northern Arizona University and attended Executive Education programs at both Harvard Business School and UCLA School of Business. Mr. Jordan's executive level and senior management business experience coupled by his private investment company experience were factors considered by the Corporate Governance and Nominating Committee in determining Mr. Jordan should serve on our Board.


Colleen DiClaudio . Ms. DiClaudio has been a member of our board of directors since September 2017. She currently serves as president of 340B Technologies, a 340B software solutions healthcare technology company she co-founded in August 2014. From June 2009 through August 2014 she served as vice president of business development of CompleteCare Health Network, located in New Jersey. Ms. DiClaudio has received a Master's Degree of Public Health from the University of Medicine and Dentistry of New Jersey and a Bachelor's Degree in Public Health from Stockton University. Ms. DiClaudio’s experience in the healthcare technology sector and entrepreneurial background were factors considered by the Corporate Governance and Nominating Committee in determining she should serve on the Board.


Code of Ethics


We are committed to maintaining the highest standards of honest and ethical conduct in running our business efficiently, serving our stockholders interests and maintaining our integrity in the marketplace. To further this commitment, we have adopted our Code of Conduct and Business Code of Ethics, which applies to all our directors, officers and employees. To assist in its governance, our Board has formed three standing committees composed entirely of independent directors, Audit, Compensation and Corporate Governance and Nominating committees. A discussion of each committee’s function is set forth below.




10



 


Bylaws


Our bylaws, the charters of each Board committee, the independent status of a majority of our board of directors, our Code of Conduct and Business Code of Ethics provide the framework for our corporate governance. Copies of our bylaws, committee charters, Code of Conduct and Business Code of Ethics may be found on our website at www.SRAX.com . Copies of these materials also are available without charge upon written request to our Corporate Secretary at 456 Seaton St., Los Angeles, California 90013.


Board of directors


The board of directors oversees our business affairs and monitors the performance of management. In accordance with our corporate governance principles, the board of directors does not involve itself in day-to-day operations. The directors keep themselves informed through discussions with the Chairman and Chief Executive Officer and our Chief Financial Officer and by reading the reports and other materials that we send them and by participating in board of directors and committee meetings. Directors are elected for a term of one year.  Our directors hold office until their successors have been elected and duly qualified unless the director resigns or by reason of death or other cause is unable to serve in the capacity of director. If any director resigns, dies or is otherwise unable to serve out his or her term, or if the Board increases the number of directors, the Board may fill any vacancy by a vote of a majority of the directors then in office, although less than a quorum exists. A director appointed to fill a vacancy shall serve for the unexpired term of his or her predecessor. Vacancies occurring by reason of the removal of directors without cause may only be filled by vote of the stockholders.


During the year ended December 31, 2018, the Board held 14 meetings. Each director attended at least 75% of all meetings of the Board. Each director attended at least 75% of meetings of committees on which the director served. The Board currently holds regularly scheduled meetings and calls for special meetings or acts through unanimous written consents as necessary. Meetings of the Board may be held telephonically. Directors are expected to attend all Board meetings and meetings of the committees of the Board on which they serve and to spend the time needed and meet as frequently as necessary to properly discharge their duties. Information with regard to committee meetings is provided for below. Although attendance of meetings is encouraged, we do not have a formal policy regarding attendance by directors at Board and committee meetings.


Board leadership structure and Board’s role in risk oversight


Mr. Miglino serves as both the Chairman of our Board of Directors and our Chief Executive Officer.  We do not have a lead independent director.  Given the small size of the Board and limited number of executive officers, the Board has determined that a lead independent director is currently not necessary.


Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including credit risk, liquidity risk, operational risk, strategic risk and reputation risk. Management is responsible for the day-to-day management of the risks we face, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.  To do this, the board of directors meets regularly to review Social Reality's risks.  Our Chief Financial Officer generally attends the Board meetings and is available to address any questions or concerns raised by any member of the Board on risk management and any other matter. The independent members of the Board work together to provide strong, independent oversight of our management and affairs through the Board's standing committees and, when necessary, special meetings of independent directors.  Our independent directors may meet at any time in their sole discretion without any other directors or representatives of management present. Each independent director has access to the members of our management team or other employees as well as full access to our books and records. We have no policy limiting, and exert no control over, meetings of our independent directors.




11



 


Board committees


The Board of Directors has standing Audit, Compensation, Compensation and Corporate Governance and Nominating committees. Each committee has a written charter. The charters are available on our website at www.SRAX.com . All committee members are independent directors. Information concerning the current membership and function of each committee is as follows:


Director

 

Audit
Committee

 

Compensation
Committee

 

Corporate
Governance and
Nominating
Committee

Marc Savas

 

[SRAX_14A005.GIF]

 

[SRAX_14A007.GIF] (1)

 

[SRAX_14A009.GIF]

Malcolm CasSelle

 

[SRAX_14A011.GIF]

 

[SRAX_14A013.GIF]

 

[SRAX_14A015.GIF] (1)

Robert Jordan

 

[SRAX_14A017.GIF] (1)

 

 

 

 

———————

(1)

denotes chairperson.


Independence


Our Class A common stock is listed on the NASDAQ Capital Market. As such, we are subject to the NASDAQ Stock Market LLC (“NASDAQ”) director independence standards. In accordance with these standards, in determining independence the Board affirmatively determines whether a director has a "material relationship" with Social Reality that would compromise his or her independence from management or would cause him or her to fail to meet the NASDAQ’s specific independence criteria. When assessing the "materiality" of a director's relationship with Social Reality, the Board considers all relevant facts and circumstances, not merely from the director's standpoint, but from that of the persons or organizations with which the director has an affiliation, and, where applicable, the frequency and regularity of the services, and whether the services are being carried out at arm's length in the ordinary course of business. Material relationships can include commercial, consulting, charitable, familial and other relationships. A relationship is not material if, in the Board's judgment, it is not inconsistent with the NASDAQ’S director independence standards and it does not compromise a director's independence from management.


Applying the NASDAQ’s standards, the Board has determined that of the electors nominated for reelection, Messrs. Savas, CasSelle, Jordan and Ms. DiClaudio are each “independent” as that term is defined by the NASDAQ’s standards. In addition to our executive directors (Miglino and Nelson), all four independent directors are up for reelection at the 2019 Annual Meeting.


Communications with Directors

 

Interested parties are invited to communicate with the non-management members of the Board by sending correspondence to the non-management members of the Board of Directors, c/o Corporate Secretary, to 456 Seaton St., Los Angeles, CA 90013.

 

The Corporate Secretary will review all such correspondence and forward to the non-management members of the Board a summary of all such correspondence received during the prior month and copies of all such correspondence that deals with the functions of the Board or committees thereof or that otherwise is determined to require attention of the non-management directors. Non-management directors may at any time review the log of all correspondence received by us that is addressed to the non-management members of the Board and request copies of any such correspondence. Concerns relating to accounting, internal controls or auditing matters will immediately be brought to the attention of the Chairman of the Audit Committee.


Audit Committee


We have a designated audit committee in accordance with section 3(a)(58)(A) of the Exchange Act. The members of the Audit Committee are Messrs. Robert Jordan (Chairperson), Malcolm CasSelle, and Marc Savas. The main function of our Audit Committee is to oversee our accounting and financial reporting processes. The Audit Committee assists the Board in fulfilling its oversight and monitoring responsibility of reviewing the financial information provided to shareholders and others, appoints Social Reality’s independent registered public accounting firm, reviews the services performed by the independent registered public accounting firm and Social Reality’s finance department, evaluates Social Reality’s accounting policies and the system of internal controls established by management and the Board, reviews significant financial transactions, and oversees enterprise risk management.

 



12



 


During 2018, our Audit Committee held 6 meetings. The Board has determined that Robert Jordan qualifies as an “audit committee financial expert” within the meaning of SEC rules. An audit committee financial expert is a person who can demonstrate the following attributes: (1) an understanding of generally accepted accounting principles and financial statements; (2) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; (3) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising one or more persons engaged in such activities; (4) an understanding of internal controls and procedures for financial reporting; and (5) an understanding of audit committee functions. Mr. Jordan has also been determined to be “independent” by the board of directors as such term is defined in the NASDAQ listing standards.  Additionally, Mr. Jordan meets the independence standards for audit committees under the NASDAQ rules.


Compensation Committee


Compensation Committee

 

The Compensation Committee reviews and approves the compensation arrangements for Social Reality’s executive officers, including the CEO, administers our equity compensation plans, and reviews the Board’s compensation. Messrs. Savas and CasSelle are members of the Compensation Committee. During 2018, the Compensation Committee held 5 meetings.


Corporate Governance and Nominating Committee

 

Our Governance and Nominating Committee’s purpose is to assist our board of directors in identifying individuals qualified to become members of our board of directors consistent with criteria set by our board of directors, to oversee the evaluation of the board of directors and management, and to develop and update our corporate governance principles. The Governance and Nominating Committee has recommended to the full Board the nominees named in this Proxy Statement for election to the Board. Messrs. CasSelle and Savas are the members of the Governance and Nominating Committee. During 2018, our Governance and Nominating Committee held 2 meetings.


Shareholder Nominations

 

Shareholders who would like to propose a candidate may do so by submitting the candidate’s name, resume and biographical information to the attention of our Corporate Secretary. All proposals for nomination received by the Corporate Secretary will be presented to the Corporate Governance and Nominating Committee for appropriate consideration. It is the policy of the Corporate Governance and Nominating Committee to consider director candidates recommended by shareholders who appear to be qualified to serve on our Board. The Corporate Governance and Nominating Committee may choose not to consider an unsolicited recommendation if no vacancy exists on the Board and the committee does not perceive a need to increase the size of the Board. In order to avoid the unnecessary use of the Corporate Governance and Nominating Committee’s resources, the committee will consider only those director candidates recommended in accordance with the procedures set forth below. To submit a recommendation of a director candidate to the Corporate Governance and Nominating Committee, a shareholder should submit the following information in writing, addressed to the Corporate Secretary of Social Reality at our main office:

 

 

·

the name and address of the person recommended as a director candidate;

 

·

all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Exchange Act;

 

·

the written consent of the person being recommended as a director candidate to be named in the proxy statement as a nominee and to serve as a director if elected;

 

·

as to the person making the recommendation, the name and address, as they appear on our books, of such person, and number of shares of our Class A common stock owned by such person; provided, however , that if the person is not a registered holder of our common stock, the person should submit his or her name and address along with a current written statement from the record holder of the shares that reflects the recommending person’s beneficial ownership of our common stock; and

 

·

a statement disclosing whether the person making the recommendation is acting with or on behalf of any other person and, if applicable, the identity of such person.




13



 


Compliance with Section 16(a) of the Exchange Act


Section 16(a) of the Exchange Act requires our officers, directors, and stockholders owning more than ten percent of our common stock, to file reports of ownership and changes in ownership with the SEC and to furnish us with copies of such reports. Based solely on our review of Form 3, 4 and 5’s, the following table provides information regarding any of the reports which were filed late during the fiscal year ended December 31, 2018:


Name of Reporting Person

 

Type of Report and Number Filed Late

 

No. of Transactions

Reported Late

 

 

 

 

 

Malcolm CasSelle

 

Form 4 (1 filed late)

 

2

Marc Savas

 

Form 4 (1 filed late)

 

2

Kristoffer Nelson

 

Form 4 (1 filed late)

 

1

Colleen DiClaudio

 

Form 3 (1 filed late)

 

1

Robert Jordan

 

Form 3 (1 filed late)

 

1

Joseph P. Hannan *

 

Form 4 (1 filed late)

 

1

Christopher Miglino

 

Form 4 (1 filed late)

 

1

Michael Malone

 

Form 3 (1 filed late)

 

1

———————

*  No Longer a Director or Service Provider of Social Reality




14



 


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


Related Party Transactions Procedure

 

We review all known relationships and transactions in which Social Reality and our directors, executive officers, and significant stockholders or their immediate family members are participants to determine whether such persons have a direct or indirect interest. Our management, in consultation with our outside legal consultants, determines based on specific fact and circumstances whether Social Reality or a related party has a direct or indirect interest in these transactions. In addition, our directors and executive officers are required to notify us of any potential related party transactions and provide us with the information regarding such transactions.

 

If it is determined that a transaction is a related party transaction, the Audit Committee must review the transaction and either approve or disapprove it. In determining whether to approve or ratify a transaction with a related party, the Audit Committee will take into account all of the relevant facts and circumstances available to it, including, among any other factors it deems appropriate:

  

 

·  

the benefits to us of the transaction;

 

·  

the nature of the related party s interest in the transaction;

 

·  

whether the transaction would impair the judgment of a director or executive officer to act in the best interests of Social Reality and our shareholders;

 

·  

the potential impact of the transaction on a director s independence; and

 

·  

whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances.

 

Any member of the Audit Committee who is a related party with respect to a transaction under review may not participate in the deliberations or vote on the approval of the transaction.

 

Related Party Transactions

 

Summarized below are certain transactions and business relationships between Social Reality and persons who are or were an executive officer, director or holder of more than five percent of any class of our securities since January 1, 2017.

 

Information regarding disclosure of an employment relationship or transaction involving an executive officer and any related compensation solely resulting from that employment relationship or transaction is included in the Section of this proxy statement entitled “ Executive Compensation .”

 

Information regarding disclosure of compensation to a director is included in the Section of this proxy statement entitled “ Director Compensation.

 

Information regarding the identification of each independent director is included in the Section of this proxy statement entitled “ Directors, Executive Officers and Corporate Governance.


 

·

Mr. Malcolm CasSelle, a member of our Board, was previously the Chief Technology Officer and President of New Ventures at tronc, Inc., which was one of our major advertisers. Revenue from New Ventures of tronc, Inc. amounted to $4,395,124 and $0 for the years ended December 31, 2016 and 2015, respectively. At December 31, 2016, New Ventures of tronc, Inc. owed us $1,042,000, net of liabilities owed to them. In August 2017, after Mr. CasSelle had ended his employment with tronc, Inc., we filed a lawsuit against tronc, Inc. and Tribune Content Agency, LLC for breach of contract, fraudulent concealment and deceptive business practices (case number 1:17-cv-05998, U.S. District Court for the Northern District of Illinois). We have alleged that tronc, Inc. and Tribune Content Agency, LLC refused to perform their contractual obligations and breached the terms of contract and insertion orders. On December 4, 2017, we entered into a settlement agreement with tronc whereby neither party admitted fault and tronc agreed to (i) pay us $2,250,000 representing amounts owed for advertisements placed by us as well as accrued interest and related costs and (ii) provide us with $300,000 in media spread over a consecutive twelve month period beginning on a date to be agreed upon by us and tronc.

 

 

 




















15



 



 

·

In January 2017, we issued 3,858 shares of our Class A common stock valued at $12,500 to Mr. Ferguson upon his appointment to our Board of Directors and the Audit Committee of the Board. The recipient is an accredited investor and the issuance was exempt from registration under the Securities Act pursuant to an exemption provided by Section 4(a)(2) of that act. As of the date hereof, Mr. Ferguson is no longer a member of our board of directors

 

 

 

 

·

On January 2, 2018, we issued a common stock purchase option to Kristoffer Nelson, our Chief Operating Officer and a member of our board of directors. The option entitles Mr. Nelson to purchase 100,000 shares of Class A Common Stock at a price per share of $5.78, has a term of three years and vests quarterly over a three (3) year period.  

 

 

 

 

·

In January 2018, we issued Hardy Thomas, a former board member, 7,195 Class A common shares valued at $10,000 as payment for 2017 services on our board of directors. The shares were issued from our 2016 equity compensation plan.

 

 

 

 

·

On January 18, 2018, we issued Colleen DiClaudio, a board member, 7,813 Class A common shares valued at $10,000 as payment for 2017 services on our board of directors. The shares were issued from our 2016 equity compensation plan.

 

 

 

 

·

In January 2018, we issued Marc Savas, Malcolm CasSelle, and William Packer each 3,774 Class A common shares valued at $10,000 as payment for their respect 2017 service on our board of directors. The shares were issued from our 2016 equity compensation plan. Mr. Packer is no longer a member of the board of directors of the Company.

 

 

 

 

·

On March 20, 2018, as we began to formally review potential strategic options for SRAXMD, we entered into certain agreements with Erin DeRuggiero, our chief innovations officer.  Pursuant to the terms of the agreements, Ms. Deruggiero employment agreement was terminated, and she became a consultant of the Company. The term of the consultancy expires in the second quarter of 2018, or upon the sale of the assets comprising SRAXmd, but may be extended by the parties. The terms of the consultancy are substantially similar to her prior employment agreement  except that in the event of a sale of the SRAXmd business unit or substantially all of the assets thereof within 120 days from March 20, 2018, (i) we (or our assignee) have the right and the obligation to purchase all of Ms. DeRuggiero’s outstanding Class A common shares (514,667) at a price of $5.80 per share, or an aggregate of $2,985,068.60 and (ii) we will pay Ms. DeRuggiero, an amount equal to five percent (5%) of the cash consideration received from the sale of the SRAXmd business unit. The Company and Ms. DeRuggiero agreed to a customary release from any claims that may have arisen during her employment. In August 2018, SRAXmd was sold to Halyard MD Opco, LLC, an affiliate of Halyard Capital, a private equity firm. Pursuant to the sale, all of the aforementioned Class A common stock of Erin DeRuggiero was repurchased.

 

 

 

 

·

Due to certain provisions of our insider trading policy, on April 2, 2018, we agreed to extend certain outstanding Class A common stock purchase options of varying expiration dates to an extended expiration date of December 31, 2018. Included in these options were the following options held by Kristoffer Nelson, our Chief operating officer and Board member and Marc Savas, a board member:


 

o

10,000 Class A common stock purchase options issued to Kristoffer Nelson on 1/1/2013 with an exercise price per share of $5.00 and an original expiration date of 1/1/2018;

 

 

 

 

o

2,400 Class A common stock purchase options issued to Marc Savas on 2/1/2013 with an exercise price per share of $5.00 and an original expiration date of 2/1/2018; and

 

 

 

 

o

10,000 Class A common stock purchase options issued to Marc Savas on 4/1/2013 with an exercise price per share of $5.00 and an original expiration date of 4/1/2018.


 

·

In August 2018, pursuant to our sale of the SRAXmd product line, we paid out an aggregate of $2,191,338.04 in stay bonuses, which amount includes $1,507,302.89 paid to Erin DeRuggiero, our former chief innovations officer and Board member.

 

 

 




















16



 



 

·

On September 18, 2018, the Board agreed to pay Christopher Miglino, our chief executive officer, an aggregate of $414,250 in salary previously deferred from 2012 through March 15, 2017.

 

 

 

 

·

On September 18, 2018, as partial consideration for the successful sale of the SRAXmd product line, the Company paid the following transaction bonuses: (i) Christopher Miglino, our chief executive officer received $548,416.67, (ii) Joseph P. Hannan, our former chief financial officer received $50,000 and (iii) Kristoffer Nelson, our chief operating officer, received $43,750.

 

 

 

 

·

On September 18, 2018, we issued a common stock purchase option to Joseph P Hannan, our former Chief Financial Officer. The option entitles Mr. Hannan to purchase 250,000 shares of Class A Common Stock at a price per share of $4.20, has a term of three years and vests quarterly over a three (3) year period.

 

 

 

 

·

On October 15, 2018, the Compensation Committee agreed to pay Joseph P. Hannan, our chief financial officer, a lump sum of $100,000 in lieu of a bonus of the same amount of restricted stock units, to which he was entitled to under his employment agreement.

 

 

 

 

·

On December 15, 2018, the we issued a common stock purchase option to Michael Malone, our Chief Financial Officer. The option entitles Mr. Malone to purchase 100,000 shares of Class A Common stock at a price per share of $2.56, has a term of three years and vests quarterly over a three year period.




17



 


DIRECTOR COMPENSATION


Below are descriptions of the Company’s current  non-executive director compensation policy, effective April 15, 2018 and its previous legacy compensation policy.


Current Director Compensation Policy


Effective April 15, 2018, each non-employee director will receive $30,000 as an annual board fee payable as follows:


·

Up to $15,000 in cash paid quarterly over the grant year; and


·

The balance in Class A common stock purchase options issued on April 15 of each year and vesting quarterly over the grant year and have a term of seven (7) years. The stock options will be valued using the Black-Scholes option pricing model and are subject to customary assumptions used in the preparation of financial statements.


All elections of compensation will be made by April 1 of each year by incumbent directors and newly elected or appointed directors will have their compensation pro-rated and made on the fifth (5 th ) day following their election or appointment to the board.


The following table provides information concerning the compensation paid to our non-executive directors for their services as members of our board of directors for 2018. The information in the following table excludes any reimbursement of out-of-pocket travel and lodging expenses which we may have paid.


Director Compensation


Name

 

Fees

earned or

paid in

cash ($)

 

 

Stock

awards

($)

 

 

Option

awards

($)

 

 

Non-equity

incentive plan

compensation

($)

 

 

Nonqualified

deferred

compensation

earnings

($)

 

 

All other

compensation

($)

 

 

Total

($)

 

Colleen DiClaudio

   

 

15,000

 

 

 

15,000

 (1)

 

 

  

 

 

  

 

 

  

 

 

  

 

 

30,000

 

Marc Savas

 

 

15,000

 

 

 

15,000

 (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,000

 

Malcolm CasSelle

 

 

15,000

 

 

 

15,000

 (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,000

 

Robert Jordan

 

 

15,000

 

 

 

15,000

 (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,000

 

———————

* No longer a director of Social Reality, Inc.

(1) Represents options to purchase 5,059 shares of Class A common stock at a price per share of $4.92, a term of 7 years, which vests quarterly over the grant year.





18



 


EXECUTIVE COMPENSATION


Summary Compensation Table


The following table summarizes all compensation recorded by us in each of the last two completed years ended December 31, for:


 

·

all individuals serving as our principal executive officer or acting in a similar capacity;

 

 

·

our two most highly compensated named executive officers, whose annual compensation exceeded $100,000; and

 

 

·

up to two additional individuals for whom disclosure would have been made in this table but for the fact that the individual was not serving as a named executive officer of our company, at December 31, 2018.


The value attributable to any option awards is computed in accordance with FASB ASC Topic 718. The assumptions made in the valuations of the option awards are included in Note 12 of the Notes to our Consolidated Financial Statements for the year ended December 31, 2018.

 

Name and principal position

 

Year

 

Salary

($)

 

 

Bonus

($)

 

 

Stock

Awards

($)

 

 

Option

Awards

($)  (1)

 

 

No equity

incentive plan

compensation

($)

 

 

Non-qualified

deferred

compensation

earnings

($)

 

 

All

other

compensation

($)

 

 

Total

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Christopher Miglino,

 

2018

 

 

291,250

 

 

 

540,000

 (9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

437,392

 (3)

 

 

1,268,642

 

Chief Executive Officer

 

2017

 

 

192,000

 

 

 

40,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

232,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chad Holsinger,

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,937

 

 

 

3,937

 

Chief Revenue Officer (4)

 

2017

 

 

32,884

 

 

 

161,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

155,900

 (2)

 

 

349,784

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kristoffer Nelson

 

2018

 

 

242,500

 

 

 

43,750

 

 

 

 

 

 

 

398,675

 (5)

 

 

 

 

 

 

 

 

 

 

25,892

 (10)

 

 

710,817

 

Chief Operating Officer

 

2017

 

 

175,000

 

 

 

54,213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

224,213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Joseph Hannan

 

2018

 

 

191,667

 

 

 

250,000

 

 

 

 

 

 

 

488,107

 (7)

 

 

 

 

 

 

 

 

 

 

34,615

 (11)

 

 

964,389

 

Chief Financial Officer (6)

 

2017

 

 

200,000

 

 

 

100,000

 

 

 

100,000

 (8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

400,000

 

———————

(1)

The amounts included in the “Option Awards” column represent the aggregate grant date fair value of the stock options, compute din accordance with ASC Topic 718.  The assumptions made in the valuations of the option awards are included in Note 4 of the notes to our consolidated financial statements appearing in the 10-K for the year end December 31, 2017.

(2)

All other compensation represents commissions received in accordance with the terms of his employment agreement.

(3)

Mr. Miglino’s contracted base salary is $340,000 annually.  Prior to March 16, 2017, Mr. Miglino had been voluntarily reducing his base salary to $114,000.  In September 2018, all of Mr. Miglino’s previously deferred salary was paid in full. Additionally, Mr. Miglino received a cash bonus of $540,000 and $23,142 of Company paid health benefits.

(4)

Mr. Holsinger resigned from the Company, effective March 31, 2017

(5)

Mr. Nelson’s Stock award represents consists of options to purchase 100,000 shares of our Class A Common stock at $5.78 options to purchase

(6)

Mr. Hannan joined the Company as Chief Financial Officer, effective October 17, 2016.  On November 29, 2018, Mr. Hannan informed the Company of his resignation.  

(7)

Mr. Hannan’s stock option award consisted of 250,000 options to purchase Class A common stock at $4.20. Upon Mr. Hannan’s termination these options were canceled.

(8)

Mr. Hannan’s stock award consists of 100,000 restricted Class A Common shares issued on October 14, 2016 that vests half on October 17, 2017 and half on October 17, 2018. The aggregate value of the shares on the grant date was $614,000. The award was granted pursuant to our 2016 Compensation Plan.

(9)

Mr. Miglino received a cash bonus for successfully completing the sale of the SRAXmd business division.

(10)

The Company paid $25,892 for insurance and benefit premiums on behalf of Mr. Nelson.

(11)

Mr. Hannan received payment for his accrued and unused vacation at the time of his termination.



19



 


Employment agreements and how the executive’s compensation is determined


We are a party to an employment agreement with each of Messrs. Miglino and Malone which provide the compensation arrangements with these individuals. We have not engaged a compensation consultant or other consultant performing similar functions to advise our company on compensation arrangements for our executive officers and directors.


Employment Agreement with Mr. Miglino


We employ Christopher Miglino as our Chief Executive Officer for a term of four years pursuant to an employment agreement entered into on January 1, 2012. The employment agreement automatically renews for successive two-year terms unless either party provides notice of non-renewal not later than three (3) months before the conclusion of the then current term. As compensation for his services, Mr. Miglino was entitled to receive a base salary of $192,000 which is subject to an annual review.   During 2012, in an effort to conserve our cash resources, Mr. Miglino agreed to a temporary reduction in his annual base salary to $60,000, which was increased to $90,000 during the fourth quarter of 2013. Mr. Miglino's annual base salary for the 2015 was $114,000.  On March 16, 2017, his salary deferral ended and he returned his compensation to $192,000 per annum. On September 18, 2018, the board of directors agreed to pay Mr. Miglino an aggregate of $414,250 in salary deferred between 2012 and March 15, 2017.  Additionally, effective October 1, 2018, Mr. Miglino’s salary was increased to $340,000 per annum. In addition, he is eligible to receive an annual bonus based upon the achievement of certain to-be-established goals fixed by the Board, which is payable in cash or non-cash compensation as determined by the Board, as well as a discretionary bonus as determined by the Board. Mr. Miglino is entitled to participate in all benefit plans we may offer, up to 45 days of paid vacation annually and reimbursement for out-of-pocket expenses incurred in furtherance of our business.


In addition to accrued obligations (including but not limited to, reimbursements, unpaid salary, unused vacation days, etc.), the following table sets forth the payments that would be made to Mr. Miglino in accordance with his employment agreement had he been terminated by us without cause or by Mr. Miglino for Good Reason, or termination as a result of disability on December 31, 2018.

 

Name

 

Terminated
Without Cause /

For Good Reason

 

 

Termination as a
result of Disability

 

Christopher Miglino

    

 

 

 

 

 

 

  

Salary (1)

 

$

680,000

 

 

$

680,000

 

Accelerated Vesting of Awards

 

 

 

 

 

 

Health Care

 

 

43,074

 

 

 

 

Total:

 

$

723,047

 

 

$

680,000

 

———————

(1)

Amount equal to twenty four (24) months of Base Salary).  Amount is to be paid over a twenty four (24) month period.


Employment Agreement with Michael Malone


On December 15, 2018 we entered into an Employment Agreement with Mr. Malone pursuant to which he was engaged to serve as Chief Financial Officer to be effective January 2, 2019. Under the terms of the employment agreement, Mr. Malone's compensation includes:


 

·

an annual base salary of $200,000;

 

·

an annual bonus of $100,000, payable in equal quarterly installments beginning on April 1, and subject to the timely filings of our periodic reports;

 

·

a one time option grant to purchase 100,000 shares of Class A Common Stock with a grant date of December 15, 2018, an exercise price of $2.56 per share, a term of three (3) years that vests quarterly over a three (3) year period subject to continued employment;

 

·

the reimbursement of up to $20,000 in expenses incurred in moving and temporary living arrangements within the first sixty (60) days following the effective date; and

 

·

annual paid time off of 30 days per year.


Mr. Malone is entitled to participate in all benefit programs we offer our other executive officers and expense reimbursement.  The employment agreement with Malone contains customary confidentiality, non-disclosure and noninterference provisions.




20



 


The following table sets forth the payments that would be made to Malone in accordance with his employment agreement had he been terminated by us “without cause” on December 31, 2018 (despite his employment beginning January 2, 2019).


Name

 

Terminated
Without Cause

 

 

Termination as a
result of Disability

 

Michael Malone

    

 

 

 

 

 

 

  

Salary

 

$

33,667

 

 

$

 

Total:

 

$

33,667

 

 

$

 


Employment Agreement with Mr. Hannan


On October 14, 2016 we entered into an Employment Agreement with Mr. Hannan pursuant to which he was engaged to serve as Chief Financial Officer. Mr. Hannan resigned from the Company effective December 16, 2018. Under the terms of the employment agreement, Mr. Hannan's compensation included:


 

·

an annual base salary of $200,000;

 

·

an annual bonus of $100,000, payable in equal quarterly installments beginning on April 1, and subject to the timely filings of our periodic reports;

 

·

an annual bonus of a restricted stock grant of $100,000 in value of shares of our Class A common stock on each annual anniversary date of the employment agreement, also subject to the timely filings of our periodic reports, subject to continued employment;

 

·

a one time restricted stock award of 100,000 shares of our Class A common stock, which completed vesting on October 17, 2018, subject to continued employment; and

 

·

annual paid time off of 30 days per year.


Mr. Hannan was entitled to participate in all benefit programs we offer our other executive officers and expense reimbursement. Upon termination of the agreement by either party, regardless of the reason, he is not entitled to any additional compensation. The employment agreement with Mr. Hannan contains customary confidentiality, non-disclosure and noninterference provisions.


Employment Agreement with Kris Nelson


Mr. Nelson is not a party to a written employment agreement, but his compensation is determined by the Compensation committee of the board of directors in consultation with the Company’s CEO. Mr. Nelson received $175,000 for the year ending December 31, 2017.  Effective October 1, 2018, Mr. Nelson’s annual salary was increased to $250,000.


Employment Agreement with Chad Holsinger


Mr. Holsinger served as our Chief Revenue Officer from October 2014 until March 2017. His employment agreement was for a term of four years beginning October 30, 2014 with automatic renewals of one (1) year unless notice to not renew is previously given by either party. Mr. Holsinger was paid a salary of $114,000 per annum, subject to increase from time to time at the Board’s discretion. Mr. Holsinger was also provided an annual bonus of $111,000 payable on January 31 st of each year and a discretionary bonus at the discretion of the Board. Such bonus payment was to be offset by payments made pursuant to certain earnout consideration related to the acquisition of Steel Media, Inc. on October 30, 2014.


Mr. Holsinger was also granted a one-time option to purchase 50,000 shares of Common Stock at an exercise price of $7.50 per share from the Company’s 2012 Equity Compensation Plan, which vested ¼ annually from the grant date.


Mr. Holsinger was also eligible to participate in all employee benefits made available by the Company to salaried employees.

 

In the event that Mr. Holsinger is terminated without cause or he resigns for good reason, he was entitled to severance equal to 12 months of his base salary as of the date of termination plus an amount equal to the greater of (a) the most recent bonus that would be payable and (b) $111,000.  As of March 2017, Mr. Holsinger was no longer employed by the Company.




21



 


Equity Compensation Plans


Our named executive officers participate in our equity compensation plans which are as follows:


2012 Equity Compensation Plan


Our 2012 Equity Compensation Plan (“2012 Plan”) is administered by our board or any of its committees. The purposes of the 2012 Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants, and to promote the success of our business. The issuance of awards under our 2012 Plan is at the discretion of the administrator, which has the authority to determine the persons to whom any awards shall be granted and the terms, conditions and restrictions applicable to any award. Under our 2012 Plan, we may grant stock options, restricted stock, stock appreciation rights, restricted stock units, performance units, performance shares and other stock based awards. Our 2012 Plan authorizes the issuance of up to 600,000 shares of Class A common stock for the foregoing awards. As of December 31, 2018, we have awards under the 2012 Plan outstanding equal to approximately 223,401 share of common stock and there are 269,932 shares of common stock available for future awards under the 2012 Plan. In the event of a change in control, awards under the 2012 Plan will become fully vested unless such awards are assumed or substituted by the successor corporation.


2014 Equity Compensation Plan


Our 2014 Equity Compensation Plan (“2014 Plan”) is administered by our board or any of its committees. The purposes of the 2014 Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants, and to promote the success of our business. The issuance of awards under our 2014 Plan is at the discretion of the administrator, which has the authority to determine the persons to whom any awards shall be granted and the terms, conditions and restrictions applicable to any award. Under our 2014 Plan, we may grant stock options, restricted stock, stock appreciation rights, restricted stock units, performance units, performance shares and other stock based awards. Our 2014 Plan authorizes the issuance of up to 1,600,000 shares of Class A common stock for the foregoing awards. As of December 31, 2018, we have awards under the 2014 Plan outstanding equal to approximately 72,400 share of common stock and there are 1,465,933 shares of common stock available for future awards under the 2014 Plan. In the event of a change in control, awards under the 2014 Plan will become fully vested unless such awards are assumed or substituted by the successor corporation.


2016 Equity Compensation Plan


Our 2016 Equity Compensation Plan (“2016 Plan”) is administered by our board or any of its committees. The purposes of the 2016 Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants, and to promote the success of our business. The issuance of awards under our 2016 Plan is at the discretion of the administrator, which has the authority to determine the persons to whom any awards shall be granted and the terms, conditions and restrictions applicable to any award. Under our 2016 Plan, we may grant stock options, restricted stock, stock appreciation rights, restricted stock units, performance units, performance shares and other stock based awards. Our 2016 Plan authorizes the issuance of up to 600,000 shares of Class A common stock for the foregoing awards As of December 31, 2018, we have awards under the 2016 Plan outstanding equal to approximately 276,236 share of common stock and there are 37,707 shares of common stock available for future awards under the 2014 Plan. In the event of a change in control, awards under the 2014 Plan will become fully vested unless such awards are assumed or substituted by the successor corporation.




22



 


Outstanding equity awards at year end


The following table provides information concerning unexercised options, stock that has not vested and equity incentive plan awards for each named executive officer outstanding as of December 31, 2018.


 

 

OPTION AWARDS

 

 

STOCK AWARDS

 

Name

 

Number of securities underlying unexercised options

(#)

exercisable

 

 

Number of securities underlying unexercised options

(#)

unexercisable

 

 

Equity incentive

plan awards: Number of securities underlying unexercised unearned options

(#)

 

 

Option

exercise

price

($)

 

 

Option

expiration

date

 

 

Number of shares or units of stock that have not vested

(#)

 

 

Market value of shares or units of stock that have not vested

($)

 

 

Equity incentive

plan awards: Number of unearned shares, units or other rights that have not vested

(#)

 

 

Equity incentive

plan awards: Market or payout value of unearned shares, units or other rights that have not vested

(#)

 

Kristoffer Nelson

 

 

10,000

 

 

 

 

 

 

 

 

 

5.00

 

 

 

12/31/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,333

 

 

 

 

 

 

 

 

 

 

 

7.50

 

 

 

10/10/2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,333

 

 

 

 

 

 

 

 

 

 

 

7.50

 

 

 

10/10/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,333

 

 

 

 

 

 

 

 

 

 

 

7.50

 

 

 

10/10/2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,333

 

 

 

66,667

 

 

 

 

 

 

 

5.78

 

 

 

1/2/2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Malone

 

 

0

 

 

 

100,000

 

 

 

 

 

 

 

2.56

 

 

 

1/2/2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 


EQUITY COMPENSATION INFORMATION


Securities Authorized for Issuance under Equity Compensation Plans

 

The following table sets forth securities authorized for issuance under any equity compensation plans approved by our shareholders as well as any equity compensation plans not approved by our stockholders as of December 31, 2018.


Plan category

 

Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)

 

 

Weighted average exercise price of outstanding options, warrants and rights ($)

 

 

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plans approved by our stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

2012 Equity Compensation Plan

 

 

223,401

 

 

$

4.70

 

 

 

262,932

 

2014 Equity Compensation Plan (1)

 

 

72,400

 

 

$

7.49

 

 

 

1,465,933

 

2016 Equity Compensation Plan

 

 

246,236

 

 

$

6.44

 

 

 

37,707

 

Plans not approved by stockholders

 

 

 

 

 

 

 

 

 

———————

(1)

Our 2014 Equity Compensation Plan was amended on 12/31/18 to increase the number of authorized share issuable under the plan from 600,000 to 1,600,000.







23



 


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


The following table summarizes the aggregate fees billed to us by our independent auditor for 2017 and 2016. All fees were paid to RBSM LLP.


 

 

2018

 

 

2017

 

Audit Fees

 

$

125,000

 

 

$

100,000

 

Audit-Related Fees

 

 

52,500

 

 

 

30,000

 

Tax Fees

 

 

0

 

 

 

20,000

 

All Other Fees

 

 

30,000

 

 

 

29,500

 

Total

 

$

207,500

 

 

$

179,500

 


Audit Fees — This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.

 

Audit-Related Fees — This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting.

 

Tax Fees — This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

 

Pre-Approval of Independent Auditor Services and Fees


Our Board has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Audit Committee of the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Audit Committee. The audit and tax fees paid to the auditors with respect to 2018 were pre-approved by the Audit Committee.  RBSM LLP did not provide any other services during 2018 except those listed above.


AUDIT COMMITTEE REPORT


The primary function of the Audit Committee is to assist the Board in its oversight of our financial reporting processes. Management is responsible for the preparation, presentation and integrity of the financial statements, including establishing accounting and financial reporting principles and designing systems of internal control over financial reporting. Our independent auditors are responsible for expressing an opinion as to the conformity of our consolidated financial statements with generally accepted accounting principles and auditing management’s assessment of the effectiveness of internal control over financial reporting.


With respect to the year ended December 31, 2018, in addition to its other work, the Audit Committee:


 

·

reviewed and discussed with management and RBSM LLP, our independent registered public accounting firm, our audited consolidated financial statements as of December 31, 2018 and the year then ended;

 

·

discussed with RBSM LLP the matters required to be discussed by Statement on Auditing Standards No. 61, “ Communication with Audit Committees ,” as amended, with respect to its review of the findings of the independent registered public accounting firm during its examination of our financial statements; and

 

·

received from RBSM LLP written affirmation of its independence as required by the Independence Standards Board Standard No. 1, “ Independence Discussions with Audit Committees .” In addition, the Audit Committee discussed with RBSM LLP, its independence and determined that the provision of non-audit services was compatible with maintaining auditor independence.


The Audit Committee recommended, based on the review and discussion summarized above, that the Board include the audited consolidated financial statements in the 10-K for the year ended December 31, 2018 for filing with the SEC.


 

 

Audit Committee of the Board of Directors of Social Reality, Inc.

 

 

 

 

 

/s/ Robert Jordan

/s/ Malcolm CasSelle

/s/ Marc Savas




24



 


PROPOSAL 1


ELECTION OF DIRECTORS

 

The Company’s Board currently consists of six (6) members, four (4) of which are “independent,” as that term is defined by NASDAQ Market Place Rules and all of which are standing for reelection.

 

At the Annual Meeting, the terms of Messrs. Miglino, Nelson, Savas, CasSelle, Jordan, and Ms. DiClaudio expire.  Six (6) directors will be elected at the Annual Meeting to serve for a one-year term which will expire at our annual meeting in 2019. The Board has nominated Messrs. Miglino, Nelson, Savas, CasSelle, Jordan and Ms. DiClaudio as its nominees for directors. All six (6) individuals are currently directors of the Company. Mr. Miglino also serves as our Chief Executive Officer, President, and Chairman of our Board and Mr. Nelson serves as our Chief Operating Officer. The candidates receiving the highest number of affirmative votes of the shares represented and entitled to vote at the Annual Meeting will be elected as the Company’s directors.

 

The sections titled “Directors, Executive Officers and Corporate Governance” beginning on page 9 of this proxy statement contain more information about the leadership skills and other experiences that caused the Corporate Governance and Nominating Committee and the Board to determine that these nominees should serve as directors Social Reality.

 

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS

For a One Year Term Expiring at the

2020 Annual Meeting

   

Nominees for Term Expiring in 2020

  

The Nominating and Corporate Governance Committee recommended, and the Board of Directors nominated the following individuals to serve as directors

 

 

·

Christopher Miglino

 

·

Kristoffer Nelson

 

·

Marc Savas

 

·

Malcolm CasSelle

 

·

Robert Jordan

 

·

Colleen DiClaudio

 

Except as set forth below, unless otherwise instructed, the persons appointed in the accompanying form of proxy will vote the proxies received by them for these nominees, who are all presently directors of Social Reality. In the event that any nominee becomes unavailable or unwilling to serve as a member of our Board, the proxy holder will vote in his discretion for a substitute nominee. The term of office of each person elected as a director will continue until the 2020 annual meeting or until a successor has been appointed and qualified, or until the director’s earlier death, resignation, or removal. The nominees for election have agreed to serve if elected, and management has no reason to believe that the nominees will be unable to serve.

 

Required Vote

 

The nominee receiving the highest number of affirmative “FOR” votes shall be elected as directors. Unless marked to the contrary, proxies received will be voted “FOR” these nominees.

 

Recommendation

 

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF ALL OF THE NOMINEES TO THE BOARD OF DIRECTORS.


****************




25



 


PROPOSAL 2


RATIFICATION OF AUDIT COMMITTEE'S SELECTION OF RBSM LLP AS OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2019

 

The Audit Committee has selected RBSM LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2019. RBSM LLP. has served as the Company’s independent registered public accounting firm since 2012. Representatives of RBSM LLP are expected to attend the Annual Meeting, either in person or telephonically, and to respond to appropriate questions, and they will have the opportunity to make a statement if they wish.

 

We are asking our shareholders to ratify the selection of RBSM LLP as our independent registered public accounting firm. Although ratification is not required, our Board is submitting the selection of RBSM LLP to shareholders for ratification because we value our shareholders' views on our independent registered public accounting firm and as a matter of good corporate practice. In the event shareholders fail to ratify the appointment of RBSM LLP, the Audit Committee will reconsider this appointment. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that the change would be in the best interests of the Company and our shareholders.

 

The Company has been informed by RBSM LLP that, to the best of their knowledge, neither the firm nor any of its members or their associates has any direct financial interest or material indirect financial interest in the Company or its affiliates.

 

Required Vote

 

Ratification of the appointment of RBSM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019 requires the affirmative “FOR” vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote thereon. Unless marked to the contrary, proxies received will be voted “FOR” ratification of the appointment of RBSM LLP.

 

Recommendation

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF RBSM LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2019.

 

****************






26



 


ANNUAL REPORT ON FORM 10-K AND OTHER SEC FILINGS

 

Enclosed herewith is the Company’s Annual Report on Form 10-K for the 2018 fiscal year. Additional copies may be requested in writing. Such requests should be submitted to Joseph Hannan, Social Reality, Inc. 456 Seaton Street, Los Angeles, CA 90013. Exhibits to Form 10-K will also be provided upon specific request. Please submit all requests for additional paper or e-mail copies of the materials by June 1, 2019 in order to ensure receipt prior to the Annual Meeting. The materials will be provided without charge. You can obtain copies of this Proxy statement, our Annual Report and exhibits, as well as other filings we make with the SEC, on the SEC's website at www.sec.gov . or on Social Reality’s website at www.SRAX.com.

 

We have not incorporated by reference into this Proxy Statement the information in, or that can be accessed through, our website or social media channels, and you should not consider it to be a part of this Proxy Statement.

 

OTHER MATTERS

 

We have not received notice of and do not expect any matters to be presented for a vote at the meeting, other than the proposals described in this proxy statement. If you grant a proxy, each of the person named as proxy holder, Christopher Miglino, or his nominees or substitutes, will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting. If for any unforeseen reason, our nominee is not available as a candidate for director, the proxy holder will vote your proxy for such other candidate or candidates nominated by our Board.

 

 

 

 

 

 

By Order of the Board of Directors

 

 

 

 

 

/s/ Christopher Miglino

April 30, 2019

 

Chairman of the Board, Chief Executive Officer

 









27



 



SOCIAL REALITY, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

ANNUAL MEETING OF SHAREHOLDERS – JUNE 26, 2019 AT 11:00 AM

[SRAX_14A019.GIF]

 

 

 

 

CONTROL ID:

 

 

 

 

 

 

 

REQUEST ID:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The undersigned, who is a shareholder of Social Reality, Inc. (the "Company") hereby revokes any proxy heretofore given, does hereby appoint Christopher Miglino, with power of substitution, for and in the name of the undersigned to attend the Annual Meeting of Shareholders of the Company to be held at the Company's offices, 456 Seaton Street, Los Angeles, CA  90013, on Wednesday, June 26, 2019 beginning at 11:00 a.m., local time, or any adjournment or postponement thereof, and there to vote, as designated below.

 

 

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VOTING INSTRUCTIONS

 

 

 

 

 

 

If you vote by phone, fax or internet, please DO NOT mail your proxy card.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 






[SRAX_14A020.JPG]

MAIL:

Please mark, sign, date, and return this Proxy Card promptly using the enclosed envelope.

 

 

 

 

 

[SRAX_14A021.JPG]

FAX:

Complete the reverse portion of this Proxy Card and Fax to 202-521-3464.

 

 

 

 

 

[SRAX_14A022.JPG]

INTERNET:

https://www.iproxydirect.com/SRAX

 

 

 

 

 

[SRAX_14A023.JPG]

PHONE:

1-866-752-VOTE(8683)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 






 



ANNUAL MEETING OF THE SHAREHOLDERS OF
SOCIAL REALITY, INC.

PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE:
ý

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

 

Proposal 1

 

à

FOR

ALL

 

WITHHOLD

ALL

 

FOR ALL

EXCEPT

 

 

 

 

To elect six (6) members to the Board of Directors to serve for the following year or until their respective successors are qualified and elected.

 

¨

 

¨

 

 

 

 

 

 

Christopher Miglino

 

 

 

 

 

¨

 

 

 

 

Kristoffer Nelson

 

 

 

 

 

¨

 

CONTROL ID:

 

 

Marc Savas

 

 

 

 

 

¨

 

REQUEST ID:

 

 

Malcolm CasSelle

 

 

 

 

 

¨

 

 

 

 

Robert Jordan

 

 

 

 

 

¨

 

 

 

 

Colleen DiClaudio

 

 

 

 

 

¨

 

 

 

Proposal 2

 

à

FOR

 

AGAINST

 

ABSTAIN

 

 

 

 

To ratify the appointment of RBSM LLP as the Company’s independent registered public accounting firm for 2019.

 

¨

 

¨

 

¨

 

 

 

 

 

 

 

 

MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING: ¨

The board of directors unanimously recommends that the shareholders vote “FOR ALL” with respect to the election of Directors, and "FOR" Proposal 2.


THIS PROXY WILL BE VOTED AS DIRECTED. IF NO CONTRARY INSTRUCTION IS INDICATED, THE VOTE OF THE UNDERSIGNED WILL BE CAST FOR ALL NOMINEES IN PROPOSAL 1 AND FOR PROPOSAL 2.  IF ANY OTHER BUSINESS IS PRESENTED AT THE SPECIAL MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.


 

 

MARK HERE FOR ADDRESS CHANGE    ¨   New Address (if applicable):

____________________________
____________________________
____________________________


IMPORTANT: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.


Dated: ________________________, 2019

 

 

(Print Name of Shareholder and/or Joint Tenant)

 

(Signature of Shareholder)

 

(Second Signature if held jointly)







SRAX (NASDAQ:SRAX)
Historical Stock Chart

1 Year : From Nov 2018 to Nov 2019

Click Here for more SRAX Charts.

SRAX (NASDAQ:SRAX)
Intraday Stock Chart

Today : Tuesday 19 November 2019

Click Here for more SRAX Charts.

Latest SRAX Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....


No posts yet, be the first! No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts


Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.


NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.