As
filed with the Securities and Exchange Commission on November 27, 2019
Registration
No. ___________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
SRAX,
Inc.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or other jurisdiction of incorporation or organization)
45-2925231
(I.R.S.
Employer Identification Number)
456
Seaton Street
Los
Angeles, CA 90013
Telephone:
(323) 694-9800
(Address,
including zip code, and telephone number,
including
area code, of registrant’s principal executive offices)
Paracorp
Incorporated
2140
S Dupont Hwy
Camden,
DE 19934
Telephone:
(302) 697-4590
(Name,
address, including zip code, and telephone number,
including
area code, of agent for service)
with
a copy to:
Raul
Silvestre Esq.
Silvestre
Law Group, P.C.
31200
Via Colinas., Suite 200
Westlake
Village, CA 91362
(818)
597-7552
From
time to time after effectiveness of this registration statement
(Approximate
date of commencement of proposed sale to the public)
If
the only securities being registered on this Form are being offered pursuant to a dividend or interest reinvestment plans, please
check the following box: [ ]
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check
the following box: [X]
If
this Form is to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement number of the earlier effective registration statement for
the same offering. [ ]
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ]
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box: [ ]
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box: [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer [ ]
|
Accelerated
filer [ ]
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Non-accelerated
filer [X]
|
Smaller
reporting company [X]
|
|
Emerging
growth company [ ]
|
If
an emerging growth company, indicate by checkmark if the registrant has not elected to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
[ ]
CALCULATION
OF REGISTRATION FEE
Title of Each Class of
Securities to be Registered
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|
Amount
to be
Registered
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|
|
Proposed
Offering
Price
Per
Share
|
|
|
Proposed
Aggregate
Offering
Price
(1)(2)
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|
|
Amount
of
Registration
Fee
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|
Class A Common Stock, par value $0.001 per share
|
|
|
|
(1)
|
|
|
|
(2)
|
|
|
|
(2)
|
|
|
—
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|
Preferred Stock, par value $0.01 per share
|
|
|
|
(1)
|
|
|
|
(2)
|
|
|
|
(2)
|
|
|
—
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|
Warrants
|
|
|
|
(1)
|
|
|
|
(2)
|
|
|
|
(2)
|
|
|
—
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|
Rights
|
|
|
|
(1)
|
|
|
|
(2)
|
|
|
|
(2)
|
|
|
—
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|
Purchase Contracts
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|
|
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(1)
|
|
|
|
(2)
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|
|
|
(2)
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|
|
—
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Units
|
|
|
|
(1)
|
|
|
|
(2)
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|
|
|
(2)
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—
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Total
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(1)
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$
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100,000,000
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$
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12,980
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(3)
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(1)
|
There
are being registered hereunder such indeterminate amount of shares of common stock and preferred stock, such indeterminate
number of warrants, rights and purchase contracts to purchase common stock or preferred stock, and such indeterminate number
of units as may be sold by the Registrant from time to time, which together shall have an aggregate initial offering price
not to exceed $100,000,000 (the “Shelf Securities”). Any securities registered hereunder may be sold separately
or as units with other securities registered hereunder. The proposed maximum initial offering price per unit will be determined,
from time to time, by the registrant in connection with the issuance by the registrant of the securities registered hereunder.
The securities registered also include such indeterminate number of shares of common stock and preferred stock as may be issued
upon conversion of or exchange for preferred stock that provide for conversion or exchange, upon exercise of warrants or rights
or performance of purchase contracts or pursuant to the anti-dilution provisions of any such securities. In addition, pursuant
to Rule 416 under the Securities Act of 1933, as amended, the shares being registered hereunder include such indeterminate
number of shares of common stock and preferred stock as may be issuable with respect to the shares being registered hereunder
as a result of stock splits, stock dividends or similar transactions.
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|
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(2)
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The
proposed maximum aggregate offering price per class of security will be determined from time to time by the registrant in
connection with the issuance by the registrant of the securities registered hereunder and is not specified as to each class
of security pursuant to General Instruction II.D. of Form S-3 under the Securities Act.
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(3)
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Pursuant
to Rule 415(a)(6) under the Securities Act, the registrant is moving $8,758,698.75 unsold securities under its Prior Registration
Statement to this registration statement and is continuing to apply the filing fee associated such unsold securities against
the total filing fee of $12,980 that would otherwise be due in connection with this registration statement. Under the Prior
Registration Statement, securities available thereunder included Class A common stock, preferred stock, and warrants to purchase
Class A common stock or preferred stock. Accordingly, the registration is paying $11,843.12 in filing fees pursuant to this
registration statement. Pursuant to Rule 415(a)(6) under the Securities Act, the offering of unsold securities under the Prior
Registration Statement will be deemed terminated as of the date of effectiveness of this Registration Statement.
|
THE
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we
are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED NOVEMBER 27, 2019
PROSPECTUS
SRAX,
Inc.
$100,000,000
CLASS
A COMMON STOCK
PREFERRED
STOCK
WARRANTS
RIGHTS
PURCHASE
CONTRACTS
UNITS
This
prospectus will allow us to issue, from time to time at prices and on terms to be determined at or prior to the time of the offering,
up to $100,000,000 of any combination of the securities described in this prospectus, either individually or in units. We may
also offer Class A common stock upon conversion of or exchange for the preferred stock; Class A common stock or preferred stock
upon the exercise of warrants, rights or performance of purchase contracts; or any combination of these securities upon the performance
of purchase contracts.
This
prospectus describes the general terms of these securities and the general manner in which these securities will be offered. We
will provide you with the specific terms of any offering in one or more supplements to this prospectus. The prospectus supplements
will also describe the specific manner in which these securities will be offered and may also supplement, update or amend information
contained in this document. You should read this prospectus and any prospectus supplement, as well as any documents incorporated
by reference into this prospectus or any prospectus supplement, carefully before you invest.
Our
securities may be sold directly by us to you, through agents designated from time to time or to or through underwriters or dealers.
For additional information on the methods of sale, you should refer to the section entitled “Plan of Distribution”
in this prospectus and in the applicable prospectus supplement. If any underwriters or agents are involved in the sale of our
securities with respect to which this prospectus is being delivered, the names of such underwriters or agents and any applicable
fees, commissions or discounts and over-allotment options will be set forth in a prospectus supplement. The price to the public
of such securities and the net proceeds that we expect to receive from such sale will also be set forth in a prospectus supplement.
The
aggregate market value of our outstanding common stock held by non-affiliates was $20,032,537.20
based on 13,997,452 shares of outstanding Class A common stock as of November 13, 2019 of which approximately 12,841,370 shares
were held by non-affiliates, and based on the last reported sale price of our Class A Common stock as noted above. Pursuant to
General Instruction I.B.6 of Form S-3, in no event will we sell securities pursuant to this prospectus with a value of more than
one-third of the aggregate market value of our Class A common stock held by non-affiliates in any twelve-month period, so long
as the aggregate market value of our Class A common stock held by non-affiliates is less than $75,000,000. In the event that subsequent
to the date of this prospectus, the aggregate market value of our outstanding common stock held by non-affiliates equals or exceeds
$75,000,000, then the one-third limitation on sales shall not apply to additional sales made during the corresponding you in reliance
on this prospectus. During the prior twelve calendar months prior to, and including, the date of this prospectus, we have
not sold any securities pursuant to General Instruction I.B.6 of Form S-3.
Our
common stock is listed on the NASDAQ Capital Market under the symbol “SRAX” On November 13, 2019, the last reported
sale price of our Class A common stock was $1.56 per share. The applicable prospectus supplement will contain information, where
applicable, as to any other listing, if any, on the NASDAQ Capital Market or any securities market or other securities exchange
of the securities covered by the prospectus supplement. Prospective purchasers of our securities are urged to obtain current information
as to the market prices of our securities, where applicable. Our principal executive offices are located at 456 Seaton Street,
Los Angeles, CA 90013, and our telephone number is (323) 694-9800.
Investing
in our common stock involves a high degree of risk. You are urged to read the section entitled “Risk Factors”
beginning on page 5 of this prospectus, which describes specific risks and other information that should be considered
before you make an investment decision.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
This
prospectus is dated , 2019
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
Unless
the context requires otherwise or unless otherwise noted, all references in this prospectus to “our company,” “we,”
“our,” “SRAX” and “us” refer to SRAX, Inc. and its subsidiary. Also, any reference to “common
share” or “common stock,” refers to our $0.001 par value Class A common stock. All share and per share information
contained in this prospectus takes into account the 1-for-5 reverse stock split of our Class A common shares effective September
22, 2016.
This
prospectus is a part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, utilizing
a “shelf” registration process. Under this shelf process, we may sell the securities described in this prospectus
in one or more offerings. This prospectus provides you with a general description of the securities we may offer. Each time we
sell securities under this shelf registration, we will provide a prospectus supplement that will contain specific information
about the terms of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain
material information relating to these offerings. The prospectus supplement and any related free writing prospectus that we may
authorize to be provided to you may also add, update or change information contained in this prospectus or in any documents that
we have incorporated by reference into this prospectus. You should read this prospectus, any applicable prospectus supplement
and any related free writing prospectus, together with the information incorporated herein by reference as described under the
headings “Where You Can Find More Information” and “Incorporation by Reference.”
You
should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized any other
person to provide you with different information. If anyone provides you with different information, you should not rely on it.
We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume
that the information contained in this prospectus and the documents incorporated by reference herein and therein are accurate
only as of the date such information is presented or in any applicable prospectus supplement. Neither the delivery of this prospectus
nor any sale made in connection with this prospectus shall, under any circumstances, create any implication that there has been
no change in our affairs since the date of this prospectus or that the information contained by reference to this prospectus is
correct as of any time after its date.
This
prospectus may be supplemented from time to time to add, update or change information in this prospectus. Any statement contained
in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained in such prospectus supplement modifies or supersedes such statement. Any statement so modified will be deemed to constitute
a part of this prospectus only as so modified, and any statement so superseded will be deemed not to constitute a part of this
prospectus.
FORWARD-LOOKING
STATEMENTS
The
SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future
prospects and make informed investment decisions. This prospectus contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, or the “Securities Act”, and Section 21E of the Securities Exchange
Act of 1934, as amended, or the “Exchange Act”.
Such
statements in connection with any discussion of future operations or financial performance are identified by the use of words
such as “may,” “anticipate,” “estimate,” “expect,” “project,” “intend,”
“plan,” “believe,” and other words and terms of similar meaning. Forward-looking statements include, but
are not limited to, statements about: our business, operations, financial performance and condition, earnings, our prospects,
our ability to raise capital to fund our operations and business plan, the continued listing of our securities on the NASDAQ Capital
Market, our ability to protect intellectual property rights as well as regarding our industry generally. Forward–looking
statements are not guarantees of performance. Such statements are based on management’s expectations and are subject to
certain factors, risks and uncertainties that may cause actual results, outcome of events, timing and performance to differ materially
from those expressed or implied by such statements. For a summary of such factors, please refer to the section entitled “Risk
Factors” in this prospectus, as updated and supplemented by the discussion of risks and uncertainties in our most recent
annual report on Form 10-K, as revised or supplemented by our subsequent quarterly reports on Form 10-Q or our current reports
on Form 8-K, as well as any amendments thereto, as filed with the SEC and which are incorporated herein by reference. The information
contained in this document is believed to be current as of the date of this document. We do not intend to update any of the forward-looking
statements after the date of this document to conform these statements to actual results or to changes in our expectations, except
as required by law.
In
light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained
in this prospectus or in any document incorporated herein by reference might not occur. Investors are cautioned not to place undue
reliance on the forward-looking statements, which speak only as of the date of this prospectus or the date of the document incorporated
by reference in this prospectus. We are not under any obligation, and we expressly disclaim any obligation, to update or alter
any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent forward-looking
statements attributable to us or to any person acting on our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section.
OUR
BUSINESS
Overview
We
are a digital marketing and data technology company. We derive our revenues from:
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sales
of digital advertising campaigns to advertising agencies and brands;
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licensing
our SRAXir platform to public companies;
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creation
of custom platforms for buying media on SRAX for large brands; and
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sales
of proprietary consumer data
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BIGToken
Platform
Overview
We
have developed BIGToken as a way for consumers to benefit from the use of their data. Users of BIGToken will have the ability
to earn a pre-established number of points for completing certain tasks. By way of example, a user may earn 4 points for providing
their name and 10 points for checking in at a local restaurant. The number of points for each action will be prominently displayed
for the user to review prior to undertaking such action. The points will be convertible by the user into rewards which initially
will consist of: (i) cash, (ii) gift cards and (iii) donations to non-profit entities. We anticipate that as the user base of
BIGToken expands, additional goods and services offered by our advertising sponsors will also be available as rewards.
Since
initially launching our BIGToken platform in the United States, we have expanded the functionality of the platform through a series
of new applications as well as its geographical reach.
Platform
Development:
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Big
Rewards: An application within the BIGtoken platform that provides users branded action that drives offers for cash back.
Consumer answers questions about a brand’s specific item at a retailer and then are offered a reward for the purchase
of the item at a select retailer. This offers brands an end to end reach in the digital media cycle by creating data driven
insights for planning, audience creation, and then all the way through activation and ultimately sales and other results-based
attribution.
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BIG
Research: we’ve launched an application within the BIGtoken platform that will allow brands access to our users for
purposes of opt-in research panels. Through our global platform we can launch multi-country studies and scale consumer populations
based on client needs. Additionally, our unique platform allows for analysis and relevancy of data points collected by brands
through research studies.
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Geographic
Reach:
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BIGtoken
in Asia: The Company has entered into a partnership with an investor familiar with the Asian advertising market.
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BIGtoken
in India: We’ve entered into a partnership with the Yash Birla Group, one of India’s largest conglomerates to
explore partnerships in India.
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BIGtoken
in European Union: We’ve launched the availability of the application within the 28 member countries of the European
Union.
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As
of September 30, 2019, we have not generated any revenue through the sale of data gathered from users of the BIGToken Platform.
Since commencing the BIGToken project, we have spent approximately $4 million in the development and management of the BIGToken
Platform. Additionally, we are currently obligated to redeem users’ points which are earned on our BIGToken Platform. We
are currently redeeming each point for $0.001 to $0.01, subject to the user meeting certain conditions. Notwithstanding the foregoing,
we believe that in order to fully launch the BIGToken Platform and recognize all the benefits therefrom, not only will we be required
to further increase the functionally of the platform but we will also need to comply with both state and federal securities laws
and regulations with regard to certain aspects of the platform and specifically, BIGToken. There can be no assurances that we
will successfully develop the blockchain portion of the BIGToken Platform or that we will be able to comply with any applicable
laws or regulations on a timely basis, if at all. Our failure successfully complete the development of the BIGToken Platform or
to adequately comply with applicable laws and regulations, or comply with them on a timely basis, will greatly impact the value
and utility of the BIGToken Platform and could materially impact the operations of our company.
SRAX
IR Platform
Overview
SRAX
IR is a SaaS platform that while providing invaluable insights to public company issuers, delivers a long-term recurring revenue
stream for SRAX and builds one of the most valuable data sets in the industry.
The
platform enables issuers of public securities to analyze and engage shareholders. The Company currently offers access to the platform
through monthly subscriptions. The Company has partnered with resellers to license the platform on a white label basis for a portion
of the revenue earned from the licensees.
Employees
At
September 30, 2019 we had 48 full-time employees. We also contract for the services of a number individuals from a third-party
provider. There are no collective bargaining agreements covering any of our employees.
Corporate
information
We
were incorporated in the state of Delaware in 2011. Our principal executive offices are located at 456 Seaton Street, Los Angeles,
CA 90013, telephone number 323-694-9800. We maintain a website at www.srax.com. Effective August 25, 2019 we changed
our corporate name form Social Reality, Inc. to SRAX, Inc.
Our
wholly owned subsidiary, BIGToken, Inc. maintains a website at Bigtoken.com.
We
have not incorporated by reference into this prospectus, the information in, or that can be accessed through, our websites and
you should not consider them to be a part of this prospectus.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully
the risks and uncertainties described under the heading “Risk Factors” contained in the applicable prospectus supplement
and any related free writing prospectus, and discussed under the section entitled “Risk Factors” contained in our
most recent Annual Report on Form 10-K and in our most recent Quarterly Report on Form 10-Q, as well as any amendments thereto
reflected in subsequent filings with the SEC, which are incorporated by reference into this prospectus in their entirety, together
with other information in this prospectus, the documents incorporated by reference and any free writing prospectus that we may
authorize for use in connection with this offering. The risks described in these documents are not the only ones we face, but
those that we consider to be material. There may be other unknown or unpredictable economic, business, competitive, regulatory
or other factors that could have material adverse effects on our future results. Past financial performance may not be a reliable
indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If
any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be seriously harmed.
This could cause the trading price of our Class A common stock to decline, resulting in a loss of all or part of your investment.
Please also read carefully the section above entitled “Forward-Looking Statements.”
USE
OF PROCEEDS
We
cannot assure you that we will receive any proceeds in connection with securities which may be offered pursuant to this prospectus.
Unless otherwise indicated in the applicable prospectus supplement, we intend to use any net proceeds from the sale of securities
under this prospectus for general corporate purposes, including, but not limited to, working
capital, acquisitions, payment of debt and other business opportunities. We have not determined the amounts we plan to
spend on any of the areas listed above or the timing of these expenditures. As a result, our management will have broad discretion
to allocate the net proceeds, if any, we receive in connection with securities offered pursuant to this prospectus for any purpose.
Pending application of the net proceeds as described above, we may initially invest the net proceeds in short-term, investment-grade,
interest-bearing securities or apply them to the reduction of short-term indebtedness.
PLAN
OF DISTRIBUTION
General
Plan of Distribution
We
may offer securities under this prospectus from time to time pursuant to underwritten public offerings, negotiated transactions,
block trades or a combination of these methods. We may sell the securities (i) through underwriters or dealers, (ii) through agents
or (iii) directly to one or more purchasers, or through a combination of such methods. We may distribute the securities from time
to time in one or more transactions at:
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a
fixed price or prices, which may be changed from time to time;
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market
prices prevailing at the time of sale;
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prices
related to the prevailing market prices; or
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negotiated
prices.
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We
may directly solicit offers to purchase the securities being offered by this prospectus. We may also designate agents to solicit
offers to purchase the securities from time to time. We will name in a prospectus supplement any underwriter or agent involved
in the offer or sale of the securities.
If
we utilize a dealer in the sale of the securities being offered by this prospectus, we will sell the securities to the dealer,
as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the
time of resale.
If
we utilize an underwriter in the sale of the securities being offered by this prospectus, we will execute an underwriting agreement
with the underwriter at the time of sale, and we will provide the name of any underwriter in the prospectus supplement which the
underwriter will use to make resales of the securities to the public. In connection with the sale of the securities, we, or the
purchasers of the securities for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting
discounts or commissions. The underwriter may sell the securities to or through dealers, and the underwriter may compensate those
dealers in the form of discounts, concessions or commissions.
With
respect to underwritten public offerings, negotiated transactions and block trades, we will provide in the applicable prospectus
supplement information regarding any compensation we pay to underwriters, dealers or agents in connection with the offering of
the securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers. Underwriters,
dealers and agents participating in the distribution of the securities may be deemed to be underwriters within the meaning of
the Securities Act of 1933, as amended, or the Securities Act, and any discounts and commissions received by them and any profit
realized by them on resale of the securities may be deemed to be underwriting discounts and commissions. We may enter into agreements
to indemnify underwriters, dealers and agents against civil liabilities, including liabilities under the Securities Act, or to
contribute to payments they may be required to make in respect thereof.
If
so indicated in the applicable prospectus supplement, we will authorize underwriters or other persons acting as our agents to
solicit offers by certain institutions to purchase securities from us pursuant to delayed delivery contracts providing for payment
and delivery on the date stated in the prospectus supplement. Each contract will be for an amount not less than, and the aggregate
amount of securities sold pursuant to such contracts shall not be less nor more than, the respective amounts stated in the prospectus
supplement. Institutions with whom the contracts, when authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable institutions and other institutions, but shall in all
cases be subject to our approval. Delayed delivery contracts will not be subject to any conditions except that:
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the
purchase by an institution of the securities covered under that contract shall not at the time of delivery be prohibited under
the laws of the jurisdiction to which that institution is subject; and
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if
the securities are also being sold to underwriters acting as principals for their own account, the underwriters shall have
purchased such securities not sold for delayed delivery. The underwriters and other persons acting as our agents will not
have any responsibility in respect of the validity or performance of delayed delivery contracts.
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Certain
underwriters may use this prospectus and any accompanying prospectus supplement for offers and sales related to market-making
transactions in the securities. These underwriters may act as principal or agent in these transactions, and the sales will be
made at prices related to prevailing market prices at the time of sale. Any underwriters involved in the sale of the securities
may qualify as “underwriters” within the meaning of Section 2(a)(11) of the Securities Act. In addition, the underwriters’
commissions, discounts or concessions may qualify as underwriters’ compensation under the Securities Act and the rules of
the Financial Industry Regulatory Authority, Inc., or FINRA.
Shares
of our Class A common stock sold pursuant to the registration statement of which this prospectus is a part will be authorized
for quotation and trading on the NASDAQ Capital Market. The applicable prospectus supplement will contain information, where applicable,
as to any other listing, if any, on the NASDAQ Capital Market or any securities market or other securities exchange of the securities
covered by the prospectus supplement. We can make no assurance as to the liquidity of or the existence of trading markets for
any of the securities.
In
order to facilitate the offering of the securities, certain persons participating in the offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities,
which involve the sale by persons participating in the offering of more securities than we sold to them. In these circumstances,
these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their
over-allotment option. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing
the applicable security in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating
in the offering may be reclaimed if the securities sold by them are repurchased in connection with stabilization transactions.
The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which
might otherwise prevail in the open market. These transactions may be discontinued at any time.
The
underwriters, dealers and agents may engage in other transactions with us, or perform other services for us, in the ordinary course
of their business.
DESCRIPTION
OF SECURITIES TO BE REGISTERED
General
The
following is a summary of the rights of our common stock and preferred stock and related provisions of our certificate of incorporation
and bylaws. For more detailed information, please see our certificate of incorporation and bylaws, which are filed as exhibits
to the registration statement of which this prospectus is a part.
Our
certificate of incorporation provides that we will have two classes of common stock: Class A common stock, which has one vote
per share, and Class B common stock, which has ten votes per share. Any holder of Class B common stock may convert his or her
shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the rights of the two classes of
common stock will be identical. The rights of these classes of common stock are discussed in greater detail below.
Our
authorized capital stock consists of 309,000,000 shares, each with a par value of $0.001 per share, of which:
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250,000,000
shares are designated as Class A common stock;
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9,000,000
shares are designated as Class B common stock;
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20,000,000
shares are designated as BIGToken Preferred Tracking Stock; and
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30,000,000
remaining shares are designated as preferred stock.
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As
of November 13, 2019, we had: (i) 13,997,452 shares of Class A common stock outstanding, (ii) no shares of Class B common stock
or preferred stock outstanding, and (iii) an aggregate of 15,612,946 special dividend rights outstanding.
Common
Stock
Voting
Rights
Holders
of our Class A and Class B common stock have identical rights, except that holders of our Class A common stock are entitled to
one vote per share and holders of our Class B common stock are entitled to ten votes per share. Holders of shares of Class A common
stock and Class B common stock will vote together as a single class on all matters (including the election of directors) submitted
to a vote of stockholders, unless otherwise required by law. Delaware law could require either our Class A common stock or Class
B common stock to vote separately as a single class in the following circumstances:
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If
we amended our certificate of incorporation to increase the authorized shares of a class of stock, or to increase or decrease
the par value of a class of stock, then that class would be required to vote separately to approve the proposed amendment.
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If
we amended our certificate of incorporation in a manner that altered or changed the powers, preferences or special rights
of a class of stock in a manner that affects them adversely then that class would be required to vote separately to approve
the proposed amendment.
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We
have not provided for cumulative voting for the election of directors in our certificate of incorporation.
Dividends
Subject
to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of Class A common stock and
Class B common stock shall be entitled to share equally in any dividends that our board of directors may determine to issue from
time to time. In the event a dividend is paid in the form of shares of common stock or rights to acquire shares of common stock,
the holders of Class A common stock shall receive Class A common stock, or rights to acquire Class A common stock, as the case
may be, and the holders of Class B common stock shall receive Class B common stock, or rights to acquire Class B common stock,
as the case may be.
Liquidation
Rights
Upon
our liquidation, dissolution or winding-up, the holders of Class A common stock and Class B common stock shall be entitled to
share equally all assets remaining after the payment of any liabilities and the liquidation preferences on any outstanding preferred
stock.
Subdivision
or Combinations.
Upon
the subdivision or combination of the outstanding shares of one class of Common Stock, the outstanding shares of the other class
of Common Stock will be subdivided or combined in the same manner.
Conversion
Our
Class A common stock is not convertible into any other shares of our capital stock.
Each
share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In
addition, each share of Class B common stock shall convert automatically into one share of Class A common stock upon any transfer,
whether or not for value, except for certain transfers described in our certificate of incorporation, including the following:
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Transfers
between one Class B Stockholder to another Class B Stockholder.
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Transfers
for tax and estate planning purposes, including to trusts, corporations and partnerships controlled by a holder of Class B
common stock.
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The
death of any holder of Class B common stock who is a natural person will result in the conversion of his or her shares of Class
B common stock to Class A common stock. Once transferred and converted into Class A common stock, the Class B common stock shall
not be reissued. No class of common stock may be subdivided or combined unless the other class of common stock concurrently is
subdivided or combined in the same proportion and in the same manner.
Dual
Class Structure
As
discussed above, our Class B common stock has ten votes per share, while our Class A common stock, which is the class of stock
the Selling Stockholders are selling pursuant to this prospectus and which is the only class of stock which is publicly traded,
has one vote per share. We currently have no shares of our Class B common stock outstanding. Notwithstanding, in the event Class
B common stock were issued, due to our dual class structure with superior voting rights, such ownership of Class B common stock
could discourage others from initiating any potential merger, takeover or other change of control transaction that other stockholders
may view as beneficial.
Preferred
Stock
Our
board of directors has the authority, without approval by the stockholders, to issue up to a total of 50,000,000 shares of preferred
stock in one or more series. Our board of directors may establish the number of shares to be included in each such series and
may fix the designations, preferences, powers and other rights of the shares of a series of preferred stock. Our board could authorize
the issuance of preferred stock with voting or conversion rights that could dilute the voting power or rights of the holders of
common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other
corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of SRAX.
Anti-Takeover
Effects of Delaware Law and Our Certificate of Incorporation and Bylaws
Certain
provisions of Delaware law, our certificate of incorporation and our bylaws contain provisions that could have the effect of delaying,
deferring or discouraging another party from acquiring control of us. In particular, our dual class common stock structure will
concentrate ownership of our voting stock in the hands of our founders, board members, and employees. These provisions, which
are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are
also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe
that the benefits of increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh
the disadvantages of discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement
of their terms.
Special
Approval for Change in Control Transactions
In
the event a person seeks to acquire us by means of a merger or consolidation transaction, a purchase of all or substantially all
of our assets, or an issuance of stock which constitutes 2% or more of our outstanding shares at the time of issuance and which
results in any person or group owning more than 50% of our outstanding voting power, then these types of acquisition transactions
must be approved by our stockholders at an annual or special meeting. At this meeting, we must obtain the approval of stockholders
representing the greater of:
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A
majority of the voting power of our outstanding capital stock; and
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60%
of the voting power of the shares of capital stock present in person or represented by proxy at the stockholder meeting and
entitled to vote.
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Undesignated
Preferred Stock
The
ability to authorize undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting
or other rights or preferences that could impede the success of any attempt to acquire us. These and other provisions may have
the effect of deferring hostile takeovers or delaying changes in control or management of our company.
Requirements
for Advance Notification of Stockholder Nominations and Proposals
Our
bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election
as directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors.
The bylaws do not give the board of directors the power to approve or disapprove stockholder nominations of candidates or proposals
regarding business to be conducted at a special or annual meeting of the stockholders. However, our bylaws may have the effect
of precluding the conduct of certain business at a meeting if the proper procedures are not followed. These provisions may also
discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of
directors or otherwise attempting to obtain control of our company.
Delaware
Anti-Takeover Statute
We
will be subject to the provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. In general,
Section 203 prohibits a publicly-held Delaware corporation from engaging under certain circumstances, in a business combination
with an interested stockholder for a period of three (3) years following the date the person became an interested stockholder
unless:
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Prior
to the date of the transaction, the board of directors of the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an interested stockholder.
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Upon
completion of the transaction that resulted in the stockholder becoming an interested stockholder, the stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes
of determining the number of shares outstanding (1) shares owned by persons who are directors and also officers and (2) shares
owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares
held subject to the plan will be tendered in a tender or exchange offer.
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On
or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual
or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding
voting stock which is not owned by the interested stockholder.
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Generally,
a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested
stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three (3) years
prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting securities.
We expect the existence of this provision to have an anti-takeover effect with respect to transactions our board of directors
does not approve in advance. We also anticipate that Section 203 may also discourage attempts that might result in a premium over
the market price for the shares of common stock held by stockholders.
The
provisions of Delaware law, our certificate of incorporation and our bylaws could have the effect of discouraging others from
attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common
stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing
changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders
may otherwise deem to be in their best interests.
Transfer
Agent and Registrar
The
transfer agent and registrar for our Class A common stock is Transfer Online, Inc. 512 SE Salmon Street, Portland, OR 97214, 503-227-2950.
Limitations
on Liability and Indemnification of Officers and Directors
Our
amended restated certificate of incorporation limits the liability of our officers and directors to the fullest extent permitted
by the Delaware General Corporation Law, and our restated certificate of incorporation and restated bylaws provide for indemnification
of our officers and directors to the fullest extent permitted by such law.
DESCRIPTION
OF WARRANTS
General
We
may issue warrants to purchase shares of our Class A common stock and/or preferred stock in one or more series together with other
securities or separately, as described in the applicable prospectus supplement. Below is a description of certain general terms
and provisions of the warrants that we may offer. Particular terms of the warrants will be described in the warrant agreements
and the prospectus supplement relating to the warrants.
The
applicable prospectus supplement will contain, where applicable, the following terms of and other information relating to the
warrants:
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the
specific designation and aggregate number of, and the price at which we will issue, the warrants;
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the
currency or currency units in which the offering price, if any, and the exercise price are payable;
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the
designation, amount and terms of the securities purchasable upon exercise of the warrants;
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if
applicable, the exercise price for shares of our Class A common stock and the number of shares of Class A common stock to
be received upon exercise of the warrants;
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if
applicable, the exercise price for shares of our preferred stock, the number of shares of preferred stock to be received upon
exercise, and a description of that series of our preferred stock;
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the
date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not
continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;
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whether
the warrants will be issued in fully registered form or bearer form, in definitive or global form or in any combination of
these forms, although, in any case, the form of a warrant included in a unit will correspond to the form of the unit and of
any security included in that unit;
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any
applicable material U.S. federal income tax consequences;
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if
applicable, the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents,
transfer agents, registrars or other agents;
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the
proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities exchange;
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if
applicable, the date from and after which the warrants and the Class A common stock and/or preferred stock will be separately
transferable;
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if
applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
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information
with respect to book-entry procedures, if any;
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the
anti-dilution provisions of the warrants, if any;
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any
redemption or call provisions;
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whether
the warrants may be sold separately or with other securities as parts of units; and
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any
additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the
warrants.
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Transfer
Agent and Registrar
The
transfer agent and registrar for any warrants we offer will be set forth in the applicable prospectus supplement.
DESCRIPTION
OF RIGHTS
General
We
may issue rights to our stockholders to purchase shares of our Class A common stock, preferred stock or the other securities described
in this prospectus. We may offer rights separately or together with one or more additional rights, preferred stock, Class A common
stock, warrants or purchase contracts, or any combination of those securities in the form of units, as described in the applicable
prospectus supplement. Each series of rights will be issued under a separate rights agreement. The following description sets
forth certain general terms and provisions of the rights to which any prospectus supplement may relate. The particular terms of
the rights to which any prospectus supplement may relate and the extent, if any, to which the general provisions may apply to
the rights so offered will be described in the applicable prospectus supplement. To the extent that any particular terms of the
rights, rights agreement or rights certificates described in a prospectus supplement differ from any of the terms described below,
then the terms described below will be deemed to have been superseded by that prospectus supplement. We encourage you to read
the applicable rights agreement and rights certificate for additional information before you decide whether to purchase any of
our rights.
We
will provide in a prospectus supplement the following terms of the rights being issued:
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the
date of determining the stockholders entitled to the rights distribution;
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the
aggregate number of shares of Class A common stock, preferred stock or other securities purchasable upon exercise of the rights;
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the
exercise price;
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the
aggregate number of rights issued;
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whether
the rights are transferrable and the date, if any, on and after which the rights may be separately transferred;
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the
date on which the right to exercise the rights will commence, and the date on which the right to exercise the rights will
expire;
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the
method by which holders of rights will be entitled to exercise;
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the
conditions to the completion of the offering, if any;
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the
withdrawal, termination and cancellation rights, if any;
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whether
there are any backstop or standby purchaser or purchasers and the terms of their commitment, if any;
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whether
stockholders are entitled to oversubscription rights, if any;
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any
applicable U.S. federal income tax considerations; and
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any
other terms of the rights, including terms, procedures and limitations relating to the distribution, exchange and exercise
of the rights, as applicable.
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Each
right will entitle the holder of rights to purchase for cash the principal amount of shares of Class A common stock, preferred
stock or other securities at the exercise price provided in the applicable prospectus supplement. Rights may be exercised at any
time up to the close of business on the expiration date for the rights provided in the applicable prospectus supplement.
Holders
may exercise rights as described in the applicable prospectus supplement. Upon receipt of payment and the rights certificate properly
completed and duly executed at the corporate trust office of a rights agent, if applicable, or any other office indicated in the
prospectus supplement, we will, as soon as practicable, forward the shares of common stock, preferred stock or other securities,
as applicable, purchasable upon exercise of the rights. If less than all of the rights issued in any rights offering are exercised,
we may offer any unsubscribed securities directly to persons other than stockholders, to or through agents, underwriters or dealers
or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus
supplement.
Rights
Agent
If
applicable, the rights agent for any rights we offer will be set forth in the applicable prospectus supplement.
DESCRIPTION
OF PURCHASE CONTRACTS
We
may issue purchase contracts, including contracts obligating holders to purchase from us, and for us to sell to holders, a specific
or variable number of our shares of Class A common stock, preferred stock, warrants or rights, or securities of an entity unaffiliated
with us, or any combination of the above, at a future date or dates. Alternatively, the purchase contracts may obligate us to
purchase from holders, and obligate holders to sell to us, a specific or variable number of our shares of Class A common stock,
preferred stock, warrants, rights or other property, or any combination of the above. The price of the securities or other property
subject to the purchase contracts may be fixed at the time the purchase contracts are issued or may be determined by reference
to a specific formula described in the purchase contracts. We may issue purchase contracts separately or as a part of units each
consisting of a purchase contract and one or more of our other securities described in this prospectus or securities of third
parties, including U.S. Treasury securities, securing the holder’s obligations under the purchase contract. The purchase
contracts may require us to make periodic payments to holders or vice versa and the payments may be unsecured or pre-funded on
some basis. The purchase contracts may require holders to secure the holder’s obligations in a manner specified in the applicable
prospectus supplement.
The
applicable prospectus supplement will describe the terms of any purchase contracts in respect of which this prospectus is being
delivered, including, to the extent applicable, the following:
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whether
the purchase contracts obligate the holder or us to purchase or sell, or both purchase and sell, the securities subject to
purchase under the purchase contract, and the nature and amount of each of those securities, or the method of determining
those amounts;
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whether
the purchase contracts are to be prepaid;
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whether
the purchase contracts are to be settled by delivery, or by reference or linkage to the value, performance or level of the
securities subject to purchase under the purchase contract;
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any
acceleration, cancellation, termination or other provisions relating to the settlement of the purchase contracts;
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any
applicable U.S. federal income tax considerations; and
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whether
the purchase contracts will be issued in fully registered or global form.
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The
preceding description sets forth certain general terms and provisions of the purchase contracts to which any prospectus supplement
may relate. The particular terms of the purchase contracts to which any prospectus supplement may relate and the extent, if any,
to which the general provisions may apply to the purchase contracts so offered will be described in the applicable prospectus
supplement. To the extent that any particular terms of the purchase contracts described in a prospectus supplement differ from
any of the terms described above, then the terms described above will be deemed to have been superseded by that prospectus supplement.
We encourage you to read the applicable purchase contract for additional information before you decide whether to purchase any
of our purchase contracts.
DESCRIPTON
OF UNITS
The
following description, together with the additional information that we include in any applicable prospectus supplements summarizes
the material terms and provisions of the units that we may offer under this prospectus. While the terms we have summarized below
will apply generally to any units that we may offer under this prospectus, we will describe the particular terms of any series
of units in more detail in the applicable prospectus supplement. The terms of any units offered under a prospectus supplement
may differ from the terms described below.
We
will incorporate by reference from reports that we file with the SEC, the form of unit agreement that describes the terms of the
series of units we are offering, and any supplemental agreements, before the issuance of the related series of units. The following
summaries of material terms and provisions of the units are subject to, and qualified in their entirety by reference to, all the
provisions of the unit agreement and any supplemental agreements applicable to a particular series of units. We urge you to read
the applicable prospectus supplements related to the particular series of units that we may offer under this prospectus, as well
as any related free writing prospectuses and the complete unit agreement and any supplemental agreements that contain the terms
of the units.
General
We
may issue units consisting of Class A common stock, preferred stock, warrants, rights or purchase contacts for the purchase of
Class A common stock and/or preferred stock in one or more series or in any combination thereof. Each unit will be issued so that
the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights
and obligations of a holder of each security included in the unit. The unit agreement under which a unit is issued may provide
that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified
date.
We
will describe in the applicable prospectus supplement the terms of the series of units being offered, including:
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the
designation and terms of the units and of the securities comprising the units, including whether and under what circumstances
those securities may be held or transferred separately;
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any
provisions of the governing unit agreement that differ from those described below; and
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any
provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units.
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The
provisions described in this section, as well as those set forth in any prospectus supplement or as described under “Description
of Common Stock,” “Description of Preferred Stock,” “Description of Warrants,” “Description
of Rights” and “Description of Purchase Contracts” will apply to each unit, as applicable, and to any Class
A common stock, preferred stock, warrant, right or purchase contract included in each unit, as applicable.
Unit
Agent
If
applicable, the name and address of the unit agent for any units we offer will be set forth in the applicable prospectus supplement.
Issuance
in Series
We
may issue units in such amounts and in such numerous distinct series, if any, as we determine.
Enforceability
of Rights by Holders of Units
If
applicable, each unit agent will act solely as our agent under the applicable unit agreement and will not assume any obligation
or relationship of agency or trust with any holder of any unit. A unit agent may act as unit agent for more than one series of
units. If applicable, a unit agent will have no duty or responsibility in case of any default by us under the applicable unit
agreement or unit, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand
upon us. Any holder of a unit may, without the consent of the related unit agent or the holder of any other unit, enforce by appropriate
legal action its rights as holder under any security included in the unit.
LEGAL
MATTERS
The
validity of the issuance of the securities offered hereby will be passed upon for us by the Silvestre Law Group, P.C., Westlake
Village, California. The Silvestre Law Group, P.C. or its affiliates or principals own 133,000 shares of our Class A common stock.
EXPERTS
Our
consolidated balance sheets as of December 31, 2018 and 2017 and the related consolidated statement of operations, stockholders’
equity and cash flows for the years ended December 31, 2018 and 2017 included in this prospectus have been audited by RBSM LLP,
independent registered public accounting firm, as indicated in their report with respect thereto, and have been so included in
reliance upon the report of such firm given on their authority as experts in accounting and auditing.
INFORMATION
INCORPORATED BY REFERENCE
The
SEC permits us to “incorporate by reference” the information contained in documents we file with the SEC, which means
that we can disclose important information to you by referring you to those documents rather than by including them in this prospectus.
Information that is incorporated by reference is considered to be part of this prospectus, and you should read it with the same
care that you read this prospectus. Later information that we file with the SEC will automatically update and supersede the information
that is either contained, or incorporated by reference, in this prospectus, and will be considered to be a part of this prospectus
from the date those documents are filed.
We
incorporate by reference into this prospectus the following documents and information filed with the SEC:
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Our Annual Report
on Form 10-K filed with the SEC on April 16, 2019, for the year ended December 31, 2018;
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Our Quarterly Report
on Form 10-Q for the fiscal quarter ended March 31, 2019, filed on May 15, 2019, our Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 2019, filed on August 14, 2019, and our Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2019, filed on November 14, 2019;
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Our Definitive Proxy
Statement on Form 14A for our 2019 Annual Meeting of Stockholders, filed with the SEC on April 30, 2019;
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Our Current Reports
on Forms 8-K filed with the SEC on January 4, 2019, April 2, 2019, April 8, 2019, April 10, 2019, May 16, 2019, June 28, 2019,
August 14, 2019, and August 15, 2019 (excluding any information furnished in such reports under Item 2.02, Item 7.01 or Item
9.01); and
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The description
of our Class A common stock and related rights contained in our registration statement on S-1 filed with the SEC on January
24, 2012, including any amendment or report filed for the purpose of updating such description;
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We
also incorporate by reference into this prospectus all additional documents that we file with the SEC under the terms of Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 that are made after the date of this prospectus and before the
termination of the offering of securities offered by this prospectus, including all such documents we may file with the SEC after
the date of the initial registration statement and prior to the effectiveness of the registration statement. We are not, however,
incorporating, in each case, any documents or information that we are deemed to furnish and not file in accordance with SEC rules.
You
may request a copy of any of the documents incorporated by reference into this prospectus, at no cost, by writing or telephoning
us at the following address: Corporate Secretary, SRAX, Inc., 456 Seaton Street, Los Angeles, CA 90013, telephone number (323)
694-9800.
WHERE
YOU CAN FIND MORE INFORMATION
As
permitted by SEC rules, this prospectus omits certain information and exhibits that are included in the registration statement
of which this prospectus forms a part. Since this prospectus may not contain all of the information that you may find important,
you should review the full text of these documents. If we have filed a contract, agreement or other document as an exhibit to
the registration statement of which this prospectus forms a part, you should read the exhibit for a more complete understanding
of the document or matter involved. Each statement in this prospectus, including statements incorporated by reference as discussed
above, regarding a contract, agreement or other document is qualified in its entirety by reference to the actual document.
We are subject to the information reporting
requirements of the Exchange Act, and, in accordance with these requirements, we file annual, quarterly and current reports, proxy
statements, and other information with the SEC. You may inspect, read and copy the reports and other information we file with
the SEC at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information
on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet website
at www.sec.gov that contains our filed reports, proxy and information statements, and other information that we file electronically
with the SEC. Additionally, we make these filings available, free of charge, on our website at www.srax.com in the “Filings”
subsection of the “Investors” menu as soon as reasonably practicable after we electronically file such materials with,
or furnish them to, the SEC. The information on our website, other than these filings, is not, and should not be, considered part
of this prospectus, is not incorporated by reference into this prospectus, and should not be relied upon in connection with making
any investment decision with respect to our securities.
SRAX,
INC.
$100,000,000
COMMON
STOCK
PREFERRED
STOCK
WARRANTS
RIGHTS
PURCHASE
CONTRACTS
UNITS
PROSPECTUS
,
2019
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
aggregate estimated (other than the registration fee) expenses payable by the Company in connection with a distribution of securities
registered hereby are as follows:
SEC registration and filing fee
|
|
$
|
12,980.00
|
|
Accounting fees and expenses
|
|
|
15,000.00
|
|
Legal fees and expenses
|
|
|
5,000.00
|
|
Printing and engraving expenses
|
|
|
1,000.00
|
|
Transfer Agent fees and Expenses
|
|
|
1,000.00
|
|
Miscellaneous
|
|
|
1,000.00
|
|
TOTAL
|
|
$
|
35,980.00
|
|
All
fees and expenses other than the SEC registration and filing fee are estimated.
Item
15. Indemnification of Directors and Officers.
Our
certificate of incorporation, as amended, contains provisions that eliminate, to the maximum extent permitted by the General Corporation
Law of the State of Delaware, the personal liability of directors and executive officers for monetary damages for breach of their
fiduciary duties as a director or officer. Our certificate of incorporation, as amended, and bylaws provide that we shall indemnify
our directors and executive officers and may indemnify our employees and other agents to the fullest extent permitted by the General
Corporation Law of the State of Delaware.
Sections
145 and 102(b)(7) of the General Corporation Law of the State of Delaware provide that a corporation may indemnify any person
made a party to an action by reason of the fact that he or she was a director, executive officer, employee or agent of the corporation
or is or was serving at the request of the corporation against expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her in connection with such action if he or she acted in
good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except
that, in the case of an action by or in right of the corporation, no indemnification may generally be made in respect of any claim
as to which such person is adjudged to be liable to the corporation.
We have also entered into indemnification
agreements with certain of our directors and executive officers. These agreements require us to indemnify these individuals to
the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to SRAX,
and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
We
have also purchased and intend to maintain insurance on behalf of any person who is or was a director or officer of our company
against any loss arising from any claim asserted against him or her and incurred by him or her in any such capacity, subject to
certain exclusions.
See
also the undertakings set out in our response to Item 17 herein.
Item
16. Exhibits.
A
list of exhibits filed herewith is contained in the exhibit index that immediately precedes such exhibits and is incorporated
herein by reference.
Item
17. Undertakings.
(a)
|
The
undersigned registrant hereby undertakes:
|
|
(1)
|
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
|
(i)
|
To
include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
|
|
|
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
|
|
|
|
|
(iii)
|
To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
|
Provided,
however , that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant
to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the registration statement, or is contained
in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as
of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however , that no statement
made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made
in the registration statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such effective date;
(5)
That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned
Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser,
if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant
will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant
to Rule 424;
(ii)
any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred
to by the undersigned Registrant;
(iii)
the portion of any other free writing prospectus relating to the offering containing material information about the undersigned
Registrant or its securities provided by or on behalf of an undersigned Registrant; and
(iv)
any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
(b)
That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s
annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(c)
That, insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised
that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933
and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements of filing on Form S-3 and has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in Los Angeles, California on November 27, 2019.
|
SRAX,
Inc.
|
|
|
|
|
By:
|
/s/
Christopher Miglino
|
|
|
Christopher
Miglino
|
|
|
Chief
Executive Officer
|
SIGNATURES
AND POWER OF ATTORNEY
We,
the undersigned officers and directors of SRAX, Inc., hereby severally constitute and appoint Christopher Miglino as our true
and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to sign any and all amendments (including
post-effective amendments) to this registration statement (or any other registration statement for the same offering that is to
be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933), and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about
the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons
in the capacities and on the dates indicated.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Christopher Miglino
|
|
Chief
Executive Officer, Director, President
|
|
November
27, 2019
|
Christopher
Miglino
|
|
(principal
executive officer)
|
|
|
|
|
|
|
|
/s/
Michael Malone
|
|
Chief
Financial Officer
|
|
November
27, 2019
|
Michael
Malone
|
|
(principal
financial and accounting officer)
|
|
|
|
|
|
|
|
/s/
Kristoffer Nelson
|
|
Chief
Operating Officer, Director
|
|
November
27, 2019
|
Kristoffer
Nelson
|
|
|
|
|
|
|
|
|
|
/s/
Marc Savas
|
|
Director
|
|
November
27, 2019
|
Marc
Savas
|
|
|
|
|
|
|
|
|
|
/s/
Malcolm CasSelle
|
|
Director
|
|
November
27, 2019
|
Malcolm
CasSelle
|
|
|
|
|
|
|
|
|
|
/s/
Robert Jordan
|
|
Director
|
|
November
27, 2019
|
Robert
Jordan
|
|
|
|
|
|
|
|
|
|
/s/
Colleen DiClaudio
|
|
Director
|
|
November
27, 2019
|
Colleen
DiClaudio
|
|
|
|
|
|
|
|
|
|
INDEX
TO EXHIBITS
|
|
|
|
|
|
Incorporated
by Reference
|
Exhibit
No.
|
|
Description
|
|
Filed
Herewith
|
|
Form
|
|
Exhibit
No.
|
|
File
No.
|
|
Filing
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.01(i)
|
|
Certificate of Incorporation filed on 8/2/2011
|
|
|
|
S-1
|
|
3.01(i)
|
|
333-179151
|
|
1/24/2012
|
3.02(i)
|
|
Certificate of Correction of Certificate of Incorporation filed on August 30, 2011
|
|
|
|
S-1
|
|
3.01(ii)
|
|
333-179151
|
|
1/24/2012
|
3.03(i)
|
|
Certificate of Amendment to the Certificate of Incorporation of Social Reality, Inc. filed on 9/6/2016
|
|
|
|
8-K
|
|
3.5
|
|
000-54996
|
|
9/19/2016
|
3.04(i)
|
|
Certificate of Designation of Series 1 Preferred Stock
|
|
|
|
8-K
|
|
3.4
|
|
000-54996
|
|
8/22/2013
|
3.05(i)
|
|
Certificate of Designation of BIGToken Preferred Tracking Stock
|
|
|
|
S-1/A
|
|
3.05(i)
|
|
333-229606
|
|
10/16/2019
|
3.06(i)
|
|
Certificate of Amendment to the Certificate of Incorporation of Social Reality, Inc. effective 8/25/19
|
|
|
|
8-K
|
|
3.01(i)
|
|
001-37916
|
|
8/15/2019
|
3.07(ii)
|
|
Amended and Restated Bylaws of Social Reality, Inc. adopted March 27, 2019
|
|
|
|
8-K
|
|
3.01(ii)
|
|
001-37916
|
|
4/2/2019
|
4.02
|
|
Form
of Certificate of Designation
|
|
†
|
|
|
|
|
|
|
|
|
4.03
|
|
Form
of Preferred Stock Certificate, if any
|
|
†
|
|
|
|
|
|
|
|
|
4.04
|
|
Form
of Warrant Agreement
|
|
†
|
|
|
|
|
|
|
|
|
4.05
|
|
Form
of Warrant Certificate, if any
|
|
†
|
|
|
|
|
|
|
|
|
4.06
|
|
Form
of Unit Agreement, if any
|
|
†
|
|
|
|
|
|
|
|
|
5.01
|
|
Opinion of Silvestre Law Group, P.C.
|
|
*
|
|
|
|
|
|
|
|
|
23.1
|
|
Consent of RBSM LLP
|
|
*
|
|
|
|
|
|
|
|
|
23.2
|
|
Consent of Silvestre Law Group, P.C. (included in Exhibit 5.01)
|
|
*
|
|
|
|
|
|
|
|
|
24.1
|
|
Power of Attorney (see page II-4)
|
|
*
|
|
|
|
|
|
|
|
|
† To be filed by amendment
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