Item 1.01. Entry into a Material Definitive Agreement.
On
May 5, 2020, SRAX, Inc. (the “Company”) entered into an At Market Issuance Sales Agreement (the “Agreement”)
with B. Riley FBR, Inc. (“Sales Agent”), with respect to an at-the-market offering program, under which the Company
may offer and sell, from time to time at its sole discretion, shares of its Class A common stock, par value $0.001 (the “Common
Stock”), having an aggregate offering price of up to $3,150,000 (the “Placement Shares”) through or to the Sales
Agent. The issuance and sale, if any, of the Placement Shares by the Company under the Agreement will be made pursuant to the
Company’s effective “shelf” registration statement on Form S-3 and an accompanying base prospectus contained
therein (Registration Statement No. 333-235298) filed with the Securities and Exchange Commission (“SEC”) on November
27, 2019, and declared effective on December 11, 2019. The Company filed a prospectus supplement (the “Prospectus Supplement”),
dated May 5, 2020, with the SEC in connection with the offer and sale of the Placement Shares pursuant to the Sales Agreement.
Subject
to the terms and conditions of the Agreement, the Sales Agent may sell the Placement Shares by any method permitted by law deemed
to be an “at the market” offering as defined in Rule 415 of the Securities Act of 1933, as amended. The Sales Agent
will use commercially reasonable efforts to sell the Placement Shares from time to time, based upon instructions from the Company
(including any price, time or size limits or other customary parameters or conditions that the Company may impose), provided that
no “Event of Default” has occurred under the Company’s outstanding loan and security agreement entered into
with BRF Finance CO., LLC (“BRF”) entered into on February 28, 2020 (“Loan Agreement”). In the event of
an “Event of Default” we have granted BRF a power of attorney with the authority to direct the sale of an undetermined
amount of Common Stock by the Sales Agent under the Sales Agreement. The proceeds from such sales would be dedicated toward payment
of all amounts due and owing under the Loan Agreement. The Company will pay Sales Agent a commission of five percent (5.0%) of
the gross sales proceeds of any Placement Shares sold through Sales Agent under the Agreement, and also has provided Sales Agent
with customary indemnification and contribution rights. In addition, the Company has agreed to pay certain legal expenses and
filing fees incurred by Sales Agent in connection with the offering, including $50,000 at the time the Company entered into the
Agreement and $2,500 each calendar quarter.
The
offering of Placement Shares pursuant to the Agreement will terminate upon the earlier of (i) the sale of all Placement Shares
subject to the Agreement, or (ii) termination of the Agreement pursuant to certain triggering events or at the discretion of Company
or Sales Agent, subject to the terms contained in the Sales Agreement.
The
foregoing description of the Agreement is not complete and is qualified in its entirety by reference to the full text of the Agreement,
a copy of which is filed herewith as Exhibit 10.01 to this Current Report on Form 8-K and is incorporated herein by reference.
A
copy of the opinion of Silvestre Law Group, P.C., relating to the validity of the Placement Shares to be issued pursuant to the
Agreement, is filed with this Current Report on Form 8-K report as Exhibit 5.01.
This
Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the Placement Shares,
nor shall there be any offer, solicitation, or sale of Common Stock in any state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of any such state.