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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended DECEMBER 31, ~~2021~~2022

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission file number: 001-37916

SRAX, INC.

(Exact name of registrant as specified in its charter)

Delaware

45-2925231

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2629 Townsgate Road #215,

Westlake Village, CA 91361

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (323) 694-9800

Securities registered under Section 12(b) of the Act: None

Title of Class		Trading Symbol		Name of Each Exchange on Which Registered
Class A Common Stock, $0.001 par value		SRAX		Nasdaq Global Market

Title of Class		Trading Symbol		Name of Each Exchange on Which Registered
N/A		N/A		N/A

Securities registered under Section 12(g) of the Act:

~~None~~Class A Common Stock, $0.001 par value

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☐ Yes ☒ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☐ Yes ☒ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

~~State~~The ~~the~~ aggregate market value of the voting and non-voting common equity held by non-affiliates ~~computed~~as ~~by reference to the price at which the common equity was sold, or the average bid and asked prices~~ of ~~such~~June ~~common equity~~30, as2022 ofwas ~~the last business day of the registrant’s most recently completed second fiscal quarter.~~ $~~121~~78,~~972~~884,~~024~~ 807 based on the closing price of $53.~~44 on June 30, 2021~~32.

~~Indicate~~There ~~the~~were ~~number of shares outstanding of each of the registrant’s classes of common stock~~29, ~~as of the latest practicable date. 26~~150,~~315,178~~ 262 shares of Class A common stock ~~are~~ outstanding as of ~~October~~August 1029, ~~2022~~2024.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

		Page No.
	Part I
Item 1.	Business.	1
Item 1A.	Risk Factors.	410
Item 1B.	Unresolved Staff Comments.	1117
Item 2.	Description of Property.	11
Item 1C.	Cybersecurity.	17
Item 3.	Legal Proceedings.	11
Item 2.	Description of Property.	17
Item 4.	Mine Safety Disclosures.	11
Item 3.	Legal Proceedings.	17
Item 4.	Mine Safety Disclosures.	17
	Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	1218
Item 6.	~~Selected Financial Data.~~[Reserved]	1520
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	1520
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	2535
Item 8.	Financial Statements and Supplementary Data.	2535
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	2535
Item 9A.	Controls and Procedures.	2535
Item 9B.	Other Information.	26
Item 9B	Other Information.	36
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	36
	Part III
Item 10.	Directors, Executive Officers and Corporate Governance.	2737
Item 11.	Executive Compensation.	3139
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	3841
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	4043
Item 14.	Principal Accounting Fees and Services.	4144
	Part IV
Item 15.	Exhibits, Financial Statement Schedules.	4245
Item 16.	Form 10-K Summary.3	4448

PART I

We urge you to read this entire Annual Report on Form 10-K, including the “Risk Factors” section, the financial statements and the related notes included therein. As used in this Annual Report, unless context otherwise requires, the words “we,” “us,” “our,” “the Company,” “SRAX,” “Registrant” refer to SRAX, Inc. and its subsidiaries. Additionally, and reference to “LD Micro” refers to the Company’s previously wholly owned subsidiary, LD Micro, Inc. and the assets used in its operations. LD Micro was divested pursuant to an Agreement and Plan of Merger that closed on March 3, 2023. Any reference to “BIGToken” and “BIGToken, Inc.”, or the “BIGToken Project” refer to the Company’s previously wholly owned subsidiary, BIGToken, Inc. and the assets used in its operations. BIGToken was divested ~~pursuant~~ pursuant to a share exchange agreement that closed on February 4, 2021.

Any reference to “common share” or “common stock,” refers to our $0.001 par value Class A common stock. Any reference to our Series A Preferred Stock refers to our $0.001 par value Series A Non-Voting Preferred Stock. Any reference to our Series B Preferred Stock refers to our $0.001 par value Series B Non-Voting Preferred Stock.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this Annual Report on Form 10-K that are not purely historical are considered to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements include, but are not limited to: any projections of revenues, earnings, or other financial items; any statements of the strategies, plans and objectives of management for future operations; any statements concerning proposed new products or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” and any other similar words. These statements represent our expectations, beliefs, anticipations, commitments, intentions, and strategies regarding the future and include, but are not limited to, the risks and uncertainties outlined in Item 1.A Risk Factors and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and those discussed in other documents we file with the Securities and Exchange Commission (SEC). Readers are cautioned that actual results could differ materially from the anticipated results or other expectations that are expressed in forward-looking statements within this report. The forward-looking statements included in this report speak only as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

ITEM 1.

BUSINESS.

Overview

We are a technology firm focused on enhancing communications between public companies and their shareholders and investors. We currently have two distinct business units that are part of the Sequire platform:

● Our unique SaaS platform, Sequire, which allows issuers to track their shareholders’ behaviors and trends, then use data-driven insights to engage with shareholders across marketing channels. Through Sequire, we offer tools and related data and insight services to allow issuers of publicly traded securities to better understand their position in the market. ● LD Micro organizes and hosts investor conferences for micro and small-cap companies.

●	Our unique SaaS platform, Sequire, which allows issuers to track their shareholders’ behaviors and trends, then use data driven insights to engage with shareholders across marketing channels. Through Sequire, we offer tools and related data and insight services to allow issuers of publicly traded securities to better understand their position in the market.

●	LD Micro organizes and hosts investor conferences for micro and small-cap companies, which we sold following the year end December 31, 2022 during the first quarter of 2023. The Company has added its own conferences to the Sequire Platform that are separate and apart from the LD Miro Conferences.

We derive our revenues from the:

●	Licensing of our proprietary SaaS platform;

●	Sales of proprietary data;

●	Attendance and sponsorship fees from investor conferences and events; and

●	Sales of insight and consulting services.

Sequire

The Sequire platform is a central hub where companies can manage certain administrative functions, reach out and engage with shareholders as well as identify potential new investors. The platform utilizes ~~machine learning and~~ advanced analytics to bring our clients actionable information that we believe can be used to maximize ROI through better investor and stockholder communications. ~~Clients then can engage with targeted shareholder groups across marketing channels including email, social media, programmatic, and hyperlocal.~~

Clients then can engage with targeted shareholder groups across marketing channels including email, social media, programmatic advertising, and hyperlocal targeting.

When interpreting data, clients can see gains and losses over time, buying/selling trends, total outstanding shares, new shareholders, and shareholders broken out by percentage. Based on this data, we can assist our users in developing customized communications campaign utilizing targeted ads and messaging.

Among other features, the Sequire platform provides its users tools to monitor investor sentiment and activities and simplify back office administration such as:

●	real-time level-two trading data,

●	the ability to monitor the activities of competitive public companies of the user,

●	news alerts,

●	custom survey feature to enhance shareholder communications;

●	real-time and searchable warrant and option ledgers; and

●	integrated communication between investor relations programs and corporate communication firms.

Data Targeting

We help our clients build an investor base through targeted advertising and marketing campaigns, tailored to their needs. Using data- driven insights, we help clients meet their unique marketing objectives, whether they’re messaging existing investors, new investors, or consumers.

1Investor Conferences

~~Website~~Through the ~~Disclosing~~events platform, we have the ~~Value~~ability to host a variety of virtual events and conferences including investor conferences, earnings calls, shareholder meetings, annual, investor/analyst days, corporate town halls, roadshows, and more. We believe that our ~~Securities~~ability ~~Portfolio~~to offer users a seamless, centrally managed virtual events solution that can be customized to any industry will help transform our platform into the premier investor event tool.

~~Pursuant~~We have toalso launched the ~~terms~~Sequire ofInvestor ~~the~~Conference ~~transaction documents~~ in ~~our~~Puerto ~~Senior Secured Revolving Credit Facility entered into on August 8~~Rico, ~~2022,~~which webrings ~~are~~together ~~required~~public tocompanies ~~disseminate~~with ~~more~~investors ~~current information regarding our portfolio of securities that we receive~~ from ~~customers.~~the ~~Accordingly, we have elected to disseminate such required information~~island ~~via~~and afrom ~~website~~around atthe ~~https://srax~~world.~~com/stock-portfolio~~ ~~(the~~The ~~“Portfolio~~conference ~~Website”).~~has ~~The~~been ~~most~~held ~~current~~for ~~information~~two ~~about~~years ~~the~~and ~~portfolio of~~is ~~securities~~about ~~will~~to be ~~available~~launched onfor the ~~Portfolio~~third ~~Website,~~year ~~which~~in ~~will~~January beof ~~updated daily~~2025. We ~~Additionally,~~collect ~~the~~fees ~~Portfolio~~from ~~Website~~the ~~describes or~~public ~~details~~companies ~~the~~that ~~value~~participate ofat ~~such~~the ~~portfolio~~event ofas ~~securities~~well ~~separately~~as sponsors that are ~~currently~~looking ~~restricted~~to ormarket ~~unrestricted.~~to ~~The~~both ~~Portfolio~~the ~~Website~~investors ~~additionally~~and ~~outlines~~ the ~~dollar~~companies ~~value~~at ofthe ~~securities that have been sold in a given quarter~~event.

Individuals accessing the Portfolio Website are cautioned that the value of securities contained on the Portfolio Website are calculated by multiplying the quoted price of each security on its applicable exchange or interdealer quotation system, by the quantity owned. This method does not take into account any adjustment of value based on liquidity, the potential lack of an active market, excessive bid-ask spread, and other inputs used generally for valuing securities under the generally accepted principles of accounting (GAAP), the financial accounting standards board (FASB) and U.S. securities laws. Accordingly, the dollar values contained on the Portfolio Website may not be indicative of the fair value of the securities that we own, and the value for which we may be able to sell such securities could be materially and substantially less than that presented on the Portfolio Website. Additionally, the value of the securities contained on the Portfolio Website may be materially different from the value ascribed to such securities in our periodic reports filed with the Securities and Exchange Commission. Further, as a result of the potential holding periods of such securities and other restrictions on transferability or sale, we may, with respect to any specific security, (i) realize substantially less value upon the sale of such security or (ii) realize no value at all. Additionally, any disclosure with regard to the ability to sell as a result of such securities being unrestricted is subject to change and is highly dependent on facts that may change and that we have no control over. Any projections of sales for any future quarter or other time period are forward looking and speculative and you should not place any reliance on such projections. In addition, the values of securities listed on the Portfolio Website do not take into account any embedded features that may result in the adjustment of any conversion prices or issuance of additional shares. You are further cautioned not to rely on the values listed on the Portfolio Website for purposes of determining the fair value of our portfolio of securities.

Our team of experts takes a deep dive into each company, building out unique messaging to suit their target investors. Once media campaigns are built, they are run through the Sequire platform across multiple target segments. We then track performance and modify the campaign for the best possible results. Our clients have needs to target particular sectors and exchanges, and the value we deliver lies in the hyper-specific investor insights necessary for that kind of focused outreach.

We are maximizing the efficacy of our media campaigns by providing our clients with custom-built landing pages that are crafted to educate, engage, and convert new investors. When a new investor clicks through an ad, they will land on a story-driven page with data-tracking software embedded to collect analytics for later use.

Virtual Events and LD Micro

LD Micro is the premier event platform for micro-cap and small cap companies. In September of 2020, we acquired LD Micro, and hosted the 2020 Main Event on our Sequire Virtual Events platform. The 2021 Main Event had over 3,000 attendees and hosted webinars with over 500 companies. We are currently planning to expand the number and subject matter of our conferences and events. Through the events platform, we have the ability to host a variety of virtual events and conferences including investor conferences, earnings calls, shareholder meetings, annual, investor/analyst days, corporate town halls, roadshows, and more. We believe that our ability to offer users a seamless, centrally managed virtual events solution that can be customized to any industry will help transform our platform into the premier investor event tool.

Marketing and sales

We market our services through our in-house sales and marketing team. Our team focuses on social media, including Facebook, LinkedIn and Twitter, public relations (PR), industry events and the creation of white papers which assist in our marketing efforts and are used as lead generation tools.

Intellectual property

We currently rely on a combination of patents, trade secret laws and restrictions on disclosure to protect our intellectual property rights. Our success depends on the protection of the proprietary aspects of our technology as well as our ability to operate without infringing on the proprietary rights of others. We also enter into proprietary information and confidentiality agreements with our employees, consultants and commercial partners and control access to, and distribution of, our software documentation and other proprietary information. We currently have eight (8) US patent applications filed.

Government regulation

We are subject to a variety of laws and regulations in the United States that involve matters central to our business. Many of these laws and regulations are still evolving and being tested in courts and could be interpreted in ways that could harm our business. We are also subject to many of the laws that cover the securities industry and are regulated by the Securities and Exchange Commission.

These laws may involve privacy, data protection and personal information, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, electronic contracts and other communications, competition, protection of minors, consumer protection, product liability, taxation, economic or other trade prohibitions or sanctions, anti-corruption law compliance, securities law compliance, and online payment services. In particular, we are subject to federal, state, and foreign laws regarding privacy and protection of people’s data. Foreign data protection, privacy, content, competition, and other laws and regulations can impose different obligations or be more restrictive than those in the United States. U.S. federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change. As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices.

Proposed or new legislation and regulations could also significantly affect our business. For example, the European General Data Protection Regulation (GDPR) took effect in May 2018 and applies to all of our products and services used by people in Europe. The GDPR includes operational requirements for companies that receive or process personal data of residents of the European Union that are different from those previously in place in the European Union and includes significant penalties for non-compliance. The California Consumer Privacy Act, which took effect in January 2020, also establishes certain transparency rules and creates new data privacy rights for users. Similarly, there are a number of legislative proposals in the European Union, the United States, at both the federal and state level, as well as other jurisdictions that could impose new obligations or limitations in areas affecting our business, such as liability for copyright infringement. In addition, some countries are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services.

WeProposed or new legislation and regulations could also significantly affect our business. For example, the European General Data Protection Regulation (GDPR) took effect in May 2018 and applies to all of our products and services used by people in Europe. The GDPR includes operational requirements for companies that receive or process personal data of residents of the European Union that are different from those previously in place in the European Union and includes significant penalties for non-compliance. The California Consumer Privacy Act, which took effect in January 2020, also establishes certain transparency rules and creates new data privacy rights for users. Similarly, there are a number of legislative proposals in the European Union, the United States, at both the federal and state level, as well as other jurisdictions that could impose new obligations or limitations in areas affecting our business, such as liability for copyright infringement. In addition, some countries are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services. We may become the subject of investigations, inquiries, data requests, requests for information, actions, and audits by government authorities and regulators in the United States, Europe, and around the world, particularly in the areas of privacy, data protection, law enforcement, consumer protection, and competition, as we continue to grow and expand our operations. We are currently, and may in the future be, subject to regulatory orders or consent decrees, including the modified consent order we entered into in July 2019 with the U.S. Federal Trade Commission (FTC) which is pending federal court approval and which, among other matters, will require us to implement a comprehensive expansion of our privacy program. Orders issued by, or inquiries or enforcement actions initiated by, government or regulatory authorities could cause us to incur substantial costs, expose us to unanticipated civil and criminal liability or penalties (including substantial ~~monetary~~ monetary remedies), interrupt or require us to change our business practices in a manner materially adverse to our business, divert resources and the attention of management from our business, or subject us to other remedies that adversely affect our business.

Employees and Human Capital Resources

As of ~~August~~December 31, 2022, we had 10122 full-time employees. Of these employees, 5six are engaged in executive management, 68 65 in information technology including those participating in our research and development efforts, 1713 in sales and marketing, 28 29 in integration and customer support and 129 in administration. All employees are employed “at will.” We believe our relations with our employees are generally positive and we have no collective bargaining agreements with any labor unions. As of August 15, 2024, the Company currently has 7 full time employees and 13 contractors.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees. The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel, whether existing employees or new hires, through the granting of stock-based and cash-based compensation awards. We believe that this increases value to our stockholders and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

We provide our employees and their families with access to health and wellness programs, including benefits that provide protection and security concerning events that may require time away from work or that impact their financial well-being; and that offer choices where possible so employees can customize their benefits to meet their needs. In response to the COVID-19 pandemic, we implemented significant changes that we determined were in the best interest of our employees, as well as the community in which we operate, and which comply with government regulations, including working in a remote environment where appropriate or required. As of the date of this Annual Report, all of our employees are currently working remotely.

Our history

We were originally organized in August 2009 as a California limited liability company under the name Social Reality, LLC, and we ~~converted~~ converted to a Delaware corporation effective January 1, 2012. Social Reality, LLC began business in May 2010. Upon the conversion, we changed our name to Social Reality, Inc. On August 15, 2019, we formally changed our ~~Name~~name to SRAX, Inc. In September of 2020, we acquired LD Micro as a wholly owned subsidiary. In February of 2021 we completed the divestiture of our BIGToken subsidiary and the related platform. In March 2023, we completed the sale of the LD Micro business and in May 2024 we signed an agreement to acquire DNA Holdings Venture Inc. (“DNA”). Mr. Miglino, Chief Executive Officer and sole director of the Company, serves as the Chief Executive Officer of DNA.

Recent Developments

Putative Issuance – Series A

On September 27, 2021, the Company issued 36,412,417 shares of Series A Non-voting Preferred Stock (“Series A Stock”) as a dividend to holders of its (i) Class A common stock (“Common Stock”), (ii) certain warrants to purchase Common Stock, and (iii) the Company’s original issue discount senior convertible debentures. The Company’s certificate of designation of preferences, rights and limitations of Series A Non-Voting Preferred Stock (the “COD”) authorized the issuance of up to 36,412,417 shares of Series A Stock. As a result of an oversight, the Company determined that a holder of a warrant to purchase 50,000 shares of Common Stock (the “Warrant Holder”) that had a contractual right to receive the Series A Stock dividend was not included in such dividend. As a result, on December 23, 2021, the Company issued an additional 50,000 shares of Series A Stock to such Warrant Holder (the “Putative Issuance”). As a result of the Putative Issuance, the Company exceeded its authorized shares of Series A Stock by 50,000 shares in excess of what was authorized under the COD.

Pursuant to Section 204 of the Delaware General Corporation Law (“DGCL”), the Company’s Board of Directors adopted a resolution ratifying the Putative Issuance on January 24, 2022. On January 31, 2022, the Company filed a Certificate of Validation (the “Validation Certificate”) and a Certificate of Increase of the COD (“Certificate of Increase”) with the Secretary of State of the State of Delaware (“Delaware SOS”) approving the Putative Issuance and authorizing an increase of 50,000 shares of Series A Stock, or an aggregate of 36,462,417 shares of Series A Stock effective as of December 23, 2021, the date such Putative Issuance occurred.

Extension of Outstanding Original Issue Discount Senior Secured Convertible Debentures

On July 1, 2022, the holders (“2020 Holders”) of $1,102,682 in principal of the Company’s Original Issue Discount Senior Secured Convertible Debentures (“2020 Debentures”), representing all of the outstanding 2020 Debentures that were originally issued on June 30, 2020, entered into an agreement with the Company to (i) extend the maturity date of the 2020 Debentures until December 31, 2023 and (ii) extend the first date that monthly redemptions are required to be made by the Company to begin on January 1, 2023 (the “Debenture Extension”). As consideration for the Debenture Extension, the Company increased the principal amount outstanding on the 2020 Debentures by five percent (5%). Additionally, the holders of the 2020 Debentures have the unilateral right to extend the maturity date and monthly redemption period by an additional six (6) month period at any time prior to January 1, 2023 for an additional five percent (5%) to be added to the outstanding principal of such 2020 Debentures. The 2020 Debentures, including the additional principal added to the 2020 Debentures are secured by substantially all of the assets of the Company pursuant to a security agreement entered into between the Company and 2020 Holders contemporaneous with the original issuance of the Debentures.

Bridge Note

On June 28, 2022, we entered into a nonbinding term sheet regarding a $10 million revolving credit facility with ATW Opportunities Master Fund II, LP (“ATW”). As part of the transaction, on July 1, 2022, the Company issued an original issue discount bridge note in principal amount of $650,000 (“Bridge Note”) to ATW in exchange for $500,000 in cash. The Bridge Note is non-interest bearing and has a maturity date of August 15, 2022. The Company’s obligations pursuant to the Bridge Note are secured by substantially all of the assets of the Company pursuant to the terms of the Security Agreement.

Senior Secured Revolving Credit Facility

On August 8, 2022, the Company entered into a senior secured revolving credit facility agreement (the “Credit Agreement”) with ATW to initially borrow up to $9,450,000 (“Loan Amount”) in the aggregate from time to time, subject to certain conditions (each a “Revolving Loan”). The Revolving Loan is secured by all the assets of the Company and was guaranteed by the Company’s former wholly owned subsidiary LD Micro, Inc. (collectively, the Company and LD Micro are the “Credit Parties”). In addition to the Credit Agreement, the Company and/or the Credit Parties, as applicable, also entered into a: (i) Revolving Note, (ii) Security Agreements, (iii) Fee Agreement and (iv) Registration Rights Agreement. As part of the transaction, the Company also amended and restated ATW’s outstanding warrants to extend the maturity date until September 30, 2023. In May 2023, in connection with the sale of LD Micro to Freedom (as defined below), ATW released the LD Micro assets from its secured interest. ATW advanced $5,580,000 consisting of $4,930,000 in cash and the exchange of the $650,000 bridge note entered into on June 28, 2022.

The Revolving Note was initially convertible into shares of the Company’s Class A Common Stock at a conversion price of $15.00 per share (“Conversion Price”). The Conversion Price is subject to adjustment in the event of stock splits, dividends and fundamental transactions. Moreover, in the event the Company is deemed to have issued or sold shares of its Common Stock while the Revolving Loan is outstanding at a price equal to or less than $5.00 per share, the conversion price will adjust to such lower applicable price.

The principal balance of each Revolving Loan will reflect an initial original issue discount of ten percent (10%) which will increase to twelve percent (12%) in the event the Prime borrowing rate increases to 6.75%. Additionally, on the 12-month anniversary of the origination date of each Revolving Loan, the principal will increase by the ten percent (10%) or twelve percent (12%) pursuant to the calculation in the foregoing sentence. The annual interest rate on each Revolving Loans is eleven and one half percent (11.5%). The Revolving Loans have a maturity date of the earlier of (i) twenty-four (24) months from the effective date of the Credit Agreement or (ii) the occurrence of an event of default.

Commencing on the first day of each month after the effective date of the Credit Agreement (each a “Payment Date”), the outstanding balance of the Revolving Loan were required to be paid as follows:

	●	With respect to the first, second and third months, 10% of the monthly collections from the sale of securities received by SRAX from its customers during the prior month;
	●	With respect to the fourth, fifth and sixth months, 15% of the monthly collections from the sale of securities received by SRAX from its customers during the prior month; and
	●	With respect to each successive Payment Date, 20% of the monthly collections from the sale of securities received by SRAX from its customers during the prior month.

Additionally, with respect to any Payment Date where the applicable monthly collection from the sale of securities received by the Company from its customers during the prior month exceeds $2,000,000, the Company will make an additional payment equal to 30% of any amounts in excess of $2,000,000.

In order to perfect ATW’s security interest, the Credit Parties entered into: (i) Security Agreements, (ii) Guaranty Agreements, (iii) Pledge Agreements and (iv) Security Account Control Agreements and Deposit Account Control Agreements (collectively “Security Agreements”). The Security Agreements provide for a general lien on all of the Credit Parties’ assets, including each party’s respective intellectual property. In May 2023, in connection with the sale of LD Micro to Freedom (as defined below), ATW released the LD Micro assets from its secured interest.

As part of the transactions contemplated by the Loan Documents, the Company additionally agreed to extend the expiration dates of the following outstanding Common Stock purchase warrants held by the Lender or its affiliated entities until September 30, 2023:

	●	a warrant to purchase 1,363,636 shares of Common Stock issued on June 30, 2020;
	●	a warrant to purchase 166,667 shares of Common Stock issued on November 29, 2018;
	●	a warrant to purchase 530,027 shares of Common Stock issued on November 29, 2018; and
	●	a warrant to purchase 530,028 shares of Common Stock issued on October 27, 2017.

As consideration for Lender entering into the Loan Documents, Lender will be entitled to receive, in addition to any payment made under the Credit Agreement, 10% of the net proceeds received by SRAX from the sales of securities received during the term of the Revolving Loan.

DNA Holdings, LLC Asset Acquisition

On February 3, 2023 (the “APA Closing Date”), the Company entered into and consummated the transactions contemplated by the Asset Purchase Agreement (the “APA”) and the related Bill of Sale and Assignment and Assumption Agreement (the “Assignment Agreement,” and together with the Assignment Agreement, the “Transaction Documents”) with DNA Holdings, LLC, a limited liability company formed under the laws of the Commonwealth of Puerto Rico (the “Seller”), pursuant to which, subject to the terms and conditions of the APA, the Seller sold certain assets from its advisory company that is engaged in the business of advising entrepreneurs in connection with capital structuring, marketing, developing decentralized ecosystems and providing introductions to strategic investors (the “Business”). Specifically, pursuant to the Transaction Documents, the Company acquired certain assets of the Business (the “Purchased Assets”), including $1,000,000 in cash, crypto assets, equity investments into three private companies and a customer database from the Seller (the “Acquisition”). The Seller is managed by The Roundtable LLC, which is managed by Brock Pierce, who as of the APA Closing Date was a member of the Company’s board of directors (the “Board”). The Acquisition was approved on February 3, 2023, by the Audit Committee of the Board and the Board. Mr. Pierce did not participate in discussions of the Board about whether to approve the Acquisition, and did not vote on the Acquisition at the Board meeting. In each case, it was considered that Mr. Pierce was an interested director of the Company. In each case, it also was determined, among other things, that, notwithstanding that Mr. Pierce was an interested director of the Company, the assets acquired in the Acquisition constitute fair and adequate consideration for the securities to be issued pursuant to the APA.

Pursuant to the terms of the APA, at the closing of the Acquisition (the “APA Closing”), in exchange for the Purchased Assets, which had an aggregate value of approximately $4,000,000 (excluding the value of the customer database, as the Company is finalizing the valuation of such asset), the Company issued and delivered to Seller (i) 1,313,127 shares of the Company’s Class A common stock and (ii) 63,743 shares of the Company’s newly designated class of Series B Non-Voting Convertible Preferred Stock (the “Series B Preferred Stock”) convertible into an aggregate of 3,059,664 shares of Common Stock (collectively, the “Upfront Shares”). In addition to the Upfront Shares, the Company delivered into escrow 54,908 shares of Series B Preferred Stock convertible, subject to receipt of APA Stockholder Approval and the Deferred Payment (as defined below), into 2,635,591 shares of Common Stock (the “Escrow Shares,” together with the Upfront Shares, the “Acquisition Shares”).

Pursuant to the APA, the Upfront Shares were issued and delivered at the APA Closing Date, subject to the terms of the Lock-Up Agreement (as defined below). The Escrow Shares were delivered to the Escrow Agent at the closing of the Acquisition, and the Seller received a book-entry confirmation in its name evidencing the Escrow Shares.

In accordance with applicable Nasdaq listing rules, the Company had intended to obtain stockholder approval to issue the shares of common stock underlying the Series B Preferred Stock so that it may issue shares of common stock to the Seller in excess of 1,313,127 shares of common stock, the amount of shares equal to 4.99% of the issued and outstanding common stock on the APA Closing Date (“APA Stockholder Approval”). Within thirty (30) days, but not earlier than fifteen (15) business days after APA Stockholder Approval is obtained, the Seller was required to prepare and deliver to the Company a written determination, in the Seller’s sole and absolute discretion, of an amount equal to or less than $2,000,000 to be paid to the Company, if any (such amount to be paid to the Company, the “Deferred Payment” and such amount that will not be paid to the Company, the “Uncollected Deferred Payment”). Within five (5) business days of the delivery of such written determination, subject and upon receipt of the Deferred Payment, the Company and the Seller will instruct the Escrow Agent to release to the Company such number of Escrow Shares based upon the shares of common stock underlying the Series B Preferred Stock multiplied by the quotient of (i) the outstanding Uncollected Deferred Payment divided by (ii) $2,000,000. The balance of the Escrow Shares will then be released to the Seller (the “Post-Closing Adjustment”). In the event APA Stockholder Approval is not received on or prior to the eighteen (18) month anniversary of the APA Closing, the Deferred Payment will lapse and the Escrow Shares will all be released to the Company. The Company did not receive the required APA Stockholder Approval and the Escrow Shares were returned to the Company for cancellation.

The powers, designations, preferences and other rights of the shares of Series B Preferred Stock are set forth in the Certificate of Designation establishing the Series B Preferred Stock filed by the Company with the Delaware Secretary of State on February 3, 2023, in connection with the Closing. Each share of Series B Preferred Stock shall had an initial Stated Value of $48.00 per share.

Each share of Series B Preferred Stock is convertible at any time at the option of the holder into shares of common stock. The initial conversion price is $1.00 per share of common stock, subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations and reclassifications, and other similar events affecting the Common Stock. Except as otherwise provided in the Certificate of Designation or as otherwise required by law, the Series B Preferred Stock has no voting rights. In the event we effect certain mergers, consolidations, sales of substantially all of our assets, tender or exchange offers, reclassifications or share exchanges in which our common stock is effectively converted into or exchanged for other securities, cash or property, we consummate a business combination in which another person acquires 50% of the outstanding shares of our common stock, or any person or group becomes the beneficial owner of 50% of the aggregate ordinary voting power represented by our issued and outstanding common stock, then, upon any subsequent conversion of the Series B Preferred Stock, the holders of the Series B Preferred Stock will have the right to receive any shares of the acquiring corporation or other consideration it would have been entitled to receive if it had been a holder of the number of shares of Common Stock then issuable upon conversion in full of the Series B Preferred Stock. Holders of Series B Preferred Stock shall be entitled to receive dividends (on an as-if-converted-to-Common-Stock basis, without regard to any conversion limitations in the Certificate of Designation) in the same form as dividends actually paid on shares of the common stock when, as and if such dividends are paid on shares of Common Stock.

In connection with the Acquisition, the Seller entered into a lock-up agreement (the “Lock-Up Agreement”), whereby the Seller is restricted for a period of 540 days after the Closing from certain sales or dispositions (including any pledge) of all of the Series B Preferred Stock and Common Stock held by the Seller or any securities convertible into or exercisable or exchangeable for such securities, provided, however, that the Seller may sell, in one or a series of open-market transactions, one-third (1/3) of the shares of Common Stock, including the shares of Common Stock issuable upon conversion of Series B Preferred Stock, received pursuant to the APA as of February 3, 2023: (i) after 180 days, and (ii) after 360 days. The foregoing restrictions will not apply to certain other transfers customarily excepted.

ATW Amendment

Amendment and Waiver Agreements

On February 3, 2023, the Company entered into an amendment and waiver agreement (the “Amendment and Waiver Agreement”) with the ATW and its affiliates, pursuant to which the parties agreed to amend or modify certain outstanding agreements to permit the consummation of the Acquisition and avoid any potential noncompliance or events of default relating to such prior agreements. Unless otherwise noted, all capitalized terms used below but not defined herein shall have the meaning ascribed to such term in the Amendment and Waiver Agreement.

Series A Warrant

Pursuant to the Amendment and Waiver Agreement, the Company and the Holder of Series A Common Stock Purchase Warrants, issued on October 27, 2017, agreed to amend the exercise price of such warrants from $3.00 per share to $1.00 per share.

Series B Warrant

On November 29, 2018, the Company issued that certain Series B Common Stock Purchase Warrant to one of the Holders.

Pursuant to the Amendment and Waiver Agreement, the Company and the Holder of Series B Common Stock Purchase Warrants agreed to amend the exercise price of such warrants from $3.00 per share to $1.00 per share.

Debentures

Pursuant to the Amendment and Waiver Agreement, the Company and the Holder of that certain Original Issue Discount Senior Secured Convertible Debenture, issued on June 30, 2020, (the “Debenture”) agreed to:

	●	amend and restate the definition of “Maturity Date” of the Debenture from June 30, 2023 to June 30, 2024;
	●	amend and restate the definition of “Conversion Price” in Section 4(b) of the Debenture from $2.69 to $1.00, subject to adjustment as provided for in the Debenture; and
	●	waive Section 8(a)(viii) of the Debenture to avoid an Event of Default, as defined in Section 8(a)(viii) of the Debenture.

Purchase Warrant

Pursuant to the Amendment and Waiver Agreement, the Company and the Holder of that certain Common Stock Purchase Warrant agreed to amend the exercise price of such warrants from $2.50 per share to $1.00 per share.

Revolving Note

Pursuant to the Amendment and Waiver Agreement, the Company and the Holder of that certain Revolving Note, issued on August 8, 2022 (the “Note”) agreed to change the conversion price of such notes from $15.00 to $1.00, subject to adjustments as provided for in the Note.

Credit Agreement

Pursuant to the Amendment and Waiver Agreement, the Company and the Holder of that certain Senior Secured Revolving Credit Facility Agreement, entered into on August 8, 2022 (the “Credit Agreement”) agreed to amend, modify and waive certain terms and conditions of the Credit Agreement. Specifically, the Amendment and Waiver Agreement amends the Credit Agreement to, among other things:

	●	remove the obligation of the lender to advance up to an additional $3,870,000;
	●	change the due date of monthly revolving loan payments from the first day of each month to the fifteenth day of each month;
	●	add the amount of interest payments made in connection with the fourth and fifth revolving loan payment date to the balance of all amounts owed under the Credit Agreement;
	●	reduce the cash proceeds amount owed in respect to the sixth monthly revolving loan payment to the Holder from the sale of any marketable securities by the Company from 15% to 7.5% during the applicable period for such payment;
	●	add that in respect to each succeeding monthly revolving loan payment following the sixth monthly revolving loan payment, the Company shall deliver to Holder an amount of cash proceeds from the sale of any marketable securities at an amount equal to the greater of (1) an amount equal to 20% of the cash proceeds from any sale of marketable securities by the Company during the applicable period for such payment and (2) the outstanding principal balance owed under the Credit Agreement as of the date of such monthly revolving loan payment, divided by the number of remaining monthly payments under the Credit Agreement;
	●	add that a loan request approval pursuant to the Credit Agreement is further subject to the outstanding principal balance under the Credit Agreement being less than $3,000,000; and
	●	add that the Company failing to become current with its filing obligations with the SEC by April 30, 2023, and thereafter failing to comply with its SEC filing obligations for another sixty (60) days beyond any filing deadline will constitute an Event of Default under the Credit Agreement.

On February 3, 2023, pursuant to the Amendment and Waiver Agreement, the Company and one of the Holders mutually terminated the registration rights agreement entered into on August 8, 2022.

On September 13, 2023, the closing date, the Company and ATW and its affiliates entered into an Omnibus Amendment Agreement (the “Amendment”). The parties have agreed to temporarily amend certain provisions of the Credit Agreement, Revolving Note, and Debenture for a period of up to fourteen (14) months from the effective date of the Amendment. These amendments include, but are not limited to, provisions related to the payment of amounts owing under the Credit Agreement from the proceeds of the sale of third-party securities held by the company. Per the agreement ATW shall receive one hundred percent of the proceeds from sales from third party securities owned by the Company until such time as outstanding amounts due under the respective agreements have been repaid. The Company shall maintain the rights to all proceeds from sales of the marketable securities once the amounts due to ATW have been satisfied. The Amendment includes temporary waivers and amendments that allow for Permitted Subsequent Offerings, subject to specified conditions. The Company has agreed to various covenants and conditions, including providing access to certain accounts and notifying ATW of material changes.

Sale of LD Micro, Inc.

On March 3, 2023 (the “Freedom Closing Date”), the Company entered into and consummated the transactions contemplated by the Agreement and Plan of Merger (the “Freedom Merger Agreement”) with Freedom Holding Corp., a Nevada corporation (the “Parent”), Freedom U.S. Markets, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Parent (the “Buyer”), LDM Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Buyer (“Merger Sub”), LD Micro, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“LD Micro”), to sell LD Micro, a small cap platform and conference provider. Specifically, pursuant to the terms of the Merger Agreement, at the closing of the transactions contemplated by the Merger Agreement (the “Freedom Closing”), LD Micro merged with and into Merger Sub (the “Freedom Merger”), with Merger Sub surviving the Freedom Merger (the “Surviving Corporation”), in a transaction intended to qualify for tax-free treatment under Section 368(a) of the Internal Revenue Code of 1986, as amended.

At the Freedom Closing, as consideration for the sale of LD Micro by means of the Merger, the Buyer paid the Company $8,300,000 in consideration, consisting of $4,000,000 in cash (the “Cash Payment”), and 59,763 shares of the Parent’s common stock, par value $0.001 per share (the “Payment Shares,” and together with the Cash Payment, the “Merger Consideration”). The Company also entered into a four (4) year Sponsorship Agreement that provides the Company certain exclusive rights as it relates to LD Micro following the Merger, as more fully described below.

LD Micro’s President, Christopher Lahiji, at the time of the transaction, was a member of the Company’s board of directors. The Freedom Merger was approved on March 2, 2023, by the Board. In such case, it was considered that Mr. Lahiji was an interested director of the Company with respect to the Freedom Merger. In such case, it also was determined, among other things, that, notwithstanding that Mr. Lahiji was an interested director of the Company, the Merger Consideration received for the sale of LD Micro, by means of the Freedom Merger, constitute fair and adequate consideration. In connection with the Freedom Merger, Mr. Lahiji stepped down from the board of directors.

Consent, Waiver and Release Agreement

The Company and LD Micro entered into a consent, waiver and release agreement (the “Consent Agreement”) dated as of March 1, 2023, but effective as of the Freedom Closing Date, with ATW, pursuant to which ATW agreed to: (i) fully release LD Micro from its obligations as a credit party in each of the Loan Documents LD Micro is a party of; (ii) release and terminate the Lender’s lien and security interest in and to any assets of LD Micro granted under the respective Loan Document creating such interest; (iii) release and terminate LD Micro’s issued and outstanding shares pledge under the respective Loan Document creating such pledge; (iv) waive any restrictions, covenants and other obligations contained in the Loan Documents, which would otherwise be potentially breached as a result of the Freedom Merger; and (v) waive any Events of Default (as defined in the Credit Agreement) arising under the Loan Documents as a result of or in connection with the Freedom Merger.

The Consent Agreement also provides that, within forty-five (45) days following the Company’s receipt of the Merger Consideration, the Company must use 15% of the gross cash proceeds from the Cash Payment to redeem its common stock at a price per share of less than $5.00, and pay 10% of the gross cash proceeds from the Cash Payment to pay any outstanding amounts under the Revolving Loans. Further, to the extent permitted under applicable law, following the Company’s sale of the Payment Shares, and within forty-five (45) days of the receipt of the proceeds from any sale of the Payment Shares, the Company will use 15% of the gross cash proceeds from the sale of the Payment Shares (less any broker’s fees or commissions) to redeem its common stock at a price per share less than $5.00, and 10% of such proceeds to pay any outstanding amounts under the Revolving Loans (less any broker’s fees or commissions).

On March 3, 2023, in connection with the consummation of the Freedom Merger, Christopher Lahiji, President of LD Micro and member of our board of directors, resigned as a member of the Board pursuant to a resignation letter, effective immediately. Mr. Lahiji did not serve on any committees of the board of directors.

Private Offering – November 2023

On November 2, 2023, the Company entered into definitive securities purchase agreements with certain accredited and institutional investors (the “November 2023 Purchasers”) for the purchase and sale of an aggregate of: (i) $552,000 in principal amount of Original Issue Discount Convertible Debenture (the “November 2023 Debentures”) for $460,000 (representing a 20% original issue discount) and (ii) warrants to purchase up to 3,680,000 shares of the Company’s Class A common stock (the “November 2023 Warrants”) in a private placement.

The Debentures, which mature on November 3, 2024, pay 0%, no interest per annum commencing on November 3, 2023. The November 2023 Debentures are convertible at the option of the holder into shares of our Class A common stock at an initial conversion price of $0.25 per share, subject to adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business combinations, and reorganizations (v) subsequent equity sales.

Subject to our compliance with certain equity conditions, (as more fully set forth in the Debentures), upon ten (5) trading days’ notice to the November 2023 Purchasers, the Company has the right to prepay the November 2023 Debentures in cash at 120% of their outstanding principal, plus accrued interest for the first 90 days of the note and 135% thereafter.

The November 2023 Debentures also contain certain customary events of default provisions, including, but not limited to, default in payment of principal, changes in control of the Company. Upon the occurrence of any such event of default, the outstanding principal amount of the Debenture plus liquidated damages, interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the November 2023 Purchaser’s election, immediately due and payable in cash.

The November 2023 Warrants are initially exercisable at $0.25 per share and, are subject to cashless exercise after six months if the shares underlying the November 2023 Warrants are not subject to an effective resale registration statement. The November 2023 Warrants are also subject to adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business combinations, and reorganizations. (v) subsequent equity sales.

Pursuant to the terms of the November 2023 Debentures and November 2023 Warrants, a November 2023 Purchaser will not have the right to convert any portion of the November 2023 Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% or 9.99% (at the November 2023 Purchaser’s option) of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or exercise, as such percentage ownership is determined in accordance with the terms of the November 2023 Debentures and the November 2023 Warrants; provided that at the election of a holder and notice to us such percentage ownership limitation may be increased to 9.99%; provided that any increase will not be effective until the 61^st day after such notice is delivered from the holder to the Company.

The Offering closed on November 3, 2023.

Private Offering – March 2024

On March 5, 2024, the Company entered into definitive securities purchase agreements with a certain accredited and institutional investor (the “March 2024 Purchasers”) for the purchase and sale of an aggregate of: (i) $90,000 in principal amount of Original Issue Discount Convertible Debenture (the “March 2024 Debentures”) for $75,000 (representing a 20% original issue discount) and (i) in a private placement.

The March 2024 Debentures, which mature on February 28, 2026, pay 0%, no interest per annum commencing on February 29, 2024.

The March 2024 Debentures are convertible at the option of the holder into shares of our Class A common stock at an initial conversion price of $0.25 per share, subject to adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business combinations, and reorganizations (v) subsequent equity sales.

Subject to our compliance with certain equity conditions, (as more fully set forth in the March 2024 Debentures), upon five (5) trading days’ notice to the March 2024 Purchasers, the Company has the right to prepay the March 2024 Debentures in cash at 120% of their outstanding principal, plus accrued interest for the first 90 days of the note and 135% thereafter.

The Debentures also contain certain customary events of default provisions, including, but not limited to, default in payment of principal, changes in control of the Company. Upon the occurrence of any such event of default, the outstanding principal amount of the March 2024 Debenture plus liquidated damages, interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the March 2024 Purchaser’s election, immediately due and payable in cash.

The Offering closed on March 5, 2024.

Series B Preferred Stock

On March 27, 2024, the Company filed a Certificate of Amendment to its Certificate of Designation of its Series B of Preferred Stock with the Secretary of State of Delaware, modifying certain provisions of the Certificate of Designation. The modifications include the removal of the need for Shareholder Approval per the NASDAQ rules; the addition of OTCQB, OTCQX and OTC Pink as a trading market; the removal of section 6 (d) removing the need for shareholder approval to issue shares to the holder; and the addition of section 7(c) Subsequent Equity Sales.

Private Offering – April 2024

On March 29, 2024, the Company entered into definitive securities purchase agreements with a certain accredited and institutional investor (the “April 2024 Purchasers”) for the purchase and sale of an aggregate of $90,000 in principal amount of Original Issue Discount Convertible Debenture (the “April 2024 Debentures”) for $75,000 (representing a 20% original issue discount).

The April 2024 Debentures, which mature on March 29, 2026, pay 0%, no interest per annum commencing on March 29, 2024.

The April 2024 Debentures are convertible at the option of the holder into shares of our Class A common stock (“Common Stock”) at an initial conversion price of $0.25 per share, subject to adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business combinations, and reorganizations (v) subsequent equity sales.

Subject to our compliance with certain equity conditions, (as more fully set forth in the Debentures), upon five (5) trading days’ notice to the April 2024 Purchasers, the Company has the right to prepay the April 2024 Debentures in cash at 120% of their outstanding principal, plus accrued interest for the first 90 days of the note and 135% thereafter.

The April 2024 Debentures also contain certain customary events of default provisions, including, but not limited to, default in payment of principal, changes in control of the Company. Upon the occurrence of any such event of default, the outstanding principal amount of the April 2024 Debenture plus liquidated damages, interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the Purchaser’s election, immediately due and payable in cash.

The Offering closed on April 2, 2024.

DNA Merger

DNA is a Web3 investment company which provides both advisory services and invests in Web3 infrastructure. DNA was founded by Brock Pierce, the Chairman of the Bitcoin Foundation and Scott Walker, a Web3 investor. The DNA team has been co-founders, investors and advisors in some of the most notable Web3 projects in the world; including Tether (USDT), Blockchain Capital (Web3 Venture Fund), Hedera Hashgraph (HBAR) among many others. Mr. Miglino, Chief Executive Officer and sole director of the Company, serves as the Chief Executive Officer of DNA.

The Merger Agreement contains customary representations, warranties and covenants made by SRAX and DNA, including covenants relating to obtaining the requisite approvals of the shareholders of DNA, and the Company’s and DNA’s conduct of their respective businesses between the date of signing of the Merger Agreement and the closing of the transaction.

The closing is subject to satisfaction or waiver of certain conditions including, among other things, (i) the required approvals by the DNA’s shareholders, (ii) the accuracy of the representations and warranties, subject to certain materiality qualifications, (iii) compliance by the parties with their respective covenants, (iv) no law or order preventing the merger and related transactions, (iv) the Company getting current in its reporting obligations with the Securities and Exchange Commission (the “SEC”), (v) the Company obtaining all required third party consents, including the consents of its senior secured creditors and warrantholders, (vi) DNA entering into an exchange agreement agreeing to exchange its existing securities in the Company for the Preferred Stock to be issued upon closing of the Merger and (v) the DNA advancing the Company at least $500,000 on or prior to the closing of the Merger. The Merger Agreement also contains certain termination rights for both the Company and DNA.

Resignations

On March 14, 2023, the board of directors of the Company appointed Alan Urban to replace Michael Malone as the Company’s Chief Financial Officer pursuant to an employment offer letter. On July 5, 2023, Mr. Urban resigned as Chief Financial Officer of the Company. On September 1, 2023, Randy Clark resigned as the Chief Operating Officer of the Company. On July 11 and July 13, 2023, Marc Savas, Robert Jordan, Colleen DiClaudio and Brock Pierce resigned from the board of directors and their respective committee roles of the Company.

Changes to Independent Registered Public Accounting Firm

On June 30, 2022, RBSM LLP, the independent registered public accounting firm to the Company, informed the Company of its decision not to stand for re-appointment as the independent registered public accounting firm of the Company. On October 27, 2022, the Audit Committee of the board of directors of the Company engaged Marcum LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2022. On May 2, 2023, the Audit Committee of the board of directors of the Company approved the dismissal of Marcum LLP (“Marcum”) as independent registered public accounting firm of the Company effective immediately. As previously reported, Marcum was engaged as the Company’s independent registered public accounting firm on October 27, 2022. On May 2, 2023, the audit committee approved the engagement of TAAD as its independent registered public accounting firm for the fiscal year ended December 31, 2022.

Annual Meeting

On December 31, 2022, the Company held its 2022 Annual Meeting. The meeting was held virtually. The director candidates and the 2016 Equity Compensation Plan were approved and the auditors were ratified.

Additional information

We file annual and quarterly reports on Forms 10-K and 10-Q, current reports on Form 8-K and other information with the Securities and Exchange Commission (“SEC” or the “Commission”). The public may read and copy any materials that we file with the Commission at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549, on official business days during the hours of 10:00 a.m. to 3:00 p.m. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission also maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission.

Other information about SRAX can be found on our website www.srax.com. Reference in this document to that website address does not constitute incorporation by reference of the information contained on the website.

ITEM 1A.

RISK FACTORS.

Please consider the following risk factors carefully. If any one or more of the following risks were to occur, it could have a material adverse effect on our business, prospects, financial condition and results of operations, and the market price of our securities could decrease significantly. Statements below to the effect that an event could or would harm our business (or have an adverse effect on our business or similar statements) mean that the event could or would have a material adverse effect on our business, prospects, financial condition and results of operations, which in turn could or would have a material adverse effect on the market price of our securities. Although we have organized the risk factors below under headings to make them easier to read, many of the risks we face involve more than one type of risk. Consequently, you should read all of the risk factors below carefully before making any decision to acquire or hold our securities.

Risks Related to our Business

We have a history of operating losses and there are no assurances we will report profitable operations in the foreseeable future.

For the years-ended December 31, ~~2021~~2022 and ~~2020~~2021, we reported income/(loss) from operations of $(8531,373,000) and ($734,~~032~~762,000), respectively, and accumulated deficit of ($3061,~~355~~728,000) and ($5030,~~342~~355,000), respectively. Our future success depends on our ability to continue to assimilate the planned DNA acquisition, grow our revenues, contain our operating expenses and generate profits. We do not have any long-term agreements with our customers. There are no assurances that we will be able to assimilate the proposed DNA acquisition, increase our revenues ~~and~~ and cash flow to a level which supports profitable operations. We may continue to incur losses in future periods until such time, if ever, as we are successful in significantly increasing our revenues and cash flow beyond what is necessary to fund our ongoing operations ~~and~~ and pay our obligations as they become due. If we significantly increase our revenues in future periods, the rapid growth may strain ~~our~~ our organization and we may encounter difficulties in maintaining the quality of our operations. If we are not able to successfully increase our revenues, it is unlikely we will be able to generate sufficient cash from operations to pay our operating expenses and service our debt obligations or report profitable operations in future periods.

Our auditors have expressed substantial doubt about our ability to continue as a going concern.

Our auditors’ report on our December 31, ~~2021~~ 2022 consolidated financial statements expresses an opinion that our capital resources as of the date of their audit report were not sufficient to sustain operations or complete our planned activities for the upcoming year unless we raised additional funds. Based upon our cash position on December 31, ~~2021~~2022 as well as in August 2024, there is substantial doubt about our ability to continue as a going concern ~~past~~through ~~the~~December ~~first~~31, ~~quarter of 2023~~2024. Our ability to continue as a going concern is based on several factors; (i) our ability to sustain our current operating performance, and (ii) our ability to raise additional capital. If we are not successful with either of these, we may no longer be able to continue as a going concern and may cease operation or seek bankruptcy protection.

We may need to raise additional capital to pay our indebtedness as it comes due.

~~In June 2020, we entered into a securities purchase~~As ~~agreement with institutional investors for the issuance~~ of ~~approximately $16.1 million in principal of debentures, of which $1,267,000 remains outstanding as of~~ December 31, ~~2021. In July~~ 2022, we ~~amended~~presently ~~certain~~have ~~terms of~~ the ~~debentures~~following ~~whereby~~indebtedness ~~in exchange for an additional five percent (5%) to be added onto the~~ outstanding: ~~principal~~$1,216,000 wein ~~extended~~June ~~the~~2020 ~~maturity~~Convertible ~~dates~~Debentures byand ~~six (~~$6~~) months or until December 31~~,200,000 ~~2023~~pursuant asto ~~well as extended~~ the ~~date~~Senior weSecured ~~are~~Revolving ~~required~~Credit toFacility, ~~begin~~which ~~making~~as ~~amortization~~of ~~payments~~June ~~until~~30, ~~January~~2024 1,remain ~~2023~~outstanding. In addition, ~~the~~during ~~holders~~year ended ofDecember ~~the~~31, ~~debentures~~2023 ~~have the unilateral right to extend the maturity date~~ and ~~amortization~~during ~~payments~~2024, ~~by another six (6) months each in exchange for another additional five percent (5%) to be added to~~ the ~~principal~~Company ofincurred ~~the debentures. On July 1, 2022, we entered into~~ an ~~original issue~~additional ~~discount bridge loan with a principal amount of~~ $~~650~~1,~~000 in exchange for $500~~010,~~000~~402 in ~~cash~~indebtedness. On August 8, 2022, the bridge loan was exchanged for revolving notes in the senior secured revolving credit facility whereby we received $4,930,000 cash on the first draw down. Of the amount received, we paid off approximately $3.75 million of outstanding obligations. The payment of the debentures and revolving credit facility are secured by substantially all the assets and the intellectual property of the Company. Further, in addition to payments required pursuant the revolving credit facility, the lender is also entitled to ten percent (10%) of the net proceeds of any sales of securities acquired from our customers during the term of the loan. As a result, this will further negatively impact our cash flows from operations and may require us to raise additional capital earlier than previously anticipated. Depending on our level of operations, we may not be able to generate sufficient cash flow to repay the debentures or revolving credit facility as they come due. If we are not able to generate enough cashflow through the operation of our business, we will need to raise additional capital through the sale of debt or equity or the sale of assets, in order to make the required payments. If we are unable to make the required payments, or if we fail to comply with the various requirements and covenants of the debentures and revolving credit facility, we would be in default, which would permit the holders of the debentures and lender in the revolving credit facility to accelerate the maturity and require immediate repayment and lead to potential foreclosure on the assets securing the debt. If we are unable to refinance or repay our indebtedness as it becomes due, including upon an event of default, we may become insolvent and be unable to continue operations.

Our outstanding loan obligations contain substantial covenants that may impact our business, our ability to secure additional debt financing, and our ability to pay our debts as they become due.

As of ~~August~~December 31, 2022, we presently have ~~approximately~~the ~~(i)~~ following indebtedness outstanding: $1.1,216,000 ~~million~~in ~~outstanding~~June of2020 ~~our~~Convertible ~~secured~~Debentures ~~convertible~~and ~~debentures~~$6,200,000 pursuant ~~issued~~to inthe Senior Secured Revolving Credit Facility, which as of June ~~2020~~30, ~~that~~2024 ~~are~~remain ~~due~~outstanding. ~~and~~In ~~payable~~addition, onduring year ended December 31, 2023 and ~~(ii)~~ $5during 2024,~~580,000~~ ofthe ~~revolving~~Company ~~notes~~incurred ~~outstanding~~an ~~pursuant~~additional to$1,010,402 ~~our~~in ~~senior secured revolving credit facility~~indebtedness. Each of the debentures and revolving notes / credit facility contain a number of affirmative and negative covenants, including, but not limited to: reporting requirements, certain financial covenants related to our stock portfolio, collateral limitations, certain limitations on liens and indebtedness, dispositions, mergers and acquisitions, restricted payments and investments, corporate changes and limitations on waivers and amendments to certain agreements, our organizational documents, etc. Our failure to comply with the covenants in the credit agreement governing the credit facility and the debentures and associated transaction documents could result in an event of default that, if not cured or waived, could result in the acceleration of all or a substantial portion of our debt and potential foreclosure on the assets pledged to secure the debt.

Further, we agreed to pay the lender in the credit facility, an amount equal to ten percent (10%) of the net proceeds actually received by us from the sale any securities of a customer that we acquired during the term of the revolving note(s). Given that we have not yet achieved profitability, and we will additionally be required to make payments upon the sales of our customer’s securities to the lender, we may be unable to continue to meet our obligations as they become due. If we are unable to refinance or repay our indebtedness as it becomes due or upon an event of default, we may become insolvent and be unable to continue operations.

Additionally, the revolving loan obligations under our secured credit facility provide for variable repayment terms ranging from 10% to 30% of the net proceeds actually received upon the sale of our customer’s securities that we receive pursuant to the provision of services. This will further negatively impact our cash flows and may further accelerate the anticipated timeframe in which we need to raise additional capital.

410

We are not current in our SEC reporting obligations, which could have material adverse consequences for our company and shareholders.

We are not current in our filing obligations under the Securities Exchange Act of 1934. Specifically, we have not timely filed our Form 10-K for the year ended December 31, 2023 and our Form 10-Qs for the quarters ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024 and June 30, 2024. As a result of our failure to remain current in our SEC reporting obligations:

	●	We are ineligible to use certain forms of registration statements, limiting our ability to access the capital markets.
	●	We will not be able to apply to have our securities traded on a traditional exchange or to trade on a higher tier of the OTC Markets significantly reducing the liquidity of our common stock and likely cause its price to decline.
	●	Investors lack current information about our financial condition and results of operations, impairing their ability to make informed investment decisions.
	●	We may face enforcement action by the SEC, including potential monetary penalties and injunctions.
	●	We are at heightened risk of securities litigation from shareholders.

Until we regain compliance with our SEC reporting obligations, we will continue to face these and other risks related to our filing delinquency. Even after becoming current, we may continue to experience negative impacts on investor confidence and our stock price. There can be no assurance as to when we will regain compliance or that we will be able to maintain compliance with SEC reporting requirements in the future.

Our proposed merger with DNA Holdings Venture, Inc. may not be completed, which could negatively impact our business, financial condition, results of operations, and stock price.

On May 7, 2024, the Company entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) with DNA Holdings Venture, Inc., a Puerto Rico corporation (“DNA”), and DNA Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of SRAX (“Merger Sub”). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, Merger Sub will be merged with and into DNA (the “Merger”), with DNA surviving the Merger as a wholly-owned subsidiary of the Company. As consideration for the Merger, SRAX shall issue to the shareholders of DNA 1,000 shares of a newly created Series C Convertible Preferred Stock of the Company (the “Preferred Stock”), which shall be convertible into approximately 75.5% of the outstanding shares of Common Stock of the Company upon closing of the Merger, which includes the approximately 35% of the Company which DNA owned prior to the merger. Upon completion of the Merger, the Company will change its name to DNA Holdings Venture, Inc. Mr. Miglino, Chief Executive Officer and sole director of the Company, serves as the Chief Executive Officer of DNA. The closing is subject to satisfaction or waiver of certain conditions including, among other things, (i) the required approvals by the DNA’s shareholders, (ii) the accuracy of the representations and warranties, subject to certain materiality qualifications, (iii) compliance by the parties with their respective covenants, (iv) no law or order preventing the merger and related transactions, (iv) the Company getting current in its reporting obligations with the Securities and Exchange Commission (the “SEC”), (v) the Company obtaining all required third party consents, including the consents of its senior secured creditors and warrantholders, (vi) DNA entering into an exchange agreement agreeing to exchange its existing securities in the Company for the Preferred Stock to be issued upon closing of the Merger and (v) the DNA advancing the Company at least $500,000 on or prior to the closing of the Merger. The Merger Agreement also contains certain termination rights for both the Company and DNA. There is no assurance that these conditions will be met or that the proposed merger will be completed. If the merger is not consummated, we may be subject to several risks, including:

	●	Negative perception by the market, customers, suppliers, and employees
	●	Distraction of our management and employees from ongoing business operations
	●	Difficulty in developing and executing alternative business strategies
	●	Potential loss of key personnel
	●	Significant costs incurred in connection with the proposed merger without realizing the anticipated benefits

Additionally, the current uncertainty surrounding the completion of the merger may cause or contribute to volatility in our stock price. The failure to complete the merger could materially and adversely affect our business, financial condition, results of operations, and stock price.Even if the merger is completed, we may not realize the anticipated benefits, and the integration process could result in significant costs and difficulties that may disrupt our business operations.

Having only one director, who is also the sole executive officer, limits our ability to establish effective independent corporate governance procedures and increases the control of our president/director.

We have only one director, who is also our sole executive officer. Accordingly, we cannot establish board committees comprised of independent members to oversee functions like compensation, governance or audit issues.

Until we have a larger board of directors that would include some independent members, if ever, there will be limited oversight of our CEO’s decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.

Our failure to maintain an effective system of internal control over financial reporting, has resulted in the need for us to restate previously issued financial statements. As a result, current and potential stockholders may lose confidence in our financial reporting, which could harm our business and value of our stock.

Or management has determined that, as of December 31, ~~2021~~2022, we did not maintain effective internal controls over financial reporting based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework as a result of identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Natural disasters, epidemic or pandemic disease outbreaks, trade wars, political unrest or other events could disrupt our business or operations or those of our development partners, manufacturers, regulators or other third parties with whom we conduct business now or in the future.

A wide variety of events beyond our control, including natural disasters, epidemic or pandemic disease outbreaks (such as the recent novel coronavirus outbreak), trade wars, political unrest or other events could disrupt our business or operations or those of our manufacturers, regulatory authorities, or other third parties with whom we conduct business. These events may cause businesses and government agencies to be shut down, supply chains to be interrupted, slowed, or rendered inoperable, and individuals to become ill, quarantined, or otherwise unable to work and/or travel due to health reasons or governmental restrictions. These limitations could negatively affect our business operations and continuity, and could negatively impact ability to timely perform basic business functions, including making SEC filings and preparing financial reports. If our operations or those of third parties with whom we have business are impaired or curtailed as a result of these events, the development and commercialization of our products and product candidates could be impaired or halted, which could have a material adverse impact on our business.

A pandemic, epidemic or outbreak of an infectious disease in the markets in which we operate or that otherwise impacts our facilities or advisors could adversely impact our business.

If a pandemic, epidemic, or outbreak of an infectious disease including the recent outbreak of respiratory illness caused by a novel coronavirus (COVID-19) or other public health crisis were to affect our operations, facilities or those of our customers or suppliers, our business could be adversely affected. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers, management, support staff and professional advisors. These factors, in turn, may not only materially impact our operations, financial condition and demand for our services but our overall ability to react timely to mitigate the impact of this event. Also, it may hamper our efforts to comply with our filing obligations with the Commission

Regulatory, legislative or self-regulatory developments regarding internet privacy matters could adversely affect our ability to conduct our business.

The United States and foreign governments have enacted, considered or are considering legislation or regulations that could significantly restrict our ability to collect, process, use, transfer and pool data collected from and about consumers and devices. Trade associations and industry self-regulatory groups have also promulgated best practices and other industry standards relating to targeted advertising. Various U.S. and foreign governments, self-regulatory bodies and public advocacy groups have called for new regulations specifically directed at the digital advertising industry, and we expect to see an increase in legislation, regulation and self-regulation in this area. The legal, regulatory and judicial environment we face around privacy and other matters is constantly evolving and can be subject to significant change. Additionally, the interpretation and application of data protection laws in the U.S., Europe and elsewhere are often uncertain and in flux. Legislative and regulatory authorities around the world may decide to enact additional legislation or regulations, which could reduce the amount of data we can collect or process and, as a result, significantly impact our business. Similarly, clarifications of and changes to these existing and proposed laws, regulations, judicial interpretations and industry standards can be costly to comply with, and we may be unable to pass along those costs to our clients in the form of increased fees, which may negatively affect our operating results. Such changes can also delay or impede the development of new solutions, result in negative publicity and reputational harm, require significant incremental management time and attention, increase our risk of non-compliance and subject us to claims or other remedies, including fines or demands that we modify or cease existing business practices, including our ability to charge per click or the scope of clicks for which we charge. Additionally, any perception of our practices or solutions as an invasion of privacy, whether or not such practices or solutions are consistent with current or future regulations and industry practices, may subject us to public criticism, private class actions, reputational harm or claims by regulators, which could disrupt our business and expose us to increased liability. Finally, our legal and financial exposure often depends in part on our clients’ or other third parties’ adherence to privacy laws and regulations and their use of our services in ways consistent with visitors’ expectations. We rely on representations made to us by clients that they will comply with all applicable laws, including all relevant privacy and data protection regulations. We make reasonable efforts to enforce such representations and contractual requirements, but we do not fully audit our clients’ compliance with our recommended disclosures or their adherence to privacy laws and regulations. If our clients fail to adhere to our contracts in this regard, or a court or governmental agency determines that we have not adequately, accurately or completely described our own solutions, services and data collection, use and sharing practices in our own disclosures to consumers, then we and our clients may be subject to potentially adverse publicity, damages and related possible investigation or other regulatory activity in connection with our privacy practices or those of our clients.

Unfavorable media coverage could negatively affect our business.

Unfavorable publicity regarding, for example, our privacy practices, terms of service, regulatory activity, the actions of third parties, the use of our products or services for illicit, objectionable, or illegal ends or the actions of other companies that provide similar services to us, could adversely affect our reputation. Such negative publicity also could have an adverse effect on the size, engagement, and loyalty of our customer base which could adversely affect our business and financial results.

Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, content, competition, consumer protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.

We are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business, such as privacy, data protection and personal information, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, electronic contracts and other communications, competition, protection of minors, consumer protection, taxation and securities law compliance. Expansion of our activities in certain jurisdictions, or other actions that we may take, may subject us to additional laws, regulations, or other government scrutiny. In addition, foreign data protection, privacy, content, competition, and other laws and regulations can impose different obligations or be more restrictive than those in the United States.

Additionally, as we expand our product offerings, we may become subject to the European General Data Protection Regulation (GDPR), effective as of May 2018. The GDPR increases privacy rights for individuals in Europe, extends the scope of responsibilities for data controllers and data processors and imposes increased requirements and potential penalties on companies offering goods or services to individuals who are located in Europe or monitoring the behavior of such individuals (including by companies based outside of Europe). Noncompliance can result in penalties of up to the greater of €20 million, or 4% of global company revenues.

These U.S. federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government authorities, are constantly evolving and can be subject to significant change. As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the newer industry in which we operate, and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices.

These laws and regulations, as well as any associated inquiries or investigations or any other government actions, may be costly to comply with and may delay or impede our international growth, result in negative publicity, increase our operating costs, require significant management time and attention, and subject us to remedies that may harm our business.

Security breaches and improper access to or disclosure of our data or user data, or other hacking and phishing attacks on our systems, could harm our reputation and adversely affect our business.

Our industry is prone to cyber-attacks by third parties seeking unauthorized access to our data or users’ data or to disrupt our ability to provide service. Any failure to prevent or mitigate security breaches and improper access to or disclosure of our data or user data, including personal information, content, or payment information from or to users, or information from marketers, could result in the loss or misuse of such data, which could harm our business and reputation and diminish our competitive position. In addition, computer malware, viruses, social engineering (predominantly spear phishing attacks), and general hacking have become more prevalent in our industry. As a result of recent attention and growth of, the size of our user base, and the types and volume of personal data on our systems, we believe that we are a particularly attractive target for such breaches and attacks. Our efforts to address undesirable activity may also increase the risk of retaliatory attacks. Such attacks may cause interruptions to the services we provide, degrade the user experience, cause users or marketers to lose confidence and trust in our products, impair our internal systems, or result in financial harm to us. Our efforts to protect our company data or the information we receive may also be unsuccessful due to software bugs or other technical malfunctions; employee, contractor, or vendor error or malfeasance; government surveillance; or other threats that evolve. In addition, third parties may attempt to fraudulently induce employees or users to disclose information in order to gain access to our data or our users’ data. Cyber-attacks continue to evolve in sophistication and volume, and inherently may be difficult to detect for long periods of time. Although we are currently in the process of developing systems and processes that are designed to protect our data and user data, to prevent data loss and to prevent or detect security breaches, we cannot assure you that such measures will ultimately become operational or provide absolute security, and we may incur significant costs in protecting against or remediating cyber-attacks.

Affected parties or government authorities could initiate legal or regulatory actions against us in connection with any actual or perceived security breaches or improper disclosure of data, which could cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices. Such incidents or our efforts to remediate such incidents may also result in a decline in our active user base or engagement levels. Any of these events could have a material and adverse effect on our business, reputation, or financial results.

If we were to lose or have limited access to certain platforms or data sources, we will lose our existing revenue from these platform and sources.

The loss of access to any platforms or data sources could limit our ability to effectively grow a portion of our operations. Our business would be harmed if these platforms:

	●	discontinues or limits access to its platform by us and other application developers;

	●	modify terms of service or other policies, including fees charged to, or other restrictions on, us or other application developers, or changes how the personal information of its users is made available to application developers;

	●	establishes more favorable relationships with one or more of our competitors; or

	●	develops its own competitive offerings.

We depend on the services of our executive officers and the loss of any of their services could harm our ability to operate our business in future periods.

Our success largely depends on the efforts and abilities of our sole executive ~~officers~~officer, ~~including~~ Christopher Miglino~~, Michael Malone, and Christopher Lahiji, the president of our wholly owned subsidiary, LD Micro~~. We are a party to an employment agreement with ~~each of~~ Mr. Miglino~~, Mr~~. ~~Malone~~ ~~and Mr. Lahiji.~~ Although we do not expect to lose ~~their~~his services in the foreseeable future, the loss of any of them could materially harm our business and operations in future periods until such time as we were able to engage a suitable replacement.

Weak economic conditions may reduce consumer demand for products and services.

A weak economy in the United States could adversely affect demand for advertising products, and services. A substantial portion of our revenue is derived from businesses that are highly dependent on discretionary spending by individuals, which typically falls during times of economic instability. Accordingly, the ability of our advertisers to increase or maintain revenue and earnings could be adversely affected to the extent that relevant economic environments remain weak or decline further. We currently are unable to predict the extent of any of these potential adverse effects.

Certain of our business affiliates have operations outside of the United States that are subject to numerous operational risks.

Certain of our affiliates have operations in countries other than the United States. In many foreign countries, it is not uncommon to encounter business practices that are prohibited by certain regulations, such as the Foreign Corrupt Practices Act and similar laws. Although certain of our business affiliates have undertaken compliance efforts with respect to these laws, their respective employees, contractors and agents, as well as those companies to which they outsource certain of their business operations, may take actions in violation of their policies and procedures. Any such violation, even if prohibited by the policies and procedures of these business affiliates or the law, could have certain adverse effects on the financial condition of these business affiliates. Any failure by these affiliates to effectively manage the challenges associated with the international operation of their businesses could materially adversely affect their, and hence our, financial condition.

In the event that we are unable to conduct business with certain third-party providers of data and information integral to our operations, our revenue and business prospects may suffer.

We rely on access to certain third-party providers of data in the investment sector in order for the Sequire platform to function and provide meaningful data and insights for our customers. We have benefited from the data that these third-parties have provided to us on behalf of their customers. In the event that we lose access to these third-party providers, it would limit our ability to effectively market the Sequire platform and sell our services to our customers. In the event that these third-party providers change their terms or our ability to access their data on a cost-effective basis to us, our business may be materially harmed.

Competitors may create products that compete with the Sequire platform and there can be no assurances that we will be able to protect our intellectual property related to Sequire.

The Sequire platform’s success depends heavily on our intellectual property and the continued development and innovation of the platform. Notwithstanding, there may be competitors seeking to compete by creating similar platforms with more aggressive pricing or lower cost structures, greater functionality, and by emulating the services provided by the Sequire platform. Furthermore, certain of the information that we implement in our Sequire platform is either publicly available or ascertained through third-party service providers for which no barrier to entry exists. Companies with significantly more resources than us may attempt to create competing products at lower prices. Furthermore, there can be no assurances that we are able to adequately defend our trade secrets or intellectual property rights with respect to competitors.

Our insurance coverage strategy may not be adequate to protect us from all business risks.

We may be subject, in the ordinary course of business, to losses resulting from accidents, acts of God and other claims against us, for which we may have no insurance coverage. As a general matter, we do not maintain as much insurance coverage as many other companies do, and in some cases, we do not maintain any at all. Additionally, the policies that we do have may include significant deductibles or self-insured retentions, policy limitations and exclusions, and we cannot be certain that our insurance coverage will be sufficient to cover all future losses or claims against us. A loss that is uninsured or which exceeds policy limits may require us to pay substantial amounts, which may harm our financial condition and operating results.

Risks Related to receipt of Securities for Services

Many of the securities we receive for services do not have an active trading market, and we value these securities at fair value as determined in good faith under procedures adopted by our Board of Directors, which valuation is inherently subjective and may not reflect what we may actually realize for the sale of these securities.

The majority of securities comprising our stock portfolio are, and are expected to continue to be, in securities that have a limited market, limited liquidity, high volatility, and accordingly, their market price may not accurately reflect the true value in the event that they were traded on an active market. As of December 31, ~~2021~~2022, we had unrealized losses from our stock portfolio of approximately $83.08 million. The fair value of assets whose true values are not readily ascertainable are determined in good faith under procedures adopted by our Board of Directors. Our Board of Directors utilizes the services of independent third-party valuation firms in determining the fair value of a portion of the securities we hold. Investment professionals from our investment adviser also prepare valuations using sources and/or proprietary models depending on the availability of information on our assets and the type of asset being valued, all in accordance with our valuation policy. Accordingly, the actual value of the securities we received could be substantially less than we previously estimated.

Because fair valuations, and particularly fair valuations of securities without efficient markets are inherently uncertain, may fluctuate over short periods of time, and are often based to a large extent on estimates, comparisons and qualitative evaluations of information, it may be more difficult for investors to value accurately our securities and could lead to undervaluation or overvaluation of our Common Stock. In addition, the valuation of these types of securities may result in substantial write-downs and earnings volatility.

The value ascribed to our assets in our financial statements as of a particular date may be materially greater than or less than the value that would be realized if our assets were to be liquidated as of such date. For example, if we were required to sell a certain asset or all or a substantial portion of our assets on a particular date, the actual price that we would realize upon the disposition of such asset or assets could be materially less than the value of such asset or assets as reflected in our financial statements. Volatile market conditions could also cause reduced liquidity in the market for certain assets, which could result in liquidation values that are materially less than the values of such assets as reflected in our financial statements.

We run the risk of inadvertently being deemed to be an investment company that is required to register under the Investment Company Act of 1940.

We run the risk of inadvertently being deemed to be an investment company that is required to register under the Investment Company Act of 1940 (the “Investment Company Act”) because a significant portion of our assets consists of securities in companies in which we own less than a majority interest. The risk varies depending on events beyond our control, such as significant appreciation or depreciation in the market value of certain of our publicly traded holdings, adverse developments with respect to our ownership of certain of our subsidiaries, and transactions involving the sale of certain assets. If we are deemed to be an inadvertent investment company, we may seek to rely on a safe-harbor under the Investment Company Act that would provide us a one-year grace period to take steps to avoid being deemed to be an investment company. In order to ensure we avoid being deemed an investment company, we have taken, and may need to continue to take, steps to reduce the percentage of our assets that constitute investment assets under the Investment Company Act. These steps have included, among others, selling marketable securities that we might otherwise hold for the long-term and deploying our cash in non-investment assets. We have recently sold marketable securities, including at times at a loss, and we may be forced to sell our investment assets at unattractive prices or to sell assets that we otherwise believe benefit our business in the future to remain below the requisite threshold. We may also seek to acquire additional non-investment assets to maintain compliance with the Investment Company Act, and we may need to incur debt, issue additional equity or enter into other financing arrangements that are not otherwise attractive to our business. Any of these actions could have a material adverse effect on our results of operations and financial condition. Moreover, we can make no assurance that we would successfully be able to take the necessary steps to avoid being deemed to be an investment company in accordance with the safe harbor. If we were unsuccessful, then we would have to register as an investment company, and we would be unable to operate our business in its current form. We would be subject to extensive, restrictive, and potentially adverse statutory provisions and regulations relating to, among other things, operating methods, management, capital structure, indebtedness, dividends, and transactions with affiliates. If we were deemed to be an investment company and did not register as an investment company when required to do so, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, that we would be unable to enforce contracts with third parties, and/or that third parties could seek to obtain rescission of transactions with us undertaken during the period in which we were an unregistered investment company.

We are not, and do not intend to become, regulated as an investment company under the U.S. Investment Company Act of 1940 (and similar legislation in other jurisdictions) and if we are deemed an “investment company” under the U.S. Investment Company Act of 1940, applicable restrictions would make it impractical for us to operate as contemplated.

The Investment Company Act and the rules thereunder (and similar legislation in other jurisdictions) provide certain protections to investors and impose certain restrictions on companies that are registered as investment companies. Among other things, such rules limit or prohibit transactions with affiliates, impose limitations on the issuance of debt and equity securities and impose certain governance requirements. We have not been and do not intend to become regulated as an investment company and we intend to conduct our activities so that we will not be deemed to be an investment company under the Investment Company Act (and similar legislation in other jurisdictions). In order to ensure that we are not deemed to be an investment company, we may be required to materially restrict or limit the scope of our operations or plans related to Sequire, which may limit us in the types of acquisitions that we may make and we may need to modify our organizational structure or dispose of assets that we would not otherwise dispose of. Moreover, if anything were to happen which would potentially cause us to be deemed an investment company under the Investment Company Act, it would be impractical for us to operate as intended pursuant to the Sequire platform and our business, financial condition and results of operations would be materially adversely affected. Accordingly, we would be required to take extraordinary steps to address the situation, such as the modification and restructuring of our Sequire platform, which would materially adversely affect our ability to derive revenue.

Sequire’s services are primarily paid for in restricted shares of its customers’ stock, which are often smaller publicly traded companies with volatile stock prices, limited liquidity, riskier operations and whose securities are frequently quoted on the OTC Markets, which includes the OTCQX, OTCQB as well as the OTC Pink, which typically quotes securities with increased risk and less liquidity.

Payment related to our Sequire platform and services is often made through the equity securities of our customers instead of cash. Since larger companies typically pay in cash, the securities issued are often those of smaller public companies that often have limited operating histories, limited operating cash, and negative cash flows. Additionally, these securities are primarily restricted, and are subject to legal holding periods pursuant to Rule 144 or other applicable exemptions. As of December 31, ~~2021~~2022 approximately $11.4 million of our holdings are issued by companies whose securities trade on the OTC Markets Inc. ~~Additionally,~~with a significant portion of these securities ~~quoted~~trading on the OTC ~~Markets, approximately 69% are quoted on the OTC~~ Pink. While our agreements for OTC issuers may contain certain provisions providing for the issuance of additional securities upon certain events, the value of such securities on the date of receipt compared to the date when we are able to legally sell the securities may decrease significantly, and the stock price of such issuers is often volatile, unpredictable, and with limited liquidity. Additionally, the OTC Pink has less stringent requirements for listing than even other OTC Markets, such as the OTCQB or OTCQX. Often, the OTC Pink lists companies that (i) may not be providing current information, (ii) may not have independent directors, (iii) may have little to no trading, and (iv) may be very volatile. As a result, the value of the equity received on the date of payment may be significantly greater than the actual revenue derived by us upon a sale of the securities. Furthermore, there is no guarantee that the companies that we receive securities from will remain solvent or maintain “current information”, or other required criteria during the legally required holding period under Rule 144, which would result in the loss of some or all of our anticipated revenue. These risks are significantly increased for OTC Pink issuers. As we are not experienced traders, there can be no assurances that our personnel responsible for selling the securities will do so at opportune times or be able to maximize profitability.

Our receipt of securities in lieu of cash may be negatively affected by a downturn in the U.S. and/or global securities markets and could significantly reduce our revenue.

General political and economic conditions and events such as U.S. fiscal and monetary policies, economic recessions, inflationary events, governmental shutdowns, trade tensions and disputes, global economic slowdowns, widespread health epidemics or pandemics, natural disasters, terrorist attacks, wars, changes in local and national economic and political conditions, regulatory changes or changes in the laws, or interest rate or currency rate fluctuations could create a downturn in the U.S. and/or global securities markets. As we often receive restricted securities of companies, a downturn in the U.S. or global markets may impact such companies and the value of the securities we receive for services pursuant to the Sequire platform.

Risks Related to Ownership of our Securities~~; Listing of our Securities~~.

Our Common Stock does not currently meet the continued listing requirements for the Nasdaq Market and accordingly is subject to delisting.

On April 19, 2022, we received a written notice from the Nasdaq Stock Market LLC that we are not in compliance with Nasdaq Listing Rule 5250(c)(1), because we had not yet filed our Annual Report on Form 10-K for the year ended December 31, 2021. Nasdaq Listing Rule 5250(c)(1) requires listed companies to timely file all required periodic reports with the SEC. Pursuant to Nasdaq rules, we have 60 calendar days from the date of the notification letter, or until June 20, 2022, to file the 2021 Annual Report on Form 10-K. Additionally, on May 24, 2022, we received another written notice from Nasdaq that we are further not in compliance with Nasdaq Listing Rule 5250(c)(1) because we had not yet filed our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. Similarly, on August 17, 2022, we received another written notice from Nasdaq that we are further not in compliance with Nasdaq Listing Rule 5250(c)(1) because we had not yet filed our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

Nasdaq previously provided the Company with an extension of one hundred eighty (180) days from the initial due date of the 2021 Form 10-K or until October 12, 2022, to regain compliance with Nasdaq’s continued listing rule as it relates to all of the untimely filings. Accordingly, the Company’s (i) 2021 Form 10-K, (ii) March 30, 2022 Form 10-Q, and (iii) June 30, 2022 Form 10-Q are all required to be filed with the SEC by October 12, 2022.

If our shares lose their status on the Nasdaq Market, we believe that our shares would likely be eligible to be quoted on the inter-dealer electronic quotation and trading system operated by OTC Markets Group, commonly referred to as the over-the-counter market. These markets are generally considered not to be as efficient as, and not as broad as, the Nasdaq Market. If our common stock is delisted, this would, among other things, substantially impair our ability to raise additional funds and could result in a loss of institutional investor interest and fewer development opportunities for us.

Conversions of our convertible debentures, notes issued under our revolving credit facility, and the exercise of our common stock warrants may dilute the ownership interest of existing stockholders or may otherwise depress the price of our common stock.

The conversion of some or all of the outstanding convertible debentures or the revolving note issued in our secured revolving credit facility would dilute the ownership interests of existing stockholders. Any sales in the public market of the common stock issuable upon such conversion or exercise of outstanding warrants could adversely affect their prevailing market prices. In addition, the existence of the convertible debentures, revolving note, and outstanding warrants may encourage short selling by market participants because the conversion of such notes could be used to satisfy short positions, or the anticipated conversion of such debentures into shares of our common stock could depress the price of our common stock.

The market price of our common stock may be volatile.

The market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than those of a seasoned issuer. The volatility in our share price is attributable to a number of factors. Mainly however, we are a speculative or “risky” investment due to our limited operating history, lack of significant revenues to date, our continued operating losses and missed guidance. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer. Additionally, in the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.

The trading price of the shares of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this quarterly report, these factors include:

● the success of competitive products; ● actual or anticipated changes in our growth rate relative to our competitors; ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; ● regulatory or legal developments in the United States and other countries; ● the recruitment or departure of key personnel; ● the level of expenses; ● actual or anticipated changes in estimates to financial results, development timelines or recommendations by securities analysts; ● variations in our financial results or those of companies that are perceived to be similar to us; ● fluctuations in the valuation of companies perceived by investors to be comparable to us ● inconsistent trading volume levels of our shares; ● announcement or expectation of additional financing efforts; ● sales of our common stock by us, our insiders or our other stockholders; ● additional issuances of securities upon the exercise of outstanding options and warrants; ● market conditions in the technology sectors; and ● general economic, industry and market conditions.

	●	variations in our financial results or those of companies that are perceived to be similar to us;

	●	fluctuations in the valuation of companies perceived by investors to be comparable to us

	●	inconsistent trading volume levels of our shares;

	●	announcement or expectation of additional financing efforts;

	●	sales of our common stock by us, our insiders or our other stockholders;

	●	additional issuances of securities upon the exercise of outstanding options and warrants;

	●	market conditions in the technology sectors; and

	●	general economic, industry and market conditions.

In addition, the stock market in general, and advertising technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance. The realization of any of these risks could have a dramatic and material adverse impact on the market price of the shares of our common stock.

The Revolving Note issued under our senior secured revolving credit facility contains an adjustment to the price at which the note can be converted into our common stock, which may result in further dilution to our shareholders.

The revolving note issued in our August 2022 secured revolving credit facility, of which $56,~~580~~2000,000 in principal is currently outstanding, is convertible into our common stock at a conversion price ofthat ~~$15.00 per share (the “Conversion Price”). Notwithstanding, the Conversion Price~~ is subject to adjustment upon certain enumerated events which includes the sale of our common stock or equivalents at a deemed price equal to or less than $5.00 per share. On August 3115, ~~2022~~2024, the closing price of our common stock was $20.3725 per share. In the event that we are required to raise additional capital through the sale of our equity or debt securities, given our current market price, it is likely that the Conversion Price would be adjusted, and we may be required to issue a significantly greater number of shares upon conversion, than currently anticipated, resulting in greater dilution to our existing shareholders.

We may be subject to securities litigation, which is expensive and could divert management attention.

The market price of the shares of our common stock may be volatile, and in the past companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business. To the extent that any claims or suits are brought against us and successfully concluded, we could be materially adversely affected, jeopardizing our ability to operate successfully. Furthermore, our human and capital resources could be adversely affected by the need to defend any such actions, even if we are ultimately successful in our defense.

Failure to meet the financial performance guidance or other forward-looking statements we have provided to the public could result in a decline in our stock price.

We have previously provided, and may provide in the future, public guidance on our expected financial results for future periods. Although we believe that this guidance provides investors with a better understanding of management’s expectations for the future and is useful to our stockholders and potential stockholders, such guidance is comprised of forward-looking statements subject to the risks and uncertainties. Our actual results may not always be in line with or exceed the guidance we have provided. For example, in the past, we have missed guidance a number of times. If our financial results for a particular period do not meet our guidance or if we reduce our guidance for future periods, the market price of our common stock may decline.

Delaware law contains anti-takeover provisions that could deter takeover attempts that could be beneficial to our stockholders.

Provisions of Delaware law could make it more difficult for a third-party to acquire us, even if doing so would be beneficial to our stockholders. Section 203 of the Delaware General Corporation Law may make the acquisition of our company and the removal of incumbent officers and directors more difficult by prohibiting stockholders holding 15% or more of our outstanding voting stock from acquiring us, without our board of directors’ consent, for at least three years from the date they first hold 15% or more of the voting stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the trading price of our common stock and trading volume could decline.

The trading market for our shares of our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. A small number of securities and industry analysts currently publish research regarding our Company on a limited basis. In the event that one or more of the securities or industry analysts who have initiated coverage downgrade our securities or publish inaccurate or unfavorable research about our business, the price of our shares of common stock would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our securities could decrease, which might cause the trading price of our shares of common stock and trading volume to decline.

The elimination of monetary liability against our directors and officers under Delaware law and the existence of indemnification rights held by our directors and officers may result in substantial expenditures by us and may discourage lawsuits against our directors and officers.

Our certificate of incorporation eliminates the personal liability of our directors and officers to our company and our stockholders for damages for breach of fiduciary duty as a director or officer to the extent permissible under Delaware law. Further, our bylaws provide that we are obligated to indemnify any of our directors or officers to the fullest extent authorized by Delaware law. We are also parties to separate indemnification agreements with certain of our directors and our officers which, subject to certain conditions, require us to advance the expenses incurred by any director or officer in defending any action, suit or proceeding prior to its final disposition. Those indemnification obligations could result in our company incurring substantial expenditures to cover the cost of settlement or damage awards against our directors or officers, which we may be unable to recoup. These provisions and resultant costs may also discourage us from bringing a lawsuit against any of our current or former directors or officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders against our directors and officers even if such actions, if successful, might otherwise benefit us or our stockholders.

ITEM 1B.

UNRESOLVED STAFF COMMENTS.

Not applicable to a smaller reporting company.

ITEM 1C.

CYBERSECURITY.

The Securities and Exchange Commission’s new cybersecurity disclosure requirements under Regulation S-K Item 106 are not applicable to this Annual Report on Form 10-K for the fiscal year ended December 31, 2022. These new disclosure requirements become effective for annual reports filed for fiscal years ending on or after December 15, 2023. As such, we are not required to provide the cybersecurity risk management, strategy, and governance disclosures mandated by Item 106 in this report. We will include the required cybersecurity disclosures in our Annual Report on Form 10-K for the fiscal year ending December 31, 2023, which we intend to file in 2024. At that time, we will provide information on our processes for assessing, identifying, and managing material risks from cybersecurity threats, as well as details on our board’s oversight and management’s role in cybersecurity risk management.

ITEM 2.

DESCRIPTION OF PROPERTY.

AsWe ~~a result of COVID-19, we~~ our currently operating as a virtually distributed operation. We lease our principal executive offices, located in Westlake Village, California and consisting of approximately 500 square feet on a month-to-month basis at a rate of $1,000 per month. We also maintain offices in Mexicali, Mexico where we lease approximately 3,400 square feet of office space under a lease agreement terminating in September 2023 at an annual rental of $140,000 plus a value-added tax (VAT) or its equivalent in the Mexican national currency and a 10% VAT for maintenance and certain overhead expenses. We believe ~~both~~our current locations ~~are~~is suitable and adequate for our current levels of operations and anticipated growth.

ITEM 3.

LEGAL PROCEEDINGS.

AsFrom oftime ~~the~~to ~~date of this Annual Report~~time, ~~there~~we are nosubject ~~material~~to ~~pending~~ordinary ~~legal~~routine orlitigation ~~governmental~~incidental ~~proceedings relating~~ to our ~~company~~normal orbusiness ~~properties to~~operations. ~~which~~We we are not currently a party to, and to our ~~knowledge~~property ~~there~~is ~~are~~not nosubject ~~material proceedings~~ to, ~~which~~ any ofmaterial ~~our~~legal ~~directors~~proceedings, ~~executive~~except ~~officers~~as ~~or affiliates~~set ~~are~~forth ~~a party adverse to us or which have a material interest adverse to us~~below.

Michael Malone, a former executive officer of the Company, filed a complaint in the Superior Court of the State of California for the County of Los Angeles Northwest District (Case No. 23VECVO3433) against the Company on August 7, 2023 claiming Breach of Contract, Violations of the Labor Code and Violation of the California Business and Professions Code. Mr. Malone, among other items, is seeking amounts due under an Employment Agreement entered between the parties as well as unpaid wages, and general and special damages. The Company filed an Answer on October 9, 2023 denying all claims. In addition, on October 9, 2023, the Company filed a Cross Complaint against Mr. Malone for Breach of Contract, Breach of Fiduciary Duty and Misappropriation of Trade Secrets seeking, among other items, general, special, statutory and punitive damages. The Company intends to vigorously pursue its rights in this matter.

Stock Market Manger, Inc., a company believed to be owned by Carl Dilley, filed a complaint against the Company in the Circuit Court of the Sixth Circuit in and for Pinellas County, Florida (Case No. 24-002894) claiming Breach of Contract and Breach of Covenant of Good Fauth and Fair Dealing seeking damages in the minimum amount of $1,246,235. The Company had the matter removed to the U.S. District Court for the Middle District of Florida. The Company intends to vigorously pursue its rights in this matter.

ITEM 4.

MINE SAFETY DISCLOSURES.

Not applicable.

1117

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market for Our Common Equity

~~Class~~On AMarch ~~Common~~7, 2023, the Company received written notice (the “Delisting Notice”) from the staff of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, as a result of non-compliance with Nasdaq Listing Rule 5250(c)(1) (the “Filing Requirement”), the staff of Nasdaq had determined that the Company’s Class A common stock (the “Securities”) will be delisted from Nasdaq. Trading of the Securities was suspended at the opening of business on May 9, 2023 and a Form 25-NSE was filed with the Securities and Exchange Commission, which removed the Securities from listing and registration on Nasdaq. Our common stock is currently traded on OTC Markets Expert Market under the symbol “SRAX”. Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

~~Our Class A common stock is listed on the Nasdaq Global Market under the symbol “SRAX.”~~Holders

AsOn of August 3129, ~~2022~~2024, there were ~~approximately~~59 47 holders of record of our common stock. ~~Because~~We ~~many~~believe ofa ~~our~~substantially ~~shares~~greater ~~of common~~number ~~stock are held by brokers and other institutions on behalf~~ of ~~stockholders,~~beneficial weowners hold ~~are~~shares ~~unable to estimate the total number~~ of ~~beneficial~~ ~~holders~~common ~~represented~~stock bythrough ~~these record holders~~brokers, ~~but~~banks itor isother ~~well in excess of the number of record holders~~nominees.

Dividend policy

Common Stock

We have never paid cash dividends on either our Class A common stock or our Class B common stock. Under Delaware law, we may declare and pay dividends on our capital stock either out of our surplus, as defined in the relevant Delaware statutes, or if there is no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. If, however, the capital of our company, computed in accordance with the relevant Delaware statutes, has been diminished by depreciation in the value of our property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets, we are prohibited from declaring and paying out of such net profits and dividends upon any shares of our capital stock until the deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets shall have been repaired.

Series A Preferred Stock

We issued a one-time return of capital consisting of a total of 36,462,417 shares of our Series A Preferred Stock to Qualified Recipients (as defined below) on a 1-for-1 as converted to common stock basis (the “Dividend”). The record date for the Dividend was September 20, 2021 (the “Record Date”). The Series A Preferred Stock entitles the Qualified Recipients with the right to receive the net proceeds from sales of certain securities received by SRAX as payment from its customers for access to the Sequire Platform services (the “Designated Assets”).

As of the Record Date, the following holders of securities were entitled to receive the Dividend (collectively, the “Qualified Recipients):

(i) each outstanding share of common stock, of which 25,160,504 shares were issued and outstanding, (ii) each share of common stock underlying outstanding common stock purchase warrants containing a contractual right to receive the Dividend of which, 10,377,645 were outstanding, and (iii) each original issue discount senior convertible debenture issued on June 30, 2020, containing a contractual right to receive the Dividend on an as converted to common stock basis, of which $2,486,275 of Debentures were outstanding in principal and interest, convertible into 924,268 shares of common stock.

As of the Record Date, the Designated Assets had an aggregate value of approximately $6.5 million and consisted of securities (i) from twenty-five (25) companies that trade or are quoted on the OTC Markets, (ii) having stock prices ranging from $0.01 to $5.15, (iii) with aggregate values of the securities held by the Company ranging from $1,930 to $900,000, and (iv) with the average value held by the Company equal to $260,000 per issuer. The Designated Assets consist of (a) 24 issuers’ common stock and (b) one (1) issuer’s convertible debt instrument that is convertible into common stock.

The securities and cash that underly the Designated Assets had a market value of $3,925,000 as of December 31, 2021.

During the fourth quarter and portion of the third quarter of 2021, we sold an aggregate of approximately $680,000 of the Designated Assets. On January 30, 2022, we distributed the net proceeds from those shares to holders of our Series A Preferred Shares. Pursuant to the distribution, each holder of Series A Preferred Stock received approximately $0.01 per share. During the first quarter of 2022, we sold an aggregate of $268,000 of the Designated Assets. The sale of Designated Assets did not result in sufficient proceeds to declare a distribution pursuant to the terms of the Series A Preferred Stock. During the second quarter of 2022, we sold an aggregate of $127,000 of the Designated Assets. The sale of Designated Assets did not result in sufficient proceeds to declare a distribution pursuant to the terms of the Series A Preferred Stock.

~~During~~As of December 31, 2022, after taking into account the ~~first~~sale ~~quarter~~ of ~~2022~~the Designated Assets, wethe ~~sold~~remaining Designated Assets have an aggregate value of approximately $~~268~~170,000 of(pursuant to the ~~Designated~~same ~~Assets.~~valuation ~~The~~methods ~~sale~~that ofour ~~Designated~~other ~~Assets~~securities ~~did~~are ~~not~~valued ~~result~~ in ~~sufficient~~this ~~proceeds to~~Annual ~~declare~~Report, awith such ~~distribution~~quoted ~~pursuant~~market toprice ~~the~~potentially ~~terms~~being ofgreater ~~the~~or ~~Series~~lesser Athan ~~Preferred~~such ~~Stock~~value).

During the second quarter of 2022, we sold an aggregate of $127,000 of the Designated Assets. The sale of Designated Assets did not result in sufficient proceeds to declare a distribution pursuant to the terms of the Series A Preferred Stock.

As of June 30, 2022, after taking into account the sale of approximately $691,000, $268,000, and $127,000 during 2021, first quarter of 2022, and the second quarter of 2022, respectively, of the Designated Assets, the remaining Designated Assets have an aggregate value of approximately $2,789,383 (pursuant to the same valuation methods that our other securities are valued in this Annual Report, with such quoted market price potentially being greater or lesser than such value) and subsequent to sales and other transactions, consisted of securities (i) from nineteen (19) companies that trade or are quoted on the OTC Markets, (ii) having quoted stock prices ranging from $0.001 to $2.50, (iii) with aggregate values of the securities held by us ranging from $0 to $550,000, and (iv) with an average value equal to $93,000 per issuer. The Designated Assets consist of (a) 19 issuers’ common stock and (b) cash.

Securities Authorized for Issuance under Equity Compensation Plans

See information contained in Part III Item 12 of Annual Report entitled “Equity Compensation Plan Information.”

Recent sales of unregistered securities

The following information is given with regard to unregistered securities sold since January 1, ~~2021~~2022. The following securities were ~~issued~~ issued in private offerings pursuant to the exemption from registration contained in the Securities Act of 1933, as amended (the “Securities Act”) and the rules promulgated thereunder in reliance on Section 4(a)(2) thereof, relating to offers of securities by an issuer ~~not~~ not involving any public offering:

● During 2021 we issued a total of 183,772 shares of A common stock in connection with the cashless exercise of 445,294 common stock purchase warrants. ● On March 15, 2021, we issued Brock Pierce, our newly appointed Board member, an option to purchase 803 shares of common Stock for joining the Board. The Grant covers the period from March 10, 2021 (his appointment date), through April 15, 2021. The options have an exercise price of $4.48 per share, a term of seven (7) years, and will vest fully on April 15, 2021. The options were issued as payment for services on the Board from March 10, 2021 through April 15, 2021 and is valued at $2,958. The options were issued from our 2014 equity compensation plan. ● On January 2, 2022 Michael Malone, our Chief Financial Officer exercised an option to purchase 100,000 shares of our common stock that was issued on December 15, 2018. The option was exercised on a cashless basis and included 57,016 shares withheld pursuant to the cashless exercise and an additional 16,732 shares withheld for tax withholding. Accordingly, we issued Mr. Malone 26,252 shares of common stock. ● On January 6, 2022, we issued Michael Malone, our Chief Financial Officer, a conditional option to purchase 100,000 shares of Class A common stock. The option is a conditional grant, subject to shareholder approval. Assuming approval by the shareholders, the option has an exercise price of $4.25 per share, a term of seven (7) years and vests in equal quarterly installments over a three (3) year period from the grant date. The option had a Black-Scholes value on the grant date of $331,000. ● On January 3, 2022, we issued four (4) common stock purchase options to our non-employee directors, pursuant to our amended non-employee director compensation policy. Each option entitled the holder to purchase 29,533 shares of common stock at an exercise price of $4.35 per share, for an aggregate exercise amount of $128,468.55. The options vest in equal quarterly over a one (1) year period from the issuance date. The options expire on the seven (7) year anniversary of the issuance date. Each option has a Black-Scholes value of $100,000.

●

On January 2, 2022, Michael Malone, our former Chief Financial Officer exercised an option to purchase 100,000 shares of our common stock that were issued on December 15, 2018. The option was exercised on a cashless basis and included 57,016 shares withheld pursuant to the cashless exercise and an additional 16,732 shares withheld for tax withholding. Accordingly, we issued Mr. Malone 26,252 shares of common stock.

●

On January 6, 2022, we issued Michael Malone, our former Chief Financial Officer, a conditional option to purchase 100,000 shares of Class A common stock. The option is a conditional grant, subject to shareholder approval. Assuming approval by the shareholders, the option has an exercise price of $4.25 per share, a term of seven (7) years and vests in equal quarterly installments over a three (3) year period from the grant date. The option had a Black-Scholes value on the grant date of $331,000.

1318

● On January 3, 2022, we issued four (4) common stock purchase options to our non-employee directors, pursuant to our amended non-employee director compensation policy. Each option entitled the holder to purchase 29,533 shares of common stock at an exercise price of $4.35 per share, for an aggregate exercise amount of $128,468.55. The options vest in equal quarterly over a one (1) year period from the issuance date. The options expire on the seven (7) year anniversary of the issuance date. Each option has a Black-Scholes value of $100,000. ● On January 6, 2022, we issued Christopher Miglino, our Chief Executive Officer, an option to purchase 120,000 shares of common stock. The option has an exercise price of $4.25 per share, a term of seven (7) years and vests in equal quarterly installments over a three (3) year period from the grant date. The option had a Black-Scholes value on the grant date of $397,000. ● On January 6, 2022, we issued our employees, options to purchase an aggregate of 380,000 shares of common stock. Each of the options has an exercise price of $4.25 per share, a term of five (5) years, and vests in equal quarterly installments over a three (3) year period from the grant date. The aggregate of the 380,000 options had a Black-Scholes value on the grant date $1,126,000. ● On January 6, 2022, we issued our employees, options to purchase an aggregate of 120,000 shares of common stock. Each of the options is a conditional grant, subject to shareholder approval. Each of the options has an exercise price of $4.25 per share, and 100,000 have a term of seven (7) years and 20,000 have a term of five (5) years, and each vest in equal quarterly installments over a three (3) year period from the grant date. The aggregate of the 120,000 options had a Black-Scholes value on the grant date of $390,000. ● During the second quarter of 2022, warrant holders exercised 689,173 warrants on a cashless basis for an aggregate of 195,525 shares of common stock. ● On June 13, 2022, we entered into an agreement with an institutional investor whereby in exchange for the payment of $404,513.40 (the “Purchase Price”), the investor received (i) the right to receive the net proceeds upon the sale of certain securities of the Company (“CVR Payments”) with a quoted price equal to $674,190 (with a guaranteed minimum return of 120% of such Purchase Price and (ii) the right after 90 days but before 120 days to demand payment of 120% of the Purchase Price in cash less amounts previously paid from the CVR Payments. ● On July 1, 2022, we issued an original issue discount bridge note in principal amount of $650,000 to an institutional investor in exchange for $500,000 in cash. The Bridge Note was non-interest bearing and a maturity date of August 15, 2022. Effective August 8, 2022, the bridge note was exchanged for revolving notes in the senior secured revolving credit facility. ● On August 8, 2022, we entered into a senior secured revolving credit facility agreement with an institutional investor to initially borrow up to $9,450,000 in the aggregate from time to time, subject to certain conditions. The loans are secured by all of our assets. There is currently $56,~~580~~200,000 in principal outstanding on the revolving loans, which are convertible into our common stock ~~at a conversion price of $15.00 per share~~, subject to adjustment for stock splits, dividends, fundamental transactions, and upon sales of our equity securities at $5.00 per share or less. In addition, as part of the transaction we extended the maturity dates of 2,590,358 outstanding common stock purchase warrants held by the lender until September 30, 2023. ● On November 2, 2023, the Company entered into definitive securities purchase agreements with the November 2023 Purchasers for the purchase and sale of the November 2023 Debentures and the November 2023 Warrants in a private placement. The ~~revolving~~November ~~loans~~2023 Debentures, which mature on November 3, 2024, pay 0%, no interest per annum commencing on November 3, 2023. The November 2023 Debentures are convertible at the option of the holder into shares of our Class A common stock at an initial conversion price of $0.25 per share, subject to adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business combinations, and reorganizations (v) subsequent equity sales. The November 2023 Warrants are initially exercisable at $150.0025 per share and, are subject to cashless exercise after six months if the shares underlying the November 2023 Warrants are not subject to an effective resale registration statement. The November 2023 Warrants are also subject to adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain ~~enumerated~~fundamental ~~events~~transactions, including ~~deemed~~but not limited to the sale of the Company, business combinations, and reorganizations. (v) subsequent equity sales. ● On March 5, 2024, the Company entered into definitive securities purchase agreements with the March 2024 Purchasers for the purchase and sale of an aggregate of the March 2024 Debentures. The March 2024 Debentures, which mature on February 28, 2026, pay 0%, no interest per annum commencing on February 29, 2024. The March 2024 Debentures are convertible at the option of the holder into shares of our Class A common stock orat ~~common~~an initial conversion price of $0.25 per share, subject to adjustment in the event of (i) stock ~~equivalents~~splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business combinations, and reorganizations (v) subsequent equity sales. The March 2024 Debentures also contain certain customary events of default provisions, including, but not limited to, default in payment of principal, changes in control of the Company. Upon the occurrence of any such event of default, the outstanding principal amount of the March 2024 Debenture plus liquidated damages, interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the March 2024 Purchaser’s election, immediately due and payable in cash. ● On March 29, 2024, the Company entered into definitive securities purchase agreements with a certain accredited and institutional investor April 2024 Purchasers for the purchase and sale of the April 2024 Debentures. The April 2024 Debentures, which mature on March 29, 2026, pay 0%, no interest per annum commencing on March 29, 2024. The April 2024 Debentures are convertible at the option of the holder into shares of our Class A common stock (“Common Stock”) at an initial conversion price of $0.25 per share, ~~that~~subject isto $5adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business combinations, and reorganizations (v) subsequent equity sales.00 orThe ~~less~~April 2024 Debentures also contain certain customary events of default provisions, including, but not limited to, default in payment of principal, changes in control of the Company. Upon the occurrence of any such event of default, the outstanding principal amount of the April 2024 Debenture plus liquidated damages, interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the Purchaser’s election, immediately due and payable in cash.

Purchases of equity securities by the issuer and affiliated purchasers.

The following table provides information about our repurchases of our common stock that is registered pursuant to Section 12 of the Securities Exchange Act of 1934 during the year ended December 31, 2021None.

Period	Total Number of Shares Purchased(b)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)(b)		Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (a)(b)
August 1, to August 31, 2021		—		—		—	$	10,000,000
September 1 to September 30, 2021		—		—		—	$	10,000,000
October 1 to October 31, 2021		—		—		—	$	10,000,000
November 1 to November 30, 2021		155,000		5.12		155,000	$	9,206,000
December 1 to December 31, 2021		—		—		—	$	9,206,000
Total		155,000		5.12		155,000		9,206,000

(a) In August 2021, our Board of Directors approved a share repurchase program pursuant to which we are authorized to repurchase up to $10,000,000 of our common stock in privately negotiated transactions or in the open market at prices per share not exceeding the then-current market prices. The total remaining authorization for future common share repurchases under our share repurchase program was $9.2 million as of December 31, 2021. Under the program, management has discretion to determine the dollar amount of shares to be repurchased and the timing of any repurchases in compliance with applicable law and regulation. This includes purchases pursuant to Rule 10b5-1 plans, including accelerated share repurchases. The program does not have an expiration date.

ITEM 6.

SELECTED FINANCIAL DATA.

Not applicable to a smaller reporting company.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements regarding our business development plans, timing, strategies, expectations, anticipated expenses levels, business prospects and positioning with respect to market, demographic and pricing trends, business outlook, technology spending and various other matters (including contingent liabilities and obligations and changes in accounting policies, standards and interpretations) and express our current intentions, beliefs, expectations, strategies or predictions. These forward-looking statements are based on a number of assumptions and currently available information and are subject to a number of risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Special Note Regarding Forward-Looking Statements” and under “Risk Factors” and elsewhere in this annual report. The following discussion should be read in conjunction with our financial statements and related notes thereto included elsewhere in this annual report.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:

Executive Overview

~~Financial~~For ~~results:~~the years ended December 31, 2022 and 2021, total revenue was $27,859,000 and $26,707,000, respectively. Revenues increased from the prior year by $1,152,000 or 4.31%.

	●	Revenue was $26.7 million, up approximately 312% for year ended December 31, 2021 versus 2020.
	●	Cash, cash equivalents and marketable securities were $17.0 million as of December 31, 2021.

Cash, cash equivalents, and marketable securities at December 31, 2022 and 2021, were $9,193,000 and $16,965,000, respectively. Cash, cash equivalents and marketable securities decreased from the prior year by $7,772,000 or 45.81%. The Company continues to sell its marketable securities to meet working capital requirements.

Reportable Segments

We have a single operating and business segment, Sequire, which is comprised of two reporting units; Sequire and LD Micro. Our Sequire segment includes the licensing of our SaaS based Sequire platform and related services, and our event and conference operations. The segment amounts included in MD&A are presented on a basis consistent with our internal management reporting. All differences between our internal management reporting basis and accounting principles generally accepted in the United States of America (“GAAP”), along with certain corporate-level and other activity, are included in Corporate and Other. Our management, along with our chief executive officer, who acts as our Chief Operating Decision Maker (as such term is defined accounting segment reporting guidance), review financial information presented on a consolidated basis for purposes of allocating resources and evaluating performance and do not evaluate using asset information.

Our Sequire segment includes the licensing of our SaaS based Sequire platform and related services, and our LD Micro, Inc. event and conference operations. The segment amounts included in MD&A are presented on a basis consistent with our internal management reporting. All differences between our internal management reporting basis and accounting principles generally accepted in the United States of America (“GAAP”), along with certain corporate-level and other activity, are included in Corporate and Other. Our management, along with our Chief Executive Officer, who acts as our Chief Operating Decision Maker (as such term is defined accounting segment reporting guidance), review financial information presented on a consolidated basis for purposes of allocating resources and evaluating performance and do not evaluate using asset information.

Deconsolidation of BIGToken, Inc.

On ~~December~~ December 29, 2021, ~~our~~we ~~subsidiary~~deconsolidated ~~BIGtoken,~~our ~~Inc.~~majority ~~(fka~~owned ~~Force~~subsidiary ~~Protection~~BIG ~~Video Equipment) completed a merger with BritePool~~Token, Inc. (~~BritePool~~“BIGToken”). As(formerly aknown ~~result~~as ~~of the transaction our ownership interest in BIGToken was reduced from 65.9% to 36.45% of the issued~~Force ~~and~~Protection ~~outstanding~~Video ~~common~~Equipment ~~stock~~Corporation). AsAfter ~~part of~~ the ~~transaction~~deconsolidation, we ~~entered~~did ~~into~~not anbeneficially ~~exchange~~own ~~agreement~~a ~~pursuant~~controlling tointerest ~~which~~in ~~we converted 135~~BIGToken,~~870,262,448~~ ~~or approximately 50% of the issued~~ and no ~~outstanding~~longer ~~shares~~consolidated of BIGToken into ~~non-voting Series D Convertible Preferred Stock (“Series D Stock”). The decrease in~~ our ~~ownership~~financial ofresults ~~voting~~for ~~equity~~periods ~~resulted~~ending inafter ~~our~~December ~~loss~~31, ~~of the ability to exert significant control over BIGToken resulted in us deconsolidating its operation~~2021.

WeThe ~~have~~financial ~~classified~~results ~~the~~of ~~related assets and liabilities associated with~~ BIGToken’s ~~business~~for asthe ~~discontinued~~year ~~operations~~ended inDecember ~~our~~31, ~~consolidated balance~~2021 ~~sheet.~~are ~~The~~presented ~~financial~~as ~~results~~income of(loss) ~~BIGToken’s~~from ~~business has been presented as~~ discontinued operations, innet ~~our consolidated statement~~ of taxes ~~income~~on ~~for all periods presented through~~ the ~~respective~~consolidated ~~transaction~~statements ~~close~~of ~~date.~~operations ~~Please~~and ~~see~~its ~~“Note 2~~assets —and ~~Discontinued~~liabilities ~~Operations”~~as inof ~~our~~December ~~consolidated~~31, ~~financial~~2021 ~~statements~~are ~~included~~presented ~~elsewhere~~as inassets ~~this report for additional information.~~and Asliabilities ~~such, the discussion~~ of ~~our~~discontinued ~~results of~~ operations ~~and~~on the ~~related~~consolidated ~~tables,~~balance ~~below~~sheets. doThe ~~not~~historical ~~included~~consolidated ~~the~~statement ~~operations~~ of ~~BIGToken,~~cash asflows reflects ~~its~~the ~~results~~effect of ~~operations have been included in discontinued operations on~~ the ~~consolidated statements of operations~~deconsolidation.

15Unless noted otherwise, discussion in the notes to the consolidated financial statements pertain to continuing operations.

See Note 4 – Discontinued Operations.

Business Focus

During ~~2021~~2022, we have focused on: (i) the continued growth of our Sequire platform’s functionality and user base and (ii) the expansion of LD ~~micro~~Micro events and offerings. Subsequent to year end, we disposed of LD Micro.

~~Covid-19~~21

Our business has been impacted by the COVID-19 pandemic, which has resulted in authorities implementing numerous preventative measures to contain or mitigate the outbreak of the virus, such as travel bans and restrictions, limitations on business activity, quarantines, and shelter-in-place orders. These measures have caused, and are continuing to cause, business slowdowns or shutdowns in affected areas, both regionally and worldwide, which have significantly impacted our business and results of operations. We are unable to predict the impact of the pandemic on user growth and engagement with any certainty, and we expect these trends to continue to be subject to volatility.Business

~~More~~We ~~recently,~~are wea ~~believe~~technology ~~the~~firm ~~pandemic~~focused ~~has~~on ~~contributed~~enhancing tocommunications anbetween ~~acceleration~~public incompanies ~~the~~and ~~shift~~their ofshareholders ~~commerce~~and ~~from~~investors. ~~offline~~We ~~to online, as well as increasing~~currently ~~consumer~~have ~~demand~~two ~~for~~distinct ~~purchasing~~business ~~products~~units; ashowever ~~opposed to services, and~~ we ~~experienced~~operate ~~increasing~~in ~~demand~~one ~~for~~business ~~our products as a result of these trends. The impact of the pandemic on our overall results of operations, remains highly uncertain for the foreseeable future.~~segment:

We intend to continue to invest in our business based on our company priorities, and we anticipate that additional investments in our network infrastructure, as well as scaling our headcount to support our growth, will continue to drive expense growth in 2022.

	●	Our unique SaaS platform, Sequire, which allows issuers to track their shareholders’ behaviors and trends, then use data-driven insights to engage with shareholders across marketing channels. Through Sequire, we offer tools and related data and insight services to allow issuers of publicly traded securities to better understand their position in the market.

	●	LD Micro, Inc. organizes and hosts investor conference for micro and small-cap companies. LD Micro, Inc. was disposed of on March 3, 2023. See the accompanying financial consolidated financial statements for additional information.

~~FINANCIAL~~We ~~CONDITION~~derive our revenues from the following sources:

~~Going Concern~~● Licensing of our proprietary SaaS platform; ● Sales of proprietary data; ● Attendance and sponsorship fees from investor conferences and events; and ● Sales of insight and consulting services.

Cash on hand and marketable securities at December 31, 2021 was approximately $1.35 million and $15.6 million, respectively. Based upon our cash flow projections taking into account cash, marketable securities and the projected cash flows from operations we believe we have enough liquidity, taking into account the uncertainty related to the ongoing pandemic and general economic uncertainty, to continue to fund operations at their currently level through the remainder of the year.Sequire

The ~~Company has incurred significant losses since~~ ~~its~~Sequire ~~inception~~platform ~~and~~is ~~has~~a ~~not~~central ~~demonstrated~~hub anwhere ~~ability~~companies tocan ~~generate~~manage ~~cash~~certain ~~from~~administrative ~~the~~functions, ~~sales~~reach ofout ~~its~~and ~~services~~engage towith ~~in excess of operating expenses.~~shareholders Inas ~~addition,~~well ~~the~~as ~~Company’s~~identify ~~operations~~potential ~~may~~new ~~require additional financial support or additional financing~~investors. ~~These~~The ~~factors~~platform ~~create~~utilizes ~~uncertainty or~~machine ~~doubt~~learning ~~about~~and ~~the~~advanced ~~Company’s~~analytics ~~ability~~ to ~~continue~~bring asour aclients ~~going~~actionable information ~~concern within one year after the date~~ that ~~the~~we ~~consolidated~~believe ~~financial statements~~can ~~are issued. The consolidated financial statements do not include any adjustments that might~~ be ~~necessary~~used ifto ~~the~~maximize ~~Company~~ROI ~~is unable~~through tobetter ~~continue~~investor asand astockholder ~~going concern~~communications. ~~Accordingly,~~Clients ~~the~~then ~~consolidated~~can ~~financial statements have been prepared on a basis that assumes~~engage ~~the~~with ~~Company~~targeted ~~will~~shareholder ~~continue~~groups asacross amarketing ~~going~~channels ~~concern~~including ~~and~~email, ~~which~~social ~~contemplates~~media, ~~the~~programmatic, ~~realization of assets~~ and ~~satisfaction of liabilities and commitments in the ordinary course of business~~hyperlocal.

~~Cash~~When interpreting data, clients can see gains and losses over time, buying/selling trends, total outstanding shares, new shareholders, and ~~Cash~~shareholders ~~Equivalents~~broken out by percentage. Based on this data, we can assist our users in developing customized communications campaign utilizing targeted ads and ~~Investments~~messaging.

As of December 31, 2021, we had (i) cash of $1.35 million , and (ii) marketable securities of $15.6 million for a total of approximately $17 million compared to $8.90 million as of December 31, 2020. Cash and cash equivalents consist primarily of highly liquid investments such as money market funds and deposits held at major banks. In addition, we had availability of $1,000,000 of unused amounts available under a credit facility as of December 31, 2021. Certain of such unused amounts are subject to satisfying specified conditions prior to draw-down (such as pledging to our lenders sufficient subscriptions and customer contracts).22

16Among other features, the Sequire platform provides its users tools to monitor investor sentiment and activities and simplify back office administration such as:

~~Components~~ ● real-time level-two trading data, ● the ability to monitor the activities of ~~Results~~competitive public companies of ~~Operations~~the user, ● news alerts, ● custom survey feature to enhance shareholder communications, ● real-time and searchable warrant and option ledgers; and ● integrated communication between investor relations programs and corporate communication firms.

Data Targeting

We help our clients build an investor base through targeted advertising and marketing campaigns, tailored to their needs. Using data-driven insights, we help clients meet their unique marketing objectives when messaging existing investors, new investors, or consumers.

Virtual Events and LD Micro

LD Micro is the premier event platform for micro-cap and small cap companies. We are currently planning to expand the number and subject matter of our conferences and events. Through the events platform, we have the ability to host a variety of virtual events and conferences including investor conferences, earnings calls, shareholder meetings, annual, investor/analyst days, corporate town halls, roadshows, and more. We believe that our ability to offer users a seamless, centrally managed virtual events solution that can be customized to any industry will help transform our platform into the premier investor event tool. LD Micro, Inc. was disposed of on March 3, 2023. See the accompanying financial consolidated financial statements for additional information.

Marketing and sales

Intellectual property

Financial Condition

Liquidity and Going Concern

As reflected in the accompanying consolidated financial statements, for the year ended December 31, 2022, the Company had:

●	Net loss of $31,638,000; and

●	Net cash used in operations was $12,327,000

Additionally, at December 31, 2022, the Company had:

●	Accumulated deficit of $61,993,000

●	Stockholders’ deficit of $9,294,000; and

●	Working capital deficit of $12,866,000

The Company anticipates that it will need to raise additional capital immediately in order to continue to fund its operations. The Company has relied on third parties for debt based funding of its operations. There is no assurance that the Company will be able to obtain additional funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its initiatives or attain profitable operations.

The Company’s operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully expand to new markets, competition, and the need to enter into collaborations with other companies or acquire other companies to enhance or complement its product and service offerings.

There can be no assurances that financing will be available on terms which are favorable, or at all. If the Company is unable to raise additional funding to meet its working capital needs in the future, it will be forced to delay, reduce, or cease its operations.

The Company is heavily reliant on its ability to convert its marketable securities into cash. The ability to sell these investments have inherent limitations such as legal restrictions/holding periods and illiquid markets.

In making this assessment we performed a comprehensive analysis of our current circumstances including: our financial position, our cash flows and cash usage forecasts for the twelve months ended December 31, 2023, and our current capital structure including equity-based instruments, obligations and debts. Additionally, this assessment was made as of the date of these consolidated financial statements.

We manage liquidity risk by reviewing, on an ongoing basis, our sources of liquidity and capital requirements. The Company had cash on hand of $7,000 at December 31, 2022.

The Company has historically incurred significant losses since inception and has not demonstrated an ability to generate sufficient revenues from the sales of its products and services to achieve profitable operations.

These factors create substantial doubt about the Company’s ability to continue as a going concern within the twelve-month period subsequent to the date that these financial statements are issued.

The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Cash, cash equivalents and marketable securities

Cash consist primarily of highly liquid investments such as money market funds and deposits held at major banks. Certain of such unused amounts are subject to satisfying specified conditions prior to draw-down (such as pledging to our lenders sufficient subscriptions and customer contracts).

Our cash, cash equivalents and marketable securities were as follows for the years ended December 31, 2022 and 2021 as follows:

	For the Year Ended December 31,
	2022		2021		Year over Year Changes
Cash, cash equivalents and marketable securities	$	9,193,000	$	16,965,000	$	(7,772,000	)	-45.81	%

Results of Operations

Revenues

Sequire Platform: We recognize revenue from the licensing of our Sequire platform, data, marketing and insight services performed in conjunction with the Sequire platform. We recognize revenue using the percentage of completion method based primarily on time.

Conference Revenue.: We recognize revenue from hosting conferences and associated sponsorships. We receive payment from presenting companies ~~and~~ and sponsors of the conferences.

~~2020~~The ~~was~~following ~~the~~table ~~first~~presents ~~full~~revenues ~~year~~by oftype ~~operations~~ for ~~our~~the ~~Sequire~~years ~~business.~~ended WeDecember ~~charge a base monthly license fee for a Sequire subscription~~31, ~~which ranges~~2022 ~~from~~and ~~$1,000~~2021 ~~per~~as ~~month up to $5,000 per month.~~follows:

During the third quarter of 2020, we acquired LD Micro, Inc. LD Micro’s primary line of business was the hosting of investor related conferences. Historically, LD Micro’s investor conferences have been in-person, however, during the past year we have successfully hosted virtual conferences leveraging Sequire’s platform technology to execute these events.

	For the Year Ended December 31,
	2022					2021					Year over Year Changes
Revenue	Revenue		% of Revenues			Revenue		% of Revenues			$ Amount			% Change

Sequire SaaS platform revenue	$	25,110,000		90.13	%	$	25,478,000		95.40	%	$	(368,000	)		-1.44	%
LD Micro - conference revenue		2,749,000		9.87	%		1,229,000		4.60	%		1,520,000			123.68	%
Total Revenues	$	27,859,000		100	%	$	26,707,000		100	%	$	1,152,000			4.31	%

~~The~~Sequire ~~following~~SaaS ~~table~~platform ~~presents~~revenues ~~net~~remained ~~revenues~~consistent byyear ~~type~~over year as operations for this portion of the ~~periods~~business ~~indicated~~were (relatively unchanged. Sequire’s customer base did not grow further in ~~dollars~~2022, ~~except~~this ~~percentages):~~primarily has to do with the Company switching to cash as compensation for services rendered as compared to accepting marketable securities, which was the more common form of payment earlier in 2022 and 2021.

	Year Ended December 31,
	2021		2020		% Change
Sequire platform revenue	$	24,514,000	$	5,976,000		310	%
Conference revenue		1,229,000		503,000		144	%
Other revenues		964,000		-		n/a
Total net revenues	$	26,707,000	$	6,479,000		312	%

LD Micro conference revenues increased primarily due to additional events in 2022.

~~Operating Expenses~~26

~~Cost~~Operating ofCosts ~~revenue.~~and Our cost of revenue consists primarily of expenses associated with the cost of media from third parties. If the estimated consideration expected to be received under a revenue contract less than the estimated cost to fulfill our obligations under the contract, the Company will record a liability for the estimated cost in excess of estimated consideration in the period this is knowable.Expenses

~~Employee~~Cost ~~Related~~of ~~Costs~~revenue. ~~These~~Our ~~are~~cost of revenue consists primarily of expenses associated with the ~~costs~~cost of media from third parties, such as costs we incur to ~~employ~~market our ~~staff~~products, data service fees and third-party selling costs as well as certain employee related and platform costs (salaries, technology and content hosting for Sequire). If the estimated consideration expected to be received under a revenue contract less than the estimated cost to fulfill our obligations under the contract, the Company will record a liability for the estimated cost in excess of estimated consideration in the period this is known.

~~Platform~~Depreciation ~~costs~~and Amortization. ~~Consist~~Depreciation and Amortization cost represent an allocation of the ~~technology~~costs ~~and~~incurred ~~content~~to ~~hosting~~acquire ofthe long-lived assets used in our ~~Sequire~~business over their estimated useful lives. Our long-lived assets consist of computers, office equipment, and furniture.

~~Marketing~~General and administrative. General and administrative expense consists primarily of human resources, information technology, professional ~~data~~fees, ~~services~~IT and ~~sales~~facility overhead, and other general corporate expenses. ~~These~~We ~~are~~expect our general and administrative expense to increase primarily as a result of the increased costs associated with being a stand-alone public company, specifically, our professional fees. However, we ~~incur~~also expect our general and administrative expense to ~~market~~fluctuate as a percentage of our ~~products,~~revenue ~~data~~in ~~service~~future ~~fees~~periods based on fluctuations in our revenue and ~~third-party~~the ~~selling~~timing ~~costs~~of related expenses.

~~Depreciation~~The ~~and~~following ~~Amortization.~~table ~~Depreciation~~represents ~~and~~our ~~Amortization~~operating ~~cost~~expenses ~~represent~~for ~~an allocation of~~ the ~~costs~~years ~~incurred~~ended toDecember ~~acquire~~31, ~~the~~2022 ~~long-lived assets used in our business over their estimated useful lives. Our long-lived assets consist of property~~ and ~~equipment~~2021, ~~and internally developed software~~respectively.

General and administrative. General and administrative expense consists primarily of human resources, information technology, professional fees, IT and facility overhead, and other general corporate expense. We expect our general and administrative expense to increase in absolute dollars primarily as a result of the increased costs associated with being a stand-alone public company. However, we also expect our general and administrative expense to fluctuate as a percentage of our revenue in future periods based on fluctuations in our revenue and the timing of such expense.

	For the Year Ended December 31,
	2022					2021					Year over Year Changes
Operating Expenses	Amount		% of Revenues			Amount		% of Revenues			$ Amount			% Change
Cost of revenues	$	9,413,000		39.46	%	$	6,521,000		24.42	%	$	2,892,000			44.35	%
Depreciation and amortization		417,000		1.75	%		842,000		3.15	%		(425,000	)		-50.48	%
General and administrative expenses		14,026,000		58.79	%		19,429,000		72.75	%		(5,403,000	)		-27.81	%
Total Operating Expenses	$	23,856,000		85.63	%	$	26,792,000		100.32	%	$	(2,936,000	)		-10.96	%

~~2020 was the first~~Cost ~~full~~of ~~year~~revenues ofincreased ~~operations~~in ~~for~~2022 ~~our~~from ~~Sequire~~2021 ~~business.~~primarily Wedue ~~charge~~to aan ~~base~~increase ~~monthly~~in ~~license~~data ~~fee~~and ~~for~~media acosts ~~Sequire~~required ~~subscription,~~to ~~which~~support ~~ranges~~the ~~from~~Company’s ~~$1,000~~growth ~~per~~and ~~month~~expected ~~up to $5,000 per month~~expansion.

~~During~~Depreciation ~~the~~and ~~third~~amortization ~~quarter~~decreased ofin ~~2020,~~2022 wefrom ~~acquired~~2021 LDprimarily ~~Micro,~~due ~~Inc.~~to LDproperty ~~Micro’s~~and ~~primary~~equipment ~~line~~having ofa ~~business~~lower ~~was~~net ~~the~~book ~~hosting~~value ofas ~~investor~~well ~~related~~as ~~conferences.~~an impairment ~~Historically,~~loss LDof ~~Micro’s~~$41,000 ~~investor~~sustained ~~conferences have been~~ in~~-person,~~ ~~however, during the past year we have successfully hosted virtual conferences leveraging Sequire’s platform technology to execute these events~~2022.

17General and administrative expenses decreased due to employee benefits, officer compensation, professional fees and advertising as well as other general corporate overhead expenses.

~~Operating Expenses~~27

~~The~~Other ~~following~~Income ~~table presents operating expenses for the periods indicated~~ (~~in dollars, except percentages~~Expense):

	Year Ended December 31,
	2021			2020			% Change
Cost of revenues		6,521,000			1,789,000			265	%
% of net revenues		24	%		28	%
Employee related costs		7,533,000			4,683,000			61	%
% of net revenues		28	%		72	%
Platform costs		214,000			960,000			(78	)%
% of net revenues		1	%		15	%
Marketing, data service and sales		6,330,000			1,717,000			269	%
% of net revenues		24	%		27	%
Depreciation and Amortization		842,000			772,000			9	%
% of net revenues		3	%		12	%
General and administrative		5,352,000			3,590,000			49	%
% of net revenues		20	%		55	%
Total operating expenses		26,792,000			13,511,000			98	%

During the years ended December 31, 2022 and 2021, the Company incurred various one-time charges related to impairments, as well as changes to the Company’s marketable securities related to realized losses and changes in fair value (unrealized gains/losses).

~~Revenues~~The following table represents our operating expenses for the years ended December 31, 2022 and 2021, respectively.

Revenues for the year ended December 31, 2021 increased to approximately $26,707,000 compared to approximately $6,479,000 for the year ended December 31, 2020. Sequire’s continued growth was primarily driven by the growth of the services provided to issuers through the Sequire platform. During the year ended December 31, 2021, the Company closed sales with total gross contract value of approximating $44,000,000.

	For the Year Ended December 31,
	2022						2021						Year over Year Changes
Other income (expense)	Amount			% of Revenues			Amount			% of Revenues			$ Amount			% Change
Interest expense	$	(4,391,000	)		12.32	%	$	(10,295,000	)		63.51	%	$	5,904,000			-57.35	%
Impairment - goodwill		(10,200,000	)		28.62	%		-			0.00	%		(10,200,000	)		0.00	%
Impairment - intangibles		(1,481,000	)		4.16	%		-			0.00	%		(1,481,000	)		0.00	%
Impairment - property and equipment		(41,000	)		0.12	%		-			0.00	%		(41,000	)		0.00	%
Impairment - marketable securities		(3,664,000	)		10.28	%		-			0.00	%		(3,664,000	)		0.00	%
Loss on sale of note receivable		(47,000	)		0.13	%		-			0.00	%		(47,000	)		0.00	%
Realized gain (loss) - marketable securities		(8,799,000	)		24.69	%		804,000			-4.96	%		(9,603,000	)		-1194.40	%
Unrealized gain (loss) - marketable securities		(3,792,000	)		10.64	%		(7,904,000	)		48.76	%		4,112,000			-52.02	%
Change in fair value - contract assets		(1,504,000	)		4.22	%		-			0.00	%		(1,504,000	)		0.00	%
Realized gain (loss) - designated assets		(1,803,000	)		5.06	%		(84,000	)		0.52	%		(1,719,000	)		2046.43	%
Unrealized loss - designated assets		(762,000	)		2.14	%		(2,378,000	)		14.67	%		1,616,000			-67.96	%
Change in fair value - preferred stock		2,566,000			-7.20	%		2,462,000			-15.19	%		104,000			4.22	%
Make-whole provision		(240,000	)		0.67	%		-			0.00	%		(240,000	)		0.00	%
Interest income		12,000			-0.03	%		42,000			-0.26	%		(30,000	)		-71.43	%
Other income (expense)		(1,495,000	)		4.19	%		1,144,000			-7.06	%		(2,639,000	)		-230.68	%
Total Operating Expenses	$	(35,641,000	)		100	%	$	(16,209,000	)		100	%	$	(19,432,000	)		119.88	%

InInterest ~~certain~~expense ~~circumstances,~~decreased ~~the~~to ~~Company~~($4,391,000) ~~accepts payment~~ in ~~the~~2022 ~~form~~from of($10,295,000) ~~securities~~in of2021 ~~our~~with ~~publicly~~less ~~held~~debt ~~customers~~outstanding. ~~The~~Additionally, ~~Company~~the ~~values~~majority of the ~~securities~~change in ~~accordance~~interest ~~with~~costs ~~ASC~~related ~~820,~~to ~~see~~a ~~the~~warrant ~~Valuation~~inducement ~~section~~expense oftotalling ~~our Management Discussion and Analysis section for further discussion~~$7,737,000.

~~Sequire~~Impairment ~~Operating~~of ~~Expenses~~goodwill ($10,200,000) and intangible assets ($1,481,000) in 2022 related to the disposal and related discontinued operations of the Company’s legacy businesses Steel Media and Five Delta.

~~Operating~~Impairment ~~expenses~~of ~~consisted~~property and equipment ($41,000) in 2022 related to certain items of ~~the~~equipment ~~following:~~identified as no longer having any future economic benefit.

~~Costs of revenue: Sequire’s operating expenses for the years ended December 31, 2021 and 2020 were approximately $6,521,000 and $1,789,000, respectively.~~28

~~Employee~~Impairment ~~Related~~of ~~Costs.~~marketable ~~These~~securities ~~are~~of ~~the~~$3,664,000 ~~costs~~in we2022 ~~incur~~relate to ~~employ~~those ~~our~~securities ~~staff.~~whose ~~Employee~~fair ~~related~~value ~~costs~~has ~~increased~~declined toon ~~$7,533,000~~an ~~during~~other ~~the~~than ~~year~~temporary ~~ended~~basis ~~December~~and ~~31,~~deemed ~~2021~~permanent. ~~compared~~The toCompany ~~$4,683,000~~analyzes ~~for~~all ~~the~~of ~~year~~its ~~ended~~holdings ~~December~~at 31least annually, ~~2020.~~or ~~The~~sooner ~~increase~~if iscircumstances ~~primarily~~require ~~the result of~~ an ~~increase~~assessment into ~~staffing~~ascertain ~~expenses~~fair ~~due~~value, toand anwith ~~increase in~~ the ~~number~~assistance of ~~employees~~a inthird ~~all~~party ~~departments~~independent ofvaluation ~~the~~specialist ~~business~~concluded tothat ~~support~~there ~~the~~was ~~growth~~sufficient ~~in operations~~evidence ~~during the year. We expect these expenses~~ to ~~continue~~support tothe ~~increase~~impairment ~~in absolute dollars as revenue increases~~loss.

~~Platform~~Loss ~~costs.~~on ~~Consist~~note receivable of ~~the~~$47,000 ~~technology~~in ~~and~~2022 ~~content~~related ~~hosting.~~to ~~Platform~~an ~~costs~~investment ~~for~~that the ~~year~~Company ~~ended~~elected ~~December~~to ~~31,~~receive ~~2021~~cash ~~were~~proceeds ~~$214~~for,~~000.~~ ~~For the~~which ~~year ended December 31, 2020 Platform costs~~ were ~~$960,000.~~less than ~~These costs decreased from~~ the ~~prior~~carrying ~~year~~amount ~~due to the Company’s elimination~~ of the ~~outsourcing~~note ofreceivable, ~~certain~~in ~~function~~order to ~~support~~settle to the ~~Company’s~~outstanding ~~platform.~~amount ~~We expect these costs to continue to increase in absolute dollars as we continue to grow but expect that they continue to decrease as a percentage of our revenues~~due.

~~Marketing,~~Realized ~~data~~gains ~~services~~ and ~~sales.~~losses ~~These~~on ~~are~~marketable ~~the~~securities ~~costs~~are wedetermined ~~incur~~by tocomparing ~~market our products and third-party services and selling costs. Marketing, data services and sales for~~ the ~~years~~basis ~~ended~~of ~~December~~these ~~31,~~financial ~~2021~~instruments ~~and~~to ~~2020~~their ~~were~~exit ~~$6,330,000 and $1,717,000, respectively~~price. WeThe sale ~~expect~~of these ~~costs~~ tosecurities ~~continue~~may tobe ~~grow~~influenced inby ~~nominal~~market ~~dollars~~timing as wewell ~~continue~~as tothe ~~grow~~Company’s ~~but~~need ~~expect~~for ~~that~~additional ~~they continue to decrease as a percentage of our revenues~~capital.

~~Depreciation~~Unrealized ~~and~~gains ~~Amortization. Depreciation~~ and ~~Amortization~~losses ~~cost~~on ~~represent~~marketable ansecurities ~~allocation~~is ofa ~~the~~measure ~~costs incurred to acquire the long-lived assets used in our business over their estimated useful lives. Our long-lived assets primarily consist~~ of ~~internally developed software. For~~ the ~~years~~change ~~ended December 31, 2021 and 2020 depreciation and amortization were $842,000 and $772,000, respectively. We expect these expenses to continue to increase as we anticipate further investment~~ in ~~long-lived~~fair ~~assets~~value toat ~~support~~each ~~our~~reporting ~~business growth~~period.

18Contract assets represent securities that are due to the Company as payment for services to be rendered, but have not yet been sent to the Company for deposit. The value of these securities is known on the commitment date, and are subject to mark to market adjustments while held.

~~Corporate~~Realized gains and ~~Other~~losses ~~Operating~~on ~~Expenses~~designated assets for return of capital are determined by comparing the basis of these financial instruments to their exit price. The sale of these securities may be influenced by market timing as well as the Company’s need for additional capital. Additionally,

~~Corporate~~Unrealized ~~and~~gains ~~Other Operating expense consists primarily of human resources, information technology, professional fees, IT~~ and ~~facility~~losses ~~overhead, and~~on ~~other~~designated ~~general~~assets ~~corporate expense. General and Administrative expenses were approximately $5,352,000 and $3,590,000 million~~ for ~~the years~~return ~~ended~~of ~~December~~capital ~~31,~~is ~~2021~~a ~~and~~measure ~~2020,~~of ~~respectively. The increase in expense for~~ the ~~year~~change ~~is driven by an increase~~ in ~~corporate~~fair ~~employee and~~value ~~staffing~~at ~~related~~each ~~expenses~~reporting ~~to support the growth of the Company~~period.

WeChange ~~expect our general and administrative expense to increase~~ in ~~absolute~~fair ~~dollars~~value asof wepreferred ~~continue~~stock tois ~~grow~~a ~~our~~measure ~~business.~~of ~~However,~~the wechange ~~also~~in ~~expect our~~fair ~~general~~value ~~and~~at ~~administrative~~each ~~expense~~reporting ~~to decrease as a percentage of our revenues as revenues increase~~period.

Make-whole provision of $240,000 in 2022 related to an additional amount due to a vendor in connection with an agreement requiring payment in the event certain conditions of that agreement were not satisfied timely.

Interest income for both 2022 and 2021 are insignificant.

Other income (expense) relates to items not otherwise classified above.

Net Loss

The ~~Company’s~~following ~~Net~~table ~~Loss~~represents ~~for~~our ~~the~~net ~~year-ended~~loss ~~December~~(including ~~31,~~non-controlling ~~2021~~interest) ~~was $41,227,000. This represented an increase of $26,522,000 from the prior year. The increase in Net Loss~~ for the ~~year~~years ended December 31, ~~2021~~2022 ~~was~~and ~~primarily~~2021, ~~due to an increase in Net loss from our Discontinued Operations~~respectively.

Discontinued Operations represent the results from operations of BIGtoken. Upon the deconsolidation of BIGtoken, BIGtoken’s operating results, assets, liabilities and cash flows for all periods presented have been classified as discontinued operations within the Consolidated Financial Statements.

	For the Year Ended December 31,
	2022			2021			Year over Year Changes
	Amount			Amount			$ Amount		% Change
Net Loss	$	(31,638,000	)	$	(41,227,000	)	$	9,589,000		-23.26	%

~~Loss~~As further ~~from~~discussed ~~discontinued~~above, ~~operations for~~ the ~~year~~net ~~ended~~loss ~~December~~decreased 31by $9,589,000 or 23.26% from 2021 ~~was~~to ~~$25~~2022. The decrease primarily included significant amounts for impairment of goodwill,~~060~~ intangibles,~~000~~ property and equipment, ~~which~~and ~~represented~~marketable ansecurities ~~increase~~aggregating of $2015,~~419~~386,000, ~~from~~offset ~~the~~largely by ~~year~~a ~~ended~~reduction ~~December~~of ~~31,2020.~~interest ~~The~~expense ~~loss~~of ~~from~~$5,904,000. ~~discontinued~~However, ~~operations~~in ~~for~~2022, the ~~year-ended~~Company ~~December~~had ~~31,~~income ~~2021 includes~~from aoperations ~~loss~~ of $104,~~684~~003,000 ~~related~~compared to a ~~our~~loss ~~disposal~~from operations of ~~BIGtoken~~($85,000) in 2021.

~~See~~Finally, ~~“Note~~in 22022, –the ~~Discontinued~~Company ~~Operations”~~had ina ~~our~~net ~~consolidated~~loss of $31,638,000. In 2021, and the largest component of the change from 2021 to 2022 was the Company reflected a net loss of $41,227,000, which included a loss from discontinued operations of $25,060,000 (See Note 2 to the consolidated financial statements). ~~included~~This ~~elsewhere~~loss inwas ~~this~~comprised ~~report~~of ~~for~~a ~~additional~~loss on discontinued operations of $14,376,000 combined with a loss on disposal of ~~information~~subsidiary of $10,684,000.

~~Loss~~Discontinued ~~from~~Operations ~~continuing~~represent the results from operations ~~for~~of ~~the~~BIGToken. ~~year~~Upon ~~ended~~the ~~December~~deconsolidation 31of BIGToken, ~~2021~~its ~~was~~operating ~~$16~~results,~~167~~ assets,~~000,~~ ~~which~~liabilities and ~~represented~~cash anflows ~~increase~~for ofall ~~$6,103,000~~periods ~~from~~presented have been classified as discontinued operations within the ~~year~~ ~~ended~~Consolidated ~~December~~Financial ~~31,2020~~Statements.

Cash Flows

	Year Ended December 31,
	2021			2020
(In $)
Net cash provided by (used in):
Continuing operating activities		(15,317,000	)		(9,154,000	)
Continuing investing activities		3,998,000			6,221,000
Continuing financing activities		15,443,000			7,862,000

Our cash, cash equivalents and marketable securities on hand at December 31, 2022 and 2021 were as follows:

Cash flows from continuing operating activities

	For the Year Ended December 31,
	2022		2021		Year over Year Changes
Cash, cash equivalents and marketable securities	$	9,193,000	$	16,965,000	$	(7,772,000	)	-45.81	%

The ~~primary~~Company ~~use~~actively ofliquidates ~~operating~~its ~~cash~~marketable issecurities to ~~pay~~meet ~~our~~its ~~media,~~current ~~data and platform vendors, employees and others for a wide range of services~~obligations. Cash flows used in operating activities increased by $6,163,000 during the year ended December 31, 2021, primarily driven by an increase in operating expenses and costs of revenues, partially offset by increases in cash receipts and revenues.

The ~~Company~~following ~~expects~~table torepresents ~~continue~~our tonet ~~use~~ cash inflows ~~excess of receipts generated from operations~~ for the ~~foreseeable~~years ~~future~~ended ~~due~~December to31, ~~the~~2022 ~~substantial portion~~and of2021, ~~the Company’s sales paid for in marketable securities of our customers~~respectively. ~~The Company classifies sales of marketable securities received from our customers for the payment of our services as investing activities.~~

	For the Year Ended December 31,
	2022			2021			Year over Year Changes
							Increase (Decrease)
Net Cash Provided by (Used in)	Amount			Amount			$ Amount			% Change
Operating activities	$	(12,327,000	)	$	(23,435,000	)	$	11,108,000			-47.40	%
Investing activities		6,186,000			4,839,000			1,347,000			27.84	%
Financing activities		4,800,000			20,179,000			(15,379,000	)		-76.21	%
Net change in cash and cash equivalents	$	(1,341,000	)	$	1,583,000		$	(2,924,000	)		-184.71	%

Cash ~~flows~~Flows from ~~continuing~~Operating ~~investing activities~~Activities

~~Our~~The ~~principal~~primary ~~recurring~~use ~~investing activities are the funding~~ of ~~our~~cash ~~internal~~used ~~software~~in ~~development~~operations ~~and~~is ~~the~~to ~~sale~~pay ofour ~~marketable securities. During the years ended December 31~~media, ~~2021,~~data and ~~2020,~~platform ~~net cash provided by investing activities was $3~~vendors,~~998,000~~ ~~and $6~~employees,~~221,000,~~ ~~respectively. Expenditures for software development were $798,000~~ and ~~$633,000~~others for ~~the~~a ~~years~~wide ~~ended~~range ~~December~~of ~~31, 2021, and 2020, respectively~~services. ~~Deferred~~ ~~payments~~Cash ~~related~~flows toused ~~our~~in ~~acquisition~~continuing ofoperating LDactivities ~~Micro~~decreased ~~during~~by ~~the year December 31~~11, ~~2021~~108, ~~were $3,004,~~000. ~~During~~in ~~years~~2022 ~~ended~~to ~~December 31, 2021, the Company generated~~ $812,~~666~~327,000 from ~~the~~2021 ~~sale~~net ofcash ~~marketable~~used ~~securities~~in ~~and~~operations of ~~purchased~~ $123,~~450~~435,000 ~~of marketable securities~~.

~~Cash~~Net ~~flows~~cash ~~from~~used ~~continuing~~in ~~financing~~operations ~~activities~~decreased for one time charges related to impairments of goodwill, intangibles, property and equipment, and marketable securities aggregating $15,386,000.

~~During the years ended December~~ 31~~, 2021, we generated net cash from financing activities of $15,443,000. During the years ended December 31, 2020, cash provided by financing activities was $7,862,000.~~

~~Recently~~Other ~~Issued~~significant ~~Accounting~~changes ~~Pronouncements~~include:

~~For further~~● ~~information~~net onincreases ~~recently~~in ~~issued~~2022 ~~accounting~~of ~~pronouncements~~realized and unrealized losses of marketable securities totaling $7,719,000, ~~see~~● ~~Note~~net decrease in forgiveness of payroll protection loan of $1~~—Summary~~,106,000, ● net decrease in stock based compensation of ~~Significant~~$1,162,000, ~~Accounting~~● ~~Policies~~net decrease in depreciation and amortization of intangible assets of $502,000, ● the ~~accompanying~~ ~~notes~~net tochange ~~Consolidated~~in ~~Financial~~cash ~~Statements~~used ~~included~~in operations in ~~Part~~2022 IIwas $12,327,000, ~~Item~~a 8decrease of $2,990,000 ~~“Financial~~from ~~Statements~~2021 and ~~Supplementary~~consisted ~~Data”~~ of ~~our~~changes ~~Annual~~affecting ~~Report~~items onpreviously ~~Form~~mentioned ~~10-K.~~as well as operating assets and liabilities as follows:

~~Off balance~~● ~~sheet~~accounts ~~arrangements~~receivable ($1,135,000), ● contracts receivable (988,000), ● due from related party ($263,000), ● prepaid and other current assets of $1,219,000, ● designated assets for return of capital of $684,000, ● note receivable (accrued interest receivable) of $30,000, ● accounts payable and accrued expenses of $2,815,000, ● accounts payable and accrued expenses – related party of $159,000, ● deferred revenue ($2,096,000), ● deferred income tax liability of $131,000, ● other current liabilities of $468,000; and ● operating lease liability of $53,000.

AsIn of2021, the ~~date~~Company ofhad ~~this~~net ~~report,~~cash weused ~~do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes~~ in ~~financial~~discontinued ~~condition,~~operations ~~revenues or expenses, results~~ of ~~operations~~$8, ~~liquidity~~118,000 ~~capital expenditures~~as orcompared ~~capital resources that are material~~ to ~~investors.~~$0 The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in ~~assets~~ ~~transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets~~2022.

Total net cash used in operating activities for 2022 was $12,327,000 as compared to $23,435,000 in 2021.

The Company expects to continue to use cash in excess of receipts generated from operations for the foreseeable future as accepting cash in lieu of marketable securities for services rendered is lower, with no potential for capital appreciation.

Cash Flows from Investing Activities

For the year ended December 31, 2022, we generated $6,186,000 of net cash provided by investing activities as compared to $4,839,000 in 2021.

The primary driver of our investing activities relates to our proceeds from the sale of marketable securities of $5,221,000 in 2022 as compared to $8,666,000 in 2021. Additionally, in 2021 we purchased marketable securities of $1,450,000 as well as made our deferred payments in connection with the acquisition of LD Micro totaling $3,004,000. There were no such comparative amounts in 2022. In 2022, we received proceeds from the sale of a note receivable for $900,000 as compared to $0 in 2021.

Cash Flows from Financing Activities

For the year ended December 31, 2022 we generated net cash from financing activities of $4,800,000 as compared to $15,443,000 in 2021.

The primary reasons for the change were as follows:

In 2022, we received net proceeds of $5,450,000 from a senior secured revolving credit facility as compared to $0 in 2021.

In 2021, we received net proceeds of $15,952,000 from the exercise of commons stock warrants, as compared to $0 in 2022.

Off Balance Sheet Arrangements

The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Liquidity and Capital Resource Requirements

~~Our~~We ~~primary~~believe ~~source~~that ofour ~~cash~~current issources ~~from~~of ~~proceeds~~funds ~~received~~will ~~from~~not ~~the~~provide ~~sale~~us ofwith ~~marketable~~adequate ~~securities~~liquidity weincluding ~~receive~~the ~~from~~ability ~~our~~to ~~customers~~repay asour ~~consideration~~remaining debt ~~for~~obligations ~~our~~within ~~services,~~one asyear ~~well~~from asthe ~~cash~~issuance ~~proceeds~~date ~~received~~of ~~directly~~these ~~from~~consolidated ~~customers~~financial ~~as consideration~~statements.

Our ~~primary~~future ~~use~~capital ofrequirements ~~cash~~will isdepend ~~the~~on ~~payment~~many offactors; ~~our~~however, ~~operating~~the ~~costs,~~Company’s ~~which~~current ~~consist~~primary ~~primarily~~source of ~~employee-related~~capital ~~expenses,~~is ~~such~~the assale ~~compensation~~of ~~and~~marketable ~~benefits,~~securities asit ~~well~~has received as ~~general~~consideration ~~operating expenses~~ for ~~our SaaS operations, marketing, facilities and overhead costs, and capital expenditures. We also utilize cash for debt service, stock repurchases, dividends on~~ the ~~Preferred~~licensing ~~Stock, and business acquisitions. Cash generated from operations, along with our existing cash, cash equivalents, and short-term investments, are our primary sources~~ of ~~operating liquidity, and we believe that~~ our ~~operating~~Sequire ~~liquidity~~platform ~~is currently insufficient to support our business operations, including debt service,~~ and ~~capital~~ ~~expenditure~~the ~~requirements~~associated services.

We believe that our current sources of funds, along with the financing source described below, will provide us with adequate liquidity during the 12-month period following December 31, 2021, including to repay our remaining debt obligations. Our future capital requirements will depend on many factors, however, the Company’s primary source of capital is the sale of marketable securities received as consideration for the licensing of our Sequire platform and the associated services. The marketable securities the Company receives are primarily issued through an exemption to registration and as a result are restricted from resale into the public market for a period of time. The periods of restriction are generally at least six months, and in some cases up to two years. These restriction periods often change based on circumstances outside of the Company’s control, such as the issuers status with filing of current information. Since a majority of the marketable securities are primarily listed on the OTC Markets, they are more likely to experience such changes in restriction periods. The changes in restriction periods in conjunction with market volatility make it difficult to predict the timing of the associated cash flows from the sales of these marketable securities. Additionally, other factors such as , our subscription growth rate, subscription renewal activity, including the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the introduction of new and enhanced products, the continuing market adoption of Sequire.33

The Company’s sales of marketable securities are primarily through sale transactions that qualify for exemptions pursuant to Rule 144 of the Securities Act of 1933. The conditions required to be met to qualify for the exemptions under Rule 144 are often difficult to predict, making it difficult to predict the timing of the associated cash flows from the sales of these securities.

The Company’s holdings of marketable securities are subject to risks and uncertainties such as fluctuations in pricing in the primary market, and legal restrictions that create uncertainty around realization and timing of cash flows.

Additionally, other factors contribute to uncertainty of our cash flows, such as our subscription growth rate, subscription renewal activity, including the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the introduction of new and enhanced products, the continuing market adoption of Sequire.

The Company projects the sale of its marketable security holding will represent a substantial portion of the cash required for operations for the foreseeable future, consequently creating substantial doubt about the Company’s ability to continue as a going concern.

We continually evaluate our cash needs and may decide it is best to raise additional capital or seek alternative financing sources to fund our operations. However, due to our delisting from NASDAQ, raising capital through the sale of our equity or debt securities will be more challenging as investors are historically less likely to purchase securities that are not listed on a national exchange.

Financing Arrangements

InSee ~~May~~Notes ~~2020~~6, we12 ~~entered~~and ~~into~~20 anin ~~at-~~the~~-market~~ ~~Sales~~accompanying ~~Agreement~~consolidated ~~with~~financial B.statements ~~Riley FBR, Inc.~~ for ~~the sale of up to $3,125,000 of shares of our Class A Common Stock. The at-the-market agreement was entered into pursuant to~~ a ~~takedown~~discussion ~~from our shelf registration statement declared effective on December 11, 2019 (Registration No. 333-235298). During 2021, we sold 53,616 shares under such agreement at an average per share price~~ of ~~$5.47~~relevant ~~resulting~~financing ~~in gross proceeds of $293,000 and net proceeds of $284,000 after deducting commissions and other costs and expenses associated with such sales~~arrangements. ~~On April 15, 2022 we lost our ability to utilize Form S-3 registration statements for the registration of our securities. Accordingly, we are no longer able to utilize the ATM.~~

During the three months ended March 31, 2022 the Company entered into a factoring agreement with a financial institution to sell certain accounts receivable and future sales of up to $3 million. The factoring agreement was fully paid off with the proceeds of our revolving credit facility described below. Pursuant to the revolving credit facility, we are precluded from entering into future factoring agreements while loans are outstanding under the credit facility.

We may, in the future, enter into arrangements to acquire or invest in complementary businesses, products, and technologies. Finally, we continually evaluate our cash needs and may decide it is best to raise additional capital or seek alternative financing sources to fund the rapid growth of our business, including through drawdowns on existing debt facilities. Conversely, we may also from time to time determine that it is in our best interests to voluntarily repay certain indebtedness early or repurchase our common stock through our Stock buy-back program.

On August 8, 2022, we entered into a revolving line of credit allowing us to borrow up to $9.45 million in principal. Until such time that the Company becomes current on its reporting obligations under the Securities Exchange Act of 1934, the maximum amount accessible is limited to $5.5 million. The revolving credit line has a two-year term with a variable repayment schedule that is tied to the proceeds the Company generates from the sale of marketable securities from its portfolio. The principal repayment as a percentage of proceeds from marketable securities is 10% for the first three months and increase up to 20% after 12 months. Further, we agreed to pay the lender in the credit facility, an amount equal to ten percent (10%) of the net proceeds actually received by us from the sale any securities of a customer that we acquired during the term of the revolving note(s).

As of December 31, 2021, our cash on hand was approximately $1.35 million. We reported a net loss from continuing operations for both the years ended December 31, 2021 and 2020.

We have historically financed our operations primarily from the sale of debt and equity securities. Recently, our operations from Sequire and LD Micro have resulted in increased revenue, but we are still not cash flow positive, and accordingly cannot fund our operations solely from our revenue. Notwithstanding our recent revolving credit facility financing (including the bridge note), for which we have received approximately $5.5 million, partially offset by the required payments we made under outstanding obligations of $3.75 million at closing, we are still unable to meet all of our obligations as they become due. We anticipate that we will need to continue to fund our operations from the sale of debt and equity securities. Additionally, we are delinquent in our SEC reporting obligations and have received notices from Nasdaq that if we are not current with our reporting obligations by October 12, 2022, we will be delisted. Although we have been historically successful in raising capital through the sale of our equity and debt securities, and management believes that such capital sources will be available should they be required, there can be no assurance that financing will be available to us when needed in order to allow us to continue our operations, or if available, on terms acceptable to us. Further, in the event we are delisted from Nasdaq, raising capital through the sale of our equity or debt securities will be more challenging as investors are historically less likely to purchase securities that are not listed on a national exchange.

Capital Allocation Framework

As noted above, after cash utilization required for working capital, capital expenditures, and required debt service, we expect that our primary usage of cash will be for business combinations, repayment of outstanding indebtedness, and/or stock repurchases under repurchase programs that may be in place from time to time (subject to the terms of our 2020 Credit Agreement). For further information regarding our recent stock repurchase program, see above.

Critical Accounting Policies and Estimates

~~Critical~~There have ~~accounting~~been ~~estimates~~no ~~are~~changes ~~those~~to ~~estimates made~~our incritical ~~accordance~~accounting ~~with~~policies ~~generally~~during ~~accepted~~the ~~accounting~~year ~~principles~~ended ~~that~~December ~~involve~~31, a2022. ~~significant~~Critical ~~level~~accounting ofpolicies ~~estimation uncertainty~~ and ~~have~~the ~~had~~significant orestimates ~~are~~in ~~reasonably~~accordance ~~likely~~with tosuch ~~have~~policies aare ~~material~~regularly ~~impact~~discussed onwith ~~the~~our ~~financial~~Audit ~~condition or results of operations of the registrant~~Committee.

~~Revenue~~Those ~~Recognition~~policies are discussed under Note 3—Summary of Significant Accounting Policies, in the notes to Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of our Annual Report on Form 10-K filed with the SEC on September 20, 2024 for the fiscal year ended December 31, 2022.

We derive and report our revenue in two categories: (a) recurring revenue, which includes bundled SaaS, unbundled SaaS, and optional managed services, and (b) nonrecurring revenue, which primarily consists of our event revenue. We account for a contract with a customer when approved, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. We recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those services. Products sold by us are delivered electronically. We generate all of our revenue from contracts with customers. We generally invoice a customer in advance of delivery, or in accordance with specific contractual provisions. Payments are due as per contract terms and do not contain a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our goods and services, and not to provide financing to or from customers.

We account for revenue in accordance with Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). Our revenue recognition policies require us to make significant judgments and estimates. In applying our revenue recognition policy, we must determine which portions of our revenue are recognized at a point in time and which portions must be deferred and recognized over time. We analyze various factors including, but not limited to, the selling price of undelivered services when sold on a stand-alone basis, our pricing policies, the creditworthiness of our customers, and contractual terms and conditions in helping us to make such judgments about revenue recognition. Changes in judgment on any of these factors could materially impact the timing and amount of revenue recognized in a given period.

Our contracts with customers often include promises to transfer multiple products and services to a customer. In contracts with multiple performance obligations, we identify each performance obligation and evaluate whether the performance obligations are distinct within the context of the contract at contract inception. Performance obligations that are not distinct at contract inception are combined. For bundled SaaS arrangements, we determine whether the services performed during the initial phases of an arrangement, such as setup activities, are distinct. In most cases, we consider our bundled SaaS deliverable to represent a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). We record deferred revenue attributable to certain process transition, setup activities where such activities do not represent separate performance obligations. Implementation, support, and other services are typically considered distinct performance obligations when sold with a software license unless these services are determined to significantly modify the software. The transaction price is generally in the form of a fixed fee at contract inception.

We enter into contracts to sell our products and services, and while some of our sales agreements contain standard terms and conditions, there are agreements that contain non-standard terms and conditions and include promises to transfer multiple goods or services. As a result, significant interpretation and judgment is sometimes required to determine the appropriate accounting for these transactions including: (1) whether performance obligations are considered distinct and required to be accounted for separately or combined, including allocation of transaction price; (2) developing an estimate of the stand-alone selling price, or SSP, of each distinct performance obligation; (3) combining contracts that may impact the allocation of the transaction price between product and services; and (4) estimating and accounting for variable consideration, including rights of return, rebates, price protection, expected penalties or other price concessions as a reduction of the transaction price.

We then look to how control transfers to the customer in order to determine the timing of revenue recognition. Revenue related to bundled SaaS, professional services and customer education services is typically recognized over time as the services are performed.

Accounting for Business Combinations

We allocate the purchase price of acquired companies to the tangible and intangible assets acquired, including in-process research and development assets, and liabilities assumed, based upon their estimated fair values at the acquisition dates, with the remaining unallocated purchase prices recorded as goodwill. These fair values are typically estimated with assistance from independent valuation specialists. The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets, contractual support obligations assumed, contingent consideration arrangements, and pre-acquisition contingencies.

Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.

Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:

● future expected cash flows from software license sales, SaaS and support agreements, consulting contracts, other customer contracts, and acquired developed technologies; ● expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed; ● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined company’s product portfolio; ● cost of capital and discount rates; and ● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.

Goodwill and Other Acquired Intangible Assets

We test goodwill for impairment at the reporting unit level, which can be an operating segment or one level below an operating segment, on an annual basis as of December 31, or more frequently if changes in facts and circumstances indicate that impairment in the value of goodwill may exist. Subsequent to the divestiture of BIGtoken, Inc. on December 28, 2021, we became a pure-play data/insights company that operates as a single reporting unit.

In testing for goodwill impairment, we may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we elect to bypass a qualitative assessment, or if our qualitative assessment indicates that goodwill impairment is more likely than not, we perform quantitative impairment testing. If our quantitative testing determines that the carrying value of the reporting unit exceeds its fair value, goodwill impairment is recognized in an amount equal to that excess, limited to the total goodwill allocated to the reporting unit.

When we decide to perform a qualitative assessment, we assess and make judgments regarding a variety of factors which potentially impact the fair value of the reporting unit, including general economic conditions, industry and market-specific conditions, customer behavior, cost factors, our financial performance and trends, our strategies and business plans, capital requirements, management and personnel issues, and our stock price, among others. We then consider the totality of these and other factors, placing more weight on the events and circumstances that are judged to most affect the reporting unit’s fair value or the carrying amount of its net assets, to reach a qualitative conclusion regarding whether it is more likely than not that the fair value of the reporting unit exceeds its carrying amount.

When we perform quantitative impairment testing, we utilize one or more of three primary approaches to assess fair value: (a) an income-based approach, using projected discounted cash flows, (b) a market-based approach, using valuation multiples of comparable companies, and (c) a transaction-based approach, using valuation multiples for recent acquisitions of similar businesses made in the marketplace.

Our estimate of fair value of our reporting unit is based on a number of subjective factors, including: (a) appropriate consideration of valuation approaches (income approach, comparable public company approach, and comparable transaction approach), (b) estimates of future growth rates, (c) estimates of our future cost structure, (d) discount rates for our estimated cash flows, (e) selection of peer group companies for the comparable public company and the comparable transaction approaches, (f) required levels of working capital, (g) assumed terminal value, and (h) time horizon of cash flow forecasts.

The determination of reporting units also requires judgment. We assess whether a reporting unit exists within a reportable segment by identifying the unit, determining whether the unit qualifies as a business under GAAP, and assessing the availability and regular review by segment management of discrete financial information for the unit.

We review intangible assets that have finite useful lives and other long-lived assets when an event occurs indicating the potential for impairment. If any indicators are present, we perform a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the assets in question to their carrying amounts. If the undiscounted cash flows used in the test for recoverability are less than the long-lived assets carrying amount, we determine the fair value of the long-lived asset and recognize an impairment loss if the carrying amount of the long-lived asset exceeds its fair value. The impairment loss recognized is the amount by which the carrying amount of the long-lived asset exceeds its fair value.

For all our goodwill and other intangible asset impairment reviews, the assumptions and estimates used in the process are complex and often subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy or our internal forecasts. Although we believe the assumptions, judgments, and estimates we have used in our assessments are reasonable and appropriate, a material change in any of our assumptions or external factors could lead to future goodwill or other intangible asset impairment charges.

Based upon our December 31, 2021 quantitative goodwill impairment review of our reporting unit, we concluded that the estimated fair value of our reporting units exceeded its carrying value. Our reporting unit carried goodwill of $17.9 million at December 31, 2021.

Accounting for Stock-Based Compensation

We recognize the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of the award.

Awards are generally subject to multi-year vesting periods. We recognize compensation expense for awards on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods.

Changes in assumptions can materially affect the estimate of fair value of stock-based compensation and, consequently, the related expense recognized. The assumptions we use in calculating the fair value of stock-based payment awards represent our best estimates, which involve inherent uncertainties and the application of judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future.

Going concern assessment

With the implementation of Financial Accounting Standards Board’s (“FASB”) standard on going concern, Accounting Standards Update (“ASU”) No. 2014-15, we assess going concern uncertainty in our consolidated financial statements to determine if we have sufficient cash and cash equivalents on hand and working capital, including available loans or lines of credit, if any, to operate for a period of at least one year from the date our consolidated financial statements are issued, which is referred to as the “look-forward period” as defined by ASU No. 2014-15. As part of this assessment, based on conditions that are known and reasonably knowable to us, we consider various scenarios, forecasts, projections, and estimates, and we make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and our ability to delay or curtail those expenditures or programs, if necessary, among other factors. Based on this assessment, as necessary or applicable, we make certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent we deem probable those implementations can be achieved and we have the proper authority to execute them within the look-forward period in accordance with ASU No. 2014-15.

Valuation

Definition and Hierarchy

Fair value is defined as the price received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation techniques. A fair value hierarchy for inputs is used in measuring fair value. It maximizes observable inputs and minimizes unobservable inputs. Valuation techniques consistent with the market or income approach are used to measure fair value. The fair value hierarchy is categorized into three levels:

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 – Valuations based on inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Fair value is a market-based measure that is based on assumptions of prices and inputs considered from the perspective of a market participant on the measurement date. Therefore, even when market assumptions are not readily available, the fund’s own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date.

The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a wide variety of factors. The determination of fair value requires prudent judgment. Due to the inherent uncertainty of valuation, estimated values may be materially different from values were a ready market available. Inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the fund’s level is based on the lowest significant level input to the fair value measurement.

Valuation Techniques and Inputs

Investments in securities and listed on major securities exchanges are valued at their last reported sales price as of the valuation date.

Many over-the-counter contracts have bid and ask prices that are observable in the marketplace. Bid prices reflect the highest price that the marketplace participants are willing to pay for an asset. Ask prices represent the lowest price that the marketplace participants are willing to accept for an asset. For securities whose inputs are based on bid-ask prices, the Company’s valuation policies do not require that fair value always be a predetermined point in the bid-ask range.

The Company’s policy for securities traded in OTC markets and for listed securities for which no sale was reported on that date are generally valued at their last reported bid price if held long and last reported ask

These securities are categorized in Level 1 of the fair value hierarchy to the extent these securities are actively traded. Securities traded on inactive markets or valued by reference to similar instruments are generally categorized in Level 2 of the fair value hierarchy.

Investments in Restricted Securities of Public Companies

Investments in restricted securities of public companies cannot be offered for sale to the public until the company complies with certain statutory requirements. The valuation will not exceed the listed price on any major securities exchange. Investments in restricted securities of public companies are generally categorized in Level 1 of the fair value hierarchy. However, investments in restricted securities in public companies may be categorized in Level 2 or 3 of the fair value hierarchy depending on the level of observable liquidity. If the restriction on the sale of the restricted securities exceeds 180 days, the Company applies a marketability discount due to the nature of the restriction related to the security.

Recently Issued Accounting Pronouncements

For further information on recently issued accounting pronouncements, see Note 13—Summary of Significant Accounting Policies in the accompanying notes to Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of ~~this~~our Annual Report on Form 10-K filed with the SEC.

~~Off balance sheet arrangements~~34

As of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable for a smaller reporting company.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Please see our consolidated financial statements beginning on page F-1 of this annual report.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

~~None.~~RBSM LLP Declining to Stand for Reappointment

On June 30, 2022, RBSM LLP (“RBSM”), the independent registered public accounting firm to the Company, informed the Company of its decision not to stand for re-appointment as the independent registered public accounting firm of the Company.

During the Company’s most recent two fiscal years prior to RBSM’s decision to not stand for reelection and any subsequent interim period prior to RBSM’s notice to not stand for re-appointment, there were not any disagreements on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure except for an explanatory paragraph in the report regarding substantial doubt about the Company’s ability to continue as a going concern as described below.

Marcum LLP

On October 27, 2022, the Audit Committee of the board of directors of the Company engaged Marcum LLP (“Marcum”) as the Company’s independent registered public accounting firm for the year ending December 31, 2022. On May 2, 2023 (the “Marcum Dismissal”), the Audit Committee approved the dismissal of Marcum as independent registered public accounting firm of the Company effective immediately. Marcum did not issue an audit report on the Company’s consolidated financial statements for the fiscal year ended December 31, 2022 or any interim period.

For the year ended December 31, 2022 and through the Marcum Dismissal, the Company had (i) no “disagreements” (as described in Item 304(a)(1)(iv) of Regulation S-K) with Marcum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused it to make reference to the subject matter of such disagreements in any of its future audit reports; and (ii) no “reportable events” (as described in Item 304(a)(1)(v) of Regulation S-K), except that Marcum concurred with the Company’s assessment of material weaknesses related to the Company’s internal control over financial reporting.

Prior to the Marcum Dismissal, Marcum advised the Audit Committee and the Company’s management of certain material weaknesses related to the Company’s internal control over financial reporting, which constitute a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K). Accordingly, the Company reported such material weaknesses in its internal control over financial reporting in Management’s Report on Internal Control Over Financial Reporting, as set forth in Part I, Item 4 “Controls and Procedures” of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

TAAD

On May 2, 2023, the Audit Committee approved the engagement of TAAD as its independent registered public accounting firm for the fiscal year ended December 31, 2022.

ITEM 9A.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management, consisting of our Principal Executive Officer and Chief Financial Officer has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, ~~2021~~2022. This ~~evaluation~~ evaluation included consideration of the controls, processes and procedures that are designed to ensure that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management has identified material weaknesses in the Company’s ~~internal~~ internal control over financial reporting. Based on that evaluation, management concluded that our disclosure controls and procedures as of December 31, ~~2021~~2022 were ineffective.

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Inherent Limitations over Internal Controls

The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company’s internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

(iv) Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management’s Annual Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process designed by, or under the supervision of the Chief Executive Officer and Chief Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013).

Based on the Company’s assessment, management has concluded that, our internal control over financial reporting was ineffective as of December 31, ~~2021~~2022 because of the following material weaknesses in internal controls over financial reporting:

	●	a lack of internal valuation experts
	●	a lack of sufficient in-house qualified accounting staff;
	●	a lack of validation of completeness and accuracy of internally prepared data, including key reports generated from systems, utilized in the operations of controls, leading to delays in the Company’s closing process;
	●	inadequate controls and segregation of duties due to limited resources and number of employees;
	●	Lack of internal personnel to properly evaluate the fair value and the associated revenue recognition related to our non-cash revenue contracts;
	●	substantial reliance on manual reporting processes and spreadsheets external to the accounting system for financial reporting leading to delays in the Company’s closing process;
	●	lack of adequate controls in the accounting for internally developed software costs.,
	●	products and services; and the recording of sophisticated, material financing transactions which are heavily dependent upon the use of estimates and assumptions and require us using consultants;
	●	and our lack of experience in monitoring and administering, the Company’s internal control over financial reporting

To mitigate the items identified in the assessment, we rely heavily on direct management oversight of transactions, along with the use of legal and accounting professionals/consultants. As we grow, we expect to increase the number of employees, which would enable us to implement adequate segregation of duties within the internal control framework.

Remediation

We are continuing to seek ways to remediate these weaknesses, which stem from our small workforce and limited resources. The Company plans to hire an independent valuation expert to value the securities it receives as consideration for its services.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the quarter ended December 31, ~~2021~~2022 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

ITEM 9B.

OTHER INFORMATION.

None.

26ITEM 9C. DISCLOSURE REGARING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The names of our directors and executive officers and their ages, positions, and biographies as of August 3115, ~~2022~~2024 (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.

Named Executive Officers and Directors

Name	Age		Positions	~~Positions~~	Position Since	~~Position Since~~
Christopher Miglino	55	53	Chairman of the Board, Chief Executive Officer, Chief Financial Officer and President	~~Chairman of the Board, Chief Executive Officer, President~~	2010		~~2010~~
Michael Malone		40		Chief Financial Officer			2019
Christopher Lahiji		38		Director, President of LD Micro, Inc. (Subsidiary)			2020
Mark Savas		54		Director			2012
Robert Jordan		53		Director			2017
Colleen DiClaudio		44		Director			2017
Brock Pierce		41		Director			2021

The following is biographical information on the current members of our executive officers and board of directors:

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 again was appointed as Chief Financial Officer on July 5, 2023. Mr. Miglino has spent the past 20 years working in the digital advertising space and has successfully launched and sold two internet companies. Both of these companies were sold to publicly-traded companies on the NASDAQ. He has a detailed understanding of the relationship between technology and brands. Mr. Miglino previously served as a Board member for EVmo, Inc. (fka YaYYo, Inc) [OTC: YAYO] and served on their compensation committee until January 2020. Mr. Miglino also served as chairman of the Board and as interim chief executive officer of BIGtoken, Inc., a former majority owned subsidiary of SARX [OTC: BGTK]. In evaluating Mr. Miglino’s specific experience, attributes and skills in connection with his appointment to our board, we took into account his role as a co-founder of our company, his operational experience in our company as well as his professional experience in our business sector.

Christopher Lahiji. Christopher Lahiji has served as the president of LD Micro, Inc., our wholly owned subsidiary since it was acquired in September 2020. Mr. Lahiji has over 14 years of experience creating, managing, and running in-person and virtual conferences in the public sector. He has served as the president of LD Micro since 2006, providing investor conferences and data to micro-cap public corporations. In evaluating Mr. Lahiji’s specific experience, attributes and skills in connection with his appointment to our board, we took into account his founding of LD Micro, as well as his operational experience in LD Micro as well as professional experience in the investor conference space.

Michael Malone. Michael Malone 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. He holds a BA in accounting from Monmouth College.

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. In evaluating Mr. Savas’s specific experience, attributes and skills in connection with his appointment to our board, we took into account his management consulting and operational experience.

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. In evaluating Mr. Jordan’s specific experience, attributes and skills in connection with his appointment to our board, we took into account his executive level and senior management business experience coupled by his private investment company experience.

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. In evaluating Ms. DiClaudio’s specific experience, attributes and skills in connection with his appointment to our board, we took into account her experience in the healthcare technology sector and entrepreneurial background.

Brock Pierce. Mr. Pierce has been a member of our board of directors since March 2021. Mr. Piece is currently employed or associated with the following entities: (i) Areytos Experiences, LLC, since March 2020, (ii) The Roundtable LLC, since February 2020, (iii) Affinity Media PR LLC, since May 2019, (iv) Percival Services LLC, since January 2019, (v) Unicorn Ventures LLC, since March 2018, and (vi) Integro Foundation Inc., since December 2017. Mr. Pierce has co-founded, advised, and funded over 100 companies, primarily focused on technological innovation and blockchain technologies. Mr. Pierce also ran as a presidential candidate in the United States for the 2020 election. In evaluating Mr. Pierce’s specific experience, attributes and skills in connection with his appointment to our board, we took into account his investment experience and knowledge of various technology industries.

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.

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 under the tab Investors – Governance. Copies of these materials also are available without charge upon written request to our Corporate Secretary at ~~2629~~1014 ~~Townsgate~~S. ~~Road~~Westlake ~~#215~~Blvd., ~~Westlake~~Suite 14-299, Westlake Village, CA 91361.

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.

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 or via electronic video format. 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, sole director and our Chief Executive Officer. We do not have a lead independent director. ~~Given~~ ~~the~~Due ~~small~~to ~~size of~~ the ~~Board~~fact ~~and~~that ~~limited~~Mr. ~~number~~Miglino ofis ~~executive~~the ~~officers~~sole director, 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 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 meets regularly to review SRAX’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.

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~~Due ~~committee~~to ~~members~~the ~~are~~fact ~~independent~~that ~~directors~~Mr. ~~Information~~ ~~concerning~~Miglino is the ~~current~~sole director, ~~membership~~we ~~and~~presently ~~function~~do ofnot ~~each~~have ~~committee~~board ismembers asappointed ~~follows:~~to committees.

Director	Audit Committee	Compensation Committee	Corporate Governance and Nominating Committee
Marc Savas		(1)
Colleen DiClaudio			(1)
Robert Jordan	(1)

(1) Denotes chairperson.

Independence

Our Class A common stock istrades ~~listed~~ on the ~~Nasdaq~~OTC ~~Global~~Markets – Expert Market. AsAlthough ~~such,~~ we are ~~subject~~not tolisted ~~the~~on Nasdaq, ~~Stock~~we ~~Market~~apply ~~LLC~~the (“Nasdaq~~”) director~~ director independence standards in determining independence. In accordance with these standards, in determining independence the Board affirmatively determines whether a director has a “material relationship” with SRAX 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 SRAX, 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 ~~Messrs~~Mr. ~~Savas~~Miglino, ~~Jordan,~~our ~~and~~sole ~~Pierce~~director, ~~and~~is ~~Ms.~~not ~~DiClaudio are each~~ “independent” as that term is defined by the Nasdaq’s independence standards.

Committees of the Board of Directors

Our Board of Directors is comprised of one individual. who is also integral to the operations of our company. As a result, we do not have a majority of independent directors as that term is defined under Rule 4200(a)(15) of the NASDAQ Marketplace Rules, even though that definition does not currently apply to us, because we are not listed on the NASDAQ. We anticipate that if we expand our Board of Directors in the future, that we will seek to include members who are independent. Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent, and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include “independent” directors.

Although our Board of Directors has established committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, the committees are not currently staffed as there is only one director, who is not independent. The functions of those committees are being undertaken by the sole director.

None of our directors is an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee or Board of Directors who:

	a)	understands generally accepted accounting principles and financial statements,

	b)	is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves,

	c)	has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements,

	d)	understands internal controls over financial reporting, and

	e)	understands audit committee functions.

We believe that the members of our sole director is collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances.

Audit Committee

We have a designated audit committee in accordance with section 3(a)(58)(A) of the Exchange Act. ~~The~~However, ~~members~~due ofto the ~~Audit~~fact ~~Committee~~that ~~are~~we presently ~~Robert~~only ~~Jordan~~have ~~(Chairperson),~~one ~~Colleen~~director ~~DiClaudio~~who is an affiliate, the audit committee presently does not have members. We intend to appoint additional directors and, ~~Marc~~at ~~Savas~~which time, we will appoint directors to the Audit Committee. 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 SRAX’s independent registered public accounting firm, reviews the services performed by the independent registered public accounting firm and SRAX’s finance department, evaluates SRAX’s accounting policies and the system of internal controls established by management and the Board, reviews significant financial transactions, and oversees enterprise risk management.

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 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

~~The~~We have formed a Compensation Committee ~~assists~~but due to the fact that we presently only have one director who is an affiliate, the Compensation Committee presently does not have members. The Compensation Committee, once staffed, will assist the Board in:

● Recommending, in executive session at which our chief executive officer is not present, the compensation and awards / bonuses for our CEO or president, if such person is acting as the CEO, as well as other executive officers; ● discharging its responsibilities for approving and evaluating our officer compensation plans, policies and programs; ~~● reviewing and recommending to the Board, compensation to be provided to our employees and directors; and ● administering our equity compensation plan(s).~~

3038

~~The Compensation~~● ~~Committee~~reviewing isand ~~charged~~recommending ~~with~~to ~~ensuring~~the ~~that~~Board, ~~our~~ compensation ~~programs~~to ~~are~~be ~~competitive,~~provided ~~designed~~ to ~~attract~~our employees and ~~retain highly qualified~~ directors,; ~~officers~~ and ~~employees,~~● ~~encourage~~administering ~~high performance, promote accountability and assure that employee interests are aligned with the interests of~~ our ~~stockholders.~~equity ~~The~~compensation ~~Compensation Committee is composed of two directors, each of whom has been determined by the Board to be independent within the meaning of Rule 5605 of the Nasdaq Marketplace Rules~~plan(s).

~~Mr.~~The ~~Savas~~Compensation ~~and~~Committee ~~Ms.~~is ~~DiClaudio~~charged with ensuring that our compensation programs are ~~the~~competitive, ~~current~~designed ~~members~~to ofattract and retain highly qualified directors, officers and employees, encourage high performance, promote accountability and assure that employee interests are aligned with the ~~Compensation~~interests ~~Committee~~of our stockholders.

Corporate Governance and Nominating Committee

~~The~~We have formed a Corporate Governance and Nominating Committee but due to the fact that we presently only have one director who is an affiliate, the Corporate Governance and Nominating Committee presently does not have members. The Corporate Governance and Nominating Committee:

	●	assists the Board in selecting nominees for election to the Board;

	●	monitor the composition of the Board;

	●	develops and recommends to the Board, and annually reviews, a set of effective corporate governance policies and procedures applicable to our company; and

	●	regularly review the overall corporate governance of the Company and recommends improvements to the Board as necessary.

The purpose of the Corporate Governance and Nominating Committee is to assess the performance of the Board and to make recommendations to the Board from time to time, or whenever it shall be called upon to do so, regarding nominees for the Board and to ensure our compliance with appropriate corporate governance policies and procedures. The Corporate Governance and Nominating Committee is composed of two directors, each of whom has been determined by the Board to be independent within the meaning of Rule 5605 of the Nasdaq Marketplace Rules.

Mr. Savas and Ms. DiClaudio are the current members of the Corporate Governance and Nominating Committee.

Delinquent Section 16(a) Reports

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~~there ~~following~~were ~~table~~no ~~provides information regarding any of the~~ reports ~~which~~that were filed late during the fiscal year ended December 31, ~~2021~~2022:

Name of Reporting Person	Type of Report and Number Filed Late	No. of Transactions Reported Late
Marc Savas	Form 4	1
Robert Jordan	Form 4	1
Colleen DiClaudio	Form 4	1
Brock Pierce	Form 4	1

ITEM 11.

EXECUTIVE COMPENSATION.

Say-on-Pay

At our 2020 Annual Meeting of Stockholders held on December 31, 2020, we submitted two proposals to our stockholders regarding our executive compensation practices.

The first was an advisory vote on the 2019 compensation awarded to our named executive officers (commonly known as a “say-on-pay” vote). At our 2020 annual meeting, excluding broker non-votes, approximately 2,925,180 shares cast votes with regard to the say-on-pay proposal. Of those, 2,827,179 or approximately 97%, of the shares approved the compensation of named executive officers. We believe that the outcome of our say-on-pay vote signals our stockholders’ support of our compensation approach, specifically our efforts to retain and motivate our named executive officers. In light of this stockholder support, the Compensation Committee determined not to change its approach to compensation. However, even though stockholders demonstrated overwhelming support for our compensation approach in 2020, the Compensation Committee annually reviews our compensation practices to determine how they might be improved. The Compensation Committee will continue to consider the outcome of say-on-pay votes when making future compensation decisions for our named executive officers.

The second proposal was a vote on the frequency of future stockholder advisory votes regarding compensation awarded to named executive officers (commonly known as a “say-when-on-pay” vote). The frequency of every three years received the highest number of votes cast. Upon review and in accordance with the foregoing results, our Board of Directors determined that we would hold our next say-on-pay vote in three years, at our 2023 Annual Meeting.

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, ~~2021~~2022.

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 11 of the Notes to our Consolidated Financial Statements for the year ended December 31, ~~2021~~2022.

Name and principal position	Year				Salary ($)				Bonus ($)				Option Awards ($)(1)				All other compensation ($)				Total ($)
Executive Name	Year		Salary				Bonus				1 Option Awards				2 All Other Compensation				Total
Christopher Miglino,		2021				340,000				225,000				-				32,295	(2)			597,295
Christopher Miglino	2022		$	340,000			$	150,000			$	396,986			$	32,540			$	919,526
Chief Executive Officer	2021	~~2020~~	$	340,000		~~340,000~~	$	225,000		~~50,000~~	$	-		~~648,489~~	~~(3)~~$	32,295		~~41,031~~	~~(2)~~$	597,295		~~1,079,520~~
Michael Malone	2022	~~2021~~	$	200,000		~~200,000~~	$	75,000		~~75,000~~	$	193,000		-	$	9,795		~~9,795~~	~~(2)~~$	477,795		~~284,795~~
Chief Financial Officer	2021	~~2020~~	$	200,000		~~200,000~~	$	75,000		~~75,000~~	$	-		-	$	9,795		~~21,554~~	~~(2)~~$	284,795		~~296,554~~
Christopher Lahiji	2022	~~2021~~	$	335,000		~~332,423~~	$	-		-	$	-		-	$	8,829		~~10,745~~	~~(2)~~$	343,829		~~343,168~~
President, LD Micro (4)		2020				58,749				-				-				6,428	(2)			65,177	(5)
President, LD Micro, Inc.	2021		$	332,423			$	-			$	-			$	10,745			$	343,168
Randall Clark	2022		$	250,000			$	-			$	330,821			$	8,142			$	588,963
Chief Operating Officer	2021		$	-			$	-			$	-			$	-			$	-

(1)	The amounts included in the “Option Awards” column represent the aggregate grant date fair value of the stock options, computed in accordance with ASC Topic 718. The assumptions made in the valuations of the option awards are included in Note 17 of the notes to our consolidated financial statements appearing in the 10-K for the year end December 31, 2021 for options awarded in 2021 or prior.
(2)	Healthcare benefits paid by the Company.
(3)	Represents and option to purchase 300,000 shares of Class A Common Stock at an exercise of $2.97 per share and a term of 5 years. The options were fully vested on the grant date.
(4)	Mr. Lahiji joined as president of LD Micro, the Company’s wholly owned subsidiary and as a member of the Board of Directors on September 16, 2020.
(5)	Does not include Cash or Class A Common Stock received as a result of the acquisition of LD Micro, Inc. that closed on September 16, 2020.

1 - Represents the aggregate grant date fair value of stock options, accounted for in accordance with ASC 718. The assumptions made in the valuations of these option awards are included in the accompanying consolidated financial statements.

322 - Represents healthcare benefits.

Employment agreements and how the executive’s compensation is determined

We are a party to an employment agreement with ~~each of Messrs~~Mr. Miglino,. Prior to our separation with Messrs Malone, and Lahiji ~~which~~following December 31, 2022, each had entered into an employment agreement with the Company. The employment agreements provide the compensation arrangements ~~with~~ with these individuals. The Company has not engaged a compensation consultant or other consultant performing similar functions to advise ~~the~~ the Company on compensation arrangements for our executive officers. Notwithstanding, as described under the heading “Director Compensation”, the Company engaged a compensation consultant to advise on the Company’s non-employee director compensation policy.

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 initially entitled to receive a base salary of $192,000 which is subject to an annual review. Subsequent to several amendments, 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, ~~2021~~2022.

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:	$	723,074	$	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~~Mr. ~~the~~Malone ~~terms~~is ofno ~~the~~longer ~~employment~~employed ~~agreement,~~by ~~Mr.~~the ~~Malone’s compensation includes:~~Company.

●Employment Agreement 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 aChristopher 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.Lahiji

33Effective September 16, 2020, we entered into an employment agreement with Christopher Lahiji pursuant to which he was engaged to serve as the president of LD Micro, Inc., our wholly owned subsidiary acquired in September 2020. The Company sold LD Micro, Inc. on March 3, 2023. Mr. Lahiji is no longer employed by the Company.

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

The following table sets forth the payments that would be made to Mr. Malone in accordance with his employment agreement had he been terminated by us “without cause” on December 31, 2021.

Name	Terminated Without Cause		Termination as a result of Disability
Michael Malone
Salary (1)	$	33,667	$	—
Total:	$	33,667	$	—

Employment Agreement with Christopher. Lahiji

Effective September 16, 2020, we entered into an employment agreement with Christopher Lahiji pursuant to which he was engaged to serve as the president of LD Micro, Inc., our wholly owned subsidiary acquired in September 2020. Mr. Lahiji’s employment agreement is for a term of three (3) years. Under the terms of the employment agreement, Mr. Lahiji’s compensation includes:

● an annual base salary of $335,000; ● an annual bonus at the discretion of the board of directors with a target bonus of fifteen percent (15%) of his base salary; ● the right to receive equity incentive awards commensurate with those of similarly situated officers of SRAX; ● A remove office allowance of $1,000 per month; and ● annual paid time off of 30 days per year.

Upon a termination of Mr. Lahiji’s employment, he will receive the following severance benefits as applicable:

(i) Upon termination for death: his estate will receive (i) salary earned but not paid through termination, (ii) pay for all contractually earned but unused days off, (iii) any annual bonus earned but unpaid through the date of termination, (iv) three (3) months of remote office allowance, and (v) any previously incurred but unpaid business expenses (collectively, “Final Compensation”); (ii) Upon termination for disability: Mr. Lahiji will receive the Final Compensation; (iii) Upon termination by the Parent “for cause” or by Mr. Lahiji without “good reason” as such terms are defined in the Employment Agreement, Mr. Lahiji will receive the Final Compensation; (iv) Upon a termination by the Parent other than “for cause” or by Mr. Lahiji for “good reason”: Mr. Lahiji will receive (i) the Final Compensation, (ii) twenty four (24) months of his base salary over a twenty four (24) month period, (iii) continued COBRA coverage for twenty four (24) months, and (iv) the immediate vesting of all outstanding equity grants

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

The following table sets forth the payments that would be made to Mr. Lahiji in accordance with his employment agreement had he been terminated by us “without cause” or by him for “good reason” on December 31, 2021.

Name	Terminated Without Cause / For Good Reason
Christopher Lahiji (1)
Salary	$	670,000
Accelerated Vesting of Awards		—
Health Care		43,074
Total:	$	713,074

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”) was administered by our board or any of its committees. The purposes of the 2012 Plan were 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 was at the discretion of the administrator, which has the authority to determine the persons to whom any awards were 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 authorized the issuance of up to 600,000 shares of Class A common stock for the foregoing awards. As of ~~December~~January ~~31, 2021, we have granted awards under the 2012 Plan equal to approximately~~ 1,~~334,867~~ shares of our Class A common stock (with all issuances in excess of 600,000 occurring subsequent to cancellations or forfeitures of certain shares under the 2012 Plan), and 901,428 shares have been cancelled or forfeited. As of January 1, 2022, the 2012 Plan terminated pursuant to its terms.

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, ~~2021~~2022, we have outstanding granted awards under the ~~2014~~ 2014 Plan equal to approximately 1819,~~672,694~~259 shares of our Class A common stock (with all issuances in excess of 1,600,000 occurring subsequent to cancellations or forfeitures of certain shares under the 2014 Plan)~~, and 335,733 shares have been cancelled or forfeited~~. Accordingly, there are ~~263~~780,~~039~~741 shares of Class A common stock available for future awards under the 2014 Plan. In the event of a change in control, ~~awards~~ 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~~ 2016 Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional ~~incentive~~ 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, ~~2021~~2022, we have outstanding granted awards under the 2016 Plan equal to approximately ~~829~~ 239,~~717~~160 shares of our Class A common stock (with all issuances in excess of 600,000 occurring subsequent to cancellations or forfeitures of certain shares under the 2016 Plan)~~, and 591,833 shares have been cancelled or forfeited~~. Accordingly, there are ~~362~~2,~~116~~392,357 shares of common stock available for future awards under the 2016 Plan. In the event of a change in control, awards under the 2016 Plan will become fully vested unless such awards are assumed or substituted by the successor corporation. Under the 2016 Plan, we made a conditional grant to our former CFO that iswas subject to the approval of our shareholders to increase the number of shares issuable under the 2016 Plan. On November 29, 2022, our Compensation Committee recommended and our Board approved the amended and restated 2016 Plan and as a result, the number of shares of class A common stock eligible for issuance under the Plan was 2,631,517 subject to an automatic increase on the first day of each calendar year by four percent (4%) of the total shares of Common Stock issued and outstanding on such date. On December 31, 2022, the shareholders of the Company approved the restated Plan.

Outstanding Equity Awards Value at Fiscal Year-End

The following table ~~provides~~presents information ~~concerning~~regarding ~~unexercised~~outstanding ~~options, stock that has not vested and~~ equity ~~incentive plan~~ awards ~~for~~held ~~each named~~by ~~executive~~the ~~officer~~Company’s ~~outstanding~~Named asExecutive ofOfficers ~~December~~at December 31, ~~2021.~~2022:

		OPTION AWARDS																STOCK AWARDS
				Option Awards															Stock Awards
Name		~~Number~~Grant ~~of securities underlying unexercised options (#) exercisable~~Date		Number of securities underlying unexercised options (#) exercisable		~~Number of securities underlying unexercised options (#) unexercisable~~		Number of securities underlying unexercised options (#) unexercisable		~~Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)~~	Equity incentive plan awards: Number of securities underlying unexercised unearned options		~~Option exercise price ($)~~		Option Exercise Price ($)		~~Option expiration date~~	~~Number~~Option ofExpiration ~~shares or units of stock that have not vested (#)~~Date	~~Market~~Number ~~value~~ of shares ~~or units~~ of stock that have not vested ~~($)~~		~~Equity~~Market ~~incentive~~value ~~plan awards: Number~~ of ~~unearned~~ shares, ~~units~~of orstock ~~other rights~~ that have not vested (#$)		Equity incentive plan awards: ~~Market~~number ~~or payout value~~ of unearned shares, ~~units or other rights~~ that have not vested (#)		Equity incentive plan awards: market or payout value of unearned shares that have not vested ($)
Christopher Miglino			300,000				0							2.97			11/13/2025
Chris Miglino	1	November 13, 2020			300,000				-			-			$	2.97		November 13, 2025		-		-		-		-
Michael Malone			100,000				0							2.56			1/2/2022
Chris Miglino	2	January 3, 2022			40,000				80,000			-			$	4.25		January 3, 2029		-		-		-		-
Michael Malone	3	December 31, 2018			-				-			-			$	2.56		January 3, 2022		-		-		-		-
Christopher Lahiji	4	N/A			-				-			-			$	-		N/A		-		-		-		-
Randall Clark	5	March 27, 2019			-				-			-			$	3.42		March 27, 2022		-		-		-		-
Randall Clark	6	August 18, 2020			22,500				27,500			-			$	2.70		August 18, 2025		-		-		-		-
Randall Clark	7	January 3, 2022			33,333				66,667			-			$	4.25		January 3, 2025		-		-		-		-

1	The Company granted 100,000 stock options on November 13, 20202, having a fair value of $648,000. The Company determined the fair value of these options (on the grant date) using a Black-Scholes option pricing model. The shares vested on the grant date. Mr. Miglino is the Company’s Chief Executive Officer.

2	The Company granted 120,000 stock options on January 3, 2022, having a fair value of $396,986. The Company determined the fair value of these options (on the grant date) using a Black-Scholes option pricing model. The shares vest quarterly over a period of three (3) years. Mr. Miglino is the Company’s Chief Executive Officer.

3	The Company granted 100,000 stock options on December 18, 2020, having a fair value of $168,000. The Company determined the fair value of these options (on the grant date) using a Black-Scholes option pricing model. The shares vested quarterly over a period of three (3) years and expired unexercised on January 2, 2022. On March 14, 2023, Mr. Malone resigned as the Company’s Chief Financial Officer.

4	No awards were granted to Mr. Lahiji. Mr. Lahiji resigned on March 3, 2023 as the President of LD Micro, Inc.

5	The Company granted 50,000 stock options on March 27, 2019, having a fair value of $110,500. The Company determined the fair value of these options (on the grant date) using a Black-Scholes option pricing model. The shares vested quarterly over a period of three (3) years and expired unexercised on March 27, 2022. Mr. Clark is the Company’s Chief Operating Officer. On September 1, 2023, Mr. Clark resigned as the Company’s Chief Operating Officer.

6	The Company granted 50,000 stock options on August 18, 2020, having a fair value of $100,000. The Company determined the fair value of these options (on the grant date) using a Black-Scholes option pricing model. The shares vested quarterly over a period of three (3) years and expired unexercised on September 1, 2023. Mr. Clark is the Company’s Chief Operating Officer. On September 1, 2023, Mr. Clark resigned as the Company’s Chief Operating Officer.

7	The Company granted 100,000 stock options on January 3, 2022, having a fair value of $331,000. The Company determined the fair value of these options (on the grant date) using a Black-Scholes option pricing model. The shares vested quarterly over a period of three (3) years and expired unexercised on September 1, 2023. Mr. Clark is the Company’s Chief Operating Officer. On September 1, 2023, Mr. Clark resigned as the Company’s Chief Operating Officer.

DIRECTOR COMPENSATION

Role of Compensation Consultant

The Compensation Committee is authorized to retain the services of one or more compensation advisors, as it sees fit, in connection with the oversight of our non-employee director and executive compensation program and related policies and practices. During ~~2021~~2022, the Compensation Committee retained Aon PLC (“Aon”), a compensation consulting firm with regard to our non-employee director compensation policy. Aon was engaged to provide the Compensation Committee with information, recommendations, and other advice relating to the non-employee director compensation policy only and not with regard to any executive compensation policies. Aon was directly engaged and served at the discretion of the Compensation Committee and provided no other services to the Company.

Current Director Compensation Policy

On October 29, 2021, the Company’s Compensation Committee amended the Company’s non-employee director compensation policy. Effective January 1, 2022, non-employee directors will be entitled to cash compensation of:

● Annual base compensation for serving on our Board of $30,000; and

	●	Annual base compensation for serving on our Board of $30,000; and

	●	Additional Annual Committee Compensation of:

● Additional Annual Committee Compensation of:

○

Audit Committee

■ Chair — $14,000

	■	Chair — $14,000

	■	Member — $7,500

■ Member — $7,500

○

Compensation Committee

■ Chair — $10,000

	■	Chair — $10,000

	■	Member - $5,000

■ Member - $5,000

○

Nomination and Governance Committee

■ Chair — $7,500

	■	Chair — $7,500

	■	Member — $3,000

■ Member — $3,000

Cash compensation will be paid quarterly over the year.

In addition, each director will be entitled to receive an annual stock option grant equal to $100,000. The number of options will be determined using the Black Scholes option pricing model. The options will vest quarterly over the grant year and have a term of seven years.

Legacy Director Compensation Policy

Effective April 15, 2018 and up until December 31, 2021, each non-employee director received $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.

37Director Compensation for 2022

~~Director~~The ~~Compensation~~following table provides information concerning the compensation paid to our non-executive directors for ~~2021~~their services as members of our board of directors for the year ended December 31, 2022. The information in the following table excludes any reimbursement of out-of-pocket travel and lodging expenses which we may have paid.

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 the year ended December 31, 2021. The information in the following table excludes any reimbursement of out-of-pocket travel and lodging expenses which we may have paid.

The awards with respect to which values are provided under the column “Option Awards” below are exclusively stock options, which have realizable value only if they actually vest over time and to the extent, if any, that our stock price exceeds the applicable exercise prices. The values provided below for these awards are based on applicable accounting standards, and do not necessarily reflect the actual amounts realized or realizable pursuant to the underlying stock options.

Name	Fees earned or paid in cash ($1)			Stock ~~awards~~Awards ($)		Option ~~awards~~Awards ($) (2)			Non-~~equity~~Equity ~~incentive~~Incentive ~~plan~~Plan ~~compensation~~Compensation ($)		Nonqualified ~~deferred~~Deferred ~~compensation~~Compensation ~~earnings~~Earnings ($)		All other ~~compensation~~Compensation ($)		Total ($)
Colleen DiClaudio	$	1530,000	~~(1)~~	$	-	$	1529,~~000~~533	~~(2)~~	$	—-	$	—-	$	—-		3059,~~000~~533
Marc Savas	$	1530,000	~~(1)~~	$	-	$	1529,~~000~~533	~~(2)~~	$	—-	$	—-	$	—-		3059,~~000~~533
Brock Pierce	$	-30,000		$	-	$	2429,~~000~~533	~~(3)~~	$	—-	$	—-	$	—-		2459,~~000~~533
Robert Jordan	$	1530,000	~~(1)~~	$	-	$	1529,~~000~~533	~~(2)~~	$	—-	$	—-	$	—-		3059,~~000~~533

	(1)	Compensation includes (i) portion of cash payment applicable to 2021 year for Board year beginning 4/15/20 and ending 4/14/2021 and (ii) portion of cash payment applicable for 2021 year for Board year beginning 4/15/21 until 12/31/2021.
1	Reflects annual payment related to board services rendered.
	(2)	Compensation applicable to 2021 year includes $15,000 from the vesting of 5,730 Class A common stock purchase options. Of these options, (i) 2,809 options have an issuance date of 4/15/20, an exercise price per share of $1.95, a term of seven (7) years, and vest quarterly on 7/15/20, 10/15/20, 1/15/21, and 4/15/21, and (ii) 2,921 options have an issuance date of 4/15/21, an exercise price per share of $4.38, a term of seven (7) years, and vest quarterly on 7/15/21, 10/15/21, 1/15/22, and 4/15/22,
2	Each member was granted 100,000 stock options, having a fair value of $29,533. The Company determined the fair value of these options (on the grant date) using a Black-Scholes option pricing model. All options were fully vested in 2022. Each member resigned on July 13, 2023. All related options expired unexercised.
	(3)	Mr. Pierce joined the Board in March of 2021. Mr. Pierce elected to receive all options. Such amount includes (i) 803 options having an issuance date of March 10, 2021, an exercise price of $4.48 per share, a term of seven (7) years, and vest quarterly on 7/15/21, 10/15/21, 1/15/22, and 4/15/22 and (ii) 5,842 options having an issuance date of 4/15/21, an exercise price of $4.38 per share, a term of seven (7) years, and vest quarterly on 7/15/21, 10/15/21, 1/15/22, and 4/15/22

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

BENEFICIAL OWNERSHIP OF SHARES OF CLASS A COMMON STOCK

At August 3129, ~~2022~~2024, we had 2629,~~226~~150,~~401~~262 shares of Class A common stock issued and outstanding. The following table sets forth information known to us as of August 3115, ~~2022~~2024 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.

	●	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
			Common Shares
			Underlying
	Common		Convertible				Percent of
Name and Address of Beneficial Owner(1)	Shares		Securities (2)		Total		Class (2)
Directors and named Executive Officers
Christopher Miglino		~~887~~967,575		330,000		1,~~217~~297,575		4.5745	%
Christopher Lahiji (3)		1,490,000		-		1,490,000		5.66	%
All directors and executive officers as a group (1 person)		967,575		330,000		1,297,575		4.45	%
Marc Savas		11,945		43,230		55,175		*
Robert Jordan		6,510		43,230		49,740		*
Colleen DiClaudio		7,813		43,230		51,043		*
Michael Malone (4)		27,544				27,544		*
Brock Pierce		20,000		31,282		51,282		*
All directors and executive officers as a group (7 persons)		2,451,387		490,971		2,942,358		10.98	%
Beneficial Owners of 5% or more
Whitefort Capital Master Fund, LP (5)		1,713,410		-		1,713,410		6.51	%
Percy Rockdale LLC (4)		2,274,816		-		2,274,816		7.70	%
Percy Rockdale LLC (6)		2,604,576		-		2,604,576		9.90	%

*	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 2629 Townsgate Rd. #215, Westlake Village, CA 91361.

(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 1014 S. Westlake Blvd., Suite 14-299, Westlake Village, CA 91361.

(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.

(3)	Disclosed pursuant to Schedule 13(g) filed with the SEC on February 14, 2024. Address of beneficial owner is 595 Madison Avenue, 29^thFloor, New York, NY 10022. Shares are owned by Continental General Insurance Company (“GCIC”). Continental Insurance Group, Ltd. (“CIG”), as the sole owner of CGIC may be deemed to be the beneficial owner and Continental General Holdings LLC (“CGH”), as the sole owner of CIG may be deemed to be the beneficial owner. Michael Gorzynski, as the sole manager of Percy Rockdale and as a manager and executive chairman of CGH, may be deemed beneficially own the shares.

(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 26,315,178 shares of Class A common stock issued and outstanding as of August 31, 2022.

(3)	Mr. Lahiji is a party to a voting agreement with SRAX whereby Mr. Lahiji appoints Mr. Miglino, or any successor designated by the Board of Directors to vote the shares of Common Stock issued in the LD Micro acquisition transaction until December 31, 2022. Mr. Lahiji is also a party to a lock-up agreement whereby Mr. Lahiji is restricted from selling the shares of Common Stock issued to him in the LD Micro acquisition transaction until September 16, 2023.
(4)	Does not include conditional option grant to purchase 100,000 shares issued on January 6, 2022 to Mr. Malone that is subject to shareholder approval. Assuming shareholder approval, the option vests quarterly over the grant year.
(5)	Disclosed pursuant to Schedule 13(g) filed with the SEC on February 3, 2022. Address of beneficial owner is 12 East 49th Street, 40th Floor, New York, New York 10017. Reporting Person is managed by Whitefort Capital Management, LP. David Salanic and Joseph Kaplan are co-managing partners at Whitefort Capital Management.
(6)	Disclosed pursuant to Schedule 13(g) filed with the SEC on February 4, 2022. Address of beneficial owner is 595 Madison Avenue, 29th Floor, New York, NY 10022. Shares are owned by Percy Rockdale which owns 234,540 shares and Continental General Insurance Company (“GCIC”), which owns 2,370,036 shares. Continental Insurance Group, Ltd. (“CIG”), as the sole owner of CGIC may be deemed to be the beneficial owner and Continental General Holdings LLC (“CGH”), as the sole owner of CIG may be deemed to be the beneficial owner. Michael Gorzynski, as the sole manager of Percy Rockdale and as a manager and executive chairman of CGH, may be deemed beneficially own the shares.

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, ~~2021~~2022:

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:
Plans approved by our stockholders (1):
2012 Equity Compensation Plan (1)		400,000	$	2.87		166,561
2014 Equity Compensation Plan		819,259	$	2.39		780,741
2014 Equity Compensation Plan		864,127	$	3.10		263,039
2016 Equity Compensation Plan		239,160	$	1.99		2,392,357
2016 Equity Compensation Plan		67,660	$	2.84		328,783
Plans not approved by stockholders
N/A

(1)

2012 Equity Compensation Plan expired on January 1, 2022.

3942

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Related Party Transactions Procedure

We review all known relationships and transactions in which SRAX 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 SRAX 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 SRAX 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. As we presently only have one director, all related party transactions are reviewed by such director.

Related Party Transactions

Summarized below are certain transactions and business relationships between SRAX 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, ~~2020~~2021.

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 Annual Report entitled “Executive Compensation.”

Information regarding disclosure of compensation to a director for the year ended December 31, ~~2021~~2022 is included in the Section of this Annual Report entitled “Director Compensation.”

● The Company subleased a suite at the Sofi Stadium in Los Angeles from an entity wholly owned by Christopher Miglino, our CEO. The sublease is for a period of one (1) year, at a rate of $382,500, and commenced on the date that the stadium opened to the general public. We believe that such annual rate is a discount from prevailing market rates and is less than the master lease rate. During May of 2022, the ~~fiscal~~Company renewed the lease for four (4) additional National Football League seasons for average per year of ~~January~~approximately 1$496,836 ~~2020~~over four (4) years. This amount is a pass-through ~~December~~of 31the actual expenses incurred by our affiliate without markup. The lease terminates in February 2026. ● On August 4, ~~2020~~2021, wethe Board declared a one-time bonus payment of $15,000 to all non-employee directors. As a result, the Company paid an aggregate of $60,000 in bonuses. ● On October 29, 2021, the ~~following~~Compensation Committee amended the Company’s non-employee director compensation policy. The policy became effective January 1, 2022 and is set forth below under the section entitled “Director Compensation”. ● On January 3, 2022, we issued four (4) common stock purchase options to our non-employee ~~Board~~directors, ~~members~~pursuant to our amended non-employee director compensation policy. Each option entitled the holder to purchase 29,533 shares of Class A Common Stock at an exercise price of $4.35 per share, for an aggregate exercise amount of $128,468.55. The options vest in equal quarterly over a one (1) year period from the issuance date. The options expire on the seven (7) year anniversary of the issuance date. Each option has a Black-Scholes value of $100,000. ● On January 6, 2022, we issued Michael Malone, our former Chief Financial Officer, a conditional option to purchase 100,000 shares of Class A common stock. The option has an exercise price of $4.25 per share, a term of seven (7) years and vests in equal quarterly installments over a three (3) year period from the grant date. The option had a Black-Scholes value on the grant date of $330,821. ● On January 6, 2022, we issued Christopher Miglino, our Chief Executive Officer, an option to purchase 120,000 shares of Class A common stock. The option has an exercise price of $4.25 per share, a term of seven (7) years and vests in equal quarterly installments over a three (3) year period from the grant date. The option had a Black-Scholes value on the grant date of $396,986. ● We entered into certain agreements and transactions with BIGtoken, Inc. our former subsidiary since January 1, 2020. We owned more than 50% of the outstanding common stock of BIGtoken until November 1, 2021, upon the completion of a merger by BIGtoken with a third party whereby SRAX ceased to be a majority owner of BIGtoken and Christopher Miglino and Michael Malone, were replaced as CEO and CFO respectively, by management of the target in the merger. Additionally, on December 30, 2021, SRAX converted the common stock of BIGtoken that it owned into a class of preferred stock of BIGtoken with no voting rights and a beneficial ownership limitation of 4.99%. On June 30, 2022, Christopher Miglino resigned as a board member of BIGtoken and we had no further officers or directors of SRAX performing any services for BIGtoken. The following represents transactions entered into between SRAX and BIGtoken since January 1, 2021:

○ an aggregate of $60,000 in cash paid in quarterly payments;

	○	Pursuant to the divestiture of BIGtoken on February 4, 2021, we (i) entered into a share exchange agreement whereby we received 149,562,566,584 shares of common stock of BIGtoken (fka Force Protection Video Equipment Corp.) (ii) entered into a transition services agreement with BIGtoken, (iii) entered into a master separation agreement with BIGtoken, and (iv) entered into a registration agreement with BIGtoken with respect to the shares of common stock received pursuant to the exchange agreement.

	○	On December 29, 2021 we exchanged our 149,562,566,584 shares of common stock of BIGtoken for 242,079 shares of Series D Preferred Stock of BIGtoken, which (i) converts back into the same number of shares owned prior to the exchange, (ii) has a beneficial ownership limitation of 4.99% (can be increased to 9.99% on 61 days notice), and (iii) is no-voting, except as required by law.

○ an aggregate of 3,237 Class A common stock purchase options that vested during 2020 out of 11,252 initial options issued on April 15, 2019, with each such option having an exercise price of $5.49 per share, a term of seven (7) years and such portion that vested in 2020 was valued at $17,260 in the aggregate;43

○ an aggregate of 26,805 Class A common stock purchase options that vested during 2020 out of 37,630 initial options issued on April 15, 2020, with each such option having an exercise price of $1.95 per share, a term of seven (7) years and such vested portion was valued at $42,739 in the aggregate;

	○	On February 11, 2022, we entered into a simple agreement for future equity (“SAFE”) with BIGtoken whereby we funded $300,000 and in March of 2022, we funded an additional $700,000. Upon BIGtoken completing an offering of its securities, amounts due under the SAFE will convert, at our option, into shares of Series D Preferred Stock of BIGtoken. The SAFE additionally provides that we will receive warrants to purchase Series D Preferred Stock of BIGtoken upon the completion of an equity financing.

	○	Between December 2021 and March 31, 2022, we factored receivables of approximately $1.2 million for BIGtoken. As of June 30, 2022, $0.4 million is due and payable to us from BIGtoken.

● ~~Christopher~~On ~~Miglino~~May 7, ~~our CEO~~2024, ~~served~~the onCompany ~~the~~entered ~~board~~into ofa ~~directors~~definitive ofAgreement ~~one~~and Plan of ~~our~~Merger ~~advertising~~(the ~~customers,~~“Merger ~~EVmo~~Agreement”) with DNA Holdings Venture, Inc., a Puerto Rico corporation (~~fka~~“DNA”), ~~YayYo~~and DNA Merger Sub, Inc.), ~~which~~a ~~purchases~~Delaware ~~advertising~~corporation atand ~~market~~wholly-owned ~~rates~~subsidiary of SRAX (“Merger Sub”). AsUpon the terms and subject to the satisfaction of ~~January~~the 22conditions described in the Merger Agreement, ~~2020~~including approval of the transaction by DNA’s shareholders, MrMerger Sub will be merged with and into DNA (the “Merger”), with DNA surviving the Merger as a wholly-owned subsidiary of the Company. ~~Miglino~~Subject ~~was~~to nothe ~~longer~~terms and conditions of the Merger Agreement, as consideration for the Merger, SRAX shall issue to the shareholders of DNA 1,000 shares of a ~~member~~newly created Series C Convertible Preferred Stock of the ~~board~~Company (the “Preferred Stock”), which shall be convertible into approximately 75.5% of ~~directors~~the outstanding shares of ~~YayYo~~Common Stock of the Company upon closing of the Merger, which includes the approximately 35% of the Company which DNA owned prior to the merger. Upon completion of the Merger, the Company will change its name to DNA Holdings Venture, Inc. Mr. Miglino, Chief Executive Officer and sole director of the Company, serves as the Chief Executive Officer of DNA.

● On September 4, 2020, pursuant to our agreement and plan of merger with LD Micro, Inc., we agreed to issue the shareholders of LD Micro (i) $4,000,000 with (a) $1,000,000 upon closing, (b) $1,000,000 on January 1, 2021, (c) $1,000,000 on April 1, 2021, and (d) $1,000,000 on July 1, 2021, and (ii) 1,600,000 shares of Class A Common Stock at the closing. Pursuant to his position as a shareholder of LD Micro, Christophe Lahiji, the president of LD Micro, Inc. and a member of our Board received 1,490,000 shares of Class A Common Stock and will be entitled to receive approximately 85% of the cash compensation. Mr. Lahiji is currently subject to a lock-up agreement with respect to his shares of SRAX for 36 months from the date of the closing of the merger with LD Micro and a voting agreement to vote his shares pursuant to the Board’s recommendations, which is effective until December 31, 2023

● On August 4, 2021, the Board declared a one-time bonus payment of $15,000 to all non-employee directors. As a result, the Company paid an aggregate of $60,000 in bonuses.

● On October 29, 2021, the Compensation Committee amended the Company’s non-employee director compensation policy. The policy became effective January 1, 2022 and is set forth below under the section entitled “Director Compensation”.

● On January 6, 2022, we issued Michael Malone, our Chief Financial Officer, a conditional option to purchase 100,000 shares of Class A common stock. The option is subject to shareholder approval as a conditional grant. Assuming approval by the shareholders, the option has an exercise price of $4.25 per share, a term of seven (7) years and vests in equal quarterly installments over a three (3) year period from the grant date. The option had a Black-Scholes value on the grant date of $330,821.

● On January 6, 2022, we issued Christopher Miglino, our Chief Executive Officer, an option to purchase 120,000 shares of Class A common stock. The option has an exercise price of $4.25 per share, a term of seven (7) years and vests in equal quarterly installments over a three (3) year period from the grant date. The option had a Black-Scholes value on the grant date of $396,986.

● We entered into certain agreements and transactions with BIGtoken, Inc. our former subsidiary since January 1, 2020. We owned more than 50% of the outstanding common stock of BIGtoken until November 1, 2021, upon the completion of a merger by BIGtoken with a third party whereby SRAX ceased to be a majority owner of BIGtoken and Christopher Miglino and Michael Malone, were replaced as CEO and CFO respectively, by management of the target in the merger. Additionally, on December 30, 2021, SRAX converted the common stock of BIGtoken that it owned into a class of preferred stock of BIGtoken with no voting rights and a beneficial ownership limitation of 4.99%. On June 30, 2022, Christopher Miglino resigned as a board member of BIGtoken and we had no further officers or directors of SRAX performing any services for BIGtoken. The following represents transactions entered into between SRAX and BIGtoken since January 1, 2020:

○ Pursuant to the divestiture of BIGtoken on February 4, 2021, we (i) entered into a share exchange agreement whereby we received 149,562,566,584 shares of common stock of BIGtoken (fka Force Protection Video Equipment Corp.) (ii) entered into a transition services agreement with BIGtoken, (iii) entered into a master separation agreement with BIGtoken, and (iv) entered into a registration agreement with BIGtoken with respect to the shares of common stock received pursuant to the exchange agreement. ○ On December 29, 2021 we exchanged our 149,562,566,584 shares of common stock of BIGtoken for 242,079 shares of Series D Preferred Stock of BIGtoken, which (i) converts back into the same number of shares owned prior to the exchange, (ii) has a beneficial ownership limitation of 4.99% (can be increased to 9.99% on 61 days notice), and (iii) is no-voting, except as required by law. ○ On February 11, 2022, we entered into a simple agreement for future equity (“SAFE”) with BIGtoken whereby we funded $300,000 and in March of 2022, we funded an additional $700,000. Upon BIGtoken completing an offering of its securities, amounts due under the SAFE will convert, at our option, into shares of Series D Preferred Stock of BIGtoken. The SAFE additionally provides that we will receive warrants to purchase Series D Preferred Stock of BIGtoken upon the completion of an equity financing. ○ Between December 2021 and March 31, 2022, we factored receivables of approximately $1.2 million for BIGtoken. As of June 30, 2022, $0.4 million is due and payable to us from BIGtoken.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

The following table summarizes the aggregate fees billed to us by our independent auditor for ~~2021~~2022 and ~~2020~~2021. All fees were paid to RBSM LLP for the year ended December 31, 2021 and TAAD for the year ended December 31, 2022.

	2021		~~2020~~2022
Audit Fees	$	342,500	$	~~326~~206,~~250~~000
Audit-Related Fees		-		-
Tax Fees		-		-
All Other Fees		45,000		45123,~~000~~600
Total	$	387,500	$	~~371~~329,~~250~~600

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, and all other fees paid to the auditors with respect to 2021 and 2022 were pre-approved by the Audit Committee. RBSM LLP and TAAD did not provide any other services during 2021 ~~except~~and 2022, respectively, except those listed above.

4144

PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Documents filed as part of this report:

	(1)	Financial Statements. See Index to Consolidated Financial Statements appearing on page F-1.

	(2)	Exhibits

			Incorporated by Reference
		Filed/
Exhibit		Furnished		Exhibit		Filing
No.	Description	Herewith	Form	No.	File No.	Date
3.01(i)	Certificate of Incorporation, filed on 8/3/11		S-1	3.01(i)	333-179151	1/24/12
2.01	Asset Purchase Agreement dated February 3, 2023, by and between SRAX, Inc. and DNA Holdings, LLC		8-K	2.1	001-37916	2/9/2023
3.02(i)	Certificate of Correction to Certificate of Incorporation, filed on 8/31/11		S-1	3.01(ii)	333-179151	1/24/12
2.02 (1)	Agreement and Plan of Merger dated March 3, 2023 by and between SRAX, Inc., LD Micro, Inc., Freedom Holding Corp, Freedom US Markets, LLC and LDM Merger Sub, Inc.		8-K	2.1	001-37916	3/7/2023
3.03(i)	Certificate of Amendment to Certificate of Incorporation authorizing 1:5 reverse stock split		8-K	3.5	000-54996	9/19/16
2.03	Agreement and Plan of Merger between SRAX, Inc., DNA Holdings Venture, Inc. and DNA Merger Sub, Inc. dated May, 2024		8-K	1.01	001-37916	5/13/2024
3.04(i)	Certificate of Amendment to Certificate of Incorporation as Amended, effective 8/25/19		8-K	3.01(i)	001-37916	8/15/19
3.01	Certificate of Incorporation, filed on 8/3/11		S-1	3.01(i)	333-179151	1/24/12
3.05(ii)	Amended and Restated Bylaws of Social Reality, Inc. adopted March 27, 2019		8-K	3.01(ii)	001-37916	4/2/19
3.02	Certificate of Correction to Certificate of Incorporation, filed on 8/31/11		S-1	3.01(ii)	333-179151	1/24/12
3.06(i)	Form of Certificate of Designation of preferences, Rights and Limitations of Series A Non-Voting Preferred Stock		8-K	3.01	001-37916	9/24/21
3.03	Certificate of Amendment to Certificate of Incorporation authorizing 1:5 reverse stock split		8-K	3.5	000-54996	9/19/16
3.07(i)	Certificate of Validation and Certificate of Increase filed on January 31, 2022		8-K/A	3.01(i)	001-37916	2/2/2022
3.04	Certificate of Amendment to Certificate of Incorporation as Amended, effective 8/25/19		8-K	3.01(i)	001-37916	8/15/19
3.05	Amended and Restated Bylaws of Social Reality, Inc. adopted March 27, 2019		8-K	3.01(ii)	001-37916	4/2/19
3.06	Form of Certificate of Designation of preferences, Rights and Limitations of Series A Non-Voting Preferred Stock		8-K	3.01	001-37916	9/24/21
3.07	Certificate of Validation and Certificate of Increase filed on January 31, 2022		8-K	3.01(i)	001-37916	2/2/2022
3.08	Certificate of Designation of the Series B Non-Voting Convertible Preferred Stock		8-K	3.1	001-37916	2/9/2023
3.09	Amended and Restated Certificate of Designation Series B Preferred Stock		8-K	3.1	001-37916	4/2/2024
3.10	Certificate of Designation of the Series C Preferred Stock		8-K	5.03	001-37916	5/13/2024
4.01	Specimen of Class A Common Stock Certificate		8-A12B	4.1	001-37916	10/12/16
4.02	Class A Common Stock Purchase Warrant Issued to Investors in October 2014		8-K	4.7	000-54996	11/4/14
4.03	Warrant to Purchase Class A Common Stock ~~Purchase Warrant~~ issued ~~in Steel Media Transaction dated~~ October 30, 2014		8-K	4.8	000-54996	11/4/14
4.04	Class A Common Stock Warrant issued in September 2016 Offering		8-K	4.6	000-54996	10/6/16
4.05	Form of Class A Common Stock Warrant ~~issued to October 2013 Offering~~		8-K	4.74	000-54996	10/24/13
4.06	Class A Common Stock Warrant issued to T.R. Winston & Company issued 8/22/13		10-Q	4.5	000-54996	11/13/13
4.07	~~Class~~Form Aof Series B Common Stock Purchase Warrant issued ~~to Investors~~ in the January 2014 ~~Offering~~private placement		8-K	4.6	000-54966	1/27/14
4.08	Class A Common Stock Warrant issued to Investors in September 2016		8-K	4.6	000-54966	10/6/16
4.09	Class A Common Stock Warrant issued to Investors in January 2017 Offering		8-K	4.1	001-37916	1/4/17
4.10	Class A Common Stock Warrant issued to Investors in January 2017 Offering (2nd Warrant)		8-K	4.2	001-37916	1/4/17
4.11	Class A Common Stock Placement Agent Warrant issued in January 2017 Offering		8-K	4.3	001-37916	1/4/17
4.12	Class A Common Stock Placement Agent Warrant issued in October 2016 Offering		10-K	4.12	001-37916	3/31/17
4.13	Class A Common Stock Warrant issued in Leapfrog Media Trading Acquisition		10-K	4.13	001-37916	4/2/18
4.14	Form of 12.5% Secured Convertible Debenture issued in April 2017 Offering		8-K	4.2	001-33672	4/21/17
4.15	Class A Common Stock Warrant issued in April 2017 Offering		8-K	4.1	001-33672	4/21/17
4.16	Form of Class A Common Stock Placement Agent Warrant issued in April 2017 Offering		8-K	4.3	001-33672	4/21/17
4.17**	2016 Equity Compensation Plan		1/20/17	A-1	001-37916	1/20/17
4.18**	2014 Equity Compensation Plan		8-K	10.33	000-54996	11/10/14
4.19	2012 Equity Compensation Plan		S-1	4.02	333-179151	1/24/12
4.20	Form of Stock Option Agreement for 2012, 2014 and 2016 Equity Compensation Plan		S-1	4.03	333-179151	1/24/12
4.21	Form of Restricted Stock Unit Agreement for 2012, 2014 and 2016 Equity Compensation Plan		S-1	4.04	333-179151	1/24/12
4.22	Form of Restricted Stock Award Agreement for 2012, 2014 and 2016 Equity Compensation Plan		S-1	4.05	333-179151	1/24/12
4.23	Class A Common Stock Warrant Issued to Investors and Placement Agents in October 2017 Offering		8-K	4.02	001-37916	10/27/17
4.24	Form of Placement Agent Warrant from April 2019 Offering		8-K	4.01	001-37916	4/10/19
4.25	Form of Series A Common Stock Warrant from August 2019 Offering		8-K	4.01	001-37916	8/14/19

4245

4.17**	2016 Equity Compensation Plan	Def 14A	A	001-37916	1/20/17
4.18**	2014 Equity Compensation Plan	8-K	10.33	000-54996	11/10/14
4.19**	2012 Equity Compensation Plan	S-1	4.02	333-179151	1/24/12
4.20	Intentionally Left Blank
4.21	Intentionally Left Blank
4.22	Intentionally Left Blank
4.23	Class A Common Stock Warrant Issued to Investors and Placement Agents in October 2017 Offering	8-K	4.02	001-37916	10/27/17
4.24	Form of Placement Agent Warrant from April 2019 Offering	8-K	4.01	001-37916	4/10/19
4.25	Form of Series A Common Stock Warrant from August 2019 Offering	8-K	4.01	001-37916	8/14/19
4.26	Form of Series B and Series C Common Stock Warrant from August 2019 Offering	8-K	4.02	001-37916	8/14/19
4.27	Form of Placement Agent Warrant from August 2019 Offering	8-K	4.03	001-37916	8/14/19
4.28	Form of Class A common stock purchase warrant issued in February 2020 Offering	8-K	4.01	001-37916	3/5/20
4.29	Form of Original Issue Discount Senior Secured Convertible Debenture from June 2020 Offering	8-K	4.01	001-37916	6/30/20
4.30	Form of Warrant from June 2020 Offering	8-K	4.02	001-37916	6/30/20
4.31	Form of Placement Agent Warrant from June 2020 Offering	S-3	4.06	333-240270	7/31/20
4.32	Form of Original Issue Discount Convertible Debenture dated November 2, 2023	8-K	4.01	001-37916	11/6/2023
4.33	Form of Stock Purchase Warrant dated November 2, 2023	8-K	4.02	001-37916	11/6/2023
4.34	Form of Original Issue Discount Convertible Debenture dated March 5, 2024	8-K	4.01	001-37916	3/6/2024
4.35	Form of Original Issue Discount Convertible Debenture dated dated March 29, 2024	8-K	4.01	001-37916	4/3/2024
10.01	Purchase Agreement among Richard Steel, Steel Media, and Social Reality, dated 10/30/14	8-K	2.1	000-54996	11/4/14
10.02	Asset Purchase Agreement with LeapFrog Media Trading dated 4/20/17	10-K	10.02	001-37916	4/2/18
10.03	Amendment to Asset Purchase Agreement with Leapfrog Media Trading dated 8/17/17	10-K	10.03	001-37916	4/2/18
10.04	Transition Services Agreement in Leapfrog Media Trading Transaction	10-K	10.04	001-37916	4/2/18
10.05	Sample Leakout Agreement in Leapfrog Media Trading Transaction	10-K	10.05	001-37916	4/2/18
10.06	Form of Securities Purchase Agreement for April 2017 Offering	8-K	10.1	001-37916	4/21/17
10.07	Form of Security Agreement for April 2017 Offering	8-K	10.2	001-37916	4/21/17
10.08	Form of Registration Rights Agreement for April 2017 Offering	8-K	10.3	001-37916	4/21/17
10.09	Form of Securities Purchase Agreement for October 2017 Offering	8-K	10.01	001-37916	10/27/17
10.10**	Employment Agreement with Christopher Miglino dated 1/1/12	S-1	10.01	333-179151	1/24/12
10.11**	Form of Proprietary Information, Inventions and Confidentiality Agreement	S-1	10.03	333-179151	1/25/12
10.12**	Form of Indemnification Agreement with Officers and Directors	S-1	10.04	333-179151	1/25/12
10.13	Services Agreement with Servicios y Asesorias Planic, S.A. de cv dated 1/25/13	10-K	10.9	000-54996	3/31/15
10.14	Financing and Security Agreement with FastPay Partners, LLC	8-K	10.41	000-54996	9/23/16
10.15	Securities Purchase Agreement for January 2017 Offering	8-K	10.1	001-37916	1/4/17
10.16	Placement Agent Agreement for January 2017 Offering with Chardan Capital Markets	8-K	10.2	001-37916	1/4/17
10.17	Letter Agreement dated 1/5/17	10-K	10.35	001-37916	3/31/17
10.18	Insider Trading Policy adopted as of 2/23/16	10-K	10.36	001-37916	3/31/17
10.19	Form of Securities Purchase Agreement for April 2019 Offering	8-K	10.01	001-37916	4/10/19
10.20	Form of Placement Agent Agreement from April 2019 Offering	8-K	10.02	001-37916	4/10/19
10.21	Form of Securities Purchase Agreement from August 2019 Offering	8-K	10.01	001-37916	8/14/19
10.22	Form of First Placement Agent Agreement from August 2019 Offering	8-K	10.02	001-37916	8/14/19
10.23	Form of Second Placement Agent Agreement from August 2019 Offering	8-K	10.03	001-37916	8/14/19

4346

10.10**	Employment Agreement with Christopher Miglino dated 1/1/12		S-1	10.01	333-179151	1/24/12
10.11**	Form of Proprietary Information, Inventions and Confidentiality Agreement		S-1	10.03	333-179151	1/25/12
10.12**	Form of Indemnification Agreement with Officers and Directors		S-1	10.04	333-179151	1/25/12
10.13	Services Agreement with Servicios y Asesorias Planic, S.A. de cv dated 1/25/13		10-K	10.9	000-54996	3/31/15
10.14	Financing and Security Agreement with FastPay Partners, LLC		8-K	10.41	000-54996	9/23/16
10.15	Securities Purchase Agreement for January 2017 Offering		8-K	10.1	001-37916	1/4/17
10.16	Placement Agent Agreement for January 2017 Offering with Chardan Capital Markets		8-K	10.2	001-37916	1/4/17
10.17	Letter Agreement dated 1/5/17		10-K	10.35	001-37916	3/31/17
10.18	Insider Trading Policy adopted as of 2/23/16		10-K	10.36	001-37916	3/31/17
10.19	Form of Securities Purchase Agreement for April 2019 Offering		8-K	10.01	001-37916	4/10/19
10.20	Form of Placement Agent Agreement from April 2019 Offering		8-K	10.02	001-37916	4/10/19
10.21	Form of Securities Purchase Agreement from August 2019 Offering		8-K	10.01	001-37916	8/14/19
10.22	Form of First Placement Agent Agreement from August 2019 Offering		8-K	10.02	001-37916	8/14/19
10.23	Form of Second Placement Agent Agreement from August 2019 Offering		8-K	10.03	001-37916	8/14/19
10.24	Form of Term Loan and Security Agreement from February 2020 Offering		8-K	10.01	001-37916	3/5/20
10.25	Form of Intellectual Property Security Agreement from February 2020 Offering		8-K	10.01	001-37916	3/5/20
10.26	Form of Securities Purchase Agreement from June 2020 Offering		8-K	10.01	001-37916	6/30/20
10.27	Form of Registration Rights Agreement from June 2020 Offering		8-K	10.02	001-37916	6/30/20
10.28	Form of Security Agreement from June 2020 Offering		8-K	10.03	001-37916	6/30/20
10.29	Agreement and Plan of Merger dated September 4, 2020 between SRAX, Inc., Townsgate Merger Sub 1, and LD Micro, Inc.		8-K	10.01	001-37916	9/11/20
10.30	Lock-up agreement dated September 4, 2020 between SRAX and Christopher Lahiji		8-K	10.02	001-37916	9/11/20
10.31	Voting Proxy Agreement dated September 4, 2020 between SRAX and Christopher Lahiji		8-K	10.03	001-37916	9/11/20
10.32	Employment Agreement between SRAX and Christopher Lahiji Dated September 4, 2020		8-K	10.04	001-37916	9/11/20
10.33	Unit Redemption Agreement dated October 30, 2020 between SRAX and Halyard MD, LLC		8-K	10.01	001-37916	11/3/20
10.34	Unit Redemption Agreement dated October 30, 2020 between SRAX and MD CoInvest, LLC		8-K	10.02	001-37916	11/3/20
10.35	Share Exchange Agreement between SRAX, Force Protection Video Equipment Corp, and Paul Feldman, dated September 30, 2020		8-K	10.01	001-37916	10/4/20
10.36	Exchange Agreement with FPVD dated December 29, 2021		8-K	10.01	001-37916	12/30/21
10.37	Form of Contingent Value Right Agreement dated June 13, 2022	*	10-K	10.37	001-37916	10/12/2022
10.38	Form of Bridge Note dated July 1, 2022	*	10-K	10.38	001-37916	10/12/2022
10.39	Form of Safe entered into with BIGtoken on February 11, 2022	*	10-K	10.39	001-37916	10/12/2022
10.40	Form of Revolving Note from August 2022 Senior Secured Revolving Credit Facility		8-K	4.01	001-37916	8/12/22
10.41	Form of Credit Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.01	001-37916	8/12/22
10.42	Form of Guaranty Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.02	001-37916	8/12/22
10.43	Form of Security Agreement (SRAX) from August 2022 Senior Secured Revolving Credit Facility		8-K	10.03	001-37916	8/12/22
10.44	Form of Security Agreement (LD Micro) from August 2022 Senior Secured Credit Facility		8-K	10.04	001-37916	8/12/22
10.45	Form of Patent Security Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.05	001-37916	8/12/22
10.46	Form of Trademark Security Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.06	001-37916	8/12/22
10.47	Form of Pledge and Escrow Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.07	001-37916	8/12/22
10,48	Form of Registration Rights Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.08	001-37916	8/12/22
10.49	Form of Fee Letter from August 2022 Senior Secured Revolving Credit Facility		8-K	10.09	001-37916	8/12/22
14.01	Code of Ethics and Conduct		S-1/A	99.1	001-37916	6/4/12
21.01	Subsidiaries of Registrant	*
31.1/31.2	Certification of the Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	*
32.1/32.2	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. § 1350	*
101.INS	Inline XBRL Instance Document	*
101.SCH	Inline XBRL Taxonomy Extension Schema	*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase	*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase	*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase	*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase	*

* Filed herein47

** Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.

10.40	Form of Revolving Note from August 2022 Senior Secured Revolving Credit Facility		8-K	4.01	001-37916	8/12/22
10.41	Form of Credit Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.01	001-37916	8/12/22
10.42	Form of Guaranty Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.02	001-37916	8/12/22
10.43	Form of Security Agreement (SRAX) from August 2022 Senior Secured Revolving Credit Facility		8-K	10.03	001-37916	8/12/22
10.44	Form of Security Agreement (LD Micro) from August 2022 Senior Secured Credit Facility		8-K	10.04	001-37916	8/12/22
10.45	Form of Patent Security Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.05	001-37916	8/12/22
10.46	Form of Trademark Security Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.06	001-37916	8/12/22
10.47	Form of Pledge and Escrow Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.07	001-37916	8/12/22
10.48	Form of Registration Rights Agreement from August 2022 Senior Secured Revolving Credit Facility		8-K	10.08	001-37916	8/12/22
10.49	Form of Fee Letter from August 2022 Senior Secured Revolving Credit Facility		8-K	10.09	001-37916	8/12/22
10.50	Bill of Sale and Assignment and Assumption Agreement dated February 3, 2023, by and between SRAX, Inc. and DNA Holdings, LLC		8-K	10.1	001-37916	2/9/2023
10.51	Lock Up Agreement dated February 3, 2023 by and between SRAX, Inc. and DNA Holdings, LLC		8-K	10.2	001-37916	2/9/2023
10.52	Amendment and Waiver Agreement dated February 2, 2023 by and between SRAX, Inc. and the Signatories Thereto		8-K	10.3	001-37916	2/9/2023
10.53 (2)	Sponsorship Agreement dated March 3, 2023 by and between SRAX, Inc. and LD Micro, Inc.		8-K	10.1	001-37916	3/7/2023
10.54	Consent, Waiver and Release Agreement dted March 1, 2023 by and between SRAX, Inc., LD Micro, Inc. and ATW Oppurtunities Master Fund II, LP		8-K	10.2	001-37916	3/7/2023
10.55	Offer Letter entered with Alan Urban dated March 14, 2023		8-K	10.1	001-37916	3/21/2023
10.56	Form of Securities Purchase Agreement dated November 6, 2023		8-K	10.01	001-37916	11/6/2023
10.57	Form of Securities Purchase Agreement dated March 5, 2024		8-K	10.01	001-37916	3/6/2024
10.58	Form of Securities Purchase Agreement dated March 29, 2024		8-K	10.01	001-37916	4/3/2024
14.01	Code of Ethics and Conduct		S-1/A	99.1	001-37916	6/4/12
21.01	Subsidiaries of Registrant		10-K	21.1	001-37916	10/12/2022
31.1	Certification of the Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	*
32.1	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. § 1350	*
101.INS	Inline XBRL Instance Document	*
101.SCH	Inline XBRL Taxonomy Extension Schema	*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase	*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase	*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase	*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase	*

*	Filed herein
**	Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.

(1)	The schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K and the Company agrees to furnish supplementally to the SEC a copy of any omitted schedules or exhibits upon request

(2)	In accordance with Item 601(b)(10)(iv) of Regulation S-K, certain information (indicated by “[***]”) has been excluded from this exhibit.

ITEM 16.

FORM 10-K SUMMARY.

None.

4448

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SRAX, Inc.
October 12, 2022	By:	/s/ Chris Miglino
September 20, 2024	By:	/s/ Chris Miglino
		Chris Miglino, Chief Executive Officer
		Chris Miglino, Chief Executive Officer and Chief Financial Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Christopher Miglino his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) and supplements to this report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all 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 Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Name	Positions	Date
/s/ Christopher Miglino Christopher Miglino	Chairman of the Board of Directors, Chief Executive Officer; principal executive officer	October 12, 2022
/s/ Christopher Miglino	Chairman of the Board of Directors, Chief Executive	September 20, 2024
/s/ Michael Malone Michael Malone	Chief Financial Officer, principal financial and accounting officer	October 12, 2022
Christopher Miglino	Officer, Chief Financial Officer; principal executive, financial and accounting officer
/s/ Marc Savas Marc Savas	Director	October 12, 2022
/s/ Colleen DiClaudio Colleen DiClaudio	Director	October 12, 2022
/s/ Robert Jordan Robert Jordan	Director	October 12, 2022

4549

~~INDEX~~SRAX, TOInc. ~~FINANCIAL~~and ~~STATEMENTS~~Subsidiaries

	Page
	Page(s)
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2021 and 2020	F-5
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 5854)	F-3
Consolidated Statements of Operations for the years ended December 31, 2021 and 2020	F-6
Consolidated Balance Sheets	F-6
Consolidated Statements of Changes in Stockholders’ equity for the years ended December 31, 2021 and 2020	F-7
Consolidated Statements of Operations	F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020	F-8
Consolidated Statements of Changes in Stockholders’ Equity	F-8
Notes to Consolidated Financial Statements	F-9
Consolidated Statements of Cash Flows	F-9
Notes to Consolidated Financial Statements	F-11 - F-83

F-1

~~Report~~REPORT ofOF ~~Independent~~INDEPENDENT ~~Registered~~REGISTERED ~~Public~~PUBLIC ~~Accounting~~ACCOUNTING ~~Firm~~FIRM

To the Board of Directors and Shareholders of SRAX, Inc.

SRAX, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance ~~sheets~~sheet of SRAX, Inc. (the “Company”), as of December 31, 2021, and ~~2020, and~~ the related consolidated statements of operations, stockholders’ equity and cash flows for each of the ~~two~~year ~~years in the period~~ ended December 31, 2021 and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 ~~and 2020~~, and the results of its operations and its cash flows for each of the ~~two~~year ~~years in the period~~ ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 12 to the consolidated financial statements, the Company has recurring losses from operations, limited cash flow, and an accumulated deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 12. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. Our opinion iswas not modified with respect to that matter.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The company is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ RBSM, LLP

We served as the Company’s auditor from 2011 till 2022

RBSM LLP

New York, NY October 12, 2022

PCAOB ID: 587

New York, NY Washington DC, Las Vegas, NV, San Francisco, CA,

Athens GRE, Beijing, CHN, Mumbai and Pune IND

Member of ANTEA International with affiliated offices worldwide

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of SRAX, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of SRAX, Inc. (the Company) as of December 31, 2022, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has an accumulated deficit, a working capital deficit and negative cash flows from operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the ~~consolidated~~ financial statements that were communicated or required to be communicated to the audit committee and that: (i1) relate to accounts or disclosures that are material to the ~~consolidated~~ financial statements and (ii2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the ~~consolidated~~ financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Investment Valuation

As described in Notes 6 and 25 to the consolidated financial statements, the Company’s consolidated investments total $19,700,000 at December 31, 2021. Investments primarily consist of common stock of publicly traded companies.

We identified the valuation of marketable securities as a critical audit matter. The Company uses a third-party consultant to provide guidance and assistance to the Company’s management in developing the assumptions, inputs, pricing models utilized in the Put Option Pricing Models (POPMs) used in the calculations to determine discounts at the contracts’ inception dates and each of the respective balance sheet dates for financial statement reporting purposes in order to comply with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 320, Investments – Debt and Equity Securities and FASB Accounting Standards Update (ASU) No. 2016-01, Financial Instruments – Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities, and ASC 820, Fair Values.

An integral part of the Company’s fair value measurement process is the assessment of the type of securities as well as the securities’ liquidity and marketability. The Company initially classifies securities between debt securities, equity securities, warrants, convertible debt, or preferred stock. For convertible debt securities the Company evaluated the security in its current “all-in” form as convertible debt and did not use the “if converted” value. Convertible debt is valued based on an analysis of the implied call option and a discounted cash flow analysis of the debt component. Equity securities were valued using the quoted prices times the number of shares acquired. The securities are then evaluated based on their marketability (usually based on the restrictions on resale into the securities primary market) and liquidity.

If the Company determines the listed securities trading market is not an active market, the Company observes other transactions reported by the listed company including private equity transactions, non-cash equity transactions, the trading price and other factors. The Company determined a fair value of the respective security’s price based on this analysis. This price is the lower of the listed price or the fair value based on the analysis.

How the Critical Audit Matter Was Addressed in the Audit

● Reviewed the qualifications, independence, objectives and scope of the third-party specialist. ● Used historical average daily trading volumes in conjunction with the estimated shares that can be transacted per day in order to determine the average expected days to sell securities, and whether a discount for lack of marketability is appropriate. ● With the assistance of an internal valuation specialist, we tested the methodology and assumptions used in the valuation. This includes testing of the model that was used to determine the value of the protective put model. Specific assumptions that were tested in the model include the stock price of the securities, volatility of the securities, the risk-free rate of interest, dividend yield, and the time-to-maturity (holding period). The assumptions used in the time-adjusted analysis include the evaluation of the Company’s holdings based on historical trading data. ● Tested proper classification of investment valuations within the Fair Value Hierarchy as set forth in ASC 820. We tested management’s analysis of the securities, which considered the Company’s holdings relative to the average daily trading volume of the securities over a period of time to determine whether the investment required a discount for lack of marketability. ● Developed an independent expectation for comparison to the Company’s estimate.

F-3

●Valuation ~~We tested information produced by the Company as audit evidence, to evaluate whether the information is sufficient and appropriate for purposes~~ of ~~the~~Transaction audit by performing procedures to (1) test the accuracy and completeness of the information, and (2) evaluate whether the information is sufficiently precise and detailed for purposes of the audit. ● We used data from an external source, and evaluated the relevance and reliability of the data, and included historical stock prices and historical trading activity. ● We identified and tested the assumptions used by the Company which were significant assumptions to the accounting estimate. These included active market or inactive market, marketability – restrictions on resale, liquidity – estimated days to liquidate, and volatility. ● Reviewed and evaluated evidence of securities acquired by agreeing to contract amount, contract date, and stock certificates or agreements.Price

The Company’s financial reporting process involves determining the estimated fair value of the marketable securities received as consideration for services rendered to the Company’s customers. The transaction price is determined based on the consideration to which the Company will be entitled to receive in exchange for transferring goods or services to the customer. We identified the valuation of transaction pricing for marketable securities and convertible debts as a critical audit matter.

For marketable securities, the Company used an external consultant (the “Company’s specialist”) to provide guidance and assistance to the Company’s management in developing the assumptions, inputs, discounted cash flow, pricing models utilized in the Put Option Pricing Models (POPMs) used in the calculations to determine the conversion features and discounts at the contracts’ inception dates and each of the respective balance sheet dates for financial statement reporting purposes in order to comply with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 320, Investments – Debt and Equity Securities and FASB Accounting Standards Update (ASU) No. 2016-01, Financial Instruments – Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities, and ASC 820, Fair Values.

For convertible debt securities the Company valued the debt component and the stock option component separately and summed the results to arrive at the fair value of the convertible debts. The Company utilized Damodaran’s Synthetic Credit Rating as of January 2022 as published by New York University to determine the appropriate market yield for each company. This publication provides a credit spread for different levels of interest coverage. The yield derived through this analysis was utilized to discount the expected cash flows of the debt to determine the Fair Value of the debt component of the Convertible Debenture. To determine the Fair Value of the embedded options in the convertible debts and warrants, the Company utilized Black-Scholes Option Pricing model as the method is generally accepted and is well understood. Like the valuation of the warrants as described in the previous section, the Black-Scholes Option Pricing model requires certain inputs in order to calculate an indicated value of an option or warrant.

Equity securities were valued using the quoted prices times the number of shares acquired. The securities are then evaluated based on their marketability (usually based on the restrictions on resale into the securities primary market) and liquidity. For convertible preferred stock with no dividends, and an expiration date the Company converts them at the closing market price on the day of conversion. As a result of these features, these securities were valued as if converted and are subject to appropriate discounts for lack of marketability applied at the relevant dates of value.

How the Critical Audit Matter Was Addressed in the Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures related to the Company’s determination of the investment valuation included the following, among others:

	●	Assessed the knowledge, skill, and ability of the Company's specialist and the specialist's relationship to the Company. Reviewed the objectives and scope and evaluated the work of the Company’s specialist.

	●	Evaluated appropriateness of a discount for lack of marketability using historical average daily trading volumes in conjunction with the estimated shares that can be transacted per day in order to determine the average expected days to sell securities. We used data from an external source, and evaluated the relevance and reliability of such data, and included historical stock prices and historical trading activity.

	●	With the assistance of an auditor-engaged valuation specialist, we tested the methodology and assumptions used in the valuation provided by the Company such as reasonableness of their methodology to determine the discount for lack of marketability and performed independent recalculations.

F-4

	●	Tested proper classification of investment valuations within the Fair Value Hierarchy as set forth in ASC 820.

	●	We tested the specific assumptions that were in the model including the stock price of the securities, volatility of the securities, the risk-free rate of interest, dividend yield, and the time-to-maturity (holding period). The assumptions used in the time-adjusted analysis include the evaluation of the Company’s holdings based on historical trading data.

	●	With the assistance of an external valuation specialist, we identified and tested the assumptions used by the Company which were significant assumptions to the accounting estimate. These included active market or inactive market, marketability – restrictions on resale, liquidity – estimated days to liquidate, and volatility.

	●	We evaluated the collectability of the convertible debts and appropriateness of Company’s impairment policy.

Revenue Recognition

As described in Note 13 to the consolidated financial statements, the Company derives its revenues primarily from annual contracts which include subscription fees earned from customers accessing the platform and managed services. The Company accounts for revenue contracts with customers by applying the requirements of ASC 606, Revenue from Contracts with Customers. The Company’s subscription ~~agreements~~ agreements generally have annual contractual terms and are billed in advance and the amounts are non-refundable. Revenues are recognized ~~ratably~~ ratably over the related contractual term beginning on the date that the platform is made available to a customer. The Company recognizes ~~revenues~~ revenues ratably because the customer receives and consumes the benefits of the platform throughout the contractual period. For the year ~~ended~~ ended December 31, ~~2021~~2022, the Company’s revenue was $2627.79 million.

We identified revenue recognition as a critical audit matter. The principal considerations for our determination that performing procedures relating to revenue recognition involved a high degree of audit effort in performing audit procedures and evaluating audit evidence related to the Company’s revenue recognition.

The Company’s financial reporting process involves determining the estimated fair value of the marketable securities received as consideration for services rendered to the Company’s customers. The transaction price is determined based on the consideration to which the Company will be entitled to receive in exchange for transferring goods or services to the customer. In cases which the Company receives marketable securities as payment the transaction price is determined to be the lower of the fair market value of the securities received or the contract amount.

How the Critical Audit Matter Was Addressed in the Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures related to the Company’s determination of revenue recognition for contracts accounted for over time included the following, among others:

● Performed inquiry and walkthrough to understand the service delivery process. ● Tested revenue transactions on a sample basis by tracing revenue transactions to source documents, including customer contracts, orders, invoices, marketable securities received and cash receipts, where applicable~~; ● Tested securities valuations at contract date~~. ● Tested ~~that the deferred revenue was the lower of the contract price or the securities price. ● Tested the completeness and accuracy of data provided by~~ management~~; ● Tested management~~’s identification of distinct performance obligations byin ~~evaluating whether~~ the ~~underlying~~contract ~~goods,~~and ~~services,~~determined orwhether ~~both~~they ~~were~~are highly interdependent and interrelated;. ● ~~Inquired and tested the estimates to complete with senior management to understand the service delivery process; ●~~ Tested the ~~contract~~completeness ~~costs~~and ~~through~~accuracy ~~a combination~~ of ~~tests~~data ofprovided ~~details,~~by inmanagement. ~~which we selected individual costs and obtained supporting documentation; and,~~ ● Tested the mathematical accuracy of management’s calculation of revenue and deferred revenue for the performance obligation. ~~● Rolled forward activity in deferred income as a result in change in fair value.~~

/s/ TAAD LLP We have served as the Company’s auditor since ~~2011~~2023. Diamond Bar, CA September 20, 2024

~~/s/ RBSM LLP~~F-5

New York, NY

October 12, 2022

PCAOB ID: 587

F-4

SRAX, INC.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31,

	December 31, 2022			December 31, 2021

Assets

Current Assets
Cash and cash equivalents	$	7,000		$	1,348,000
Accounts receivable - net		157,000			821,000
Contracts receivable		328,000			844,000
Marketable securities		7,931,000			15,617,000
Designated assets for return of capital		100,000			3,925,000
Due from related party		263,000			-
Prepaids and other		67,000			430,000
Total Current Assets		8,853,000			22,985,000

Other Assets
Marketable securities		1,255,000			-
Designated assets for return of capital		70,000			-
Note receivable		-			935,000
Property and equipment - net		59,000			114,000
Intangible assets - net		-			1,443,000
Operating lease - right of use asset - net		127,000			257,000
Other		-			36,000
Goodwill		7,706,000			17,906,000
Total Other Assets		9,217,000			20,691,000

Total Assets	$	18,070,000		$	43,676,000

Liabilities and Stockholders’ Equity (Deficit)

Current Liabilities
Accounts payable and accrued expenses	$	10,453,000		$	4,095,000
Accounts payable and accrued expenses - related party		159,000			-
Accounts payable and accrued expenses		159,000			-
Deferred revenue		7,367,000			12,859,000
Other current liabilities		1,451,000			633,000
Payroll protection loan payable		-			10,000
Operating lease liability		114,000			130,000
Convertible notes payable - net		1,181,000			1,164,000
Series A, redeemable preferred stock		994,000			3,925,000
Total Current Liabilities		21,719,000			22,816,000

Long Term Liabilities
Senior secured revolving credit facility - net		5,600,000			-
Operating lease liability		-			114,000
Total Long Term Liabilities		5,600,000			114,000

Total Liabilities		27,319,000			22,930,000

Stockholders’ Equity (Deficit)
Series A, Preferred stock, $0.001 par value, 50,000,000 shares authorized, 36,462,417 shares issued and outstanding, respectively		-			-
Class A, common stock, $0.001 par value, 250,000,000 shares authorized, 26,323,579 and 25,995,172 shares issued and outstanding, respectively		26,000			26,000
Class B, common stock, $0.001 par value, 9,000,000 shares authorized, none issued and outstanding, respectively		-			-
Common stock, value		-			-
Additional paid-in capital		52,718,000			51,075,000
Accumulated deficit		(61,993,000	)		(30,355,000	)
Total Stockholders’ Equity (Deficit)		(9,249,000	)		20,746,000

Total Liabilities and Stockholders’ Equity (Deficit)	$	18,070,000		$	43,676,000

	2021			2020
Assets
Current assets
Cash and cash equivalents	$	1,348,000		$	450,000
Accounts receivable, net		821,000			1,409,000
Contracts receivable		844,000			-
Marketable securities		15,617,000			8,447,000
Designated assets for return of capital		3,925,000			-
Prepaid expenses and other current assets		430,000			361,000
Current assets of discontinued operations		-			1,206,000
Total current assets		22,985,000			11,873,000
Notes receivable		935,000			893,000
Property and equipment, net		114,000			117,000
Intangible assets, net		1,443,000			1,492,000
Right of use assets		257,000			366,000
Other assets		36,000			2,000
Goodwill		17,906,000			17,906,000
Long-term assets of discontinued operations		-			6,364,000
Total assets	$	43,676,000		$	39,013,000
Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued expenses	$	4,095,000		$	2,708,000
Deferred revenue		12,859,000			4,842,000
Other current liabilities		763,000			3,417,000
Payroll protection loan - current portion		10,000			747,000
OID notes payable		1,164,000			6,016,000
Series A preferred stock, authorized 36,462,417 shares, $0.001 par value, 36,462,417 shares and none issued and outstanding, respectively		3,925,000			-
Current liabilities of discontinued operations		-			1,305,000
Total current liabilities		22,816,000			19,035,000
Right of use liability - long term		114,000			243,000
Payroll protection loan - long term		-			379,000
Deferred tax liability		-			131,000
Total liabilities		22,930,000			19,788,000
Commitments and contingencies (Note 19)		-			-
Stockholders’ equity
Class A common stock, authorized 250,000,000 shares, $0.001 par value, 25,995,172 and 16,145,778 shares issued and outstanding, respectively		26,000			16,000
Additional paid in capital		51,075,000			69,551,000
Accumulated deficit		(30,355,000	)		(50,342,000	)
Total stockholders’ equity		20,746,000			19,225,000
Total liabilities and stockholders’ equity	$	43,676,000		$	39,013,000

The accompanying notes are an integral part of these consolidated financial statements

F-56

SRAX, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31,


	For the Year Ended December 31,
	2022			2021

Revenues	$	27,859,000		$	26,707,000

Costs and expenses
Cost of revenues		9,413,000			6,521,000
Depreciation and amortization		417,000			842,000
General and administrative expenses		14,026,000			19,429,000
Total costs and expenses		23,856,000			26,792,000

Income (loss) from operations		4,003,000			(85,000	)

Other income (expense)
Interest expense		(4,391,000	)		(10,295,000	)
Impairment - goodwill		(10,200,000	)		-
Impairment - intangibles		(1,481,000	)		-
Impairment - property and equipment		(41,000	)		-
Impairment - marketable securities		(3,664,000	)		-
Loss on sale of note receivable		(47,000	)		-
Realized gain (loss) - marketable securities		(8,799,000	)		804,000
Unrealized gain (loss) - marketable securities		(3,792,000	)		(7,904,000	)
Change in fair value - contract assets		(1,504,000	)		-
Realized gain (loss) - designated assets		(1,803,000	)		(84,000	)
Unrealized loss - designated assets		(762,000	)		(2,378,000	)
Change in fair value - preferred stock		2,566,000			2,462,000
Make-whole provision		(240,000	)		-
Interest income		12,000			42,000
Other income (expense)		(1,495,000	)		1,144,000
Total other income (expense) - net		(35,641,000	)		(16,209,000	)

Loss from continuing operations before provision for income tax benefit (expense)		(31,638,000	)		(16,294,000	)
Provision for income tax benefit (expense)		-			127,000
Loss from continuing operations		(31,638,000	)		(16,167,000	)

Discontinued operations
Loss on discontinued operations - net of tax benefits		-			(14,376,000	)
Loss on disposal of subsidiary		-			(10,684,000	)
Loss from discontinued operations		-			(25,060,000	)

Net loss including non-controlling interest		(31,638,000	)		(41,227,000	)
Net loss attributable to non-controlling interest in discontinued operations		-			(6,465,000	)
Net loss attributable to SRAX, Inc.	$	(31,638,000	)	$	(34,762,000	)

Net loss per share attributable to SRAX, Inc. - basic and diluted
Continuing operations	$	(1.21	)	$	(0.69	)
Discontinued operations		-			(1.06	)
Net loss per share - basic and diluted	$	(1.21	)	$	(1.75	)

Weighted average number of shares outstanding - basic and diluted		26,247,709			23,550,744

	2021			2020
Revenues	$	26,707,000		$	6,479,000
Cost and expenses
Cost of revenue		6,521,000			1,789,000
Employee related costs		7,533,000			4,683,000
Marketing and selling expenses		6,330,000			1,717,000
Platform costs		214,000			960,000
Depreciation and amortization		842,000			772,000
General and administrative expenses		5,352,000			3,590,000
Total cost and expenses		26,792,000			13,511,000
Income (loss) from operations		(85,000	)		(7,032,000	)
Other income (expense)
Financing costs		(10,295,000	)		(12,150,000	)
Realized gain on marketable securities		804,000			684,000
Unrealized gain (loss) on marketable securities		(7,904,000	)		261,000
Realized loss on designated assets		(84,000	)		-
Unrealized loss on designated assets		(2,378,000	)		-
Gain on sale of SRAXmd, net		-			7,873,000
Interest income		42,000			-
Other income		1,144,000			-
Change in fair value of preferred stock		2,462,000			-
Change in fair value of derivative liabilities		-			321,000
Total other expense		(16,209,000	)		(3,011,000	)
Loss before provision for income taxes		(16,294,000	)		(10,043,000	)
Provision for income tax benefit (expense)		127,000			(21,000	)
Loss from continuing operations		(16,167,000	)		(10,064,000	)
Discontinued operations
Loss before income tax benefits		(14,376,000	)		(4,641,000	)
Loss on disposal of subsidiary		(10,684,000	)		-
Income tax benefit		-			-
Loss from discontinued operations		(25,060,000	)		(4,641,000	)
Net loss		(41,227,000	)		(14,705,000	)
Net loss attributable to non-controlling interest in discontinued operations		6,465,000			-
Net loss attributable to SRAX, Inc.	$	(34,762,000	)	$	(14,705,000	)
Basic and diluted loss per share
Continuing operations	$	(0.69	)	$	(0.69	)
Discontinued operations attributable to SRAX, Inc.		(0.79	)		(0.32	)
Net loss per share, basic and diluted	$	(1.48	)	$	(1.01	)
Weighted average shares outstanding, basic and diluted		23,550,744			14,649,788

The accompanying notes are an integral part of these consolidated financial statements

F-67

SRAX, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

YEAR ENDED DECEMBER 31, ~~2021 AND 2020~~2022

	Common Stock					Additional paid-in			Accumulated			Noncontrolling			Stockholders’
	Series A Preferred Stock					Common Stock - Class A						Common Stock - Class B						Additional Paid-in			Accumulated				Total Stockholders’
	Shares			Amount		~~Capital~~Shares			~~Deficit~~Amount			~~Interest~~Shares			~~Equity~~Amount			Capital			Deficit				Equity (Deficit)
Balance, December 31, 2019		13,997,452		$	14,000	$	48,129,000		$	(35,637,000	)	$	-		$	12,506,000
December 31, 2021		-		$	-		25,995,172		$	26,000			-		$	-		$	51,075,000		$	(30,355,000	)	-	$	20,746,000
Stock based compensation		-			-		1,710,000			-			-			1,710,000
Share based compensation (benfit) - employees		-			-		-			-			-			-			(156,000	)		-				(156,000	)
Relative fair value of warrants issued with notes payable		-			-		4,331,000			-			-			4,331,000
Shares issued for exercise of employee options		-			-		65,729			-			-			-			-			-				-
Shares issued for extension agreement		36,700			-		71,000			-			-			71,000
Shares issued for cashless exercise of employee options - net of taxes - related party							58,124			-			-			-			(101,000	)		-				(101,000	)
Shares issued for debt extinguishment		100,000			-		181,000			-			-			181,000
Exercise of warrants (cashless)		-			-		195,525			-			-			-			-			-				-
Conversion of debt to equity		411,626			-		434,000			-			-			434,000
Exercise of warrants		-			-		8,401			-			-			-			32,000			-				32,000
Common stock issued for the acquisition of a subsidiary		1,600,000			2,000		4,262,000			-			-			4,264,000
Warrant modification expense		-			-		-			-			-			-			1,788,000			-				1,788,000
Reclassification of warrants from liability to equity		-			-		4,076,000			-			-			4,076,000
Stock issued for loan breakup fee		-			-		33,000			-			-			-			80,000			-				80,000
Premium on debt extinguishment		-			-		46,000			-			-			46,000
True up adjustment related to actual shares cancelled		-			-		(32,372	)		-			-			-			-			-				-
Beneficial conversion feature		-			-		6,311,000			-			-			6,311,000
Net loss		-			-		-			-			-			-			-			(31,638,000	)	-		(31,638,000	)
Net loss		-			-		-			(14,705,000	)		-			(14,705,000	)
December 31, 2022		-		$	-		26,323,579		$	26,000			-		$	-		$	52,718,000		$	(61,993,000	)	-	$	(9,249,000	)
Balance, December 31, 2020		16,145,778			16,000		69,551,000			(50,342,000	)		-			19,225,000
Balance		16,145,778			16,000		69,551,000			(50,342,000	)		-			19,225,000
Stock based compensation		-			-		1,006,000			-			-			1,006,000
Shares issued for cash		53,616			-		284,000			-			-			284,000
Conversion of convertible debt to equity		3,122,167			3,000		5,971,000			-			-			5,974,000
Shares issued for exercise of warrants, net of offering costs		6,828,611			7,000		15,945,000			-			-			15,952,000
Warrants issued as an inducement to exercise warrants		-			-		7,737,000			-			-			7,737,000
Acquisition of noncontrolling interest of FVPD		-			-		-			-			(95,000	)		(95,000	)
Warrants issued by FVPD for SRAX, Inc. debenture holders		-			-		-			-			885,000			885,000
Series B convertible preferred stock issued by FPVD		-			-		-			-			5,860,000			5,860,000
Beneficial conversion feature FPVD series B convertible preferred stock		-			-		-			-			5,860,000			5,860,000
Dividends on preferred stock		-			-		(6,387,000	)		-			-			(6,387,000	)
Disposition of subsidiary		-			-		(42,239,000	)		54,749,000			(6,045,000	)		6,465,000
Repurchase and retirement of shares		(155,000	)		-		(793,000	)		-			-			(793,000	)
Net loss attributable to SRAX, Inc.		-			-		-			(34,762,000	)		-			(34,762,000	)
Net loss attributable to non controlling interest in discontinued operations		-			-		-			-			(6,465,000	)		(6,465,000	)
Balance, December 31, 2021		25,995,172		$	26,000	$	51,075,000		$	(30,355,000	)	$	-		$	20,746,000
Balance		25,995,172		$	26,000	$	51,075,000		$	(30,355,000	)	$	-		$	20,746,000

The accompanying notes are an integral part of these consolidated financial statements

F-78

~~SRAX,~~CONSOLIDATED ~~INC.~~STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

YEAR ENDED DECEMBER 31, 2021


	Series A Preferred Stock				Common Stock - Class A				Common Stock - Class B				Additional Paid-in		Accumulated			Non-Controlling			Total Stockholder’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Interest			Equity

December 31, 2020		-	$	-		16,145,778	$	16,000		-	$	-	$	69,551,000	$	(50,342,000	)	$	-		$	19,225,000
Balance		-	$	-		16,145,778	$	16,000		-	$	-	$	69,551,000	$	(50,342,000	)	$	-		$	19,225,000

Stock based compensation		-		-		-		-		-		-		1,006,000		-			-			1,006,000

Stock issued for cash		-		-		53,616		-		-		-		284,000		-			-			284,000

Conversion of debt to equity		-		-		3,122,167		3,000		-		-		5,971,000		-			-			5,974,000

Stock issued in connection with exercise of warrants - net of offering costs		-		-		6,828,611		7,000		-		-		15,945,000		-			-			15,952,000

Warrants issued as an inducement to exercise warrants		-		-		-		-		-		-		7,737,000		-			-			7,737,000

Acquisition of non-controlling interest of FPVD		-		-		-		-		-		-		-		-			(95,000	)		(95,000	)

Filing Compare · SRAX, Inc.