# EDGAR Filing Document

**Accession Number:** 0001538217
**File Stem:** 0001493152-23-000345
**Filing Date:** 2023-1
**Character Count:** 28161
**Document Hash:** e8b00f065b5f4d496694e74e657bbcf3
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-23-000345.hdr.sgml**: 20230104

**ACCESSION NUMBER**: 0001493152-23-000345

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230104

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Submission of Matters to a Vote of Security Holders

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230104

**DATE AS OF CHANGE**: 20230104

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SRAX, Inc.
- **CENTRAL INDEX KEY:** 0001538217
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-ADVERTISING AGENCIES [7311]
- **IRS NUMBER:** 452925231
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-37916
- **FILM NUMBER:** 23507541

**BUSINESS ADDRESS:**
- **STREET 1:** 2629 TOWNSGATE ROAD #215
- **CITY:** WESTLAKE VILLAGE
- **STATE:** CA
- **ZIP:** 91361
- **BUSINESS PHONE:** 323-694-9800

**MAIL ADDRESS:**
- **STREET 1:** 2629 TOWNSGATE ROAD #215
- **CITY:** WESTLAKE VILLAGE
- **STATE:** CA
- **ZIP:** 91361

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SOCIAL REALITY, Inc.
- **DATE OF NAME CHANGE:** 20131112

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SOCIAL REALITY
- **DATE OF NAME CHANGE:** 20111227

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported) **January 4, 2023 (December 31, 2022)**

**SRAX, INC.**

*(Exact name of registrant as specified in its charter)*

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-37916** | **45-2925231** |
| *(State or other jurisdiction<br> of incorporation or organization)* | *(Commission<br> File Number)* | *(I.R.S. Employer <br> 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** |

---

**not applicable**

*(Former name or former address, if changed since last report)*

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

---

| | | |
|:---|:---|:---|
| **Title of Class** | **Trading Symbol** | **Name of Each Exchange on Which Registered** |
| **Class A Common stock** | SRAX | **NASDAQ Capital Market** |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by checkmark 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. ☐

**Item 2.02 Results of Operations and Financial Condition**

On January 3, 2022, SRAX, Inc. (the "Company") filed its quarterly report for the quarter ended March 31, 2022, and disclosed certain financial and operational results for the quarter ended March 31, 2022 via press release. The press release is attached as Exhibit 99.01 and is incorporated herein by reference.

The information furnished under Items 2.02, including the accompanying Exhibit 99.01 shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liability of such section, nor shall such information be deemed to be incorporated by reference in any subsequent filing by the Company under the Securities Act of 1933 or the Exchange Act, regardless of the general incorporation language of such filing, except as specifically stated in such filing.

**Item 5.07 Submission of Matters to a Vote of Security Holders.**

On December 31, 2022, the Company held its 2022 Annual Meeting ("Annual Meeting") at 11:00 a.m. Pacific Time. The meeting was held virtually. Only stockholders of record as of the close of business on December 6, 2022 ("Record Date") were entitled to vote at the Annual Meeting. As of the Record Date, 26,315,178 shares of the Company's Class A common stock were issued, outstanding and entitled to vote, of which 21,167,290 shares were represented in person or by proxy, and which constituted a quorum. The final results of the stockholder vote on each proposal brought before the meeting were as follows:

(a) **Proposal 1**. The following individuals were elected to serve as directors for a one-year term expiring at the 2023 Annual Meeting, or until their successor is qualified and appointed, based upon the following votes:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Nominee** | **Votes For** | **Votes For** | **Votes Withheld** | **Votes Withheld** |
| Christopher Miglino |  | 10662100 |  | 422561 |
| Marc Savas |  | 9053381 |  | 2031280 |
| Robert Jordan |  | 8972696 |  | 2111965 |
| Colleen DiClaudio |  | 8972976 |  | 2111685 |
| Christopher Lahiji |  | 10662310 |  | 422351 |
| Brock Pierce |  | 9666160 |  | 1418501 |

---

(b) **Proposal 2**. The ratification of Marcum LLP, as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2022 was ratified based upon the following votes:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Votes For** | **Votes Against** | **Votes Against** | **Abstentions** | **Abstentions** | **Broker**<br>**Non-Votes** |
| 21110975 |  | 35853 |  | 20462 |  |

---

(c) **Proposal 3**. The approval of the amended and restated 2016 Equity Compensation Plan and conditional grants made thereunder was approved based upon the following votes:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | | | | **Broker** | **Broker** |
| <br>**Votes For** | **Votes Against** | **Votes Against** | **Abstentions** | **Abstentions** | **Non-Votes** | **Non-Votes** |
| 8522754 |  | 2529635 |  | 32272 |  | 10082629 |

---

**Item 9.01 Financial Statement and Exhibits.**

---

| | |
|:---|:---|
| **Exhibit**<br> **No.** | <br> **Description** |
| 99.01<br>| [Press Release dated January 3, 2023](ex99-01.htm)<br>|
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
| Date: | January 4, 2023 | SRAX, Inc. | SRAX, Inc. |
|  |  |  | */s/ Christopher Miglino* |
|  |  | By: | Christopher Miglino |
|  |  |  | Chief Executive Officer |

---

**INDEX OF EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit**<br> **No.** | <br> **Description** |
| 99.01<br>| [Press Release dated January 3, 2023](ex99-01.htm)<br>|
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document |

---

## Exhibit 99.01

**Exhibit 99.01**

SRAX Reports Q1 2022 Financial Results

LOS ANGELES—(GLOBENEWSWIRE)—SRAX, Inc. (NASDAQ: SRAX), a financial technology company that unlocks data and insights for publicly traded companies through Sequire, its SaaS platform, is providing Q1 2022 financial results.

SRAX reports year-over-year revenue growth of 53% and $0.13 fully diluted EPS for the quarter ended March 31, 2022

---

| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| <br>*In thousands, except percentages and per share amounts* | **2022** | **2021** | **% Change** |
| Revenue | $7499 | $4917 | 53% |
| Costs and expenses | 8827 | 4492 | 97% |
| Income from operations | $(1328) | $425 | (412)% |
| Income (loss) from marketable securities | $5313 | $4494 | 18% |
| Financing costs | $(312) | $(9265) | (97)% |
| Other income (loss) | $55 | $29 | 90% |
| Net income | $3728 | $(4317) | (186)% |
| Diluted earnings per share (EPS) | $0.13 | $(0.57) | (123)% |

---

**First Quarter 2022 Financial and Operational Highlights**

● **Revenue -** GAAP revenue of $7.5M vs $4.9M or a 53% increase year-over-year.

● **Non-GAAP revenue** - excluding marketability and liquidity discounts of $10.6 M vs $4.9M or a 116% increase year-over-year.

● **Net Income -** $3.7M vs a loss of ($4.3M) year-over-year

● **Earnings per shares (EPS)** - $0.14 and $0.13 per basic and diluted share respectively vs (.57) year-over-year.

● **Cash and marketable securities -** $29.2m, an increase of $12.2m vs. prior quarter end.

● **Sequire contract bookings** - $15.2 million gross contract value.

**Recent Business Highlights**

 

● Launched the <u>Sequirecommunity.com</u> site that allows issuers to engage and communicate with their shareholders.

● Successfully launched over 20 virtual conferences in 2022

● Definitive dates planned to bring fillings current prior to the NASDAQ extension deadline.

**About SRAX**

SRAX (NASDAQ: SRAX) is a financial technology company that unlocks data and insights for publicly traded companies. Through its premier investor intelligence and communications platform, Sequire, companies can track their investors' behaviors and trends and use those insights to engage current and potential investors across marketing channels. For more information on SRAX, visit srax.com and mysequire.com.

**Cautionary Statement Regarding Forward-Looking Information:**

This news release contains "forward-looking statements'' made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future, not past, events and may often be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "seek" or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Specific risks and uncertainties that could cause our actual results to differ materially from those expressed in our forward-looking statements include risks inherent in our business, and our need for future capital. Actual results may differ materially from the results anticipated in these forward-looking statements. Additional information on potential factors that could affect our results and other risks and uncertainties are detailed from time to time in SRAX's periodic reports filed with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year ended December 31, 2021, its Quarterly Reports on Form 10-Q as well as and in other reports filed with the SEC. We do not assume any obligation to update any forward-looking

statements.

**Non-GAAP Financial Measures**

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), we use the following non-GAAP financial measures: revenue excluding contract valuation adjustments, and adjusted earnings before interest income taxes depreciation and amortization.. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures.

We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.

We exclude the following items from our non-GAAP financial measures:

*Fair valuation effect on revenue*. We adjusted revenue for the three months ended March 31, 2022 by excluding marketability and liquidity discounts, which we believe is a useful metric that facilitates comparison to our historical performance.

*Interest and financing costs, realized and unrealized gains and loss on marketable securities and designated assets, non-cash equity based compensation, income tax expense and benefit.* We remove the benefit or expenses from gains or losses associated with our marketable securities in our calculation of adjusted EBITDA because we believe that these items are historically volatile and a result of the core operations of our Sequire business. We also remove non cash charges such as depreciation and amortization and income taxes. We believe that this methodology can provide useful supplemental information to help investors better understand underlying trends in our business. Free cash flow is not intended to represent our residual cash flow available for discretionary expenditures.

For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the "Reconciliation of GAAP to Non-GAAP Results" table in this press release.

Contact

Investor relations

<u>Investors@srax.com</u>

**SRAX, INC. and SUBSIDIARIES**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **March 31, 2022<br> (unaudited)** | **December 31,<br> 2021** |
| **ASSETS** |  |  |
| CURRENT ASSETS |  |  |
| Cash and cash equivalents | $351000 | $1348000 |
| Accounts receivable, net | 1041000 | 821000 |
| Contracts receivable | 1460000 | 844000 |
| Marketable securities | 28824000 | 15617000 |
| Designated assets for return of capital | 3799000 | 3925000 |
| Prepaid expenses and other current assets | 761000 | 430000 |
| TOTAL CURRENT ASSETS | 36236000 | 22985000 |
| Notes receivable | 944000 | 935000 |
| Property and equipment, net | 112000 | 114000 |
| Intangible assets, net | 1501000 | 1443000 |
| Right of use assets | 227000 | 257000 |
| Other assets | 43000 | 36000 |
| Goodwill | 17906000 | 17906000 |
| TOTAL ASSETS | $56969000 | $43676000 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| CURRENT LIABILITIES |  |  |
| Accounts payable and accrued expenses | $6527000 | $4095000 |
| Deferred revenue | 16722000 | 12859000 |
| Other current liabilities | 3922000 | 763000 |
| Payroll protection loan | 10000 | 10000 |
| OID convertible notes payable | 1181000 | 1164000 |
| Series A redeemable preferred stock | 3799000 | 3925000 |
| TOTAL CURRENT LIABILITIES | 32161000 | 22816000 |
| Right of use liability, net of current | 77000 | 114000 |
| TOTAL LIABILITIES | 32238000 | 22930000 |
| **STOCKHOLDERS' EQUITY** |  |  |
| Series A preferred stock, $0.001 par value, 36,462,417 shares authorized, issued and outstanding, as liability classified at March 31, 2022 and December 31, 2021 |  |  |
| Class A common stock, $0.001 par value, 250,000,000 shares authorized, 26,087,153 and 25,995,172 shares issued and outstanding at March 31, 2022 and December 31, 2021 | 26000 | 26000 |
| Class B common stock, $0.0001 par value, 9,000,000 shares authorized and 0 issued and outstanding, at March 31, 2022 and December 31, 2021 |  |  |
| Additional paid-in capital | 51332000 | 51075000 |
| Accumulated deficit | (26627000) | (30355000) |
| TOTAL STOCKHOLDERS' EQUITY | 24731000 | 20746000 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $56969000 | $43676000 |

---

**SRAX, INC. AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED INCOME STATEMENT**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2022** | **2021** |
| Revenues | $7499000 | $4917000 |
| Cost and expenses |  |  |
| &nbsp;&nbsp;&nbsp;Cost of revenues | 2798000 | 1377000 |
| &nbsp;&nbsp;&nbsp;Employee related costs | 2497000 | 1550000 |
| &nbsp;&nbsp;&nbsp;Marketing and selling expenses | 1413000 | 994000 |
| &nbsp;&nbsp;&nbsp;Platform costs | 76000 | 20000 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 187000 | 256000 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 1856000 | 295000 |
| Total cost and expenses | 8827000 | 4492000 |
| (Loss) income from operations | (1328000) | 425000 |
| Other income (expense) |  |  |
| &nbsp;&nbsp;&nbsp;Financing costs | (312000) | (9265000) |
| &nbsp;&nbsp;&nbsp;Unrealized gain on marketable securities | 6366000 | 3978000 |
| &nbsp;&nbsp;&nbsp;Realized (loss) gain on marketable securities | (1053000) | 516000 |
| &nbsp;&nbsp;&nbsp;Interest income | 9000 | 15000 |
| &nbsp;&nbsp;&nbsp;Change in fair value of preferred stock | 126000 |  |
| &nbsp;&nbsp;&nbsp;Realized loss on designated assets | (116000) |  |
| &nbsp;&nbsp;&nbsp;Unrealized gain on designated assets | 89000 |  |
| &nbsp;&nbsp;&nbsp;Other income (expense) | (53000) | 14000 |
| Total other income (expense) | 5056000 | (4742000) |
| Income (loss) before income tax expense | 3728000 | (4317000) |
| Income tax expense | - | - |
| Income (loss) from continuing operations | 3728000 | (4317000) |
| Discontinued operations |  |  |
| &nbsp;&nbsp;&nbsp;Loss before income tax expense |  | (7627000) |
| &nbsp;&nbsp;&nbsp;Noncontrolling interest in discontinued operations |  | 854000 |
| &nbsp;&nbsp;&nbsp;Income tax expense | - | - |
| Loss from discontinued operations | - | (6773000) |
| Net income (loss) | $3728000 | $(11090000) |
| Basic income (loss) per share |  |  |
| &nbsp;&nbsp;&nbsp;Continuing operations | $0.14 | $(0.22) |
| &nbsp;&nbsp;&nbsp;Discontinued operations | - | (0.35) |
| Net income (loss) per share, basic | $0.14 | $(0.57) |
| Diluted income (loss) per share |  |  |
| &nbsp;&nbsp;&nbsp;Continuing operations | $0.13 | $(0.24) |
| &nbsp;&nbsp;&nbsp;Discontinued operations | - | (0.33) |
| Net income (loss) per share, diluted | $0.13 | $(0.57) |
| Weighted average shares outstanding, basic | 26032055 | 19411519 |
| Weighted average shares outstanding, diluted | 28193714 | 19411519 |

---

**SRAX, INC. AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**(Unaudited)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Permanent Equity** | **Permanent Equity** | **Permanent Equity** | **Permanent Equity** | **Permanent Equity** | **Permanent Equity** |
|  | **Common stock** | **Common stock** | | | | |
|  | **Shares** | **Amount** | **Additional paid-in**<br>**capital** | **Accumulated**<br>**deficit** | **Noncontrolling**<br>**interest** | **Total stockholders'<br> equity**<br>**(deficit)** |
| Balance at December 31, 2021 | 25995172 | $26000 | $51075000 | $(30355000) | $- | $20746000 |
| Share based compensation |  |  | 358000 |  |  | 358000 |
| Shares issued for exercise of employee options, net of taxes | 91981 |  | (101000) |  |  | (101000) |
| Net income | - | - | - | 3728000 | - | 3728000 |
| Balance at March 31, 2022 | 26087153 | $26000 | $51332000 | $(26627000) |  | $24731000 |
| Balance at December 31, 2020 | 16145778 | $16000 | $69551000 | $(50342000) | $- | $19225000 |
| Share based compensation |  |  | 253000 |  |  | 253000 |
| Shares issued for cash | 53616 |  | 284000 |  |  | 284000 |
| Conversion of convertible debt to equity | 2041551 | 2000 | 3445000 |  |  | 3447000 |
| Shares issued for exercise of warrants, net of offering costs | 4945320 | 5000 | 12215000 |  |  | 12220000 |
| Warrants issued as inducement to exercise warrants |  |  | 7737000 |  |  | 7737000 |
| Activity by FPVD subsidiary |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Establishment of noncontrolling interest of FPVD |  |  |  |  | (95000) | (95000) |
| &nbsp;&nbsp;&nbsp;Warrants issued by FPVD to SRAX, Inc. debenture holders |  |  |  |  | 885000 | 885000 |
| &nbsp;&nbsp;&nbsp;Series B convertible preferred stock issued by FPVD |  |  |  |  | 5775000 | 5775000 |
| &nbsp;&nbsp;&nbsp;Beneficial conversion feature of FPVD series B convertible preferred stock |  |  |  |  | 5775000 | 5775000 |
| Net loss | - | - | - | (11090000) | (854000) | (11944000) |
| Balance at March 31, 2021 | 23186265 | $23000 | $93485000 | $(61432000) | $11486000 | $43562000 |

---

**SRAX, INC. AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
|  | **2022** | **2021** |
| Cash flows from operating activities |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $3728000 | $(11944000) |
| &nbsp;&nbsp;&nbsp;Less: net loss from discontinued operations | - | (7627000) |
| &nbsp;&nbsp;&nbsp;Income (loss) from continuing operations | 3728000 | (4317000) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income (loss) from continuing operations to net cash used in continuing operations: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized gain on marketable securities | (6366000) | (3978000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Realized loss (gain) on marketable securities | 1053000 | (516000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized (gain) on designated assets | (89000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Realized loss on designated assets | 116000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income | (9000) | (15000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value of warrants issued by FPVD to SRAX, Inc. debenture holders |  | 885000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of preferred stock | (126000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock based compensation | 358000 | 253000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | 17000 | 532000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Warrant inducement expense |  | 7737000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net provision for (recovery of) bad debts | 27000 | (396000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation expense | 18000 | 18000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible assets | 185000 | 224000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of right of use asset | 30000 | 26000 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | (247000) | (477000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (331000) | (629000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designated assets for the return of capital | (169000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 2432000 | (216000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | (5924000) | (3752000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 6000 | (30000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right of use liability | (37000) | - |
| Net cash used in continuing operations | (5328000) | (4651000) |
| Net cash used in discontinued operations | - | (1518000) |
| Net cash used in operating activities | (5328000) | (6170000) |
| Cash flows from investing activities |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of marketable securities | 1277000 | 2266000 |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of designated assets | 268000 |  |
| &nbsp;&nbsp;&nbsp;Payment for deferred consideration to LD Micro |  | (1004000) |
| &nbsp;&nbsp;&nbsp;Net cash invested in prior subsidiary | (7000) |  |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment | (16000) | (32000) |
| &nbsp;&nbsp;&nbsp;Acquisition of intangible assets | (243000) | (154000) |
| &nbsp;&nbsp;&nbsp;Other assets | - | (2000) |
| Net cash from continuing operations | 1279000 | 1074000 |
| Net cash from discontinued operations | - | 924000 |
| Net cash from investing activities | 1279000 | 1998000 |
| Cash flows from financing activities |  |  |
| &nbsp;&nbsp;&nbsp;Due from affiliate |  | 464000 |
| &nbsp;&nbsp;&nbsp;Payments for taxes related to settlement of restricted stock units | (101000) |  |
| &nbsp;&nbsp;&nbsp;Proceeds from factoring facilities, net of repayments | 3153000 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of warrants |  | 12220000 |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock | - | 284000 |
| Net cash from continuing operations | 3052000 | 12968000 |
| Net cash from discontinued operations | - | 4261000 |
| Net cash from financing activities | 3052000 | 17229000 |
| Net (decrease) increase in cash from continuing operations | (997000) | 9391000 |
| Net increase in cash from discontinued operations |  | 3667000 |
| Cash, beginning of period | 1348000 | 451000 |
| Cash, end of period | 351000 | 13509000 |
| Less cash from discontinued operations | - | 1000 |
| Cash from continuing operations | $351000 | $13508000 |

---

See accompanying notes to unaudited Condensed Consolidated Financial Statements.

**SRAX, INC. AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Continued)**

**(Unaudited)**

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| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
|  | **2022** | **2021** |
| Supplemental schedule of cash flow information |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $- | $- |
| &nbsp;&nbsp;&nbsp;Cash paid for taxes | $- | $- |
| Supplemental schedule of noncash investing and financing activities |  |  |
| &nbsp;&nbsp;&nbsp;Convertible notes converted into shares | $- | $5487000 |
| &nbsp;&nbsp;&nbsp;Fair value of marketable securities received for revenue contracts, net | $9787000 | $7334000 |

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NON-GAAP TO GAAP RECONCILIATIONS

(Unaudited)

**ADJUSTED EBITDA**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** | | |
| *In thousands* | **2022** | **2021** | **$ CHG** | **% CHG** |
| **Net income (loss) attributable to common stockholders (GAAP)** | $**3728** | $**(11090)** | $**14818** | 134% |
| ***less:*** |  |  |  |  |
| Financing costs, net | 312 | 9265 | (8953) | -97% |
| (Gain) loss on marketable securities | (5313) | (4494) | (819) | -18% |
| Other income | (55) | (29) | (26) | -90% |
| Loss from discontinued operations | - | 6773 | (6773) | -100% |
| **Operating (loss) income (GAAP)** | $**(1328)** | $**425** | $**(1753)** | -412% |
| ***add:*** |  |  |  |  |
| Depreciation and amortization | 203 | 242 | (39) | -16% |
| Stock-based compenstation expense | 358 | 253 | 105 | 42% |
| **Adjusted EBITDA (non-GAAP)** | $**(767)** | $**920** | $**(1687)** | -183% |

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**NET REVENUES, EXCLUDING FAIR VALUE DISCOUNTS**

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| <br>*In thousands* | **2022** | **2021** | **$ CHG** | **% CHG** |
| **GAAP revenue** | $**7499** | $**4917** | $**2582** | 53% |
| *add: Fair value discounts effect on 2022 revenue* | 3129 | 0 | 3129 | 100% |
| **Non - GAAP revenue, excluding fair value discounts** | $**10628** | $**4917** | $**5711** | 116% |

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