8-K

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) August 15, 2019 (August 13, 2019)

SOCIAL REALITY, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-37916	45-2925231
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

456 Seaton Street, Los Angeles, CA	90013
(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):

o

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

o

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

o

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

o

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

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 August 14, 2019, Social Reality, Inc. (the “Company”) reported results for the quarter ended June 30, 2019. 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 5.03.     Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Years.

The Company filed with the Secretary of State of the State of Delaware, a Certificate of Amendment to our Certificate of Incorporation, as amended, to change our corporate name from “Social Reality, Inc.” to “SRAX, Inc.”, effective August 25, 2019. A copy of the Certificate of Amendment to the Certificate of Incorporation, as amended, is attached as Exhibit 3.01(i) hereto and incorporated by reference.

In connection with our name change, we will also amend our Bylaws to reflect the corporate name SRAX, Inc., also effective on August 25, 2019. No other changes will be made to our Bylaws.

Our Class A common stock will continue to trade on the NASDAQ Capital Market under the ticker symbol "SRAX". Outstanding stock certificates for shares of the Company are not affected by the name change; they continue to be valid and need not be exchanged.

On August 13, 2019, we announced the formal name change.  The press release is attached as Exhibit 99.02 and is incorporated by reference herein.

Item 9.01

Financial Statement and Exhibits.

Exhibit No.	Description
3.01(i)	Certificate of Amendment to Certificate of Incorporation, as amended
99.01	Press Release Dated August 14, 2019
99.02	Press Release Dated August 13, 2019

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:	August 15, 2019	Social Reality, Inc.
		/s/ Christopher Miglino
		By: Christopher Miglino
		Chief Executive Officer

INDEX OF EXHIBITS

Exhibit No.	Description
3.01(i)	Certificate of Amendment to Certificate of Incorporation, as amended
99.01	Press Release Dated August 14, 2019
99.02	Press Release Dated August 13, 2019

EX-3.01(I)

EXHIBIT 3.01(i)

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

Social Reality, Inc., a corporation organized under the laws of the State of Delaware (hereinafter called the “Corporation”), does hereby certify as follows:

1.

The name of the Corporation is Social Reality, Inc.

2.

This Certificate of Amendment of the Certificate of Incorporation was duly adopted in accordance with Section 242 of the General Corporation Law of the State of Delaware and amends the provisions of the Corporation’s Certificate of Incorporation.

3.

Article 1 of the Corporation’s Certificate of Incorporation is hereby amended to read in its entirety as set forth below:

ARTICLE I

The name of this Corporation is SRAX, Inc. (this “Corporation”).

4.

This Certificate of Amendment of Certificate of Incorporation shall be effective as of August 25, 2019 and the effective time shall be 5:00 p.m., Eastern Time.

IN WITNESS WHEREOF, this Certificate of Amendment of Certificate of Incorporation has been duly executed by an authorized officer of the corporation on August 8, 2019.

Social Reality, Inc.

a Delaware Corporation

By:____________________

Name: Christopher Miglino

Title: Chief Executive Officer

EX-99.01

EXHIBIT99.01

Social Reality to Formally Change Its Name to SRAX

LOS ANGELES, CA – August 13, 2019 –SRAX, Inc.(NASDAQ: SRAX), a digital marketing and consumer data management technology company, will formally change its name from Social Reality, Inc. to SRAX, Inc. The name change is consistent with the company’s evolution from social media to consumer data management and technology.

"Changing our name to SRAX is symbolic of our shift to a broader strategy to answer the needs of today’s consumer,” said SRAX's CEO and Founder Christopher Miglino. “While our roots were in social media, today we are focused on building the platform and tools to unlock the power of data. Through BIGtoken we put data back into the hands of consumers and through our verticals are delivering verified data to brands looking for a competitive edge.”  

About SRAX

SRAX, Inc. (NASDAQ: SRAX) is a digital marketing and consumer data management technology company. SRAX's technology unlocks data to reveal brands core consumers and their characteristics across marketing channels. Through the BIGtoken platform, SRAX has developed a consumer-managed data marketplace where people can own and earn from their data thereby providing everyone in the Internet ecosystem choice, transparency, and compensation. SRAX's tools deliver a digital competitive advantage for brands in the CPG, automotive, investor relations, luxury, and lifestyle verticals by integrating all aspects of the advertising experience, including verified consumer participation, into one platform. For more information on SRAX, visit www.srax.com.

Safe Harbor Statement

This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as "anticipate," "plan," "will," "intend," "believe" or "expect'" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including, without limitation, statements made with respect to expectations of our ability to increase our revenues, satisfy our obligations as they become due, report profitable operations and other risks and uncertainties, as set forth in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of SRAX and are difficult to predict. SRAX undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information:

Kirsten Chapman/Mary Magnani, LHA Investor Relations, +1 415 433 3777, srax@lhai.com

EX-99.02

EXHIBIT 99.02

SRAX Reports Revenue Grew 53% Sequentially for Q2 2019

 LOS ANGELES, August 14, 2019 - SRAX, Inc. (Nasdaq: SRAX), a digital marketing and consumer data management and distribution technology platform company, reported results for the three months ended June 30, 2019.

“We continue to build our data assets through increasing adoption of our verticals and BIGtoken,” stated SRAX's CEO and Founder Christopher Miglino. “These proprietary platforms are positioned to generate long-term revenue and value. During the quarter, we made substantial technology advancements in the SRAX IR platform and BIGtoken. SRAX IR is a perfect example of the type of platform that we believe will deliver long term recurring revenue, while building one of the most valuable data sets in the financial markets.  

“BIGtoken is the leading edge of the new data economy. Our global and diverse BIGtoken subscriber base experienced viral growth in April and reached 15.9 million users as of this week.  During the third quarter, we began to monetize our BIGtoken users, as we engaged with brands and several marketing agencies. Now, we are focused on increasing scale within certain data segments in specific countries. In addition, our discussions with advertisers and agencies have uncovered new revenue opportunities that leverage our high-quality user data. Through building what we predict will be one of the most valuable opt-in data sets in the world, we are well positioned to generate long-term revenue and value for shareholders.

Financial Highlights for Second Quarter 2019 

·

Grew Q2 2019 total revenue 53%, compared to Q1 2019.        

·

Increased total gross margin to 55% in the second quarter, compared to 42% in Q1 2019.

Operating Highlights:

·

BIGtoken, the first digital exchange of transparent and verified consumer data:

o

Signed agreement with one of India’s largest conglomerate groups, Yash Birla Group, to launch BIGtoken India. 

o

Partnered with several high-profile non-profit association to provide BIGtoken users the ability to donate their earnings. They include

§

American Heart Association, the nation's oldest and largest voluntary organization dedicated to fighting heart disease and stroke;

§

HealthCorps, founded by Dr. Mehmet Oz, dedicated to helping high-school students make better choices about their health and physical fitness; and 

§

ALS Association, which recently launched its Challenge Me campaign in observance of the fifth anniversary of the ALS Ice Bucket Challenge. 

o

Introduced the ability for users to receive gift cards in exchange for giving brands access to their anonymized data.

o

Formed a strategic partnership with LiveXLive (NASDAQ: LIVX), a global digital media company focused on live entertainment, to increase each platform’s user base while generating data-based insight.  

o

Signed an agreement with Blue Chip, integrated marketing agency, to activate anonymized self-attested, transaction, location, and social media data.

o

Introduced a feature for users to earn points with popular travel, grocery, and retail loyalty/rewards programs. 

·

Verticals:

o

Enhanced SRAX IR features, adding real-time trading data, warrant management and the ability for companies to access shareholder contact data, including email, phone number and social media links. 

o

Launched SRAX Lux, in June, to target and reach luxury consumers at luxury retail stores, high-end art, music, film, fashion, and sports events, across all consumer devices.

·

Corporate:

o

Changing the company name to SRAX to better reflect the positioning. 

o

Raised $1 million at $5 per share in a private placement to support the launch of BIGtoken across Asia.

o

Raised $7.8 million: $6.7 million from a registered direct offering and $1.1 million from warrant conversion.

o

Raised $5.5 million from a registered direct offering, subsequent to quarter end.

o

Options trading became available for SRAX.

Conference Call:

Management will review the results on a conference call with a live question and answer session today, August 14, 2019, at 4:30 p.m. ET/1:30 p.m. PT.

·

If calling from the U.S. or Canada, please dial 1-877-451-6152 to access the live call and  1-844-512-2921 for the replay, code 13691889 available until Wednesday August 28, 2019.

·

If calling internationally, please dial 1-201-389-0879 to access the live call and 1-412-317-6671 for the replay, code 13691889.

·

The call will be webcast over the Internet and accessible at the company's website at  https://srax.com/investors/ for at least 90 days. 

Non-GAAP 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 measure:  Adjusted EBITDA. 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. 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.

·

·

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, changes in the fair-value of derivative and warrant liabilities, other non-cash charges related to financing activities and certain additional one-time charges.

About SRAX 

SRAX, Inc.  (NASDAQ: SRAX) is a digital marketing and consumer data management technology company. SRAX's technology unlocks data to reveal brands core consumers and their characteristics across marketing channels. Through our BIGtoken platform, SRAX has developed a consumer-managed data marketplace where people can own and earn from their data thereby providing everyone in the Internet ecosystem choice, transparency, and compensation. SRAX's tools deliver a digital competitive advantage for brands in the CPG, automotive, investor relations, luxury, and lifestyle verticals by integrating all aspects of the advertising experience, including verified consumer participation, into one platform. For more information on SRAX, visit www.srax.com.

Safe Harbor Statement 

This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as "anticipate," "plan," "will," "intend," "believe" or "expect'" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including, without limitation, statements made with respect to expectations of our ability to increase our revenues, satisfy our obligations as they become due, report profitable operations and other risks and uncertainties as set forth in our Annual Report on Form 10-K for the year ended December 31, 2018, and our subsequent Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of Social Reality and are difficult to predict. Social Reality undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information:

Kirsten Chapman/Mary Magnani, LHA Investor Relations, +1 415 433 3777, srax@lhai.com

SOCIAL REALITY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30,		December 31,
		2019		2018
		(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	2,465,639	$	2,784,865
Accounts receivable, net		780,187		1,828,940
Prepaid expenses		550,003		466,823
Other current assets		300,898		387,085
Total current assets		4,096,727		5,467,713
Non-current Assets:
Property and equipment, net		211,240		192,065
Goodwill		15,644,957		15,644,957
Intangible assets, net		1,811,044		1,762,605
Right-of-Use Asset - Long Term Portion		466,253		—
Other assets		107,454		51,153
Total non-current assets		18,240,948		17,650,780
Total assets	$	22,337,675	$	23,118,493
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses		1,456,965		3,574,926
Debenture warrant liability		8,215,035		4,323,499
Leapfrog warrant liability		1,161,350		622,436
Derivative liability		902,915		496,260
Other current liabilities		894,686		—
Total current liabilities		12,630,951		9,017,121
Non-current liabilities:
Secured convertible debentures, net		—		—
Lease Obligation - Long Term Portion		326,471		—
Total non-current liabilities		326,471		—
Total liabilities		12,957,422		9,017,121
Commitments and contingencies (Note 11)
Stockholders' equity:
Preferred stock, authorized 50,000,000 shares, $0.001 par value, no shares issued or outstanding at June 30, 2019 and December 31, 2018, respectively		—		—
Class A common stock, authorized 250,000,000 shares, $0.001 par value, 12,546,022 and 10,109,530 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively		12,546		10,109
Class B common stock, authorized 9,000,000 shares, $0.001 par value, no shares issued or outstanding at June 30, 2019 and December 31, 2018, respectively		—		—
Common stock to be issued		—		—
Additional paid in capital		42,030,110		32,869,611
Accumulated deficit		(32,662,403)		(18,778,348)
Total stockholders' equity		9,380,253		14,101,372
Total liabilities and stockholders' equity	$	22,337,675	$	23,118,493

 SOCIAL REALITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 (Unaudited)

	Three Months ended				Six Months ended
	June 30,				June 30,
	2019		2018		2019		2018
Revenue	$	904,222	$	4,697,351	$	1,495,977	$	6,808,201
Cost of revenue		410,892		1,320,464		753,239		2,138,569
Gross profit		493,330		3,376,887		742,738		4,669,632
General, selling and administrative expense		5,114,115		5,392,625		9,605,377		9,522,883
Loss from operations		(4,620,785)		(2,015,738)		(8,862,639)		(4,853,251)
Other income (expense):
Interest expense		(182,957)		(486,758)		(250,944)		(921,543)
Amortization of debt issuance costs		-		(482,588)		-		(918,254)
Total Interest Expense		(182,957)		(969,346)		(250,944)		(1,839,797)
Gain or (loss) on sale of Assets		(77,373)		(22,165)		395,106		(22,165)
Exchange Gain or Loss		-		(596)		13,509		(5,260)
Loss on repricing of equity warrants		(341,682)		-		(341,682)		-
Change in Fair Value of Warrant Liability		(2,875,554)		(1,013,565)		(4,837,405)		2,710,129
Other non operating income / (expense)		(3,294,609)		(1,036,326)		(4,770,472)		2,682,704
Total other income / (expense)		(3,477,566)		(2,005,672)		(5,021,416)		842,907
Income / (Loss) before provision for income taxes		(8,098,351)		(4,021,410)		(13,884,055)		(4,010,344)
Provision for income taxes		-		-		-		-
Net income / (loss)	$	(8,098,351)	$	(4,021,410)	$	(13,884,055)	$	(4,010,344)
Net income / (loss) per share, basic and diluted	$	(0.67)	$	(0.39)	$	(1.24)	$	(0.40)
Weighted average shares outstanding
Basic		12,129,787		10,213,618		11,210,810		10,126,247
Diluted		12,129,787		10,213,618		11,210,810		10,126,247

SOCIAL REALITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
	June 30,
	2019		2018
Cash flows from operating activities
Net Income (loss)	$	(13,884,055)	$	(4,010,344)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:		-		-
Stock based compensation		446,395		1,161,760
Amortization of debt issuance costs		-		300,185
Accretion of debenture discount and warrants		-		618,069
Gain/Loss on valuation of warrant derivatives		4,837,406		(2,710,129)
Amortization of intangibles		495,178		350,165
Changes in operating assets and liabilities:		-		-
Accounts receivable		807,000		1,630,258
Prepaid expenses		(83,480)		(47,061)
Other assets		29,886		(2,672)
Accounts payable and accrued expenses		(1,363,056)		2,140,856
Unearned revenue		-		-
Net cash used in operating activities	$	(8,097,542)	$	(554,303)
Cash flows from investing activities
Purchase of equipment		(52,924)		(20,793)
Development of software		(543,617)		(451,168)
Net cash (used in) provided by investing activities	$	(596,541)	$	(471,961)
Cash flows from financing activities
Proceeds from the issuance of common stock units		7,228,709		-
Proceeds from the issuance of common stock in conjunction with warrant exercised		1,146,148		50,001
Proceeds from secured convertible debentures, net		-		-
Repayments of notes payable		-		-
Net cash provided by financing activities	$	8,374,857	$	50,001
Net increase / (decrease) in cash and cash equivalents		(319,226)		(976,263)
Cash and cash equivalents, beginning of period		2,784,865		1,017,299
Cash and cash equivalents, end of period	$	2,465,639	$	41,036
		-
Supplemental schedule of cash flow information
Cash paid for interest	$	-	$	313,791
Cash paid for taxes		-		-
Supplemental schedule of noncash financing activities
Recorded right-of-use asset		(466,253)		-
Recorded lease obligation		466,253
Common stock issued for preferred stock conversion and vesting grants		-		-
Vesting of common stock award		-		150,000
Issuance of treasury shares  for purposes of loan collateralization		220		-
Issuance of common stock to be issued		-		869,500

SOCIAL REALITY, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

 (Unaudited)