Item
3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
As
previously disclosed on October 20, 2022, SRAX, Inc. (the “Company”) received notice
from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that,
based upon the Company’s continued non-compliance with Nasdaq Listing Rule 5250(c)(1) (the “Filing Requirement”), the
Company’s securities are subject to delisting from Nasdaq unless the Company timely requests a hearing before the Nasdaq Hearings
Panel (the “Panel”). On November 16, 2022, the Company received another notice from the Staff that the Company’s failure
to timely file its Quarterly Report on Form 10-Q for the period ending September 30, 2022 with the Securities and Exchange Commission
(“SEC”) could serve as an additional basis for delisting under the Filing Requirement, in addition to the previously not-filed
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022, and June 30, 2022 (collectively, the “Delinquent Reports”).
The
Company requested a hearing and, in accordance with Nasdaq Listing Rule 5815(a)(1)(B), a stay of any further suspension or delisting
action by Nasdaq, which was subsequently granted. At the hearing, the Company presented its plan to regain compliance with the Filing
Requirement and request an extension to file all outstanding periodic reports with the SEC. On December 16, 2022, the Panel allowed the
Company, with milestones based on the Company’s timeline, to file its delinquent reports to regain compliance.
On
October 12, 2022, the Company filed its Annual Report on Form 10-K for the year ended December 31, 2021 with the SEC, and on December
30, 2022, the Company filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2022; however, the Company, as of the date
hereof, has not yet filed its Quarterly reports on Form 10-Q for the quarters ended June 30, 2022, and September 30, 2022.
On
the deadline to submit the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, the Company requested additional time to
comply with filing the Delinquent Reports on the Panel’s timeline, as the Company was implementing a new accounting system. Thereafter,
Marcum LLP (“Marcum”), the Company’s independent auditor, submitted a letter to the Panel on February 16th
stating that, following the engagement of Marcum in October 2022, they identified three key internal control deficiencies that they did
not anticipate when assessing its ability to comply with the Panel’s timeline to file the Delinquent Reports, and the Company then
requested an additional extension to file the remaining Delinquent Reports.
On
March 7, 2023, the Company received written notice from the Panel stating that they have determined to suspend trading of the Company’s
common stock effective at the open of business on March 9, 2023, and commence delisting procedures because of the Company’s failure
to comply with the Panel’s timeline as well as overall reservations the Panel holds regarding the Company’s ability to operate
a Nasdaq listed entity. They further informed that Nasdaq will file a Form 25 Notification of Delisting with the SEC, notifying the SEC
of Nasdaq’s determination to remove the Company’s common stock from listing on Nasdaq under Section 12(b) of the Securities
Exchange Act of 1934, as amended. The formal delisting of the Company’s common stock from Nasdaq will become effective ten (10)
days after the Form 25 is filed.
As
a result of this decision by the Panel, the Company will move its common stock to the OTC Expert Market until the remaining Delinquent
Reports are filed with the SEC, and subsequently move our common stock to the OTC Pink Market. At such time, the Company will evaluate
all of its options and how to best proceed to relist its common stock as soon as possible on Nasdaq or another national securities exchange.
The Company’s common stock will continue to be registered under the Securities Exchange Act of 1934, as amended, and the Company
will continue to file periodic financial and other reports with the SEC that will be available on the SEC’s website, www.sec.gov.