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 16thstating
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.
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Item 8.01 Other Events.
On March 8, 2023, the Company issued a press release announcing the receipt of
the Panel letter and suspension of trading on Nasdaq. A copy of the press
release is attached as Exhibit 99.1 and incorporated herein by reference.
Cautionary Statement Regarding Forward Looking Statements
Statements contained in this report that are not historical fact may be
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements generally relate to future events or the Company's
future financial or operating performance. In some cases, you can identify
forward-looking statements because they contain words such as "may," "will,"
"should," "expects," "plans," "anticipates," "could," "intends," "target,"
"projects," "contemplates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of these words or other similar terms or expressions
that concern the Company's expectations, strategy, plans or intentions. Such
forward-looking statements may relate to, among other things, the Company's
continued efforts and ability to regain and maintain compliance with the Nasdaq
Listing Rules. Such forward-looking statements do not constitute guarantees of
future performance and are subject to a variety of risks and uncertainties.
Actual results may vary materially from those expressed or implied by the
forward-looking statements herein due to a variety of factors, including: the
Company's decision to seek an appeal of any Panel action and any decision of the
Nasdaq Listing and Hearing Review Council with respect thereto; the ability of
the Company to file its Delinquent Reports and all other SEC filings and regain
compliance with the Nasdaq Listing Rules; and those other factors and risks
contained in the Company's filings with the SEC, including those factors
discussed under the caption "Risk Factors" in such filings.
Item 9.01 Financial Statement and Exhibits.
Exhibit
No. Description
99.1 Press Release dated March 8, 2023.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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