SOCIAL REALITY, Inc. (Form: 10-Q, Received: 11/13/2013 16:14:45)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

[SCRI_10Q001.JPG]

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FORM 10-Q

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(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2013

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

For the transition period from________ to ________

Commission File Number 000-54996

———————

SOCIAL REALITY, INC.

(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.)

456 Seaton Street, Los Angeles, CA	90013
(Address of Principal Executive Offices)	(Zip Code)

(323) 601-1145

Registrant’s Telephone Number, Including Area Code:

NOT APPLICABLE

Former name, former address and former fiscal year, if changed since last report)

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 þ NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

YES þ NO ¨

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 þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ¨ NO þ

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 19,891,794 shares of Class A common stock and no shares of Class B common stock are issued and outstanding as of November 13, 2013.

TABLE OF CONTENTS


		Page
		No

	PART I-FINANCIAL INFORMATION

ITEM 1.	Financial Statements	1

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	11

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	14

ITEM 4.	Controls and Procedures	14

	PART II - OTHER INFORMATION

ITEM 1.	Legal Proceedings	15

ITEM 1A.	Risk Factors	15

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15

ITEM 3.	Defaults Upon Senior Securities	15

ITEM 4.	Mine Safety Disclosures	15

ITEM 5.	Other Information	15

ITEM 6.	Exhibits	16

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward- looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about:

our net loss,

our limited operating history,

our reliance on our relationships with Facebook and Google,

our dependence on a limited number of customers,

possible declines in Internet advertising,

our relationships with our publishers,

our ability to sufficiently protect our intellectual property,

our ability to effectively compete,

the dependence on our executives and the terms of the employment agreements with those executives,

the adverse impact of system failures,

existing or new government regulation,

challenges as a new public company and the requirement to comply with Federal securities laws,

the anti-takeover provisions of the Delaware statutes which may not be beneficial to our stockholders,

the application of penny stock rules to market transactions in our Class A common stock, and

the implications of our status as an emerging growth company.

You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in this report, in Part I. Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2012 and our other filings with the Securities and Exchange Commission. Other sections of this report include additional factors which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

OTHER PERTINENT INFORMATION

Unless specifically set forth to the contrary, when used in this report the terms "Social Reality," "we," "our," 'Us," and similar terms refers to Social Reality, Inc., a Delaware corporation. In addition, "third quarter 2013" refers to the three months ended September 30, 2013, "third quarter 2012" refers to the three months ended September 30, 2012, "2012" refers to the year ended December 31, 2012, "2011" refers to the year ended December 31, 2011 and "2013" refers to the year ending December 31, 2013.

Unless specifically set forth to the contrary, the information which appears on our websites at www.socialrealitv.com or www.groupad.com are not part of this report.

PART 1 - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

SOCIAL REALITY, INC.

CONDENSED BALANCE SHEETS


	September 30,			December 31,
	2013			2012
	(Unaudited)

Assets

Current assets:
Cash and cash equivalents	$	145,818		$	105,987
Accounts receivable, net of allowance for doubtful accounts of $0		481,101			53,821
Tax refunds receivable		-			38,000
Other current assets		5,402			5,000

Total current assets		632,321			202,808

Property and equipment, net of accumulated depreciation of $7,500 and $3,000		10,500			15,000

Deferred offering costs		14,539			-
Prepaid fees		1,333,247			58,834
Other assets		3,555			3,555

Total assets	$	1,994,162		$	280,197


Liabilities and stockholders' equity (deficit)

Current liabilities:
Accounts payable and accrued expenses	$	1,097,516		$	302,057
Note payable		371,297			-
Common stock put liability payable		175,000			-

Total current liabilities		1,643,813			302,057

Stockholders' equity (deficit)
Preferred stock, undesignated; authorized 49,800,000 shares, $0.001 par value, no shares issued and outstanding		-			-
Preferred stock, Series 1; authorized 200,000 shares, $0.001 par value, 86,000 and no shares issued and outstanding, respectively		86			-
Class A common stock, authorized 250,000,000 shares, $0.001 par value, 5,465,804 and 3,912,129 shares issued and outstanding, respectively		5,466			3,912
Class B common stock, authorized 9,000,000 shares, $0.001 par value, 9,000,000 and 9,000,000 shares issued and outstanding, respectively		9,000			9,000
Additional paid in capital		3,079,148			1,224,087
Accumulated deficit		(2,743,351	)		(1,258,859	)

Total stockholders' equity (deficit)		350,349			(21,860	)

Total liabilities and stockholders' equity (deficit)	$	1,994,162		$	280,197

The accompanying notes are an integral part of these unaudited condensed financial statements.

SOCIAL REALITY, INC.

CONDENSED STATEMENTS OF OPERATIONS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2013 AND 2012

(Unaudited)


	Three Months ended September 30,						Nine Months ended September 30,
	2013			2012			2013			2012


Revenues	$	853,338		$	242,799		$	1,519,999		$	1,073,214
Cost of revenue		671,412			78,025			1,077,098			498,139

Gross profit		181,926			164,774			442,901			575,075

Operating expense		864,394			481,456			1,614,340			1,368,061

Loss from operations		(682,468	)		(316,682	)		(1,171,439	)		(792,986	)

Interest expense		(147,148	)		-			(313,053	)		-

Loss before provision for income taxes		(829,616	)		(316,682	)		(1,484,492	)		(792,986	)

Provision for income taxes		-			-			-			-

Net loss	$	(829,616	)	$	(316,682	)	$	(1,484,492	)	$	(792,986	)


Net loss per share, basic and diluted	$	(0.06	)	$	(0.02	)	$	(0.11	)	$	(0.06	)

Weighted average shares outstanding		13,801,891			12,912,129			13,295,851			12,819,481

The accompanying notes are an integral part of these unaudited condensed financial statements.

SOCIAL REALITY, INC.

CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTH PERIODS ENDED SEPTEMBER 30, 2013 AND 2012
(Unaudited)


	Nine Month Periods Ended September 30,
	2013			2012

Cash flows from operating activities:
Net loss	$	(1,484,492	)	$	(792,986	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of stock based prepaid fees		85,503			49,089
Stock based compensation		493,785			31,770
Amortization of debt issuance costs		274,737			-
Depreciation		4,500			1,500
Changes in operating assets and liabilities:
Accounts receivable		(427,280	)		423,531
Prepaid expenses		-			(85,821	)
Tax refunds receivable		38,000
Other current assets		(402	)		200
Other assets		-			(3,555	)
Accounts payable and accrued expenses		798,459			(178,246	)
Deferred tax liability		-			(38,000	)

Cash used in operating activities		(217,190	)		(592,518	)

Cash flows from investing activities:
Purchase of equipment		-			(18,000	)

Cash used in investing activities		-			(18,000	)

Cash flows from financing activities:
Proceeds from note payable, net		486,425			-
Repayments of note payable		(178,703	)		-
Deferred offering costs		(14,539	)		-
Debt issuance costs		(36,162	)		-
Sale of common stock		-			472,959

Cash provided by financing activities		257,021			472,959

Net increase (decrease) in cash		39,831			(137,559	)
Cash, beginning of period		105,987			221,664
Cash, end of period	$	145,818		$	84,105

Supplemental Schedule of Cash Flow Information:
Cash paid for interest	$	37,318		$	-
Cash paid for taxes	$	(38,000	)	$	38,000

Non-cash financial activities:
Fees and costs deducted from proceeds of debt	$	63,575		$	-
Common and preferred stock issued as prepayment for services	$	1,235,000		$	-
Common stock warrant issued as prepayment for services	$	124,916		$	-
Common stock issued as payment of financing fee	$	175,000		$	-
Common stock issued as payment of accounts payable	$	3,000		$	-
Contribution of member interests (net assets) in Social Reality, LLC in exchange for common stock	$	-		$	575,194

The accompanying notes are an integral part of these unaudited condensed financial statements.

SOCIAL REALITY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013 AND 2012
(Unaudited)

Note 1 – Organization and Summary of Significant Accounting Policies.

Organization and Nature of Operations

Social Reality, Inc. ("Social Reality", “we”, “us” or "the Company") is a Delaware corporation formed on August 2, 2011. Effective January 1, 2012 we acquired all of the member interests and operations of Social Reality, LLC, a California limited liability company formed on August 14, 2009, which began business in May of 2010, in exchange for 12,328,767 shares of our Class A and Class B common stock. The former members of Social Reality, LLC owned all of our common stock after the acquisition. Social Reality, LLC is referred to as our predecessor in these financial statements.

Currently, our principal source of revenue is through the provision of inventory to real time bidding exchanges (RTB) through our network of website partners. We provide the service of yield optimization for these partners and deliver the highest possible price for inventory provided from our partners to the exchange.

We offer our customers a number of pricing options including cost-per-thousand-impression ("CPM"), whereby our customers pay based on the number of times the target audience is exposed to the advertisement, and cost-per-engagement ("CPE"), whereby payment is triggered only when an individual takes a specific activity.

Social Reality is also an approved and accredited Facebook advertising network company. We sell targeted and measurable online advertising campaigns and programs to brand advertisers and advertising agencies across large Facebook apps and large websites, generating qualified Facebook likes and quantifiable engagement for our clients, driving online sales and increased brand equity. We also create custom applications for brands both large and small that leverage traffic on our partner sites to seed the applications to help them go viral.

We create these applications as custom programs and build them on a campaign by campaign basis as well as offer them on a managed or self-service subscription basis through our GroupAd platform. GroupAd allows brand marketers to select from a number of pre-created applications and then deploy them into their social media channels.

We are headquartered in Los Angeles, California.

Basis of Presentation

The accompanying condensed financial statements are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

These interim financial statements as of and for the three and nine months ended September 30, 2013 and 2012 are unaudited; however, in the opinion of management, such statements include all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. The results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the year ending December 31, 2013 or for any future period. All references to September 30, 2013 and 2012 in these footnotes are unaudited.

These unaudited condensed financial statements should be read in conjunction with our audited financial statements and the notes thereto for the year ended December 31, 2012, included in the Company’s annual report on Form 10-K filed with the SEC on April 1, 2013.

The condensed balance sheet as of December 31, 2012 has been derived from the audited financial statements at that date but does not include all disclosures required by the accounting principles generally accepted in the United States of America.

The accompanying unaudited condensed financial statements have been prepared in conformity with GAAP, which contemplates continuation of the Company as a going concern. This basis of accounting contemplates the recovery of the Company's assets and the satisfaction of its liabilities in the normal course of business. Continuation of the Company as a going concern is dependent upon the continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and increase revenue. Our ability to continue to grow our revenues and market share has been bolstered by recently completed private offerings. As described in Note 4, Subsequent Events, in October 2013 and November 2013, we raised approximately $2.44 million in net proceeds through the sale of our securities. We used approximately $531,000 of these proceeds to pay off our note described in Note 2 and redeem certain shares we had issued it as additional compensation under the terms of the credit agreement. The balance of the proceeds provides sufficient working capital to us for at least 12 months based upon our level of current operations.

SOCIAL REALITY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2013 AND 2012

(Unaudited)

Note 1 – Organization and Summary of Significant Accounting Policies. (Continued)

Use of Estimates

Accounting principles generally accepted in the United States require management of the Company to make estimates and assumptions in the preparation of these financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions.

The most significant area that requires management judgment and which is susceptible to possible change in the near term include the Company's revenue recognition policies, discussed elsewhere in these financial statements.

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents.

Revenue Recognition

The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Revenue is recognized on a gross basis, and publisher expenses that are directly related to a revenue-generating event are recorded as a component of cost of revenue.

In the past, certain of our revenues from certain sales of targeted and measurable online advertising campaigns and programs to brand advertisers and advertising agencies were recognized on a net basis as the payments to the websites on which the advertising is placed for these specific transactions were based on cash actually collected from the advertisers and agencies, rather than the actual fees billed to the advertisers and agencies.

Cost of Revenue

Cost of revenue consists of payments to website publishers that are directly related to a revenue-generating event and project and application design costs. The Company becomes obligated to make payments related to website publishers in the period the advertising impressions, click-throughs, actions or lead-based information are delivered or occur. Such expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying income statement.

Accounts Receivable

Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. No allowance was recorded as of September 30, 2013 and December 31, 2012. The Company usually does not require collateral.

Concentration of Credit Risk, Significant Customers and Supplier Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited in the United States. The balances in the United States held at any one financial institution are generally in excess of Federal Deposit Insurance Corporation ("FDIC") insurance limits.

At September 30, 2013, our RTB exchange service provider accounted for more than 10% of the accounts receivable balance, for a total of 88%. For the nine months ended September 30, 2013 no one customer accounted for 10% or more of total revenue. However, 79% of our revenue was collected and paid to us by our RTB exchange service provider. For the nine months ended September 30, 2012 four customers accounted for 84% of total revenue (of which $200,000, or 19%, was from a related party).

Fair Value of Financial Instruments

The Company's financial instruments, including cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses, note payable and put liability payable, are carried at historical cost. At September 30, 2013 and December 31, 2012 the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.

SOCIAL REALITY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2013 AND 2012

(Unaudited)

Note 1 – Organization and Summary of Significant Accounting Policies. (Continued)

Loss Per Share

We use ASC 260, “Earnings Per Share” for calculating the basic and diluted loss per share. We compute basic loss per share by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding. Basic and diluted loss per share are the same, in that any potential common stock equivalents would have the effect of being anti-dilutive in the computation of net loss per share. There were 1,629,001 and 185,000 common share equivalents at September 30, 2013 and 2012, respectively. For the three and nine months ended September 30, 2013 and 2012 these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share.

Recently Issued Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

Note 2 – Note Payable.

Termination Agreement:

During October 2013 we paid all amounts due under the credit facility with TCA Global Credit Master Fund, LP (the "Lender" or “TCA”) described below, aggregating $550,000. Following the repayment of the credit facility, in October 2013 we entered into a Termination Agreement with TCA whereby we terminated the Amended Credit Agreement and all of our obligations thereunder. As part of this Termination Agreement, we also redeemed the 174,010 shares issued to TCA pursuant to the credit facility, thereby terminating any obligations under the make whole provisions of the Termination Agreement. We paid TCA $175,000 to redeem the shares.

Credit Facility:

Effective February 22, 2013, the Company entered into a senior secured revolving credit facility agreement (the “Credit Agreement”) with TCA Global Credit Master Fund, LP (the "Lender" or “TCA”). Pursuant to the Credit Agreement, the Lender agreed to loan up to $5,000,000 for working capital purposes. A total of $300,000 was funded by Lender in connection with the closing and we received net proceeds of $257,850. The amounts borrowed pursuant to the Credit Agreement were evidenced by a revolving promissory note (“Revolving Note”), the repayment of which was secured by a security agreement (“Security Agreement”) executed by the Company. Pursuant to the Security Agreement, the repayment of the Revolving Note was secured by a security interest in substantially all of our assets in favor of Lender. The initial Revolving Note in the amount of $300,000 was due and payable along with interest thereon on August 22, 2013, unless extended an additional six months so long as no Event of Default has occurred, and bore interest at the rate of 18% per annum.

We also agreed to pay Lender various fees during the term of the Credit Agreement, including a $1,500 asset monitoring fee (which increases as additional amounts are borrowed under the Credit Agreement) due each quarter that the Credit Agreement is outstanding, a commitment fee of 4 % of the revolving loan commitment and 2% of any increase in the amount thereof, other associated fees as more fully disclosed in the Credit Agreement. We also paid Lender due diligence and document review fees of $22,500 in connection with the closing. In total, we incurred $42,150 in fees, expenses and other costs at closing which were deducted from the proceeds, and netted $257,850 in connection with the execution of the Credit Agreement.

We also agreed to pay Lender a fee of $100,000, payable in the form of 99,010 shares of Class A common stock (the “Facility Fee Shares”). In the event that Facility Fee Shares were sold for less than $100,000, we were required to pay Lender the balance of $100,000 less the amount of proceeds from the sale or, alternatively, issue additional shares in an amount as to reach the $100,000 aggregate. Because of the potential of the transfer of assets to settle this fee, we have recorded $100,000 as a liability on the balance sheet at September 30, 2013 (see Termination Agreement above).

In total, we incurred costs aggregating $166,633, including the amount allocated to the Facility Fee Shares. These costs are being amortized over the term on the note. During the three and nine months ended September 30, 2013 we have amortized $48,525 and $166,633, respectively, of these costs as interest expense and the costs have been fully amortized at September 30, 2013.

Credit Facility Amendment:

On June 11, 2013, we entered into the First Amendment to Credit Agreement (the “Amended Credit Agreement”) which increased our credit line to $550,000. The amounts borrowed pursuant to the Amended Credit Agreement were evidenced by a convertible Replacement Revolving Note in the principal amount of $550,000 (the “ Amended Revolving Note ”), due August 22, 2013, which amended, restated and replaced the initial revolving note delivered TCA in February 2012.

SOCIAL REALITY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2013 AND 2012

(Unaudited)

Note 2 – Note Payable. (Continued)

The Amended Revolving Note also included a new make-whole provision. In the event TCA should elect to convert the note pursuant to its terms, and if upon the sale of those shares of our Class A common stock it did not realize net proceeds equal to the principal amount and accrued interest due under the note so converted, we were obligated to issue TCA additional shares of our Class A common stock at a per share price equal to the average volume weighted price of our Class A common stock during the five business days before the notice of conversion.

Upon the closing of the second draw under the Credit Agreement, we paid TCA a transaction advisory fee of 2% ($5,000), due diligence fees of $2,500, legal fees of TCA’s counsel and out of pocket charges of $8,925 and a finder’s fee of $5,000 to Meyers Associates, LP, a broker dealer. In total, we incurred $21,425 in fees, expenses and other costs at closing which were deducted from the proceeds, and netted $228,575 in connection with the execution of the second draw under the Credit Agreement. Under the terms of the Amended Credit Agreement, the asset monitoring fee was also increased to $2,000 per calendar quarter.

We also paid TCA an advisory fee of $75,000 which was paid through the issuance of 75,000 shares of our Class A common stock (the “Advisory Shares”). In the event TCA did not receive at least $75,000 in net proceeds from the sale of those Advisory Shares, we were obligated to issue TCA additional shares of our Class A common stock in an amount sufficient that, when sold, provided net proceeds to TCA equal to the $75,000 advisory fee. Because of the potential of the transfer of assets to settle this fee, we have recorded $75,000 as a liability on the balance sheet at September 30, 2013 (see Termination Agreement above).

In total, we incurred costs aggregating $108,104, including the amount allocated to the Advisory Shares. These costs are being amortized over the term of the note. During the three and nine months ended September 30, 2013 we have amortized $78,487 and $108,104, respectively, of these costs as interest expense and the costs have been fully amortized at September 30, 2013.

Note 3 – Stockholders’ Equity.

We are authorized to issue 50,000,000 of preferred stock, par value $0.001.

We are authorized to issue an aggregate of 259,000,000 shares of common stock. Our certificate of incorporation provides that we will have two classes of common stock: Class A common stock (authorized 250,000,000 shares, par value $0.001), which has one vote per share, and Class B common stock (authorized 9,000,000 shares, par value $0.001), which has ten votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the rights of the two classes of common stock are identical.

Preferred Stock

On August 16, 2013 the Board of Directors of Social Reality, Inc. approved a Certificate of Designations, Rights and Preferences pursuant to which it designated a series consisting of 200,000 shares of its blank check preferred stock as Series 1 Preferred Stock. The designations, rights and preferences of the Series 1 Preferred Stock are as follows:


	·	each share has a stated and liquidation value of $0.001 per share,
	·	the shares do not pay any dividends, except as may be declared by our Board of Directors, and are not redeemable,
	·	the shares do not have any voting rights, except as may be provided under Delaware law,
	·	each share is convertible into 10 shares of our Class A common stock, subject to customary anti-dilution provisions in the event of stock splits, recapitalizations and similar corporate events, and
	·	the number of shares of Series 1 Preferred Stock, as well as the number of shares of Class A common stock issued upon a conversion of shares of Series 1 Preferred Stock, that a holder may sell, transfer, assign, hypothecate or otherwise dispose of (collectively or severally, a “Disposition”) at any one time shall be limited to an amount which is pari passu to any Disposition of Class A common stock by either Christopher Miglino and/or Erin DeRuggerio, executive officers and directors of our company. Notwithstanding anything contained in the designations, the holder of Series 1 Preferred Stock is not obligated to make any Dispositions of Series 1 Preferred Stock or Class A common stock issued upon the conversion of Series 1 Preferred Stock.

During August 2013 we issued 86,000 shares of Series 1 Preferred Stock, valued at $817,000, pursuant to a consulting agreement with a three year term. We will expense the value of the shares over that three year period. During three and nine months ended September 30, 2013, we recorded expense of $34,042.

Common Stock

During January 2013 we issued 5,000 shares of Class A common stock, valued at $5,000, as payment for legal services.

During February 2013 we issued 51,665 shares of Class A common stock upon the vesting of common stock awards.

SOCIAL REALITY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2013 AND 2012

(Unaudited)

Note 3 – Stockholders’ Equity. (Continued)

During February 2013 we issued 99,010 shares of Class A common stock pursuant to the revolving credit facility agreement described above.

During June 2013 we issued 75,000 shares of Class A common stock pursuant to the revolving credit facility agreement described above.

During August 2013 we issued 440,000 shares of Class A common stock, valued at $418,000, pursuant to a consulting agreement with a three year term. We will expense the value of the shares over that three year period. During three and nine months ended September 30, 2013, we recorded expense of $17,417.

During August 2013 we issued 300,000 shares of Class A common stock, valued at $285,000, to a director upon his appointment to the board. We have expensed the value of the shares upon grant.

During August 2013 we issued 30,000 shares of Class A common stock, valued at $28,500, as payment for consulting services.

During August 2013 we issued 550,000 shares of Class A common stock pursuant to a restricted stock award.

Stock Awards

During January 2013 we granted an aggregate of 50,000 Class A common stock awards to two employees. The shares will vest upon the one year anniversary of the grant date. Compensation expense will be recognized over the vesting period. During the three and nine months ended September 30, 2013 we recorded $12,500 and $37,500, respectively, of compensation expense related to these awards.

On April 1, 2013 we granted 25,000 Class A common stock awards to a contract employee. The shares will vest upon the one year anniversary of the grant date. Compensation expense will be recognized over the vesting period. During the three and nine months ended September 30, 2013, we recorded $6,250 and $12,500 of compensation expense related to this award.

On August 16, 2013 we issued 550,000 shares of Class A common stock pursuant to a restricted stock award to an employee. Of this award, 45,833 shares vested upon grant and the balance will vest quarterly over 2.75 years. Compensation expense will be recognized over the vesting period. During the three and nine months ended September 30, 2013, we recorded $65,313 of compensation expense related to this award.

During the three and nine months ended September 30, 2013 we recorded expense of $14,938 and $41,051, respectively, related to stock awards granted in 2012. Unvested 2012 awards of 3,334 shares were forfeited in 2013.

Stock Options and Warrants

During January 2013 we granted an aggregate of 106,500 Class A common stock options to three employees. The options will vest ratably over a period of three years commencing on the grant date and vesting on each one year anniversary. The options have an exercise price of $ 1.00 per share and a term of five years. These options have a grant date fair value of $0.28 per option, determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.375%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our Class A common stock of 40%; and (4) an expected life of the options of 3 years. We have recorded an expense for the employee options of $2,485 and $7,455 for the three and nine months ended September 30, 2013, respectively.

During February 2013 we granted 12,000 Class A common stock options to a director. The options will vest quarterly over one year. The options have an exercise price of $1.00 per share and a term of five years. These options have a grant date fair value of $ 0.23 per option, determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.375 %; (2) dividend yield of 0 %; (3) volatility factor of the expected market price of our Class A common stock of 40 %; and (4) an expected life of the options of 2 years. We have recorded an expense for the director options of $690 and $1,840 for the three and nine months ended September 30, 2013, respectively.

On April 1, 2013 we granted 50,000 Class A common stock options to a director. The options will vest ratably over a period of three years commencing on the grant date and vesting on each one year anniversary. The options have an exercise price of $1.00 per share and a term of five years. These options have a grant date fair value of $0.29 per option, determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.25 %; (2) dividend yield of 0 %; (3) volatility factor of the expected market price of our Class A common stock of 42 %; and (4) an expected life of the options of 3 years. We have recorded an expense for the director options of $1,194 and $2,388 for the three and nine months ended September 30, 2013, respectively.

SOCIAL REALITY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2013 AND 2012

(Unaudited)

Note 3 – Stockholders’ Equity. (Continued)

On April 1, 2013 we granted an aggregate of 100,000 Class A common stock options to two non-employees. The options will vest ratably over a period of three years commencing on the grant date and vesting on each one year anniversary. The options have an exercise price of $1.00 per share and a term of five years. During the three and nine months ended September 30, 2013 we have recorded an expense of $3,276 and $5,621, respectively, related to the fair value of the options expected to vest, determined using the Black-Scholes method based on the following weighted average assumptions: (1) risk free interest rate of 1.375%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our Class A common stock of 51%; and (4) an expected life of the options of 4.75 years.

During the three and nine months ended September 30, 2013 we recorded expense of $109 and $1,617, respectively, related to stock options granted in 2012. Unvested 2012 options of 20,000 options were forfeited in 2013.

On August 22, 2013 we granted an aggregate of 250,000 Class A common stock warrants pursuant to an agreement for investment banking services to be provided over a three year period. The warrants vested upon grant. The exercise price of the warrants will equal the exercise price of warrants subsequently issued in an organized distribution of our securities; provided, however, that if no such organized distribution occurs within twelve months from the date of the agreement, the exercise price of the warrant shall be at an exercise price equal to $0.75 per share. These warrants have a grant date fair value of $124,916, determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 1.50%; (2) dividend yield of 0 %; (3) volatility factor of the expected market price of our Class A common stock of 52%; (4) an expected life of the warrants of 5 years; and (5) an exercise price of $0.75 per share. We have recorded an expense for the warrants of $4,627 for the three and nine months ended September 30, 2013, respectively.

Note 4 – Subsequent Events

On October 4, 2013, 9,000,000 shares of our Class B common stock was converted into an aggregate of 9,000,000 shares of our Class A common stock pursuant to the terms of the Class B common stock as set forth in our Certificate of Incorporation.

Between October 8, 2013 and October 30, 2103 we sold an aggregate of 4,587,940 units of our securities to accredited investors in a private placement exempt from registration under the Securities Act, in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D. The units were sold at a purchase price of $0.50 per unit resulting in gross proceeds to us of $2,293,970. We also issued 212,206 units to our placement agent as payment of $106,030 of fees and expenses. Each unit consisted of one share of our Class A common stock and one three year Class A Common Stock Purchase Warrant to purchase 0.5 shares of our Class A common stock, resulting the issuance of 4,800,000 shares of our Class A common stock and Class A Common Stock Purchase Warrants to purchase an additional 2,400,000 shares of our Class A common stock. T.R. Winston & Company, LLC, a broker-dealer and member of FINRA, acted as placement agent for us in this offering. In addition to the 212,206 units referenced above, we paid the placement agent and a selling agent commissions and a non-accountable expense allowance totaling $181,976 and issued it three year warrants to purchase 480,000 of our Class A common stock at an exercise price of $1.00 per share. We used a portion of the net proceeds to satisfy our revolving note due TCA and to redeem the Facility Fee Shares and the Advisory Shares and we are using the balance of the net proceeds for general working capital.

If we fail to timely file the registration statement described below, if the registration statement is not declared effective by the SEC within 90 days of its filing date, or at any time thereafter during the exercise period of the warrants there is not an effective registration statement, then the warrants may also be exercised on a cashless basis. We also have the right to call the warrants under certain circumstances.

The purchase price of the units and the exercise price of the warrants are subject to a full ratchet anti-dilution adjustment in the event that we issue additional equity or equity-linked securities at a purchase price that is less than the applicable purchase price per unit or the exercise price of the warrant for a period of one year from the final closing of this offering, subject to certain exclusions. We agreed to file a registration statement with the SEC within 60 days from October 30, 2013 registering for resale all of the shares of our Class A common stock issuable upon the exercise of the warrants included in the units sold in this offering. We are subject to payment to the purchasers of the units registration rights penalties if we do not timely file this registration statement or if the registration statement is not declared effective by the SEC within 90 days of its filing date.

During October 2013 we paid all amounts due under the Amended Revolving Note, aggregating $550,000. On October 31, 2013 following the repayment of the Amended Revolving Note, in October 2013 we entered into a Termination Agreement with TCA whereby we terminated the Amended Credit Agreement and all of our obligations thereunder. As part of this Termination Agreement, we also redeemed the 174,010 shares issued to TCA as the Facility Fee Shares and the Advisory Shares, thereby terminating any obligations under the make whole provisions of the Termination Agreement. We paid TCA $175,000 to redeem the shares.

On October 28, 2013 we granted an aggregate of 107,000 Class A common stock options to employees. The options have an exercise price of $1.00 per share and will vest ratably over a period of three years commencing on the grant date and vesting on each one year anniversary.

SOCIAL REALITY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 2013 AND 2012

(Unaudited)

Note 4 – Subsequent Events (Continued)

On October 29, 2013 we entered into a consulting agreement with Siskey Capital, LLC pursuant to which we engaged the company to provide certain consulting services to us under the terms of an agreement expiring in July 2016. As compensation, we issued the consultant 150,000 shares of our Class A common stock and 35,000 shares of our Series 1 Preferred Stock.

In November 2013 we sold an additional 650,000 units of our securities to accredited investors in a private placement exempt from registration under the Securities Act which were identical to the units sold in the October 2013 offering. We received gross proceeds of $325,000. We did not pay any commissions or finder’s fees in this offering. We are using the proceeds for general working capital.

ITEM 2.

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

The following discussion of our financial condition and results of operations for the three and nine month periods ended September 30, 2013 and 2012 should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward- looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Item 1A, Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in our Annual Report on Form 10-K for the year ended December 31, 2012, this report, and our other filings with the Securities and Exchange Commission. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Such statements are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this report.

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

Overview — Summary of our business in order to provide context for the remainder of MD&A.

Critical Accounting Policies — Accounting policies that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.

Results of Operations — Analysis of our financial results comparing the three and nine month periods ended September 30, 2013 to the comparable periods of 2012.

Liquidity and Capital Resources — An analysis of changes in our balance sheets and cash flows, and discussion of our financial condition including recent developments and potential sources of liquidity.

Overview

We have developed technology that allows brands to launch and manage digital advertising campaigns and that allows website publishers to sell their inventory to a number of digital adverting buyers.

Our focus is to provide technology tools that enable both publishers and advertisers to maximize their digital advertising initiatives. The three core elements of our business are:

Social Reality Ad Exchange or “SRAX” – Real Time Bidding sell side representation. Our technology assists publishers in delivering their inventory to the RTB exchanges. Our tools provide reporting to these publishers about the sales of their inventory on theses exchanges. We assist publishers in maximizing their yield and thus maximizing the revenue they generate. We contract with web and mobile publishers to sell their inventory on the RTB exchanges. This consists of contacting the publishers and having them sign up on our portal to become one of our publishing partners. Once they sign up, the traffic they deliver is evaluated; once the site is approved, we provide them with assets that allow us to deliver advertising to their approved sites or applications. The price that advertisers are willing to pay for any specific placement is determined in real time and we seek to deliver the highest paid ad at any given time.

GroupAd. GroupAd is a social media and loyalty platform that allows brands to launch and manage their social media initiatives. GroupAd allows brand marketers to select from a number of pre-created applications, and then launch these applications on their social media sites. GroupAd also provides an online loyalty program that rewards users for being brand advocates. GroupAd allows brands to identify who their brand advocates are and then provide the brands the tools to communicate and reward the advocates. This platform is currently provided on a managed basis, whereby large advertisers and their agencies contract with us to manage their programs utilizing the GroupAd technology. We generate revenue from GroupAd from brands who license the platform from us on a managed basis and on a self-service basis to deliver a social media application, and, in some cases a loyalty application as well. These fees are paid on a monthly basis and are recurring in nature for as long as the brand is utilizing the platform. The amount that a brand pays for the platform is calculated by the number of social media followers they have on different social networks.

Social Reality Innovations. Brands need new and innovative programs to stay ahead of the market. Our innovation group works with brands large and small to develop mobile and social applications that become the standard for the market. These applications are a breeding ground for those applications which are then added to the GroupAd platform. We generate our revenue in this unit through the creation of custom programs. This includes conceptualizing, launching and managing these programs. We also provide media services from this unit which includes buying media to drive engagements to our custom built programs and to our GroupAd programs.

In 2012 we began the process of transitioning from a campaign only based model to a monthly recurring revenue model combined with campaign revenue. During the first quarter of 2013 we launched our SRAX product. As a result, we reported a 251% increase in our revenues for the third quarter of 2013 from the comparable period in 2012, and a 42% increase for the comparable nine month periods. The significant increase in our revenues is primarily attributable to our efforts to build our Ad Exchange business and we have seen month over month increases in the monthly recurring revenue model from this product as well as our self-service GroupAd product. We expect our revenues will continue to increase during the balance of 2013 and into 2014, both as a result of an increased customer base in both our SRAX and GroupAd products. We have recently increased our sales team fourfold and anticipate that this increase in our sales team and marketing efforts will accelerate the revenue growth for the company. We have also increased our technical resources and we anticipate that this will enable us to bring enhanced revenue generating projects to market more rapidly.

Our ability to continue to grow our revenues and market share has been bolstered by recently completed private offerings. As described later in this report, in October 2013 and November 2013, we raised approximately $2.44 million in net proceeds through the sale of our securities. We used approximately $531,000 of these proceeds to pay off the note to TCA and redeem certain shares we had issued it as additional compensation under the terms of the credit agreement. The balance of the proceeds provides sufficient working capital to us for at least 12 months, based upon our level of current operations and we now have funds to expand our sales team and aggressively market our technology and services.

Critical Accounting Policies

Our MD&A is based on our unaudited condensed financial statements, which have been prepared in accordance GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses for each period. The following represents a summary of our critical accounting policies, defined as those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

Revenue recognition.

We recognize revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable. We act as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Revenue is recognized on a gross basis, and publisher expenses that are directly related to a revenue-generating event are recorded as a component of cost of revenue.

Accounts receivable allowances.

Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses our accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made.

Use of estimates.

GAAP requires our management to make estimates and assumptions in the preparation of these unaudited condensed financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions.

Results of Operations

Revenue

We currently derive our revenues from the:

sale of inventory from our publishing partners on our SRAX real-time bidding, or RTB, exchanges,

licensing of our GroupAd platform on a managed and self-service basis,

sale of media and custom applications to drive engagement to our GroupAd programs, and

creation of custom programs for both large and small brands.

Overall, our revenues increased 251% for the third quarter of 2013 and 42% for the nine months ended September 30, 2013 as compared to the 2012 periods.

We launched our Social Reality Ad Exchange product in January 2013, and since its launch this product has consistently experienced growth rates. The quarter over quarter growth rates for this product were 290% and 155% for the second and third quarters of 2013, respectively. This growth can be attributed to the company’s continued sales efforts to establish long term relationships with publishing partners. While we cannot be certain that we will maintain this type of growth, we are optimistic about the recurring revenue from this product.

Cost of revenue

Our gross margins have changed during the 2012 and 2013 comparable periods as a result of the transition of our revenue model. Cost of revenue as a percent of revenue was 79% for the third quarter of 2013 compared to 32% for third quarter of 2012, and 71% for the nine months ended September 30, 2013 compared to 46% for nine months ended September 30, 2012. Cost of revenue consists of certain labor costs, payments to website publishers and others that are directly related to a revenue-generating event and project and application design costs. We become obligated to make payments related to website publishers in the period the advertising impressions, click-throughs, actions or lead-based information are delivered or occur. These expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying income statement.

Approximately 99% of cost of revenue for the third quarter of 2013 and the nine months ended September 30, 2013 was attributable to payments to website publishers and others. We did not have comparable costs in the 2012 periods as a result of the different sources of revenues. The balance was attributable to labor costs and project and application design costs. We expect that our gross margins will remain in the range reported during 2013 in future periods.

Operating expense

Operating expense increased 80% for the third quarter of 2013 from the comparable period in 2012, and 18% for the nine months ended September 30, 2013 from the comparable period in 2012. Included in our operating expenses for both the three and nine months ended September 30, 2013 are significant amounts of non-cash expenses associated with stock based compensation. These amounts are related to costs associated with various consultants we have engaged to assist our company in its growth efforts. Certain of these non-cash expenses are being amortized over the lives of the contracts which extend into 2016. The balance of our other operating expenses includes salaries and general overhead expenses. These other operating expenses have decreased overall following the implementation of cost cutting measures to conserve our available cash during the transition of our revenue model. During 2012, in an effort to conserve our cash resources, Mr. Miglino and Ms. DeRuggiero, our executive officers, each agreed to a temporary reduction in their annual base salary to $60,000 until such time as we have sufficient cash resources to return their compensation to a level that is in line with the company’s revenue growth. We are currently assessing partial reinstatements of the reductions.

We expect that our operating expenses will increase as our business grows and we devote additional resources towards promoting that growth, most notably reflected in anticipated increases in salaries for sales personnel and technical resources.

Interest expense

Interest expense in the three and nine months ended September 30, 2013 represents costs associated with the revolving credit facility from TCA Global Credit Master Fund, L.P. As described later in this report, we paid off the note and terminated this facility in October 2013. Accordingly, interest expense will decline in the fourth quarter of 2013.

Non-GAAP Financial Measures

We use Adjusted net income (loss) to measure our overall results because we believe it better reflects our net results by excluding the impact of non-cash equity based compensation. We use Adjusted EBITDA to measure our operations by excluding certain additional non-cash expenses. We believe the presentation of Adjusted net income (loss) and Adjusted EBITDA enhances our investors’ overall understanding of the financial performance of our business.

You should not consider Adjusted net income (loss) and Adjusted EBITDA as an alternative to net income (loss), determined in accordance with GAAP, as an indicator of operating performance. A directly comparable GAAP measure to Adjusted net income (loss) and Adjusted EBITDA is net income (loss). The following is a reconciliation of net income (loss) to Adjusted net income (loss) and Adjusted EBITDA:



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(unaudited, in thousands)	2013			2012			2013			2012
Net income (loss)	$	(830	)	$	(317	)	$	(1,484	)	$	(793	)
plus:
Equity based compensation		486			21			579			81
Adjusted net income (loss)	$	(344	)	$	(296	)	$	(905	)	$	(712	)
Interest expense		147			—			313			—
Depreciation of property, plant and equipment		2			—			5			—
Adjusted EBITDA	$	(195	)	$	(296	)	$	(587	)	$	(712	)

Liquidity and Capital Resources

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash. As of September 30, 2013 we had approximately $146,000 in cash and cash equivalents and a working capital deficit of $1,011,492, as compared to cash and cash equivalents of approximately $106,000 and a working capital deficit of $99,249 at December 31, 2012. Our principal sources of operating capital have been equity financings and, in February and June 2013, debt financing. Effective February 22, 2013, we entered into a senior secured revolving credit facility agreement which provided net proceeds of approximately $258,000. On June 11, 2013, we entered into an amended credit facility agreement which provided additional net proceeds of approximately $229,000. At September 30, 2013 our current availability under the facility was $550,000. During October 2013 we repaid all amounts due under this credit facility. Thereafter, we entered into a termination agreement whereby we terminated the credit facility agreement and redeemed certain shares of our Class A common stock which were issued as additional compensation to the lender. These subsequent events will positively impact our balance sheet in the fourth quarter of 2013.

Our accounts receivable has increased substantially at September 30, 2013 from December 31, 2012 and reflects both our increased revenues and the impact of the transition of our revenue model.

Subsequent to September 30, 2013 we closed two private placements which generated $2,618,970 in gross proceeds to us. Between October 8, 2013 and October 30, 2103 we sold an aggregate of 4,587,940 units of our securities to accredited investors in a private placement exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D. The units were sold at a purchase price of $0.50 per unit resulting in gross proceeds to us of $2,293,970. We also issued 212,206 units to our placement agent as payment of $106,030 of fees and expenses. Each unit consisted of one share of our Class A common stock and one three year Class A Common Stock Purchase Warrant to purchase 0.5 shares of our Class A common stock, resulting the issuance of 4,800,000 shares of our Class A common stock and Class A Common Stock Purchase Warrants to purchase an additional 2,400,000 shares of our Class A common stock. T.R. Winston & Company, LLC, a broker-dealer and member of FINRA, acted as placement agent for us in this offering. In addition to the 212,206 units referenced above, we paid the placement agent and a selling agent commissions and a non-accountable expense allowance totaling $181,976 and agreed to issue it three year warrants to purchase 480,000 of our Class A common stock at an exercise price of $1.00 per share.

In November 2013 we sold an additional sold an aggregate of 650,000 units of our securities to accredited investors in a private placement exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D. The units, which were identical to the units sold in the October 2013 offering, were sold at a purchase price of $0.50 per unit resulting in gross proceeds to us of $325,000. We did not pay any commissions or finder’s fees in this transaction.

Net Cash Provided by Operating Activities

We used $217,190 of cash in our operating activities during the nine months ended September 30, 2013 compared to $592,518 used by our operating activities for the nine months ended September 30, 2012. The decrease in cash used in operating activities was primarily attributable to a decrease in net loss (after adjusting for non-cash expenses) and decreases in expenditures for prepayments, taxes and accounts payable and other liabilities, all partially offset by a decrease in net collections on accounts receivable.

Net Cash Used in Investing Activities

We used $18,000 for the purchase of furniture and equipment during the nine months ended September 30, 2012, with no expenditures during the nine months ended September 30, 2013.

Net Cash Provided by Financing Activities

During the nine months ended September 30, 2013 we received $486,425 in cash from financing activities during the period from the proceeds of a credit facility. We paid costs of $36,162 related to this facility and repaid $178,703 of the revolving credit facility. We also paid costs of $14,539 related to the sale of our securities that occurred in October 2013.

During the nine months ended September 30, 2012 we received $472,959 in cash from financing activities from the sale of equity interests.

Recent accounting pronouncements

The recent accounting standards that have been issued or proposed by the Financial Accounting Standards Board (FASB) or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

Off balance sheet arrangements

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 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable for a smaller reporting company.

ITEM 4.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures. We are required to maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. Based on their evaluation as of the end of the period covered by this report, our Chief Executive Officer who also serves as our Chief Financial Officer, has concluded that our disclosure controls and procedures were not effective. As a newly public company, we are still in the process of formally adopting comprehensive policies to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. We expect to complete the adoption of these comprehensive policies during 2013 which will ensure that the information relating to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting. There have been no changes in our internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

None.

ITEM 1A.

RISK FACTORS.

Not applicable for a smaller reporting company.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On August 22, 2013 we issued T.R. Winston & Company, LLP a warrant to purchase 250,000 shares of our Class A common stock valued at $124,916 as compensation under the terms of an Investment Banking Agreement described later in this section. The recipient was an accredited investor and the shares were issued in a private transaction exempt from registration under the Securities Act in reliance on an exemption provided by Section 4(a)(2) of that act.

On October 28, 2013 we granted options to purchase an aggregate of 107,000 shares of our Class A common stock as grants under our 2012 Equity Compensation Plan 19 of our employees as additional compensation for their services. The options were issued under an exemption provided by Section 12h-1(g) of the Securities Exchange Act of 1934.

On October 29, 2013 we issued an accredited investor 150,000 shares of our Class A common stock and 35,000 shares of our Series 1 Preferred Stock valued at an aggregate of $500,000 as compensation for consulting services to us under the terms of an agreement described later in this report. The recipient was an accredited investor and the shares were issued in a private transaction exempt from registration under the Securities Act in reliance on an exemption provided by Section 4(a)(2) of that act.

In November 2013 we sold an aggregate of 650,000 units of our securities to eight accredited investors in a private placement exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D. The units, which were identical to the units sold in our October 2013 private placement, were sold at a purchase price of $0.50 per unit resulting in gross proceeds to us of $325,000. We did not pay any commissions or finder’s fees in this transaction. We are using the proceeds for general working capital. We granted these purchasers the same registration rights as were granted the purchasers of units in our October 2013 private placement.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY DISCLOSURES.

Not applicable to our company’s operations.

ITEM 5.

OTHER INFORMATION.

On August 22, 2013 we entered into an Investment Banking Agreement with T.R. Winston & Company, LLC, a broker-dealer and member of FINRA, pursuant to which we engaged the firm to provide investment banking services to us. As compensation, we issued the firm a three year warrant to purchase 250,000 shares of our Class A common stock at an exercise price of $1.00 per share. The firm subsequently served as the placement agent in our October 2013 offering.

On October 29, 2013 we entered into a consulting agreement with Siskey Capital, LLC pursuant to which we engaged the company to provide certain consulting services to us. As compensation, we issued the consultant 150,000 shares of our Class A common stock and 35,000 shares of our Series 1 Preferred Stock valued at an aggregate of $500,000. The issuances were exempt from registration under the Securities Act in reliance on an exemption provided by Section 4(a)(2) of that act. Siskey Capital, LLC is an affiliate of Carolina Preferred Investment Investments, LLC, a principal stockholder of our company.

On October 31, 2013 we entered into a Termination Agreement with TCA Global Credit Master Fund, L.P. pursuant to which we terminated the revolving credit facility with the lender. As a provision of the Termination Agreement, we redeemed 174,010 shares of our Class A common stock previously issued to the lender as compensation under the agreement for $175,000 in full satisfaction of the make-whole rights granted the lender under the credit agreement. Following this redemption, the shares are being returned to the status of authorized but unissued shares of our Class A common stock.

ITEM 6.

EXHIBITS.


No.		Description
4.5		Warrant dated August 22, 2013 issued to T.R. Winston & Company, LLC under the terms of the Investment Banking Agreement *
10.14		Termination Agreement dated October 31, 2013 by and between Social Reality, Inc., TCA Global Credit Master Fund, L.P. and Pearlman Schneider LLP *
10.15		Investment Banking Agreement dated August 22, 2013 by and between Social Reality, Inc. and T.R. Winston & Company, LLC *
10.16		Consulting Agreement dated October 29, 2013 by and between Social Reality, Inc. and Siskey Capital, LLC *
31.1		Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer *
31.2		Rule 13a-14(a)/ 15d-14(a) Certification of Chief Financial Officer*
32.1		Section 1350 Certification of Chief Executive Officer and Chief Financial Officer*
101.INS		XBRL Instance Document**
101.PRE		XBRL Taxonomy Extension Presentation Linkbase **
101.LAB		XBRL Taxonomy Extension Label Linkbase **
101.DEF		XBRL Taxonomy Extension Definition Linkbase **
101.SCH		XBRL Taxonomy Extension Schema **
101.CAL		XBRL Taxonomy Extension Calculation Linkbase **

———————

filed herewith

In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 to this report shall be deemed furnished and not filed.

SIGNATURES

Pursuant to the requirements 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.


	SOCIAL REALITY, INC.

November 13, 2013	By:	/s/ Christopher Miglino
		Christopher Miglino, Chief Executive Officer, Chief Financial Officer

Exhibit 4.5

CLASS A COMMON STOCK PURCHASE WARRANT

THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF WITHOUT (i) EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED, OR (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES.


August 22, 2013	No. W-100

SOCIAL REALITY INC.

This certifies that, for good and valuable consideration, receipt of which is hereby acknowledged, T.R. WINSTON & COMPANY, LLC (“ Holder ”) is entitled to purchase, subject to the terms and conditions of this Warrant, from Social Reality Inc., a Delaware corporation (the “ Company ”), TWO HUNDRED FIFTY THOUSAND (250,000) fully paid and nonassessable shares of the Company’s Class A Common Stock, par value $0.001 per share (“ Class A Common ”). Holder shall be entitled to purchase the shares of Class A Common in accordance with Section 2 at any time subsequent to the date of this Warrant set forth above and prior to the Expiration Date (as defined below). The shares of Class A Common of the Company for which this Warrant is exercisable, as adjusted from time to time pursuant to the terms hereof, are hereinafter referred to as the “ Shares .” This Warrant is issued as compensation under the terms of the Investment Banking Agreement dated August 22, 2013 by and between the Company and the Holder (the “ Agreement ”).

Exercise Period; Price .

1.1

Exercise Period . This Warrant shall be immediately exercisable and the exercise period (“ Exercise Period ”) shall terminate at 5:00 p.m. Pacific time on October [•], 2016 (the “ Expiration Date ”).

1.2

Exercise Price . The initial purchase price for each of the Shares shall be $1.00 per share. Such price shall be subject to adjustment pursuant to the terms hereof (such price, as adjusted from time to time, is hereinafter referred to as the “ Exercise Price ”).

Exercise and Payment .

2.1

At any time after the date of this Warrant, this Warrant may be exercised, in whole or in part, from time to time by the Holder, during the term hereof, by surrender of this Warrant and the Notice of Exercise attached hereto as Annex I , duly completed and executed by the Holder, to the Company at the principal executive offices of the Company, together with payment in the amount obtained by multiplying the Exercise Price then in effect by the number of Shares thereby purchased, as designated in the Notice of Exercise. Payment may be in cash, wire transfer or by check payable to the order of the Company in immediately available funds. If not exercised in full, this Warrant must be exercised for a whole number of Shares.

2.2

If at any time thereafter during the Exercise Period there is not an effective registration statement registering the Shares, or the prospectus contained therein is not available for the issuance of the Shares to the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A) = the average of the closing sale prices for the five (5) trading days immediately prior to (but not including) the exercise date;

(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

(X) = the number of Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

For purposes of Rule 144 promulgated under the Securities Act of 1933, as amended (the “ Act ”), it is intended, understood and acknowledged that the Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Agreement (provided the Securities and Exchange Commission (“ SEC ”) continues to take the position that such treatment is proper at the time of such exercise).

2.3

The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). When used in this paragraph, “ Affiliates ” of the Holder means any entity which directly or indirectly controls or is controlled by the Holder and “ Persons ” means any individual, partnership, limited liability company, limited liability partnership, corporation, trust, joint venture, joint stock company, or other entity. For purposes of the foregoing sentence, the number of shares of Class A Common beneficially owned by the Holder and its Affiliates shall include the number of shares of Class A Common issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Class A Common which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Class A Common Equivalents, as hereinafter defined, subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2.3, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2.3 applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such

determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2.3, in determining the number of outstanding shares of Class A Common, a Holder may rely on the number of outstanding shares of Class A Common as reflected in (a) the Company’s most recent periodic or annual report filed with the SEC, as the case may be, (b) a more recent public announcement by the Company or (c) a more recent written notice by the Company setting forth the number of shares of Class A Common outstanding. Upon the written request of a Holder, the Company shall within two (2) trading days confirm orally and in writing to the Holder the number of shares of Class A Common then outstanding. In any case, the number of outstanding shares of Class A Common shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Class A Common was reported. The “ Beneficial Ownership Limitation ” shall be 4.99% of the number of shares of the Class A Common outstanding immediately after giving effect to the issuance of shares of Class A Common issuable upon exercise of this Warrant. The Holder, upon not less than sixty-one (61) days prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2.3, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Class A Common outstanding immediately after giving effect to the issuance of shares of Class A Common upon exercise of this Warrant held by the Holder and the provisions of this Section 2.3 shall continue to apply. Any such increase or decrease will not be effective until the sixty-first (61 ^st ) day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2.3 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

Company’s Right to Call this Warrant . Subject to the terms and conditions set forth herein, and providing that there is an effective registration statement registering the shares of Class A Common issuable upon exercise of this Warrant, during the Exercise Period, upon twenty (20) days prior written notice to the Holder (each, a “ Call Notice ”) following the date on which the last sale price of the Company’s Class A Common equals or exceeds $2.50 per share for twenty (20) consecutive trading days, as may be adjusted for stock splits, stock dividends and similar corporate events, and the daily average minimum volume of the Class A Common during those twenty (20) trading days is at least 100,000 shares, the Company shall have the right to call any or all of the Warrants at a call price of $0.001 per underlying Share (the " Call Price "). Warrant holders shall have the period from the date of the Call Notice until 5 p.m., Pacific time, on the twentieth (20th) day following the Call Notice (the " Call Date ") to exercise the Warrant pursuant to the terms hereof. Any Warrants which have been called but remain unexercised by the Call Date shall automatically terminate and no longer entitle the Holder to exercise such Warrant or to receive any consideration therefor, other than the Call Price. For any Warrants which are not exercised by the Call Date, the Company shall promptly as possible following the Call Date pay the Call Price to the Holder of any Warrants which have been called and not exercised.

Reservation of Shares . The Company hereby agrees that at all times there shall be reserved for issuance and delivery upon exercise of this Warrant such number of shares of Class A Common or other shares of capital stock of the Company from time to time issuable upon exercise of this Warrant . All such shares shall be duly authorized, and when issued upon such exercise, shall be validly issued, fully paid and non-assessable, free and clear of all liens, security interests, charges and other encumbrances or restrictions on sale and free and clear of all preemptive rights.

Delivery of Stock Certificates . Within three (3) trading days after exercise, in whole or in part, of this Warrant, the Company shall issue in the name of and deliver to the Holder a certificate or certificates for the number of fully paid and nonassessable Shares which the Holder shall have requested in the Notice of Exercise. If this Warrant is exercised in part, the Company shall deliver to the Holder a new Warrant (dated the date hereof and of like tenor) for the unexercised portion of this Warrant at the time of delivery of such stock certificate or certificates. In lieu of delivering physical certificates representing the Shares issuable upon exercise of this Warrant, provided the Company is participating in the Depository Trust Company (“ DTC ”) Fast Automated Securities Transfer (FAST) program, upon request of the Holder in the Notice of Exercise, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Shares issuable upon exercise to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission (DWAC) system.

No Fractional Shares . This Warrant must be exercised for a whole number of Shares. No fractional shares or scrip representing fractional Shares will be issued upon exercise of this Warrant. Any fractional Share which otherwise might be issuable on the exercise of this Warrant as a result of the anti-dilution provisions Section 10 hereof will be rounded up to the nearest whole Share.

Charges, Taxes and Expenses . The Company shall pay all transfer taxes or other incidental charges, if any, in connection with the transfer of the Shares purchased pursuant to the exercise hereof from the Company to the Holder.

Loss, Theft, Destruction or Mutilation of Warrant . Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to the Company, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor and dated as of such cancellation, in lieu of this Warrant.

Saturdays, Sundays, Holidays, Etc . If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may be exercised on the next succeeding weekday which is not a legal holiday.

10.

Adjustment of Exercise Price and Number of Shares . The Exercise Price and the number of and kind of securities purchasable upon exercise of this Warrant shall be subject to adjustment from time to time as follows:

10.1

Subdivisions, Combinations and Other Issuances . If the Company shall at any time after the date hereof but prior to the expiration of this Warrant subdivide its outstanding securities as to which purchase rights under this Warrant exist, by split-up or otherwise, or combine its outstanding securities as to which purchase rights under this Warrant exist, the number of Shares as to which this Warrant is exercisable as of the date of such subdivision, split-up or combination shall forthwith be proportionately increased in the case of a subdivision, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the Exercise Price, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant as of such date shall remain the same.

10.2

Stock Dividend . If at any time after the date hereof the Company declares a dividend or other distribution on Class A Common payable in Class A Common or other securities or rights convertible into Class A Common (“ Class A Common Equivalents ”) without payment of any

consideration by such holder for the additional shares of Class A Common or the Class A Common Equivalents (including the additional shares of Class A Common issuable upon exercise or conversion thereof), then the number of shares of Class A Common for which this Warrant may be exercised shall be increased as of the record date (or the date of such dividend distribution if no record date is set) for determining which holders of Class A Common shall be entitled to receive such dividend, in proportion to the increase in the number of outstanding shares (and shares of Class A Common issuable upon conversion of all such securities convertible into Class A Common) of Class A Common as a result of such dividend, and the Exercise Price shall be adjusted so that the aggregate amount payable for the purchase of all the Shares issuable hereunder immediately after the record date (or on the date of such distribution, if applicable), for such dividend shall equal the aggregate amount so payable immediately before such record date (or on the date of such distribution, if applicable).

10.3

Other Distributions . If at any time after the date hereof the Company distributes to holders of its Class A Common, other than as part of its dissolution or liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any of its assets (other than cash, Class A Common or Class A Common Equivalents), then the Company may, at its option, either (i) decrease the Exercise Price of this Warrant by an appropriate amount based upon the value distributed on each share of Class A Common as determined in good faith by the Company’s Board of Directors, or (ii) provide by resolution of the Company’s Board of Directors that on exercise of this Warrant, the Holder hereof shall thereafter be entitled to receive, in addition to the shares of Class A Common otherwise receivable on exercise hereof, the number of shares or other securities or property which would have been received had this Warrant at the time been exercised.

10.4

Effect of Consolidation, Merger or Sale . In case of any reclassification, capital reorganization, or change of securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of any subdivision, combination, stock dividend or other distribution provided for in Sections 10.1 , 10.2 and 10.3 above), or in case of any consolidation or merger of the Company with or into any corporation (other than a consolidation or merger with another corporation in which the Company is the acquiring and the surviving corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing corporation, as the case may be, shall duly execute and deliver to the holder of this Warrant a new Warrant (in form and substance satisfactory to the holder of this Warrant), or the Company shall make appropriate provision without the issuance of a new Warrant, so that the holder of this Warrant shall have the right to receive, at a total purchase price not to exceed that payable upon the exercise of the unexercised portion of this Warrant, and in lieu of the Shares theretofore issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, capital reorganization, change, merger or sale by a holder of the number of Shares then purchasable under this Warrant. In any such case, appropriate provisions shall be made with respect to the rights and interest of Holder so that the provisions hereof shall thereafter be applicable to any shares of stock or other securities and property deliverable upon exercise hereof, or to any new Warrant delivered pursuant to this Section 10.4 , and appropriate adjustments shall be made to the Exercise Price per share payable hereunder, provided, that the aggregate Exercise Price shall remain the same. The provisions of this Section 10.4 shall similarly apply to successive reclassifications, capital reorganizations, changes, mergers and transfers.

11.5

Antidilution Rights . The Exercise Price will be subject to a full ratchet anti-dilution adjustment in the event the Company issues additional equity or equity-linked securities at a purchase price that is less than the Exercise Price within one (1) year from October 30, 2013, provided, however , no adjustment shall be made for the following:

(a)

any shares of Class A Common, including options therefor (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares), issued to employees or directors of, or consultants or advisors to, the Company or any of subsidiary pursuant to a plan, agreement or arrangement approved by its Board of Directors, whether issued before or after the final Closing, provided that any options for such shares that expire or terminate unexercised or any restricted stock repurchased by the Company at cost shall not be counted toward such maximum number unless and until such shares are regranted as new stock grants (or as new options) pursuant to the terms of any such plan, agreement or arrangement;

(b)

the actual issuance of shares of Class A Common upon the exercise or conversion of securities exercisable or convertible into shares of the Class A Common outstanding on the date of the Company’s Confidential Private Placement Memorandum dated October 3, 2013, as well as shares of Class A Common, options or other convertible securities issued as a dividend or distribution on the Class A Common, Class B common stock and/or Series 1 Preferred Stock;

(c)

shares of Class A Common issued pursuant to a stock split or similar reorganization;

(d)

securities issued in connection with a secondary public offering;

(e)

securities issued or issuable pursuant to strategic transactions entered into for primarily non-equity financing purposes approved by the Board of Directors;

(f)

securities issued or issuable pursuant to equipment lease financings or bank credit arrangements entered into for primarily non-equity financing purposes approved by the Board of Directors;

(g)

securities issued or issuable pursuant to an acquisition by the Company of the assets or stock of another entity; or

(h)

any securities or warrants issued to Siskey Industries, LLC or its affiliates for advisory services to the Company.

11.

Notice of Adjustments; Notices . Whenever the Exercise Price or number of Shares purchasable hereunder shall be adjusted pursuant to Section 10 hereof, the Company shall execute and deliver to the Holder a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated and the Exercise Price and number of and kind of securities purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.

12.

Rights As Stockholder; Notice to Holders . Nothing contained in this Warrant shall be construed as conferring upon the Holder or his or its transferees the right to vote or to receive dividends or to consent or to receive notice as a shareholder in respect of any meeting of stockholders for the election of directors of the Company or of any other matter, or any rights whatsoever as stockholders of the Company. The Company shall give notice to the Holder by registered mail if at any time prior to the expiration or exercise in full of the Warrants, any of the following events shall occur:

(i)

a dissolution, liquidation or winding up of the Company shall be proposed;

(ii)

a capital reorganization or reclassification of the Class A Common (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of any subdivision, combination, stock dividend or other distribution) or any consolidation or merger of the

Company with or into another corporation (other than a consolidation or merger with another corporation in which the Company is the acquiring and the surviving corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company; or

(iii)

a taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) for other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other rights.

Such giving of notice shall be simultaneous with (or in any event, no later than) the giving of notice to holders of Class A Common. Such notice shall specify the record date or the date of closing the stock transfer books, as the case may be. Failure to provide such notice shall not affect the validity of any action contemplated in this Section 12 .

13.

Restricted Securities . The Holder understands that this Warrant and the Shares purchasable hereunder constitute “ restricted securities ” under the federal securities laws inasmuch as they are, or will be, acquired from the Company in transactions not involving a public offering and accordingly may not, under such laws and applicable regulations, be resold or transferred without registration under the Act, or an applicable exemption from such registration. The Holder further acknowledges that a securities legend to the foregoing effect shall be placed on any Shares issued to the Holder upon exercise of this Warrant.

14.

Disposition of Shares; Transferability .

14.1

Transfer . This Warrant shall be transferable only on the books of the Company, upon delivery thereof duly endorsed by the Holder or by its duly authorized attorney or representative, accompanied by proper evidence of succession, assignment or authority to transfer. Upon any registration of transfer, the Company shall execute and deliver new Warrants to the person entitled thereto.

14.2

Rights, Preferences and Privileges of Class A Common . The powers, preferences, rights, restrictions and other matters relating to the shares of Class A Common will be as determined in the Company’s Certificate of Incorporation, as amended, as then in effect.

15.

Miscellaneous .

15.1

Binding Effect . This Warrant and the various rights and obligations arising hereunder shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

15.2

Entire Agreement . This Warrant constitutes the entire agreement between the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, whether oral or written, between the parties hereto with respect to the subject matter hereof.

15.3

Amendment and Waiver . Any term of this Warrant may be amended and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holders representing a majority-in-interest of the shares of Class A Common underlying the Warrants pursuant to the Purchase Agreement. Any waiver or amendment effected in accordance with this Section 15.3 shall be binding upon the Holder and the Company.

15.4

Governing Law . This Agreement shall be governed by and construed under the laws of the State of Delaware without reference to the conflicts of law principles thereof. The exclusive jurisdiction for any legal suit, action or proceeding arising out of or related to this Warrant shall be either the California State Supreme Court, County of Los Angeles, or in the United States District Court for the Central District of California.

15.5

Headings . The headings in this Agreement are for convenience only and shall not alter or otherwise affect the meaning hereof.

15.6

Severability . If one or more provisions of this Warrant are held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and the balance shall be enforceable in accordance with its terms.

15.7

Notices . Unless otherwise provided, any notice required or permitted under this Warrant shall be given in the same manner as provided in the Agreement.

IN WITNESS WHEREOF , the parties hereto have executed and delivered this Warrant as of the date appearing on the first page of this Warrant.


	THE COMPANY:

	SOCIAL REALITY INC.

	By:	/s/ Christopher Miglino
		Christopher Miglino, Chief Executive Officer

ANNEX I

NOTICE OF EXERCISE

To:

Social Reality Inc.

The undersigned Holder hereby elects to purchase _____________ shares of Class A common stock, $0.001 par value per share (the “ Shares ”) of Social Reality Inc., a Delaware corporation (the “ Company ”), pursuant to the terms of the attached Warrant. The Holder shall make payment of the Exercise Price as follows (check one):

“ Cash Exercise ” under Section 2.1

“ Cashless Exercise ” under Section 2.2

If the Holder is making a Cash Exercise, the Holder is hereby delivering the sum of $____________, in lawful money of the United States, to the Company in accordance with the terms of the Warrant.

If the Holder is making a Cashless Exercise, the Company shall deliver to the Holder ______________ Warrant Shares in accordance with the terms of the Warrant.

Please issue and deliver certificates representing the Warrant Shares purchased hereunder to Holder:_____________________, Address:_________________________ in the following denominations: ____________________________.

Taxpayer ID No.: __________________________________

If delivery of the Warrant Shares is requested via DWAC, please check this box and provide the requested information:

The Company is requested to electronically transmit the Warrant Shares issuable pursuant to this Notice of Exercise to the account of the Holder with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

Name of DTC Prime Broker:

_______________________________

Account Number:

_______________________________

Please issue a new Warrant for the unexercised portion of the attached Warrant, if any, in the name of the undersigned.

Holder:

__________________________________________________________

Dated:

__________________________________________________________

By:

__________________________________________________________

Its:

__________________________________________________________

Address:

__________________________________________________________

Investor Status. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]


Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:

Exhibit 10.14

TERMINATION AGREEMENT

THIS TERMINATION AGREEMENT is made and entered into this 31st day of October, 2013, by and between Social Reality, Inc., a Delaware corporation with its principal place of business at 456 Seaton Street, Los Angeles, CA 90013 (the “ Borrower ”), TCA Global Credit Master Fund, LP, a Cayman Islands partnership with its principal place of business at 1404 Rodman Street, Hollywood, FL 33020 (the “ Lender ”) and Pearlman Schneider LLP (the “ Escrow Agent ”).

W I T N E S S E T H :

WHEREAS , the Borrower and Lender are parties to that certain Credit Agreement dated as of December 31, 2012 made effective as of February 22, 2013 (the “ Original Agreement ”), as amended pursuant to the First Amendment to Credit Agreement effective June 11, 2013 (the “ Amended Agreement ”) (collectively, the “ Credit Agreement ”) pursuant to which the Lender extended a revolving credit facility to the Borrower.

WHEREAS , the amounts borrowed by the Borrower pursuant to the Credit Agreement are evidenced by a convertible Replacement Revolving Note in the principal amount of $550,000 (the “ Amended Revolving Note ”) dated June 11, 2013 from Borrower to Lender.

WHEREAS , as security for the repayment of the Amended Revolving Note, the Borrower granted the Lender a security interest in its assets which is evidenced by a Security Agreement dated as of December 31, 2012 and made effective February 22, 2013 (the “ Security Agreement ”).

WHEREAS , the Borrower has paid all amounts due under the Amended Revolving Note, including the Overpayment Amount (as hereinafter defined) and desires to terminate the Credit Agreement, the Security Agreement and all related transactions, agreements, and obligations between the parties.

WHEREAS , the Lender is the beneficiary of certain make-whole rights (the “ Make-Whole Rights ”) related to an aggregate of 174,010 shares of the Borrower’s Class A common stock (the “ Shares ”) pursuant to Section 2.2 (h) of the Original Agreement and Section 10 of the Amended Agreement.

WHEREAS , the Borrower desires to redeem the Shares as hereinafter set forth in full and complete satisfaction of the Make Whole Rights and the Lender has agreed to redemption of the Shares by Borrower upon the terms and conditions of this Agreement.

WHEREAS , the Borrower and the Lender have asked the Escrow Agent to facilitate the redemption of the Shares, and the Escrow Agent has consented to act in such role pursuant to the terms and conditions of this Agreement.

NOW, THEREFORE , in consideration of the mutual covenants and agreements contained in this Agreement, it is hereby agreed as follows:

Recitals; Defined Terms . The foregoing recitals are true and correct and are herein incorporated herein by reference. Capitalized terms not otherwise defined herein shall have the same meaning as in the Credit Agreement.

Redemption of the Shares .

Subject to the terms and conditions hereinafter set forth, at the Closing (as hereinafter defined), the Borrower shall redeem the Shares from the Lender for total consideration of One Hundred and Seventy-five Thousand dollars ($175,000.00) (the “ Purchase Price ”). The Purchase Price shall be paid at Closing (as hereinafter defined) through (i) the Lender retaining the Overpayment Amount (as hereinafter defined in Section 5), and (ii) the payment by the Borrower to Lender of an additional $160,321.08 (the “ Purchase Funds ”).

Simultaneous with the execution of this Agreement, the Borrower shall tender the Purchase Funds in immediately available funds to the Escrow Agent for deposit in the Escrow Account pursuant to the provisions of Section 3 hereof.

Escrow Agent acknowledges having previously received from Lender for deposit in the Escrow Account, the stock certificates representing the Shares (the “ Certificates ”).

The Closing (as hereinafter defined) of the transactions contemplated by this Agreement shall take place following the satisfaction of all conditions set forth in Section 3 hereof. At Closing and upon Lender’s receipt of cleared funds equaling the Purchase Price, plus payment to Lender’s counsel of the fees required to be paid in accordance with Section 17 below, all Make-Whole Rights shall have been satisfied in full and be of no further force or effect.

Escrow and Escrow Agent . The Borrower and the Lender hereby appoint the Escrow Agent as escrow agent upon the terms and conditions set forth herein, and the Escrow Agent hereby accepts such appointment.

The Purchase Funds and Certificates are sometimes hereinafter referred to as the “ Escrow Property ”. The Purchase Funds shall not bear interest and no investment of the Escrow Property shall be made while held by the Escrow Agent.

At such time as the Escrow Agent shall have received (i) a duly executed Agreement from the Lender, (ii) the Certificates (which Escrow Agent hereby acknowledges having previously received), (iii) a duly executed Agreement from the Borrower, and (iv) Purchase Funds from the Borrower, the Escrow Agent shall promptly disburse the Purchase Funds to the Lender and the Certificates to the Borrower and the Lender shall be entitled to the Overpayment Amount through a transfer of such amount from the Lock Box Account to the Lender (the “ Closing ”). If the Closing shall not have occurred within seven (7) business days from the date of the execution of this Agreement by all parties and the delivery of the Escrow Property to the Escrow Agent, the Escrow Agent shall release the Escrow Property to the party which deposited same into the Escrow Account, all rights to the Overpayment Amount shall remain with the Borrower and all rights held by the Lender related to the Shares shall be retained by it. Upon disbursement of the Escrow Property as set forth in this Section 3, the obligations of the Escrow Agent under this Agreement shall terminate.

At any time, the Escrow Agent, in its sole discretion, may commence an action in the nature of interpleader in any court it deems appropriate, to determine ownership or disposition of the Escrow Property or it may deposit the Escrow Property with the clerk of any appropriate court or it may retain the Escrow Property pending receipt of a final, non-appealable order of a court having jurisdiction over all of the parties hereto directing to whom and under what circumstances the Escrow Property are to be disbursed and delivered. During the pendency of any such action, the Escrow Agent may suspend the performance of any of its obligations under this Agreement until such dispute or uncertainty shall be resolved to the sole satisfaction of Escrow Agent or until a successor Escrow Agent shall have been

appointed (as the case may be). The Escrow Agent shall have no liability to the Borrower, the Lender or any other person with respect to any such suspension of performance or disbursement into court, specifically including any liability or claimed liability that may arise, or be alleged to have arisen, out of or as a result of any delay in the disbursement of funds held in the Escrow Account or any delay in or with respect to any other action required or requested of Escrow Agent, except for actions or omissions of Escrow Agent that constitute gross negligence or willful misconduct.

The acceptance by the Escrow Agent of its duties as such under this Agreement is subject to the following terms and conditions, which all parties to this Agreement hereby agree shall govern and control with respect to the rights, duties, liabilities and immunities of the Escrow Agent:

The Escrow Agent shall not be liable for any error in judgment or mistake of law or fact, or for any action taken or omitted to be taken by it, or any action suffered by it to be taken or omitted by it, in good faith and in the exercise of its own best judgment. The Escrow Agent shall not be liable for any delay in delivering Escrow Property as required hereby, absent its own gross negligence or willful misconduct.

ii.

The Escrow Agent may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent other than itself), statement, instrument, report or other paper or document (not only as to its due execution and validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons.

iii.

The Escrow Agent shall be indemnified and held harmless by the Lender and the Borrower, upon demand by the Escrow Agent, from and against any claims, demands, losses, damages, liabilities, costs and expenses, including counsel fees and disbursements, (collectively, “ Damages ”) suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim, or in connection with any claim or demand, which in any way directly or indirectly arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, the monies or other property held by it hereunder or any such Damages. The obligations of the Lender and the Borrower under this Section 3 shall survive any termination of this Agreement and the resignation or removal of the Escrow Agent.

iv.

The Escrow Agent may resign at any time and be discharged from its duties as Escrow Agent hereunder by its giving the other parties hereto prior written notice of at least seven (7) business days. As soon as practicable after its resignation, the Escrow Agent shall turn over to a successor escrow agent appointed by the other parties hereto, jointly, all of the Escrow Property held hereunder upon presentation of the document appointing the new escrow agent and its acceptance thereof. If no new escrow agent is so appointed within the seven (7) day period following the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Property with any court it deems appropriate.

Termination of Credit Agreement . Upon Lender’s receipt of good and cleared funds representing the Purchase Price, plus payment to Lender’s counsel of the fees required to be paid in accordance with Section 17 below, the revolving credit facility granted to the Borrower by the Lender pursuant to the terms of the Credit Agreement, the Credit Agreement, including the Make Whole Rights, and the Amended Revolving Note and all other Loan Documents are hereby terminated in their entirety and neither party shall have any obligation to the other party thereunder, except for obligations or indemnities that specifically survive termination of the Credit Agreement and other Loan Documents. Within seven (7) business days from the date Lender receives good and cleared funds representing the Purchase Price, plus payment to Lender’s counsel of the fees required to be paid in accordance with

Section 17 below, the Lender shall execute and file UCC-3 Termination Statements in all jurisdictions in which UCC-1 Financing Statements were filed in respect to the Credit Agreement, the Amended Revolving Note and/or the Security Agreement.

Overpayment Amount . The Lender has advised the Borrower that there is $14,678.92 in cleared funds in the Lock-Box Account which represents an overpayment of all amounts due under the Amended Revolving Note and the Revolving Loans (the “ Overpayment Amount ”).

Termination of Lock Box Account . Other than the Overpayment Amount, the disbursement of which shall be governed by Section 3(b) of this Agreement, any payments by the Borrower’s Customers which shall be deposited in the Lock Box Account after Lender’s receipt of good and cleared funds representing the Purchase Price, plus payment to Lender’s counsel of the fees required to be paid in accordance with Section 17 below, shall be the sole property of the Borrower and Lender shall cause such amounts to be promptly transferred to the Borrower without deduction.

Intentionally Left Blank.

General Release .

Effective upon Lender’s receipt of good and cleared funds representing the Purchase Price, plus payment to Lender’s counsel of the fees required to be paid in accordance with Section 17 below, the Lender, its officers, directors, employees, agents, partners and affiliates (collectively, the “ First Party ”) do hereby release the Borrower, its officers, directors, employees, agents and affiliates (collectively, the “ Second Party ”) of and from any and all manner of action and actions, cause and causes of actions, rights, liens, agreements, contracts, covenants, obligations, suits, claims, debts, dues, sums of monies, costs, expenses, attorneys’ fees, judgments, orders and liabilities, accounts, covenants, controversies, promises and damages of whatever kind and nature in law or equity or otherwise whether now known or unknown, including specifically any and all claims arising out of the Credit Agreement and other Loan Documents, which the First Party ever had, now has or may have had against the Second Party, now or by reason of any matter, cause or thing whatsoever, from the beginning of the world to the date of this Agreement, expressly including, but not limited to, all indebtedness of any kind.

The Second Party does hereby release and forever discharge the First Party from any and all manner of action and actions, cause and causes of actions, rights, liens, agreements, contracts, covenants, obligations, suits, claims, debts, dues, sums of monies, costs, expenses, attorneys’ fees, judgments, orders and liabilities, accounts, covenants, controversies, promises, damages, of whatever kind and nature in law or equity or otherwise whether now known or unknown, including specifically, any and all claims arising out of the Credit Agreement and other Loan Documents, which the Second Party ever had, now has or may have had against the First Party, now or by reason of any matter, cause or thing whatsoever, from the beginning of the world to the date of this Agreement.

In further consideration of the aforesaid, the parties hereto do hereby agree that they will forever refrain from and desist from, directly or indirectly, instituting or asserting any claim against the other party for any of the matters covered by the releases set forth in Sections 8(a) and 8(b) above which in any way arise from or pertain to the aforesaid facts and circumstances. In executing this Agreement, the parties hereto state and represent that they understand the terms are contractual and not merely a recital. The parties hereto further acknowledge, understand and agree that this Agreement shall bind them and their heirs, next of kin, executors, administrators, successors or assigns, and shall inure to the benefit of the parties released herein and their agents, servants, employees, representatives, subsidiaries, insurers, sureties, successors or assigns.

Representation and Warranties .

The Borrower represents and warrants to the Lender that the Borrower has full power and authority to execute this Agreement and consummate the transactions contemplated hereby, and this Agreement is binding on the Borrower and enforceable in accordance with its terms. The execution and delivery of this Agreement and consummation of the transactions contemplated hereby do not violate or conflict with or constitute a default under any contract, agreement or commitment of any to which the Borrower is a party or by which the Borrower is bound, or to the Borrower’s knowledge, any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Borrower or any of its property.

The Lender represents and warrants to the Borrower that the Lender has full power and authority to execute this Agreement and consummate the transactions contemplated hereby, and this Agreement is binding on the Lender and enforceable in accordance with its terms. The execution and delivery of this Agreement and consummation of the transactions contemplated hereby do not violate or conflict with or constitute a default under any contract, agreement or commitment of any to which the Lender is a party or by which the Lender is bound, or to the Lender’s knowledge, any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Lender or any of its property.

10.

Amendment or Assignment . No modification, waiver, amendment, discharge or change of this Agreement shall be valid unless the same is evidenced by a written instrument, executed by the party against which such modification, waiver, amendment, discharge, or change is sought.

11.

Notices . All notices, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly given in accordance with the Credit Agreement.

12.

Entire Agreement . This Agreement contains all of the understandings and agreements of the parties with respect to the subject matter discussed herein. Upon Lender’s receipt of good and cleared funds representing the Purchase Price, plus payment to Lender’s counsel of the fees required to be paid in accordance with Section 17 below, all prior agreements, whether written or oral, are merged herein and shall be of no force or effect.

13.

Severability . The invalidity, illegality or unenforceability of any provision or provisions of this Agreement will not affect any other provision of this Agreement, which will remain in full force and effect, nor will the invalidity, illegality or unenforceability of a portion of any provision of this Agreement affect the balance of such provision. In the event that any one or more of the provisions contained in this Agreement or any portion thereof shall for any reason be held to be invalid, illegal or unenforceable in any respect, this Agreement shall be reformed, construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein.

14.

Construction and Enforcement . This Agreement shall be construed in accordance with the laws governing the Credit Agreement, without and application of the principles of conflicts of laws, and venue with respect to any dispute hereunder shall be as set forth in the Credit Agreement. If it becomes necessary for any party to institute legal action to enforce the terms and conditions of this Agreement, and such legal action results in a final judgment in favor of such party (" Prevailing Party "), then the party or parties against whom said final judgment is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental expenses incurred, including, but not limited to, all attorney's fees, court costs and other expenses incurred throughout all negotiations, trials or appeals undertaken in order to enforce the Prevailing Party's rights hereunder.

15.

Binding Nature, No Third Party Beneficiary . The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties, and their respective successors and assigns, and is made solely and specifically for their benefit. No other person shall have any rights, interest or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third-party beneficiary or otherwise.

16.

Counterparts . This Agreement may be executed in any number of counterparts, including facsimile signatures which shall be deemed as original signatures. All executed counterparts shall constitute one Agreement, notwithstanding that all signatories are not signatories to the original or the same counterpart.

17.

Payment of Lender’s Counsel’s Fees . At the Closing, Borrower shall be obligated to pay Lender’s counsel for its fees in connection with this Agreement in an amount equal to $750.00.

18.

Stock Purchase Agreement . Borrower represents that the form of agreement undated for October 2013 by and between TCA Global Master Credit Fund, LP., G. Tyler Runnels and Jasmine N. Runnels TTEE The Runnels Family Trust DTD January 11, 2000 and Pearlman Schneider L.L.P. was not exceuted nor consummated by or on behalf of the Runnels Family Trust and void ab initio. The Escrow Agent also represents that it never executed the form of agreement.

IN WITNESS WHEREOF , this Agreement has been executed by each of the parties hereto on the date first above written.

Social Reality, Inc.

By: /s/ Christopher Miglino

Christopher Miglino, Chief Executive Officer

TCA Global Credit Master Fund, L.P.

By:

TCA Global Credit Fund GP, Ltd.

Its:

General Partner

By: /s/ Robert Press

Robert Press, Director

Pearlman Schneider LLP

By: /s/ James M. Schneider

James M. Schneider

EXHIBIT 10.15

[SCRI_EX10Z15002.GIF]

[SCRI_EX10Z15004.GIF]

[SCRI_EX10Z15006.GIF]

[SCRI_EX10Z15008.GIF]

[SCRI_EX10Z15010.GIF]

[SCRI_EX10Z15012.GIF]

[SCRI_EX10Z15014.GIF]

[SCRI_EX10Z15016.GIF]

EXHIBIT 10.16

SISKEY CAPITAL, LLC

4521 Sharon Road, Suite 450

Charlotte, NC 28211

October 29, 2013

Social Reality Inc.

Mr. Christopher Miglino

456 Seaton Street

Los Angeles, California, 90013

Re: Consulting Agreement

Dear Mr. Miglino,

Pursuant to this Consulting Agreement (“Agreement”) Social Reality, Inc. (hereinafter referred to as “the Client”) has agreed to engage Siskey Capital, LLC (“SCAP”) on a non-exclusive basis to perform services related to financial consulting matters pursuant to the terms and conditions set forth herein.

1. Services . SCAP shall act as advisor to the Client and perform, as requested by the Client, the following Services:

•

new business support, including identifying and introducing potential strategic partners to the Client;

•

in-depth consultations to the Client’s senior management to determine the amount and structure of the capital sought by the Client,

•

evaluations of competitors and development of strategies to increase the Client’s competitiveness,

•

the continuing strategic analysis of the Client’s business objectives and balancing these objectives with the expectations of the financial markets; and

•

the implementation of a strategic plan for the Client, with a view towards enabling the Client to achieve its financial goals.

. marketing, business development

2. Performance of Services . SCAP shall be obligated to provide the Services as and when requested by Client and shall not be authorized or obligated to perform any Services on SCAP’s own initiative. The Services shall be performed reasonably promptly after Client’s request, consistent with SCAP’s availability. It is understood that the Services to be provided hereunder are not exclusive to the Client and SCAP has other business obligations, including acting as consultant for other companies, provided, however, that SCAP shall not provide services to any potential or actual competitor of the Client during the Term of this agreement.

3. Relationship of the Parties . SCAP shall be, and at all times during the Term of the Agreement, remain an independent contractor. As such, SCAP shall determine the means and methods of performing the Services hereunder and shall render the Services at such places it determines. The Client shall pay all reasonable costs and expenses incurred by SCAP in the performance of its duties hereunder, provided however such costs and expenses shall not exceed $250.00 without Client’s prior written approval.

4. Assurances . Client acknowledges that all opinions and advices (written or oral) given by SCAP to the Client in connection with this Agreement are intended solely for the benefit and use of Client, and Client agrees that no person or entity other than Client shall be entitled to make use of or rely upon the advice of SCAP to be given hereunder. Furthermore, no such opinion or advice given by SCAP

shall by used at any time, in any manner or for any purpose, and shall not be reproduced, disseminated, quoted or referred to at any time, in any manner or for any purpose, except as may be contemplated herein. Client shall not make any public references to SCAP without SCAP’s prior written consent or as required by applicable law.

5. Compensation .

(a)

As compensation for the Services to be performed by SCAP hereunder, SCAP shall receive the following:

A retainer in the form of 150,000 shares of Class A Common Stock shall be granted following the execution of this agreement;

A retainer in the form of 35,000 shares of Series 1 Preferred Stock shall be granted as soon as practicable following the execution of this agreement. The designations, rights and preferences of the Series 1 Preferred Stock as previously filed by the Client with the Secretary of State of Delaware are attached hereto as Exhibit A . SCAP acknowledges it has read such designations, rights and preferences, including the limitations on the sale, transfer, assignment, hypothecation or other disposition of the Series 1 Preferred Stock and the shares of Class A Common Stock issuable upon the conversion of the Series 1 Preferred Stock, and hereby consents to such limitations;

A value of $100,000 shall be considered as full payment for the services to be rendered under this three-year agreement. SCAP agrees to pay all taxes, federal and state, relating to this agreement. SCAP agrees to indemnify the Client for any claim for unpaid taxes which might arise from the receipt of shares.

(b)

SCAP is an accredited investor as that term is defined in the Securities Act of 1933, as amended (the “Act”). SCAP acknowledges its understanding that neither the shares of Class A Common Stock, the shares of Series 1 Preferred Stock nor the shares of Class A Common Stock issuable upon the conversion of the Series 1 Preferred Stock (collectively, the “Securities”) are registered under the Act or any state securities laws. SCAP represents that the Securities are being acquired for SCAP’s own account, for investment purposes only and not with a view for distribution or resale to others. SCAP agrees that it will not sell or otherwise transfer the Securities unless the Securities are registered under the Act or unless in the opinion of counsel satisfactory to the Client an exemption from such registration is available. SCAP further acknowledges its understanding that the Client will place a restrictive legend on the certificates representing the Securities.

(c)

SCAP shall not be entitled to convert the shares of Series 1 Preferred Stock to the extent that after giving effect to such conversion, SCAP (together with the SCAP’s Affiliates, and any other Persons acting as a group together with SCAP or any of SCAP’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). When used in this paragraph, “ Affiliates ” of SCAP means any entity which directly or indirectly controls or is controlled by SCAP and “Persons” means any individual, partnership, limited liability company, limited liability partnership, corporation, trust, joint venture, joint stock company, or other entity. For purposes of the foregoing sentence, the number of shares of Class A Common Stock beneficially owned by SCAP and its Affiliates shall include the number of shares of Class A Common Stock issuable upon conversion of the Series 1 Preferred Stock with respect to which such determination is being made, but shall exclude the number of shares of Class A Common Stock which would be issuable upon (i) conversion of the remaining, nonconverted portion of the shares of Series 1 Preferred Stock owned by SCAP or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Client, subject to a limitation on conversion or exercise analogous to the limitation contained herein, beneficially owned by SCAP or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as

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amended (the “ Exchange Act ”) and the rules and regulations promulgated thereunder, it being acknowledged by SCAP that the Client is not representing to SCAP that such calculation is in compliance with Section 13(d) of the Exchange Act and SCAP is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this paragraph applies, the determination of whether the shares of Series 1 Preferred Stock are convertible (in relation to other securities owned by SCAP together with any Affiliates) and the number of such shares of Series 1 Preferred Stock that are convertible shall be in the sole discretion of SCAP, and the submission of a notice of conversion shall be deemed to be SCAP’s determination of whether the shares of Series 1 Preferred Stock are convertible (in relation to other securities owned by SCAP together with any Affiliates) and of the number of shares of Series 1 Preferred Stock that are convertible, in each case subject to the Beneficial Ownership Limitation, and the Client shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this paragraph, in determining the number of outstanding shares of Class A Common Stock, SCAP may rely on the number of outstanding shares of Class A Common Stock as reflected in (a) the Client’s most recent periodic or annual report filed with the SEC, as the case may be, (b) a more recent public announcement by the Client or (c) a more recent written notice by the Client setting forth the number of shares of Class A Common Stock outstanding. Upon the written request of SCAP, the Client shall within two (2) trading days confirm orally and in writing to SCAP the number of shares of Class A Common Stock then outstanding. In any case, the number of outstanding shares of Class A Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company by SCAP or its Affiliates since the date as of which such number of outstanding shares of Class A Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Class A Common Stock outstanding immediately after giving effect to the issuance of shares of Class A Common Stock issuable upon conversion of the Series 1 Preferred Stock. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

6. Additional Services . Should Client desire SCAP to perform additional services not outlined herein, Client may make such request to SCAP in writing. SCAP may agree to perform those services at its sole discretion. However, any additional services performed by SCAP may require an additional compensation schedule to be mutually agreed upon prior to rendering such services.

7. Term . This Agreement shall be binding upon all parties when executed by the Client and remain in effect until July 01, 2016 unless otherwise mutually agreed upon in writing by Client and SCAP.

8. Due Diligence/Disclosure

Client recognizes and confirms that, in advising Client and in fulfilling its retention hereunder, SCAP will use and rely upon data, material and other information furnished to it by Client. Client acknowledges and agrees that in performing its Services under this Agreement, SCAP may relay upon the data, material and other information supplied by Client without independently verifying the accuracy, completeness or veracity of it.

Except as contemplated by the terms hereof or as required by applicable law, SCAP shall keep confidential, indefinitely, all non-public information provided to it by Client, and shall not disclose such information to any third party without Client’s prior written consent, other than such of its employees and advisors as SCAP reasonably determines to have a need to know.

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9. Indemnification.

Client shall indemnify and hold SCAP harmless against any and all liabilities, claims, lawsuits, including any and all awards and/or judgments to which it may become subject under the Act or the Exchange Act or any other federal or state statute, at common law or otherwise, insofar as said liabilities, claims and lawsuits, (including awards and/or judgments) arise out of or are in connection with the Services rendered by SCAP in connection with this Agreement, except for any liabilities, claims, and lawsuits (including awards, judgments and related costs and expenses), arising out of acts or omissions of SCAP. In addition, the Client shall indemnify and hold SCAP harmless against any and all reasonable costs and expenses, including reasonable attorney fees, incurred or relating to the foregoing. If it is judicially determined that Client will not be responsible for any liabilities, claims and lawsuits or expenses related thereto, the indemnified party, by his or its acceptance of such amounts, agrees to repay Client all amounts previously paid by Client to the indemnified person and will pay all costs of collection thereof, including but not limited to reasonable attorney’s fees related thereto. SCAP shall give Client prompt notice of any such liability, claim or lawsuit, which SCAP contends is the subject matter of Client’s indemnification and SCAP thereupon shall be granted the right to take any and all necessary and proper action, at its sole cost and expense, with respect to such liability, claim and lawsuit, including the right to settle, compromise and dispose of such liability, claim or lawsuit, excepting there from any and all proceedings or hearings before any regulatory bodies and/or authorities.

SCAP shall indemnify and hold Client and its director, officers, employees and agents harmless against any and all liabilities, claims and lawsuits, including and all award and/or judgments to which it may become subject under the Act, the Exchange Act or any other federal or state statute, at common law or otherwise, insofar as said liabilities, claims and lawsuits (including awards and/or judgments) that may arise out of or are based upon SCAP’s gross negligence or willful misconduct, or any untrue statement or alleged untrue statement of a material fact or omission of a material fact required to be stated or necessary to make the statement provided by SCAP not misleading, which statement or omission was made in reliance upon information furnished in writing to Client by or on behalf of SCAP for inclusion in any registration statement or prospectus or any amendment or supplement thereto in connection with any transaction to which this Agreement applies. In addition, SCAP shall also indemnify and hold Client harmless against any and all costs and expenses, including reasonable attorney fees, incurred or relating to the foregoing. Client shall give SCAP prompt notice of any such liability, claim or lawsuit which Client contends is the subject matter of SCAP’s indemnification and SCAP thereupon shall be granted the right to take any and all necessary and proper action, at its sole cost and expense, with respect to such liability, claim and lawsuit, including the right to settle, compromise or dispose of such liability, claim or lawsuit, excepting therefrom any and all proceedings or hearings before any regulatory bodies and/or authorities.

The indemnification provisions contained in this Section are in addition to any other rights or remedies which either party hereto may have with respect to the other or hereunder.

10. General Provisions.

Entire Agreement . This Agreement between Client and SCAP constitutes the entire agreement between and understandings of the parties hereto, and supersedes any and all pervious agreements and understandings, whether oral or written, between the parties with respect to the matters set forth herein.

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Notice . Any notice or communication permitted or required hereunder shall be in writing and deemed sufficiently given if hand-delivered: (i) five (5) calendar days after being sent postage prepaid by registered mail, return receipt requested; or (ii) one (1) business day after being sent via facsimile with confirmatory notice by U.S. mail, to the respective parties as set forth above, or to such other address as either party may notify the other in writing.

Binding Nature . This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors, legal representatives and assigns. All materials generated pursuant to Section 1 or otherwise produced by SCAP for and on behalf of Client during the Term of this Agreement shall be the sole and exclusive property of Client.

Counterparts . This Agreement may be executed by any number of counterparts, each of which together shall constitute the same original document.

Amendments . No provisions of the Agreement may be amended, modified or waived, except in writing signed by all parties hereto.

Assignment . This Agreement cannot be assigned or delegated, by either party, without the prior written consent of the party to be charged with such assignment or delegation, and any unauthorized assignments shall be null and void without effect and shall immediately terminate the Agreement.

Applicable Law . This Agreement shall be construed in accordance with and governed by the laws of the State of California, without giving effect to its conflict of law principles. The parties hereby agree that any dispute(s) or claim(s) with respect to this Agreement of the performance of any obligations thereunder, shall be settled by arbitration and commenced and adjudicated under the rules of the American Arbitration Association. The arbitration shall take place in Los Angeles, California if commenced by either party. The arbitration shall be conducted before a panel of three (3) arbitrators, one appointed by each of the parties and the third selected by the two appointed arbitrators. The arbitrators in any arbitration proceeding to enforce this Agreement shall allocate the reasonable attorney’s fees, among one or both parties in such proportion as the arbitrators shall determine represents each party’s liability hereunder. The decision of the arbitrator shall be final and binding and may be entered into any court having proper jurisdiction to obtain a judgment for the prevailing party. In any proceeding to enforce an arbitration award, the prevailing party in such proceeding shall have the right to collect from the non-prevailing party, its reasonable fees and expenses incurred in enforcing the arbitration award (including, without limitation, reasonable attorney’s fees).

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If you are in agreement with the foregoing, please execute two copies of this Agreement in the space provided below and return them to the undersigned.

Very truly yours,

Siskey Capital, LLC

By: /s/ Todd D. Beddard

Todd D. Beddard

Chief Operating Officer

ACCEPTED AND AGREED TO THIS 29th DAY OF OCTOBER, 2013

Social Reality, Inc.

By: /s/ Christopher Miglino

By: Christopher Miglino,

Christopher Miglino

Chief Executive Officer

Page 6 of 6

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a) Certification

I, Christopher Miglino, certify that:

I have reviewed this report on Form 10-Q for the period ended September 30, 2013 of Social Reality, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: November 13, 2013

/s/ Christopher Miglino

Christopher Miglino,

Chief Executive Officer,

principal executive officer

EXHIBIT 31.2

Rule 13a-14(a)/15d-14(a) Certification

I, Christopher Miglino, certify that:

I have reviewed this report on Form 10-Q for the period ended September 30, 2013 of Social Reality, Inc.;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: November 13, 2013

/s/ Christopher Miglino

Christopher Miglino,

Chief Financial Officer,

principal financial and

accounting officer

EXHIBIT 32.1

Section 1350 Certification

In connection with the Quarterly Report of Social Reality, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2013 as filed with the Securities and Exchange Commission (the “Report”), I, Christopher Miglino, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to SS. 906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.

Dated: November 13, 2013

/s/Christopher Miglino

Christopher Miglino,

Chief Executive Officer,

principal executive officer,

Chief Financial Officer,

principal financial and

accounting officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.