Greetings and welcome to Social Reality’s 2016 Third Quarter Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Debra Chen, Director of Client Communications at IRTH Communications. Thank you, you may begin..

Good afternoon, everyone. I’d like to welcome all of you to Social Reality’s third quarter 2016 conference call. With us today are Social Reality’s Chief Executive Officer, Christopher Miglino; and Chief Financial Officer, J.P. Hannan.

Before I turn the call over to management, I would like to remind you that in this call, management’s prepared remarks contain forward-looking statements, which are subject to risks and uncertainties, and management may make additional forward-looking statements during the question-and-answer session.

These forward-looking statements are subject to risks and uncertainties and actual results may differ materially. When used in this call the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project and similar expressions as they relate to Social Reality, Inc., are, as such forward-looking statements.

Investors are cautioned that all forward-looking statements involve risks and uncertainties that may cause actual results to differ from those anticipated by Social Reality at this time. In addition, other risks are more fully described in Social Reality’s public filings with the U.S.

Securities and Exchange Commission, which can be reviewed at www.sec.gov. Finally, please make note that on today’s call management will refer to certain non-GAAP financial measures in which Social Reality excludes certain expenses from its GAAP financial results.

Please refer to Social Reality’s 2016 10-Q for a full reconciliation of its non-GAAP performance measures to the most comparable GAAP financial measures. Earlier today, November 14th, the company filed its 10-Q with the SEC and afterwards issued a press release announcing its financial results.

So participants in this call who may not have already done so, may wish to look at these documents as we provide summary of the results on this call. I would like to now turn this over to Social Reality’s CEO, Christopher Miglino, who will give an overview of the company’s business activities and developments for the third quarter of 2016.

He will then turn this over to J.P. Hannan who will provide an overview of the company’s operating and financial metrics. We will then open the call for Q&A.

Christopher?.

Thanks, Debra, I appreciate that. Hi, everyone. And thanks for joining the call today. We're really excited about hosting our call today as a newly NASDAQ listed company.

This has been a goal of ours since I cofounded the company in 2010 and our ability to accomplish this has been a strong testament to our management team’s execution we’ve been highly focused on getting to NASDAQ as a big goal and we've accomplished that. So that's really big thing to noticed for the company.

There are some other certainly exciting development at the company during this past quarter and in the last several weeks shortly after our uplisting we appointed Business Mogul Kathy Ireland, as a Chief Branding Advisor to help us identify top industry executives in the media, entertainment and advertising industry for building out an Advisory Board.

In June 2016 Kathy was ranked by Forbes as one of the 60 richest self-made women in America and in 2012 reported Kathy Ireland worldwide sales in excess of $2.5 billion.

I believe she continues to build one of the greatest brands in American history and we believe her knowledge in brand development and expertise in product definition, marketing and retail relationships will be invaluable to what we are building in the digital media space.

So we're very excited to have Kathy on the team and look forward to that prospering. We also announced the hiring of our new Chief Financial Officer, J. P. Hannan who's on the call with us today. J.P.

is a financial and broadcasting veteran and most recently served as Vice President, Treasurer and Chief Financial Officer of Cumulus Media, a NASDAQ listed company, which is the second largest radio station operator in the United States.

During his time as the CFO of Cumulus he was also the CFO of Modern Luxury Magazine if anybody seen those when you travel around the United States with in all the nice hotels. So it's the largest publishers of regional lifestyle magazine in the country. He has served in a number of executives capacities in the media space.

And we believe his leadership and financial prudence will be a great fit to the next chapter of our business. Those of you who closely follow our progress understand that this has been a pivotal year for Social Reality the first half of 2016 we launched and enhanced new products for our custom data management platforms.

We tripled our sales team infrastructure as a result our third quarter revenues generated strong top-line growth of 29%, reflecting the strength of our business and our relentless focus on providing our clients with the most innovative and advertising tools.

Our suite of offerings the SRAX platform technology, I like to talk about this because a lot of times there is people on the call that haven't heard this before.

But for those of you that are new to the story, I want to talk about our core digital platform offerings and what differentiate Social Reality from our point platform providers in the market.

Our digital offering is the digital solution platform and we're providing tools that brand marketers and content owners need to be more effective in the competitive digital advertising space. This allows us to offer an all-encompassing marketing services platform for our clients.

Thus far we’ve been able to successfully achieve superior performance from our proprietary suite of products, which includes our solutions platform for programmatic buyers and sellers, our SRAXmd pharma targeted advertising platform and SRAX Social Media platform for brands and publishers.

Our customer base consists of long-term clients who see the value of what we provide and we've been able to diversify that into new customer accounts as well. Our core elements of our business include SRAX, it's our programmatic solution platform for brand marketers and content owners.

SRAX is a core engine that delivers value for our clients by providing tools needed to effectively buy and sell in programmatic space. SRAXmd which is a healthcare focused programmatic platform that utilizes SRAX solution platform and allows pharma brands to reach healthcare professionals.

We've build a significant database of different types of healthcare professionals and help our clients to reach those professionals across many different platforms in a number of locations.

So an example of this is if a brand is looking to reach oncologists we have the ability to target our ads specifically to oncologists or cardiologists or whatever disease state that might be. And we're having a lot of success and a lot of growth in this area.

Our SRAX Social platform, which is a social media platform and complete management tool that allows brands to launch, distribute, track and optimize their social and digital media and consumer engagement campaigns. Our tools help brand identify who their true influences are and identify the key characteristics of those consumers.

We then able to build models against this first party data that can be used in what we call real time social problematic buying. That’s a feature that belongs into our SRAX engine.

We’ve launched the sraxsocial.com site everybody if you want to can login to that site and create an account for free and you can see the types of services that are being provided from a sraxsocial.com perspective.

SRAX APP, it’s a recently lunched product, which is a platform that allows publishers and content owners to launch native mobile applications through our SRAX APP platform. On October 13, 2016, our Class A common stock begin trading on the NASDAQ Capital Market under a new symbol SRAX to better reflect our core offering of our SRAX platform.

We believe this event will help generate increased visibility, better liquidity, greater access to capital and attract a broader range of institutional investors to prompt our growth initiative enhanced stockholder at value.

During the quarter we raised an additional $3.325 million in capital through the sale of equity securities and an additional $1.275 million in October 2016. During the third quarter we also entered into an accounts receivable factoring agreement with a goal of reducing our cost of capital and strengthening our balance sheet.

Operationally, we’ve spent the resources and continuing the development of number of products that are helping differentiate us in the digital advertising space.

These products include the launch of our SRAX Social Media platform, the launch of SRAX Genome our data management platform for custom advertising segments and integration of a number of new supply and demand side partners into our SRAX platform that are bringing mobile and data supply and demand to our partners.

These resources complement our core services across all digital platforms. So that may provide unique tools and improving advertising performance for our clients. We’ll continue diversifying our service offerings as the industry market opportunity evolves and expands.

With respect to the overall digital add space real-time bidding and programmatic advertising continue to be strong growth drivers and revenue generators and we believe that our platform will continue to generate substantial momentum in this enormous market opportunity.

And looking forward we believe that we are a leading company in the digital media industry and a disruptive leader in advertising customer connection to social media marketing space. Our entire team has worked diligently to establish the company as the leader in the solutions platform market.

From a traditional banner advertising to mobile video native and social media, our SRAX engine provides solution that helps brands and publishers maximize returns on the digital assets.

It’s a great time to be in the digital advertising space as it is still in its infancy and already a multibillion dollar market, we also believe that social reality is well position to capture growing portion of the spending due to current size of the problematic space and the social media market, as well as the expected continuation of rapid growth in the digital media space.

I'd now like to turn the call over to our recently appointed Chief Financial Officer, J.P. Hannan, who’ll provide an update on the financial performance.

J.P.?.

Thanks, Chris. I would like to now turn our focus now on to the third quarter 2016 financial summary. Revenues for the three months ended September 30, 2016 was $9.5 million compared to $7.4 million reported for the three months ended September 30, 2015.

The increase in revenues reflected an increase in revenues from our SRAX buy side and sell side clients and media bought and sold, as well as continuing growth in SRAXmd. These increases are offset by a continued decline in revenues from a significant Steel Media customer at significantly reduced margins.

Gross profit decreased to $2.5 million for the three months ended September 30, compared to $4.1 million for the same period in 2015. Gross margin for the quarter ended September 30, 2016 was 26.7% that compared to 55.4% for the same period in 2015.

Gross margins declined as a result of the percentage of our overall lower margin revenues attributable to a significant customer of our wholly owned subsidiary Steel Media.

Subsequent to September 30, we are seized to providing the high volume low margin business to this historic Steel Media client and now only offer at industry standard margin solutions. For the quarter ended September 30, 2016 adjusted EBITDA was negative $734,000 compared to a positive $774,000 in the third quarter of 2015.

The decrease in adjusted EBITDA loss was due to decreased revenue and lower margin on sales. The loss for operations was $1.3 million for the third quarter 2016 as compared to income from operations of $342,000 in the third quarter of 2015.

Company reported a net loss of $2.4 million or $0.40 per share for the three months ended September 30, 2016 and that compared to a net loss of $659,000 or $0.02 per share for the corresponding period of 2015. Cash and cash equivalents totaled $4.2 million at September 30, 2016.

Current assets and total assets were $8.9 million and $25.9 million respectively. Current liabilities and total liabilities were the same at $18.3 million.

The increase in current liabilities at September 30, 2016 reflected impart the reclassification of obligations under our credit facility to short-term reflecting the maturity date of that obligation on December 31, 2016. At September 30, 2016 the company had stockholders' equity of $7.6 million. And with that we'd now like to open up for questions..

Thank you. At this time we'll be conducting a question-and-answer session. [Operator Instructions]. There are no questions, at this time I'd like to turn the call back to Debra Chen for closing comments..

So with that I would like to thank all Social Reality stockholders for their participation on today's call and it's report for the company. This concludes our third quarter 2016 conference call. Thank you..

Thank you. This concludes today's call. You may disconnect your lines at this time. And we thank you for your participation..