UNITED STATES
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Documents Incorporated by Reference
[FD1]Based on historical practice, it is unlikely that an information statement will be filed within 120 days year-end, but this reserves that option. The second part is what will likely be applicable to Mobivity.
MOBIVITY HOLDINGS CORP.
ANNUAL REPORT ON FORM 10-K
FISCAL YEAR ENDED December 31, 2023
TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, or Form 10-K, contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially and adversely from those expressed or implied by such forward-looking statements. The forward-looking statements are contained principally in Item 1—”Business,” Item 1A—”Risk Factors” and Item 7—”Management’s Discussion and Analysis of Financial Condition and Results of Operations” but appear throughout the Form 10-K. Examples of forward-looking statements include, but are not limited to our expectations, beliefs or intentions regarding our potential product offerings, business, financial condition, results of operations, strategies or prospects and other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “opportunity,” “plan,” “potential,” “predicts,” “seek,” “should,” “will,” or “would,” and similar expressions and variations or negatives of these words. These forward-looking statements are based on the expectations, estimates, projections, beliefs and assumptions of our management based on information currently available to management, all of which are subject to change. Such forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and could cause our actual results and the timing of certain events to differ materially and adversely from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below in Item 1A – “Risk Factors”. Furthermore, such forward-looking statements speak only as of the date of this Form 10-K. We undertake no obligation to update or revise publicly any forward-looking statements to reflect events or circumstances after the date of such statements for any reason, except as otherwise required by law.
Part I
Item 1. Business
General Information
Mobivity Holdings Corp. (the “Company” or “us”, “our”, or “we”) is a Nevada corporation organized in 2008, which develops and operates proprietary platforms over which brick and mortar brands and digital first enterprises can conduct national and localized, data-driven marketing campaigns with unique targeting, incentivization and promotion to drive customer acquisition and loyalty. The company’s core technology platform, RecurrencyTM, enables:
| ● | Transformation of messy point-of-sale (POS) data collected from thousands of points of sale into usable intelligence. | |
| ● | Measurement, prediction, and ability to boost guest frequency and spend by channel. | |
| ● | Deployment and management of one-time use offer codes and attribution of sales accurately across every channel, promotion and media program. | |
| ● | Delivery of uniquely attributable 1:1 offers that power incentivized actions in digital environments like user acquisition, continued monetization, and activities taken in a digital environment. |
Our recurrency platform generates revenue in two ways. First, delivered as a Software-as-a-Service (“SaaS”) platform used by leading convenience and quick service restaurant brands to build and engage with their loyal customers. Second, through our Connected RewardsTM business, our platform enables and powers unique incentivized programs in digital environments. Through our Connected Rewards platform, we enable businesses to reward their users and customers with products in the real world for actions taken in a digital environment. Our customers include some of the largest mobile casual game publishers in the world and some of the largest convenience and quick service restaurant brands in the world. The programs we run for our customers include incentivized user acquisition where users are rewarded with a real-world product, like a free or discounted burger, for downloading a mobile game, and rewarded play where users receive real world products for accomplishing activities in game, like achieving a certain level or winning enough points. We charge our customers for each unique action where our rewards are delivered, these include a per install or per individual engagement fee.
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The Recurrency Platform
The Recurrency™ platform unlocks valuable POS and mobile data to help transform customer transactions into actionable and attributable marketing insights and power Connected Rewards interactions. Our technology analyzes transaction data to provide insights, delivers mobile rewards and powers redemption at all potential points of sale (i.e., mobile, in-store, in-app), and provides 100% attribution of the transaction. In Connected Rewards applications, Recurrency is integrated into mobile gaming platforms and mobile attribution partners to deliver the necessary data to deliver rewards for in-game actions.
Company Strategy
Our objective is to build an industry-leading mobile marketing technology product that bridges between in-person and digital environments powering a unique and defensible alternative for digital-first businesses to engage and retain their customers by rewarding them with real-world products and offers. The key elements to our strategy are:
| ● | Exploit the competitive advantages and operating leverage of our technology platform. The core of our business is our ability to integrate our Recurrency platform into digital environments and deliver rewards based on activities taken in a digital environment. Because of our long history operating as a loyalty marketing solution we believe we have a defensible head start and ability to continue building products and features that will retain our competitive advantage. | |
| ● | Evolve our sales and customer support infrastructure to uniquely meet the needs of the quickly evolving digital marketing universe. We have quickly evolved our organization and business to fill a gap in the digital marketing landscape. Through continued innovation and emphasis on automation and predictive analytics we believe we will expand our niche and create further value for our Connected Rewards Customers. | |
| ● | Acquire complementary businesses and technologies. We will continue to search and identify unique opportunities which we believe will enhance our product features and functionality, revenue goals, and technology. We intend to target companies with some or all of the following characteristics: (1) an established revenue base; (2) strong and defensible technology services that further build out and differentiate our platform; (3) opportunities for substantial expense reductions through integration into our platform; and (4) strong sales teams. Our acquisitions have historically been consummated through the issuance of a combination of our common stock and cash. | |
| ● | Build our intellectual property portfolio. We currently have nine issued patents that we believe have significant potential application in the technology industry. We plan to continue our investment in building a strong intellectual property portfolio. |
While these are the key elements of our current strategy, there can be no guarantees that our strategy will not change or that our strategy will be successful.
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Recent Developments
Secured Notes 2023
During the year ended December 31, 2023, we issued to one of our directors, secured notes in the principal aggregate amount of $700,000, that was rolled into the Credit Facility, which are due and payable in 24 equal payments beginning January 31, 2023 (the “2022 Secured Notes”) The 2022 Secured Notes bear interest on the unpaid balance at the rate of fifteen percent (15%) per annum. The Company may prepay the advances and accrued interest, in whole or in part, without notice, penalty or charge. As of December 31, 2023, we have $5,873,125 as a remaining balance of the 2022 Secured Notes and accrued interest of $812,928. A total of $391,319 of accrued interest was settled into 362,335 shares of common stock and the Company recorded a loss on debt settlement of interest payable $10,315. A total of $425,502 in accrued interest was accrued for the third and fourth quarter of 2023 and recorded to equity payable.
On November 13, 2022, the Company entered into an amended and restated credit facility agreement with Thomas B. Akin, a director of the Company (the “A&R Credit Agreement”) and a corresponding convertible note in the amount of $4,466,043 (the “Convertible Note”). The A&R Credit Agreement amends and restates the current Credit Agreement and allows for the Company to borrow up to $6 million in advances. The Convertible Note accrues interest monthly at 15% per annum. Principal and accrued interest payments are due in 24 monthly installments under the Convertible Note beginning on January 31, 2023 and continuing on the last day of each of the next 23 months thereafter. The Convertible Note and all accrued interest thereon are convertible into shares of our common stock, from time to time, at the option of the holder thereof, at a conversion price per share equal to 85% of the volume-weighted average price of our common stock quoted on the OTCQB ® Venture Market operated by OTC Markets Group Inc. over the thirty (30) trading days immediately preceding such date (the “Conversion Price”). The Convertible Note and all accrued interest thereon will be automatically converted into common stock at the Conversion Price on the dated that is five business days prior to the date on which the Company becomes listed on a national securities exchange if all listing requirements have been satisfied by the Company (other than the Company satisfying any stockholders’ equity requirement to be listed on such national exchange).
The foregoing descriptions of the A&R Credit Agreement and Convertible Note does not purport to be complete and are qualified in its entirety by reference to the A&R Credit Agreement and Convertible Note, which were filed with the United States Securities and Exchange Commission (the “SEC”) as Exhibit 10.1 and 10.2 respectively, to the Company’s Current Report on Form 8-K dated November 11, 2022, and Amendment No. 1 to the A&R Credit Agreement and Convertible Note filed with the SEC as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 31, 2023.
Unsecured Promissory Notes 2022
During the year ended December 31, 2023, we issued to Talkot Capital LLC, unsecured notes in the principal aggregate amount of $ 271,875, which are due and payable two years after issuance (the “2022 Unsecured Notes”). The 2022 Unsecured Notes bear interest on the unpaid balance at the rate of fifteen percent (15%) per annum. The Company may prepay the advances and accrued interest, in whole or in part, without notice, penalty or charge. As of December 31, 2023, we have $271,875 as a remaining balance of these 2023 Unsecured Notes issued to Talkot Capital and accrued interest of $0. A total of $10,352 of interest was converted into 9,585 shares of common stock and the Company recorded a loss on settlement of interest payable of $542.A total of $20,617 was accrued and recorded to equity payable.
2023 Warrant Exercises
During March 2023, 15 warrant holders exercised their common stock purchase warrant for 3,587,487 shares at the exercise price of $1.00 per share, resulting in additional capital of $3,557,487. As an inducement for the holder’s exercise of the warrants, we issued the holders’ 1,793,745 new warrants to purchase common stock at $2.00 per share over a three-year period expiring in February 2025. The Company recorded $577,000 of stock-based expense related to warrants issued during the warrant conversion offer on February 14, 2023. The total estimated value of the warrants using the Black-Scholes Model is based on a volatility rate of 63% and an option fair value of $0.3216.
During August and September of 2023, a total of 18 warrant holders exercised their common stock purchase warrant for 1,960,976 shares at the exercise price of $.82 per share, resulting in additional capital of $1,608,000. As an inducement for the holder’s exercise of the warrants, we issued the holders’ 3,921,952 new warrants to purchase common stock at $.82 per share over a one and three-year period expiring between August and September 2026. The Company recorded $1,146,562 of stock-based expense related to warrants issued during the warrant conversion offer on September 6, 2023. The total estimated value of the warrants using the Black-Scholes Model is based on an average volatility rate of 63% and 73% and an option fair value of between $0.21 and $0.40.
2023 Convertible Notes
During the third quarter of 2023 the Company issued Convertible Notes to five related parties in the amount of $2,000,000. In addition, the Company issued Convertible Notes to 10 shareholders in the amounts of $250,000. Principal and accrued interest payments are due in full on three years from the date they are funded under the Convertible Note. The Convertible Note and all accrued interest thereon are convertible into shares of our common stock, from time to time, at the option of the holder thereof, at a conversion price per share equal to the larger of either $0.50 or of the volume-weighted average price of our common stock quoted on the OTCQB ® Venture Market operated by OTC Markets Group Inc. over the thirty (30) trading days immediately preceding such date (the “Conversion Price”). For value received the shareholders received 666,668 warrants to purchase common shares at and exercise price of $0.60 per share over a three year period.
Industry Background
Traditionally, only sophisticated e-commerce brands, such as Amazon, were capable of personalizing and targeting their marketing to consumers as they navigated online shopping experiences that tracked their every move, all the way to check out. But despite the scale and success of e-commerce, it still accounts for just around 15% of all commerce conducted in the U.S. The other 85% of “offline” merchants struggle to leverage data to combine with digital marketing channels and replicate the same personalized marketing tactics employed by successful e-commerce operators. Particularly, merchants are challenged with connecting purchase data collected by traditional point-of-sale terminals and mapping those transactions back to consumers to ensure that follow on marketing messages are personalized to the consumers purchase history.
In a similar vein, digital first businesses like mobile casual games and streaming services have encountered a seismic shift in the way they acquire and retain customers because of new constraints on privacy and targeting. These businesses rely on campaigns driven by data captured from users, aggregated and compiled into datasets that allow deep targeting and segmentation of advertising campaigns. These businesses live and die by their ability to acquire and retain users; the inability to target potential users has thrown a wrench in these efforts.
Marketing spend in digital environments is in excess of $100 billion per year, yet brick and mortar businesses and digital first businesses largely exist in different environments, their technology does not communicate and they have almost no ability to bridge between the real world and the digital world. This limits their ability to acquire and retain customers in an already volatile marketing environment. If consumers had the ability to earn and redeem real-world products in digital environments and vice versa, this would open the door to new marketing opportunities and allow for continued acquisition and retention. Mobivity aims to solve this problem with our Recurrency platform and Connected Rewards platform that bridge between digital and brick and mortar environments.
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The Mobivity Solution
Our Recurrency platform is designed to leverage point-of-sale data, along with cognitive computing, to increase visits, spend, and loyalty from consumers. We do this by capturing transaction detail, analyzing the data, and motivating customers and employees to take actions.
| ● | Capture: Recall that more than 90% of our economy still functions “offline”. Our Recurrency solution plays an integral part in bringing brick and mortar businesses into the digital future by creating an extensible point of access to their POS data. Recapture is a lightweight software client that can be installed in just about any POS system and immediately enables applications to operate off of real-time POS data. This technology allows us to run many of our connected rewards programs by allowing access to data from POS and enabling redemption of rewards delivered for actions taken in digital environments. | |
| ● | Analyze. Often times marketers spend a large portion of their budget on marketing programs with little to no visibility into attributable sales. Our Recurrency solution allows for easy access to POS data enabling full attribution of our campaigns, along with potentially linking offline POS data to other forms of digital marketing such as connected rewards. | |
| ● | Motivating Consumers. We motivate consumers and employees through our Connected Rewards solution by powering and delivering real-world rewards for actions taken in a digital environment. |
In the future, we intend to develop additional platform features with the goal of driving additional value by helping digital first businesses and brick and mortar brands acquire and engage customers in increasingly unique and valuable ways.
Marketing and Sales
We market and sell the services offered over our proprietary platform directly through our own sales force, via resellers, and in some cases through agents.
| ● | Direct Sales. Our direct sales force is predominantly comprised of a team of representatives employed by us to promote and sell our services both domestically and internationally. | |
| ● | Resellers. We sell our services via wholesale pricing of licensing and transactional fees to various resellers who market and sell the Mobivity services under their own brand. | |
| ● | Agents. We also engage independent agents to market and sell our services under the Mobivity brand in return for payment of a commission or revenue share for customers they introduce to us. | |
| ● | In addition to our direct and indirect sales channels, we also market our services online through our website, Facebook, Twitter, LinkedIn, and other online channels. We also participate in various trade and industry events to build awareness and promote exposure to our services and brand. |
Our traditional loyalty marketing services are predominantly marketed and sold in the form of a recurring software licensing fee that is determined by desired features and the number of physical locations our customers would like to deploy the services in. For example, a customer who exclusively utilizes our SMS/MMS feature for one location will pay a much lower recurring licensing fee than a marketer who desires our full breadth of product features and needs to drive localized marketing campaigns across 500 locations in various cities or locales. Our Connected Rewards services are marketed and sold on unique fee-for action contracts such as a fee for downloading an app, or a fee for achieving a certain action in a digital app, or acquiring a loyalty member.
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Research and Development
We have developed an internal and external software development team with many years of experience in the mobile advertising and marketing industries. Our research and development activities are focused on enhancements to our platform, including extending our technology into payment processing, location-based services, application analytics, and other technical opportunities in the evolving mobile industry.
Our total engineering, research and development expenditures in 2023 and 2022 were $3,515,705 and $3,583,773, respectively.
Competition
Combining POS data, cognitive computing, and various marketing applications is relatively new. The majority of our competitors are start-ups or early stage growth companies helping to pioneer the technology necessary to power digital marketing in new, valuable, and attributable channels.
We believe that the key competitive factors that differentiate us from our competitors include:
| ● | Intellectual Property. We currently own nine patents that cover various approaches to facilitating SMS/MMS text messaging solutions and manipulating receipt content. |
Customers
During the years ended December 31, 2023 and 2022 two customers accounted for 55% and 51% of our revenues, respectively.
Seasonality
Our business, as is typical of companies in our industry, is highly seasonal. This is primarily due to traditional marketing and advertising spending being heaviest during the holiday season, while brands, advertising agencies, mobile operators and media companies often close out annual budgets towards the end of the calendar year. Seasonal trends have historically contributed to, and we anticipate, will continue to contribute to fluctuations in our quarterly results, including fluctuations in sequential revenue growth rates.
Intellectual Property
We regard the protection of our developed technologies and intellectual property rights as an important element of our business operations and crucial to our success. We rely primarily on a combination of patent laws, trademark laws, copyright laws, trade secrets, confidentiality procedures and contractual provisions to protect our proprietary technology. We require our employees, consultants and advisors to enter into confidentiality agreements. These agreements provide that all confidential information developed or made known to the individual during the course of the individual’s relationship with us is to be kept confidential and not disclosed to third parties except under specific circumstances. In the case of our employees, the agreements provide that all of the technology which is conceived by the individual during the course of employment is our exclusive property. The development of our technology and many of our processes are dependent upon the knowledge, experience and skills of key scientific and technical personnel.
As of the date of this report we own nine patents. U.S. Patent numbers 7,991,388 B1 and 8,244,216 B1 were issued on August 2, 2011 and August 14, 2012, respectively. These patents cover a geo-bio-metric personal identification number, a service that authenticates a user from a feature phone or smart phone using a number of mobile attainable attributes: geolocation, facial image, accelerometer (which measures the physical orientation or movement of the device itself), and text messaging. The purpose of the geo-bio-metric PIN service is to authenticate a user while verifying the following: the user is currently using his or her other phone; the user is at the location that their phone is at; the user is not at another location and using their phone through a proxy; and an impostor is not using the phone. These patents will expire in May of 2031.
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U.S. Patent numbers 8,463,306 and 8,818,434 were issued on June 11, 2013 and August 26, 2014, respectively. U.S. Patent 9,307,430 was issued on April 5, 2016. These patents cover a method and system for testing a SMS/MMS text messaging network. The method and system allows for real-time testing of the initiation and completion of SMS/MMS text messages and any delivery delays across the major American mobile phone carriers, and accurately measures the progress on SMS/MMS broadcasts and records when a broadcast has been completed. These patents will expire in May 2032.
U.S Patent number 9,495,671 was granted on November 15, 2016. U.S. Patent 9,727,853 was issued on August 8, 2017. These patents cover a system to generate value added messages on receipts printed by POS systems based on various rules determined by information conveyed on the purchase receipt such as location, time of day, or other purchase data. The patent application claims priority to a patent application filed in 2006. These patents will expire in March 2027.
U.S. Patent number 10,475,017 B2 was granted on November 12, 2019. This patent covers a POS terminal and a computer-readable storage medium that generates transaction information for a commercial transaction, the transaction information including customer information and purchase information. The POS terminal may generate nutritional information based on the purchase information. The POS terminal may send the customer information, the purchase information, and location information identifying a location of the POS terminal to an advertising server and may receive responsive advertising content from the advertising server. The POS terminal may print a receipt including the transaction information, the nutritional information, and the advertising content. These patents will expire in March 2027.
Our issued and any future patents that we may issue may not survive a legal challenge to their scope, validity or enforceability, or provide significant protection for us. The failure of our patents, or the failure of our copyright and trade secret laws to adequately protect our technology, might make it easier for our competitors to offer similar products or technologies. In addition, patents may not issue from any of our current or any future applications.
As of the date of this report, we own trademarks for Boomtext, SmartReceipt, Livelenz, and several trademarks from the Belly acquisition.
Government Regulation
The growth and development of the mobile messaging market and the market for electronic storage of personal information has resulted in a variety of stringent consumer protection laws, many of which impose significant burdens on companies that store personal information. Depending on the products and services that they offer, mobile data service providers may be subject to regulations and laws applicable to providers of mobile, Internet and VOIP services, including domestic and international laws and regulations relating to user privacy and data protection, defamation, pricing, advertising, taxation, gambling, sweepstakes, promotions, billing, real estate, consumer protection, accessibility, content regulation, quality of services, telecommunications, mobile, television and intellectual property ownership and infringement. We expect that the regulation of our industry generally will continue to increase and that we will be required to devote increasing amounts of legal and other resources to address this regulation. In addition, the application of existing domestic and international laws and regulations relating to issues such as user privacy and data protection, marketing, advertising, consumer protection and mobile disclosures in many instances is unclear or unsettled.
In addition to its regulation of wireless telecommunications providers generally, the U.S. Federal Communications Commission, or FCC, has examined, or is currently examining, how and when consumers enroll in mobile services, what types of disclosures consumers receive, what services consumers are purchasing and how much consumers are charged. In addition, the Federal Trade Commission, or FTC, has been asked to regulate how mobile marketers can use consumers’ personal information. Consumer advocates claim that many consumers do not know when their information is being collected from cell phones and how such information is retained, used and shared with other companies. Consumer groups have asked the FTC to identify practices that may compromise privacy and consumer welfare; examine opt-in procedures to ensure consumers are aware of what data is at issue and how it will be used; investigate marketing tactics that target children; and create policies to halt abusive practices. The FTC has expressed interest, in particular, in the mobile environment and services that collect sensitive data, such as location-based information.
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The principal laws and regulations that pertain to us and our customers in connection with their utilization of our platform, include:
| ● | Deceptive Trade Practice Law in the U.S. The FTC and state attorneys general are given broad powers by legislatures to curb unfair and deceptive trade practices. These laws and regulations apply to mobile marketing campaigns and behavioral advertising. The general guideline is that all material terms and conditions of the offer must be “clearly and conspicuously” disclosed to the consumer prior to the buying decision. The balancing of the desire to capture a potential customer’s attention, while providing adequate disclosure, can be challenging in the mobile context due to the lack of screen space available to provide required disclosures. | |
| ● | Behavioral Advertising. Behavioral advertising is a technique used by online publishers and advertisers to increase the effectiveness of their campaigns. Behavioral advertising uses information collected from an individual’s web-browsing behavior, such as the pages they have visited or the searches they have made, to select which advertisements to display to that individual. This data can be valuable for online marketers looking to personalize advertising initiatives or to provide geo-tags through mobile devices. Many businesses adhere to industry self-governing principles, including an opt-out regime whereby information may be collected until an individual indicates that he or she no longer agrees to have this information collected. The FTC and EU member states are considering regulations in this area, which may include implementation of a more rigorous opt-in regime. An opt-in policy would prohibit businesses from collecting and using information from individuals who have not voluntarily consented. Among other things, the implementation of an opt-in regime could require substantial technical support and negatively impact the market for our mobile advertising products and services. A few states have also introduced bills in recent years that would restrict behavioral advertising within the state. These bills would likely have the practical effect of regulating behavioral advertising nationwide because of the difficulties behind implementing state-specific policies or identifying the location of a particular consumer. There have also been a large number of class action suits filed against companies engaged in behavioral advertising. | |
| ● | Behavioral Advertising-Privacy Regulation. Our business is affected by U.S. federal and state, as well as EU member state and foreign country, laws and regulations governing the collection, use, retention, sharing and security of data that we receive from and about our users. In recent years, regulation has focused on the collection, use, disclosure and security of information that may be used to identify or that actually identifies an individual, such as an Internet Protocol (“IP”) address or a name. Although the mobile and Internet advertising privacy practices are currently largely self-regulated in the U.S., the FTC has conducted numerous discussions on this subject and suggested that more rigorous privacy regulation is appropriate, including regulation of non-personally identifiable information which could, with other information, be used to identify an individual. Within the EU, member state data protection authorities typically regard IP addresses as personal information, and legislation adopted recently in the EU requires consent for the placement of a cookie on a user device. In addition, EU data protection authorities are following with interest the FTC’s discussions regarding behavioral advertising and may follow suit by imposing additional privacy requirements for mobile advertising practices. | |
| ● | Marketing-Privacy Regulation. In addition, there are U.S. federal and state laws and EU member state and other country laws that govern SMS/MMS and telecommunications-based marketing, generally requiring senders to transmit messages (including those sent to mobile devices) only to recipients who have specifically consented to receiving such messages. U.S. federal, EU member state and other country laws also govern e-mail marketing, generally imposing an opt-out requirement for emails sent within an existing business relationship. | |
| ● | SMS/MMS and Location-Based Marketing Best Practices and Guidelines. We voluntarily comply with the guidelines of the Mobile Marketing Association, or MMA, a global association of 700 agencies, advertisers, mobile device manufacturers, wireless operators and service providers and others interested in the potential of marketing via the mobile channel. The MMA has published a code of conduct and best practices guidelines for use by those involved in mobile messaging activities. The guidelines were developed by a collaboration of the major carriers and they require adherence to them as a condition of service. We voluntarily comply with the MMA code of conduct, which generally require notice and user consent for delivery of location-based services. In addition, the Cellular Telephone Industry Association, or CTIA, has developed Best Practices and Guidelines to promote and protect user privacy regarding location-based services. | |
| ● | TCPA. The United States Telephone Consumer Protection Act, or TCPA, prohibits unsolicited voice and text calls to cell phones through the use of an automatic telephone-dialing system (“ATDS”) unless the recipient has given prior consent. The statute also prohibits companies from initiating telephone solicitations to individuals on the national Do-Not-Call list, and restricts the hours when such messages may be sent. Violations of the TCPA can result in statutory damages of $500 per violation (i.e., for each individual text message). U.S. state laws impose additional regulations on voice and text calls. We believe that our platform does not employ an ATDS within the meaning of the TCPA based on case law construing that term. | |
| ● | CAN-SPAM. The U.S. Controlling the Assault of Non-Solicited Pornography and Marketing Act, or CAN SPAM Act, prohibits all commercial e-mail messages, as defined in the law, to mobile phones unless the device owner has given “express prior authorization.” Recipients of such messages must also be allowed to opt-out of receiving future messages the same way they opted-in. Senders have ten business days to honor opt-out requests. The FCC has compiled a list of domain names used by wireless service providers to which marketers may not send commercial e-mail messages. Senders have 30 days from the date the domain name is posted on the FCC site to stop sending unauthorized commercial e-mail to addresses containing the domain name. Violators are subject to fines of up to $6.0 million and up to one year in jail for some spamming activities. Carriers, the FTC, the FCC, and State Attorneys General may bring lawsuits to enforce alleged violations of the Act. |
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| ● | Communications Privacy Acts. Foreign and U.S. federal and state laws impose liability for intercepting communications while in transit or accessing the contents of communications while in storage. EU member state laws also require consent for our receiving this information, and if our carrier customers fail to obtain such consent we could be subjected to civil or even criminal penalties. | |
| ● | Security Breach Notification Requirements. EU member state laws require notice to the member state data protection authority of a data security breach involving personal data if the breach poses a risk to individuals. In addition, Germany enacted a broad requirement to notify individuals in the event of a data security breach that is likely to be followed by notification requirements to data subjects in other EU member states. In the U.S., various states have enacted data breach notification laws, which require notification of individuals and sometimes state regulatory bodies in the event of breaches involving certain defined categories of personal information. Japan and Uruguay have also enacted security breach notice requirements. This new trend suggests that breach notice statutes may be enacted in other jurisdictions, including by the U.S. at the federal level, as well. | |
| ● | Children. The Children’s Online Privacy Protection Act prohibit the knowing collection of personal information from children under the age of 13 without verifiable parental consent, and strictly regulate the transmission of requests for personal information to such children. Other countries do not recognize the ability of children to consent to the collection of personal information. In addition, it is likely that behavioral advertising regulations will impose special restrictions on use of information collected from minors for this purpose. | |
| ● | Data Privacy Acts. Individual states and countries have enacted or are moving forward with privacy compliance rules based on industry and types of data collected, such as the California Consumer Privacy Act (“CCPA”), Nevada’s Senate Bill 220 and the EU’s General Data Protection Regulation (“GDPR”). The acts provide residents the right to know what data is being collected about them and have access to it, whether that information is sold and the ability to refuse that data being sold, as well as the ability to opt out of its collection. Penalties for non-compliance vary by state and country, for instance the maximum penalty of the CCPA is $7,500 for intentional violations. The largest financial impact of CCPA on a business is the provisioning of the right of consumers to bring forward lawsuits. These situations may arise from instances where their “non-encrypted or non-redacted personal information” is breached, regardless of the harm done to the data. Under the CCPA, consumers can collect between $100 and $750 for each event. If the damages are greater than $750, then the consumer may receive even more. |
Employees
As of April 12, 2024, we had 37 employees, consisting of 19 full-time in research and development, 15 full-time in sales and marketing, and 3 full-time in general and administrative.
Available Information
The Company maintains a website at www.mobivity.com, where our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act can be found.
Item 1A. Risk Factors.
Risks Relating to Our Business
We may need additional financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all. As of December 31, 2023, we had working capital deficit of $6,596,741.We raised $2.6 million in cash from the exercise of warrants in February 2022 and we raised $2.1 million in Private Placement funding in 2022 In addition, we raised $3.6 million from the exercise of warrants in the first quarter of 2023. While we believe that our additional cash from our warrant conversion along with our expected cash flow from operations, may not be sufficient to fund our 12-month plan of operations, there can be no assurance that we will not require significant additional capital within 12 months. Also, we expect that we may require additional capital beyond the next 12 months unless we are able to achieve and maintain a profitable operation. In the event we require additional capital we will endeavor to raise additional funds through various financing sources, including the sale of our equity and debt securities and the procurement of commercial debt financing. However, there can be no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to expand or continue our business as desired and operating results may be adversely affected. Any debt financing will increase expenses and must be repaid regardless of operating results and may involve restrictions limiting our operating flexibility. If we issue equity securities to raise additional funds, the percentage ownership of our existing stockholders will be reduced, and our stockholders may experience additional dilution in net book value per share.
Our ability to obtain needed financing may be impaired by such factors as the capital markets, both generally and specifically in our industry, and the fact that we are not yet profitable, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, we may be required to reduce or even cease operations.
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Our sales efforts to large enterprises require significant time and effort and could hinder our ability to expand our customer base and increase revenue. Attracting new customers to our large enterprise division requires substantial time and expense, especially in an industry that is so heavily dependent on personal relationships with executives. We cannot assure that we will be successful in establishing new relationships or maintaining or advancing our current relationships. For example, it may be difficult to identify, engage and market to customers who do not currently perform mobile marketing or advertising or are unfamiliar with our current services or platform. Further, many of our customers typically require input from one or more internal levels of approval. As a result, during our sales effort, we must identify multiple people involved in the purchasing decision and devote a sufficient amount of time to presenting our products and services to those individuals. The complexity of our services often requires us to spend substantial time and effort assisting potential customers in evaluating our products and services including providing demonstrations and benchmarking against other available technologies. We expect that our sales process will become less burdensome as our products and services become more widely known and used. However, if this change does not occur, we will not be able to expand our sales effort as quickly as anticipated and our sales will be adversely affected.
We may not be able to enhance our platform to keep pace with technological and market developments, or to remain competitive against potential new entrants in our markets. The market for mobile marketing and advertising services is emerging and is characterized by rapid technological change, evolving industry standards, frequent new product introductions and short product life cycles. Our current platform and services may not in the future be acceptable to marketers and advertisers. To keep pace with technological developments, satisfy increasing customer requirements and achieve acceptance of our marketing and advertising campaigns, we will need to enhance our current mobile marketing solutions and continue to develop and introduce on a timely basis new, innovative mobile marketing services offering compatibility, enhanced features and functionality on a timely basis at competitive prices. Our inability, for technological or other reasons, to enhance, develop, introduce and deliver compelling mobile marketing services in a timely manner, or at all, in response to changing market conditions, technologies or customer expectations could have a material adverse effect on our operating results or could result in our mobile marketing services platform becoming obsolete. Our ability to compete successfully will depend in large measure on our ability to maintain a technically skilled development and engineering staff and to adapt to technological changes and advances in the industry, including providing for the continued compatibility of our mobile marketing services platform with evolving industry standards and protocols. In addition, as we believe the mobile marketing market is likely to grow substantially, other companies which are larger and have significantly more capital to invest than us may emerge as competitors. For example, in August of 2019 Attentive Mobile raised $40M in private venture financing. Similarly, in November of 2019, Punchh raised $40M in private venture funding. New entrants could seek to gain market share by introducing new technology or reducing pricing. This may make it more difficult for us to sell our products and services, and could result in increased pricing pressure, reduced profit margins, increased sales and marketing expenses or the loss of market share or expected market share, any of which may significantly harm our business, operating results and financial condition.
Our services are provided on mobile communications networks that are owned and operated by third parties who we do not control and the failure of any of these networks would adversely affect our ability to deliver our services to our customers. Our mobile marketing and advertising platform is dependent on the reliability of mobile operators who maintain sophisticated and complex mobile networks. Such mobile networks have historically, and particularly in recent years, been subject to both rapid growth and technological change. If the network of a mobile operator with which we are integrated should fail, including because of new technology incompatibility, the degradation of network performance under the strain of too many mobile consumers using it, or a general failure from natural disaster or political or regulatory shut-down, we will not be able provide our services to our customers through such mobile network. This in turn, would impair our reputation and business, potentially resulting in a material, adverse effect on our financial results.
If our platform does not scale as anticipated, our business will be harmed. We must be able to continue to scale to support potential ongoing substantial increases in the number of users in our actual commercial environment and maintain a stable service infrastructure and reliable service delivery for our mobile marketing and advertising campaigns. In addition, we must continue to expand our service infrastructure to handle growth in customers and usage. If our mobile marketing services platform does not efficiently and effectively scale to support and manage a substantial increase in the number of users while maintaining a high level of performance, the quality of our services could decline and our business will be seriously harmed. In addition, if we are unable to secure data center space with appropriate power, cooling and bandwidth capacity, we may not be able to efficiently and effectively scale our business to manage the addition of new customers and overall mobile marketing campaigns.
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The success of our business depends, in part, on wireless carriers continuing to accept our customers’ messages for delivery to their subscriber base. We depend on wireless carriers to deliver our customers’ messages to their subscriber base. Wireless carriers often impose standards of conduct or practice that significantly exceed current legal requirements and potentially classify our messages as “spam,” even where we do not agree with that conclusion. In addition, the wireless carriers use technical and other measures to attempt to block non-compliant senders from transmitting messages to their customers; for example, wireless carriers block short codes or Internet Protocol addresses associated with those senders. There can be no guarantee that we, or short codes registered to us, will not be blocked or blacklisted or that we will be able to successfully remove ourselves from those lists. Although our services typically require customers to opt-in to a campaign, minimizing the risk that our customers’ messages will be characterized as spam, blocking of this type could interfere with our ability to market products and services of our customers and communicate with end users and could undermine the effectiveness of our customers’ marketing campaigns. To date we have not experienced any material blocking of our messages by wireless carriers, but any such blocking could have an adverse effect on our business and results of operations.
We depend on third party providers for a reliable Internet infrastructure and the failure of these third parties, or the Internet in general, for any reason would significantly impair our ability to conduct our business. We outsource all of our data center facility management to third parties who host the actual servers and provide power and security in multiple data centers in each geographic location. These third-party facilities require uninterrupted access to the Internet. If the operation of our servers is interrupted for any reason, including natural disaster, financial insolvency of a third-party provider, or malicious electronic intrusion into the data center, our business would be significantly damaged. As has occurred with many Internet-based businesses, on occasion in the past, we have been subject to “denial-of-service” attacks in which unknown individuals bombarded our computer servers with requests for data, thereby degrading the servers’ performance. While we have historically been successful in relatively quickly identifying and neutralizing these attacks, we cannot be certain that we will be able to do so in the future. If either a third-party facility failed, or our ability to access the Internet was interfered with because of the failure of Internet equipment in general or we become subject to malicious attacks of computer intruders, our business and operating results will be materially adversely affected.
Failure to adequately manage our growth may seriously harm our business. We operate in an emerging technology market and have experienced, and may continue to experience, significant growth in our business. If we do not effectively manage our growth, the quality of our products and services may suffer, which could negatively affect our brand and operating results. Our growth has placed, and is expected to continue to place, a significant strain on our managerial, administrative, operational and financial resources and our infrastructure. Our future success will depend, in part, upon the ability of our senior management to manage growth effectively. This will require us to, among other things:
| ● | implement additional management information systems; | |
| ● | develop additional levels of management within our company; | |
| ● | locate additional office space in various countries; and | |
| ● | maintain close coordination among our engineering, operations, legal, finance, sales and marketing and customer service and support organizations. |
Moreover, as our sales increase, we may be required to concurrently deploy our services infrastructure at multiple additional locations or provide increased levels of customization. As a result, we may lack the resources to deploy our mobile marketing services on a timely and cost-effective basis. Failure to accomplish any of these requirements would seriously harm our ability to deliver our mobile marketing services platform in a timely fashion, fulfill existing customer commitments or attract and retain new customers.
The gathering, transmission, storage and sharing or use of personal information could give rise to liabilities or additional costs of operation as a result of governmental regulation, legal requirements, civil actions or differing views of personal privacy rights. We transmit and store a large volume of personal information in the course of providing our services. Federal, state and international laws and regulations govern the collection, use, retention, sharing and security of data that we receive from our customers and their users. Any failure, or perceived failure, by us to comply with U.S. federal, state, or international privacy or consumer protection-related laws, regulations or industry self-regulatory principles could result in proceedings or actions against us by governmental entities or others, which could potentially have an adverse effect on our business, operating results and financial condition. Additionally, we may also be contractually liable to indemnify and hold harmless our customers from the costs or consequences of inadvertent or unauthorized disclosure of their customers’ personal data which we store or handle as part of providing our services.
The interpretation and application of privacy, data protection and data retention laws and regulations are currently unsettled in the U.S. and internationally, particularly with regard to location-based services, use of customer data to target advertisements and communication with consumers via mobile devices. Such laws may be interpreted and applied inconsistently from country to country and inconsistently with our current data protection policies and practices. Complying with these varying international requirements could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business, operating results or financial condition.
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As privacy and data protection have become more sensitive issues, we may also become exposed to potential liabilities as a result of differing views on the privacy of personal information. These and other privacy concerns, including security breaches, could adversely impact our business, operating results and financial condition.
In the U.S., we have voluntarily agreed to comply with wireless carrier technological and other requirements for access to their customers’ mobile devices, and also trade association guidelines and codes of conduct addressing the provision of location-based services, delivery of promotional content to mobile devices and tracking of users or devices for the purpose of delivering targeted advertising. We could be adversely affected by changes to these requirements, guidelines and codes, including in ways that are inconsistent with our practices or in conflict with the rules or guidelines in other jurisdictions.
We currently rely on a small concentration of customers to use our products to generate our revenues, and the loss or change in any of these significant relationships could materially reduce our revenues. Although we believe we have a good relationship with these customers, our contracts with these customers are short-term in nature. Should these customers choose to terminate their contracts with us or if material events occur that are detrimental to these customers or their operations, it could have a significant negative impact on our financial performance.
We currently operate in limited vertical markets. Our customers primarily operate in the quick serve restaurant (“QSR”) industry and we expanded to the convenience store market. Should this industry be impacted by economical or other unforeseen events, it could have a significant negative impact on our financial performance.
Risks Related to our Common Stock
There has been a limited trading market for our common stock. There has been a limited trading market for our common stock on the OTCQB® Venture Market. The lack of an active market may impair the ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our ability to raise capital by selling shares of capital stock and may impair our ability to acquire other companies or technologies by using common stock as consideration.
The market price of our common stock may be, and is likely to continue to be, highly volatile and subject to wide fluctuations. The market price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to a number of factors some of which are beyond our control, including:
| ● | dilution caused by our issuance of additional shares of common stock and other forms of equity securities, which we expect to make in connection with future acquisitions or capital financings to fund our operations and growth, to attract and retain valuable personnel and in connection with future strategic partnerships with other companies; | |
| ● | announcements of new acquisitions or other business initiatives by our competitors; | |
| ● | our ability to take advantage of new acquisitions or other business initiatives; | |
| ● | quarterly variations in our revenues and operating expenses; | |
| ● | changes in the valuation of similarly situated companies, both in our industry and in other industries; | |
| ● | changes in analysts’ estimates affecting us, our competitors and/or our industry; | |
| ● | changes in the accounting methods used in or otherwise affecting our industry; | |
| ● | additions and departures of key personnel; | |
| ● | announcements by relevant governments pertaining to additional quota restrictions; and | |
| ● | fluctuations in interest rates and the availability of capital in the capital markets. |
Some of these factors are beyond our control, and the impact of these risks, singly or in the aggregate, may result in material adverse changes to the market price of our common stock and/or our results of operations and financial condition.
We do not expect to pay dividends in the foreseeable future. We do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings in the development and growth of our business. Therefore, investors will not receive any funds unless they sell their common stock, and stockholders may be unable to sell their shares on favorable terms or at all. Investors cannot be assured of a positive return on investment or that they will not lose the entire amount of their investment in the common stock.
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Our common stock may be considered to be a “penny stock” and, as such, any market for our common stock may be further limited by certain SEC rules applicable to penny stocks. To the extent the price of our common stock remains below $5.00 per share or we have net tangible assets of $2,000,000 or less, our common shares will be subject to certain “penny stock” rules promulgated by the SEC. Those rules impose certain sales practice requirements on brokers who sell penny stock to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000). For transactions covered by the penny stock rules, the broker must make a special suitability determination for the purchaser and receive the purchaser’s written consent to the transaction prior to the sale. Furthermore, the penny stock rules generally require, among other things, that brokers engaged in secondary trading of penny stocks provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the bid and asked prices and disclosure of the compensation to the brokerage firm and disclosure of the salesperson working for the brokerage firm. These rules and regulations adversely affect the ability of brokers to sell our common shares and limit the liquidity of our securities.
We are a “smaller reporting company” and, as such are allowed to provide less disclosure than larger public companies. We are currently a “smaller reporting company,” meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. As a “smaller reporting company”, we are able to provide simplified executive compensation disclosures in our SEC filings, are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting, and have certain other decreased disclosure obligations in SEC filings, including, among other things, we are only required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.
Item 1B. Unresolved Staff Comments.
Not Applicable.
Item 1C. Cybersecurity.
Over the past year, our team has implemented, optimized, and matured our cybersecurity practices, aiming to meet all major industry benchmarks. Our goal is to safeguard our information systems and protect the confidentiality, integrity, and availability of both our and our customers’ data. This includes measures related to cybersecurity incidents, risk management, management roles, and governance.
1) Cybersecurity incidents: Our public-facing website complies with WCAG 2.2 level AA standards for accessibility. We manage various databases, including those on Amazon and Google Clouds, each with three sets of development, testing, and production environments. Our main data warehousing solutions is Amazon Redshift, complemented by Amazon S3 for object storage.
| a) | To prevent unauthorized access, we have established a series of security gates across all production environments and instances | |
| b) | Only two individuals have update access to production database instances, and a limited number of individuals have read-only access to personally identifiable information (PII) data | |
| c) | In our cloud environments, 2-3 members of our Platform Engineering team have access to production and test instances, and logs are generated for any changes made |
2) Risk Management: We maintain multiple AWS and Google Cloud environments, each with three sets of development, testing, and production environments. Our primary data warehousing solution is Amazon Redshift, while we use Amazon S3 Glacier for archival storage and Amazon S3 for object storage. We also employ Amazon Sagemaker for machine learning tasks and internally host Apache Superset on the AWS platform for data visualization.
| a) | All environments are isolated using credentials and accounts | |
| b) | We are following a plan to ensure scheduled patching, upgrades, and other maintenance occur every quarter. This includes updates for SQL databases and cloud instances | |
| c) | We have the capability to search our logs for security incidents | |
| d) | We are on schedule to monitor every public endpoint using a Web Application Firewall (WAF), ensuring that all traffic is logged with patterns to detect any suspicious behavior | |
| e) | We aim to enable automatic processes to ensure no production data is changed without systematic audits | |
| f) | The data visualization tool has login credentials with role-based access |
3) Management’s Role: Our board of directors has ultimate oversight of cybersecurity risk. Our VP of Engineering and Platform Engineering Manager lead cybersecurity risk assessment and management efforts, collaborating closely with the interim CEO for guidance, strategic direction, alignment with business objectives, and environment.
| a) | The Platform Engineering Manager has over 5 years of experience and holds a bachelor’s degree in computer science. The VP of Digital Engineering brings 19 years of expertise in digital transformations across various industries, holding leadership roles at Nordstrom, Walgreens, T-Mobile, and Sony PlayStation, with a Master’s degree in Business Administration from the University of Michigan | |
| b) | We stay informed by utilizing online SOX and SOC II policy documents | |
| c) | We have robust logging systems in place to monitor our systems, and our response plan includes promptly identifying the executives and parties affected |
4) Governance: Our governance includes routing all production changes through approval processes and testing in the test environment before implementation in production.
| a) | We adhere to SOX regulations to ensure proper documentation and signoffs for any production data alterations due to incorrect data entry | |
| b) | In the event of changes, we document the reason for the update, the responsible individual, and the details of what was modified (both before and after). Additionally, all modifications undergo verification by at least one individual before and after the change | |
| c) | The board holds oversight of the Company’s risks related to cybersecurity risks. |
Our business strategy, results of operations, and financial condition have not been materially affected by risks from cybersecurity threats, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
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Item 2. Properties.
We have a current lease that was entered into starting in February of 2021 for 8,898 square feet of office space located at 3133 W. Frye Road, Suite 215, Chandler, Arizona. Monthly rental payments, excluding common area maintenance charges, will be $25,953 to $28,733. The first twelve months of the lease included a 50% abatement period. The office space in Chandler has been a perfect size for a growing company, with an open concept to encourage collaboration.
Item 3. Legal Proceedings.
As of the date of this report, the company has one pending legal proceeding related to the TCPA (Telephone Consumer Protection Act) Violation. This is a putative class action complaint alleging that Defendant initiated telephone solicitations through text messages in violation of the Florida Telephone Solicitation Act, Fla. Stat. §501.059 (“FTSA”). The defense of the matter was tendered to the Company by its client, Sonic Industries, Inc., and our firm is managing the defense of the matter. The Company intends to seek an individual settlement of the matter, and if one cannot be reached, the Company intends to vigorously defend the matter. The discovery process has not begun so it is not possible at this time to calculate an accurate assessment of the Company’s exposure.
Management believes that there is no other pending litigation of which the resolution or settlement will have a material adverse effect on the results of operations or liquidity of the Company.
Item 4. Mine Safety Disclosures
Not Applicable.
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matter and Issuer Purchases of Equity Securities
Our common stock is quoted on the OTCQB® Venture Market under the stock symbol “MFON”.
Our common stock trades only sporadically and has experienced in the past, and is expected to experience in the future, significant price and volume volatility.
Quotations reflect inter-dealer prices, without markup, markdown or commissions and may not represent actual transactions.
Holders of Record
As of April 13, 2023, there were 148 holders of record of our common stock, not including shares held in street name.
Dividend Policy
We have not paid any cash dividends since our inception and do not contemplate paying dividends in the foreseeable future. It is anticipated that earnings, if any, will be retained for the operation of our business.
Stock Repurchases
We did not repurchase any of our common stock in 2023 or 2022.
Item 6. [Reserved]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes and other information that are included elsewhere in this Form 10-K. This discussion contains 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 cautionary note regarding “Forward Looking Statements” contained in Item 1.A – “Risk Factors”.
Overview
Mobivity Holdings Corp. (the “Company” or “we”) is in the business of developing and operating proprietary platforms through which brands and enterprises can conduct national and localized, data-driven marketing campaigns.
Mobivity’s Recurrency platform fills this need with a self-service SaaS offering, enabling operators to intelligently optimize their promotions, media and marketing spend. Recurrency drives system-wide sales producing on average a 13% increase in guest spend and a 26% improvement in frequency, ultimately delivering an average Return on Marketing Spend of 10X. In other words, for every dollar invested in marketing, retailers using Recurrency to manage, optimize and deliver multi-channel consumer promotions generate an average of ten dollars in incremental revenue from their customers.
The Company’s Recurrency platform enables multi-unit retailers to leverage the power of their own data to yield maximum customer spend, frequency and loyalty while achieving the highest ROMS possible. Recurrency powers Connected Rewards transactions and allows us to offer unique and attributable programs delivering real world rewards to consumers for actions taken in a digital environment.
To date, our Connected Rewards programs have been delivered primarily in 3 ways. First, through utilizing brands’ owned loyalty channels like text and email. In these programs, brands will send offers to their loyalty customers incentivizing them to download an app or sign up for a digital service by rewarding them with a free or discounted product at their brand. Second, through placements in brand-owned apps. These placements incentivize download of digital apps or services with loyalty points or discounts on products at their brand. These programs are long term contracts and placements of an advertising unit in the brand owned app. Third, delivering free or discounted products for actions taken in a digital environment. An example of these programs is that a user could earn a free cheeseburger or discount on gas for achieving a certain level in a mobile casual game.
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Recent Events
Secured Notes 2023
During the year ended December 31, 2023, we issued to one of our directors, secured notes in the principal aggregate amount of $700,000, that was rolled into the Credit Facility, which are due and payable in 24 equal payments beginning January 31, 2023 (the “2022 Secured Notes”) The 2022 Secured Notes bear interest on the unpaid balance at the rate of fifteen percent (15%) per annum. The Company may prepay the advances and accrued interest, in whole or in part, without notice, penalty or charge. As of December 31, 2023, we have $5,873,125 as a remaining balance of the 2022 Secured Notes and accrued interest of $812,928. A total of $391,319 of accrued interest was settled into 362,335 shares of common stock and the Company recorded a loss on debt settlement of interest payable $10,315. A total of $425,502 in accrued interest was accrued for the third and fourth quarter of 2023 and recorded to equity payable.
On November 13, 2022, the Company entered into an amended and restated credit facility agreement with Thomas B. Akin, a director of the Company (the “A&R Credit Agreement”) and a corresponding convertible note in the amount of $4,466,043 (the “Convertible Note”). The A&R Credit Agreement amends and restates the current Credit Agreement and allows for the Company to borrow up to $6 million in advances. The Convertible Note accrues interest monthly at 15% per annum. Principal and accrued interest payments are due in 24 monthly installments under the Convertible Note beginning on January 31, 2023 and continuing on the last day of each of the next 23 months thereafter. The Convertible Note and all accrued interest thereon are convertible into shares of our common stock, from time to time, at the option of the holder thereof, at a conversion price per share equal to 85% of the volume-weighted average price of our common stock quoted on the OTCQB ® Venture Market operated by OTC Markets Group Inc. over the thirty (30) trading days immediately preceding such date (the “Conversion Price”). The Convertible Note and all accrued interest thereon will be automatically converted into common stock at the Conversion Price on the dated that is five business days prior to the date on which the Company becomes listed on a national securities exchange if all listing requirements have been satisfied by the Company (other than the Company satisfying any stockholders’ equity requirement to be listed on such national exchange).
The foregoing descriptions of the A&R Credit Agreement and Convertible Note does not purport to be complete and are qualified in its entirety by reference to the A&R Credit Agreement and Convertible Note, which were filed with the United States Securities and Exchange Commission (the “SEC”) as Exhibits 10.1 and 10.2 respectively, to the Company’s Current Report on Form 8-K dated November 11, 2022, and Amendment No. 1 to the A&R Credit Agreement and Convertible Note filed with the SEC as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 31, 2023.
Unsecured Promissory Notes 2022
During the year ended December 31, 2023, we issued to Talkot Capital LLC, unsecured notes in the principal aggregate amount of $ 271,875, which are due and payable two years after issuance (the “2022 Unsecured Notes”). The 2022 Unsecured Notes bear interest on the unpaid balance at the rate of fifteen percent (15%) per annum. The Company may prepay the advances and accrued interest, in whole or in part, without notice, penalty or charge. As of December 31, 2023, we have $271,875 as a remaining balance of these 2023 Unsecured Notes issued to Talkot Capital and accrued interest of $0. A total of $10,352 of interest was converted into 9,585 shares of common stock and the Company recorded a loss on settlement of interest payable of $542.A total of $20,617 was accrued and recorded to equity payable.
2023 Warrant Exercises
During March 2023, 15 warrant holders exercised their common stock purchase warrant for 3,587,487 shares at the exercise price of $1.00 per share, resulting in additional capital of $3,557,487. As an inducement for the holder’s exercise of the warrants, we issued the holders’ 1,793,745 new warrants to purchase common stock at $2.00 per share over a three-year period expiring in February 2025. The Company recorded $577,000 of stock-based expense related to warrants issued during the warrant conversion offer on February 14, 2023. The total estimated value of the warrants using the Black-Scholes Model is based on a volatility rate of 63% and an option fair value of $0.3216.
During August and September of 2023, a total of 18 warrant holders exercised their common stock purchase warrant for 1,960,976 shares at the exercise price of $.82 per share, resulting in additional capital of $1,608,000. As an inducement for the holder’s exercise of the warrants, we issued the holders’ 3,921,952 new warrants to purchase common stock at $.82 per share over a one and three-year period expiring between August and September 2026. The Company recorded $1,146,562 of stock-based expense related to warrants issued during the warrant conversion offer on September 6, 2023. The total estimated value of the warrants using the Black-Scholes Model is based on an average volatility rate of 63% and 73% and an option fair value of between $0.21 and $0.40.
2023 Convertible Notes
During the third quarter of 2023, the Company issued Convertible Notes to five related parties in the amount of $2,000,000. In addition, the Company issued Convertible Notes to 10 shareholders in the amounts of $250,000. Principal and accrued interest payments are due in full on three years from the date they are funded under the Convertible Note. The Convertible Note and all accrued interest thereon are convertible into shares of our common stock, from time to time, at the option of the holder thereof, at a conversion price per share equal to the larger of either $0.50 or of the volume-weighted average price of our common stock quoted on the OTCQB ® Venture Market operated by OTC Markets Group Inc. over the thirty (30) trading days immediately preceding such date (the “Conversion Price”). For value received the shareholders received 666,668 warrants to purchase common shares at and exercise price of $0.60 per share over a three year period ending November 10, 2026.
Results of Operations and Financial Conditions
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
Revenues
Revenues consist primarily of a suite of products under the Recurrency platform. The Recurrency platform is comprised of POS Data Capture, Analytics, Offers and Promotions, Predictive Offers, Personalized Receipt Promotions, Customized Mobile Messaging, Belly Loyalty, and other revenues.
| -15- |
Revenues for the twelve months ended December 31, 2023 were $6,977,696, a decrease of $556,216, or 7.4%, compared to $7,533,912 for the twelve months ended December 31, 2022. This decrease is primarily due to the decrease in special projects revenue.
Cost of Revenues
Cost of revenues consist primarily of cloud-based software licensing fees, short code maintenance expenses, personnel related expenses, and other expenses.
Cost of revenues for the twelve months ended December 31, 2023 was $5,129,627, a decrease of $198,856, or 3.7%, compared to $5,328,483 for the twelve months ended December 31, 2022. This decrease is primarily due to temporary guaranteed audience costs associated with increasing our key customer’s messaging database.
The gross profit margin was 26.5% and 29.2% for the twelve months ended December 31, 2023 and 2022, respectively. Lower gross profit margin in 2023 is primarily due to a decrease in special projects revenue.
Bad Debt
Bad Debt expense for the twelve months ended December 31, 2023 was $18,060 a decrease of $22,323, or 55.3%, compared to $40,383 for the twelve months ended December 31, 2022. This decrease is due primarily to a decrease in our bad debt allowance.
General and Administrative
General and administrative expenses consist primarily of administrative salaries and personnel related expenses, legal fees, stock-based compensation expense, consulting costs and other expenses.
General and administrative expenses for the twelve months ended December 31, 2023 were $6,406,512, an increase of $2,099,583, or 48.7%, compared to $4,306,929 for the twelve months ended December 31, 2022. The increase in general and administrative expense was primarily due an increase in share based expense from the two warrant issuances during the year.
Sales and Marketing Expense
Sales and marketing expenses consist primarily of salaries and personnel related expenses, stock-based compensation expense, sales travel, consulting costs and other expenses.
Sales and marketing expenses for the twelve months ended December 31, 2023 were $2,735,062, an increase of $118,466, or 4.5%, compared to $2,616,596 for the twelve months ended December 31, 2022. The increase in 2023 was primarily due to an increase in software and payroll expense.
Engineering, Research, and Development Expense
Engineering, research, and development expenses consist primarily of salaries and personnel related expenses, stock-based compensation expense, consulting costs and other expenses.
Engineering, research, and development expenses for the twelve months ended December 31, 2023, were $3,515,705, an increase of $455,676 or 14.9%, compared to $3,060,029 for the twelve months ended December 31, 2022. The increase in 2023 was primarily due to an increase in payroll expense.
Depreciation and Amortization Expense
Depreciation and amortization expense consist of depreciation on our equipment and amortization of our intangible assets.
Depreciation and amortization expenses for the twelve months ended December 31, 2023, were $178,746 a decrease of $261,580, or 59.4%, compared to $440,326 for the twelve months ended December 31, 2022. This decrease is primarily attributable to the decrease in amortized assets.
Intangible Asset Impairment
Intangible Asset Impairment expenses for the twelve months ended December 31, 2023 were $0, a decrease of $552,476, compared to $552,476 for the twelve months ended December 31, 2022.
| -16- |
Goodwill Impairment
Goodwill Impairment expenses for the twelve months ended December 31, 2023 were $0, a decrease of $411,183 compared to $411,183 for the twelve months ended December 31, 2022.
Interest Expense
Interest expense consists of stated or implied interest expense on our notes payable, amortization of note discounts, and amortization of deferred financing costs.
Interest expense for the twelve months ended December 31, 2023 was $1,027,682, an increase of $289,937, or 39.3%, compared to $737,745 for the twelve months ended December 31, 2022. The increase is primarily attributable to the increased principal on short- and long-term borrowings during the year.
Settlement Losses
Settlement losses consist of legal settlement for TCPA settlements.
Settlement losses for the twelve months ended December 31, 2023 were $19,250, a decrease of $34,250 or 69.2%, compared to $53,500 in the twelve months ended December 31, 2022. The decrease is due to a decrease in the number of TCPA claim settlement payments.
Loss on Settlement of Debt
Loss on Settlement of debt consists of the expense from the settlement of notes payable when they are settled into shares.
Loss on settlement of debt for the twelve months ended December 31, 2023 was $10,857 and $49,503, respectively.
Foreign Currency
The Company’s financial results are impacted by volatility in the Canadian/U.S. Dollar exchange rate. The average U.S. Dollar exchange rate for the year ended December 31, 2023 and 2022 was $1 Canadian equals $0.74 and $0.77 U.S. Dollars, respectively. The Company’s functional or measurement currency is the U.S. Dollar. Based on a U.S. Dollar functional currency, the following are the key areas impacted by foreign currency volatility:
| ● | The Company sells products primarily in U.S. Dollars; therefore, reported revenues are not highly impacted by foreign currency volatility. | |
| ● | A portion of the Company’s expenses are incurred in Canadian Dollars and therefore fluctuate in U.S. Dollars as the U.S. Dollar varies. A weaker U.S. Dollar results in an increase in translated expenses, and a stronger U.S. Dollar results in a decrease. | |
| ● | Changes in foreign currency rates also impact the translated value of the Company’s working capital that is held in Canadian Dollars. Foreign exchange rate fluctuations result in foreign exchange gains or losses based upon movement in the translated value of Canadian working capital into U.S. Dollars. |
The change in foreign currency was a loss of $394 and a gain of $2,119 for the years ended December 31, 2023 and 2022, respectively.
| -17- |
Liquidity and Capital Resources
We have $416,395 of cash as of December 31, 2023. We had a net loss of $12.1 million for the year ended 2023, and we used $8.2 million of cash in our operating activities during 2023. In addition, we raised $5.2 million during two warrant conversion fundings during 2023. We raised $3.0 million in cash Convertible Notes issued during the fourth quarter of 2023.Our additional cash from our warrant conversion along with our expected cash flow from operations, may not be sufficient to fund our 12-month plan of operations, and there can be no assurance that we will not require significant additional capital within 12 months.
If our cash reserves prove insufficient to sustain operations, we plan to raise additional capital by selling shares of capital stock or other equity or debt securities. In addition we currently have an additional $126,875 available on our current line of credit. We may need additional financing thereafter until we can achieve profitability. If we cannot, we will be forced to curtail our operations or possibly be forced to evaluate a sale or liquidation of our assets. Any future financing may involve substantial dilution to existing investors.
Although we are actively pursuing financing opportunities, we may not be able to raise cash on terms acceptable to us or at all. There can be no assurance that we will be successful in obtaining additional funding. Financings, if available, may be on terms that are dilutive to our shareholders, and the prices at which new investors would be willing to purchase our securities may be lower than the current price of our ordinary shares. The holders of new securities may also receive rights, preferences or privileges that are senior to those of existing holders of our ordinary shares. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations in the short term.
Cash Flows
| For the Year Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | (8,067,469 | ) | $ | (6,688,551 | ) | ||
| Investing activities | (16,255 | ) | (30,269 | ) | ||||
| Financing activities | 8,090,492 | 6,456,410 | ||||||
| Effect of foreign currency translation on cash flow | (15,707 | ) | (46,274 | ) | ||||
| Net change in cash | $ | (8,939 | ) | $ | (308,684 | ) | ||
Operating Activities
We incurred a net loss in operating activities totaling $8,067,469 in 2023 and $6,688,551 in 2022, respectively. The increase in net loss in operating activities in 2023 compared to 2022 was due primarily to the costs associated with the March 2022 warrant conversion, and an increase in interest.
Investing Activities
Investing activities during twelve months ended December 31, 2023, include $16,255 of equipment purchases compared to $13,087 in twelve months ended December 31, 2022. In addition, there was $0 in capitalized software development costs in the twelve months ended December 31, 2023 compared to $12,030 in the twelve months ended December 31, 2022
Financing Activities
Financing activities for 2023 include net proceeds from conversion of common stock warrants of $5,195,487, proceeds from related party notes payable of $2,700,000 and $250,000 in proceeds from convertible notes, offset by payments on notes payable of $54,995.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the use of estimates and assumptions 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 amount of revenues and expenses during the reporting period. Our management periodically evaluates the estimates and judgments made, Including those related to share-based compensation. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
| -18- |
The following critical accounting policies affect the more significant judgments and estimates used in the preparation of the Company’s consolidated financial statements. See Note 2 in Notes to Consolidated Financial Statements, “Summary of Significant Accounting Policies” in this Form 10-K for additional information about these critical accounting policies and estimates, as well as a description of our other accounting policies and estimates.
Income Taxes
We account for income taxes using the assets and liability method, which recognizes deferred tax assets and liabilities determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established to reduce deferred tax assets when, based on available objective evidence, it is more likely than not that the benefit of such assets will not be realized. We recognize in the consolidated financial statements only those tax positions determined to be more likely than not of being sustained.
Revenue Recognition and Concentrations
Our Recurrency platform is a hosted solution. We generate revenue from licensing our software to clients in our software as a service model, per-message and per-minute transactional fees, and customized professional services. We recognize license/subscription fees over the period of the contract, service fees as the services are performed, and per-message or per-minute transaction revenue when the transaction takes place. Under ASC 606 (as defined below), revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We consider authoritative guidance on multiple deliverables in determining whether each deliverable represents a separate unit of accounting. Some customers are billed on a month-to-month basis with no contractual term and are collected by credit card or electronic funds transfer. Revenue is recognized at the time that the services are rendered, and the selling price is fixed with a set range of plans. Cash received in advance of the performance of services is recorded as deferred revenue.
Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification 606 (“ASC 606”), is a comprehensive revenue recognition standard that superseded nearly all existing revenue recognition guidance. The Company adopted this standard effective January 1, 2018, applying the modified retrospective method. Upon adoption, the Company discontinued revenue deferral under the sell-through model and commenced recording revenue upon delivery to distributors, net of estimated returns. Generally, the new standard results in earlier recognition of revenues.
We determine revenue recognition through the following steps:
| ● | identification of the contract, or contracts, with a customer; | |
| ● | identification of the performance obligations in the contract; | |
| ● | determination of the transaction price; | |
| ● | allocation of the transaction price to the performance obligations in the contract; and | |
| ● | recognition of revenue when, or as, we satisfy a performance obligation. |
During the years ended December 31, 2023 and 2022 two customers accounted for 55% and 51% of our revenues, respectively.
Share-based compensation expense
Share-based compensation cost is measured at the date of grant, based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award). We estimate the fair value of employee stock options granted using the Black-Scholes Option Pricing Model. Key assumptions used to estimate the fair value of stock options include the exercise price of the award, the fair value of our common stock on the date of grant, the expected option term, the risk-free interest rate at the date of grant, the expected volatility and the expected annual dividend yield on our Company’s common stock. We have elected to account for forfeitures as they occur to determine the amount of compensation cost to be recognized in each period.
Derivative Financial Instruments
We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.
We review the terms of the common stock, warrants and convertible debt we issue to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Smaller reporting companies are not required to provide the information required by this item.
| -19- |
Item 8. Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders of Mobivity Holdings Corp.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Mobivity Holdings Corp. (the Company) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered net losses from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are discussed in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Revenue Recognition
As discussed in the notes to the financial statements, the Company recognizes revenue upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.
Auditing management’s evaluation of agreements with customers involves significant judgment, given the fact that some agreements require management’s evaluation and allocation of the standalone transaction prices to the performance obligations.
To evaluate the appropriateness and accuracy of the assessment by management, we evaluated management’s assessment in relationship to the relevant agreements.
/s/
We have served as the Company’s auditor since 2012.
April 16, 2024
Firm ID
| -20- |
Mobivity Holdings Corp.
Consolidated Balance Sheets
| December 31, 2023 | December 31, 2022 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $ | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Right to use lease assets | ||||||||
| Intangible assets, net | ||||||||
| Other assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest | ||||||||
| Accrued and deferred personnel compensation | ||||||||
| Deferred revenue and customer deposits | ||||||||
| Related party notes payable, net - current maturities | ||||||||
| Notes payable, net - current maturities | ||||||||
| Operating lease liability | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Related party notes payable, net - long-term | ||||||||
| Notes payable, net - long-term | ||||||||
| Operating lease liability | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies (See Note 13) | ||||||||
| Stockholders’ equity (deficit) | ||||||||
| Common stock, $ par value; shares authorized; and , shares issued and outstanding | ||||||||
| Equity payable | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| -21- |
Mobivity Holdings Corp.
Consolidated Statements of Operations and Comprehensive Loss
| For the Year Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenues | ||||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Bad Debt | ||||||||
| General and administrative | ||||||||
| Sales and marketing | ||||||||
| Engineering, research, and development | ||||||||
| Goodwill Impairment | ||||||||
| Intangible asset impairment | ||||||||
| Depreciation and amortization | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income/(expense) | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Settlement Losses | ( | ) | ( | ) | ||||
| Loss on settlement of debt | ( | ) | ( | ) | ||||
| Foreign currency gain (loss) | ( | ) | ||||||
| Total other income (expense) | ( | ) | ( | ) | ||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net Loss | ( | ) | ( | ) | ||||
| Other comprehensive income (loss), net of income tax | ||||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per share: | ||||||||
| Basic and Diluted | $ | ) | $ | ) | ||||
| Weighted average number of shares: | ||||||||
| Basic and Diluted | ||||||||
See accompanying notes to consolidated financial statements.
| -22- |
Mobivity Holdings Corp.
Consolidated Statement of Stockholders’ Equity (Deficit)
| Common Stock | Additional | Accumulated Other | Total | |||||||||||||||||||||||||
| Shares | Dollars | Equity Payable | Paid-in Capital | Comprehensive Income (Loss) | Accumulated Deficit | Stockholders’ Equity (Deficit) | ||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
| Issuance of common stock for warrants exercised | ||||||||||||||||||||||||||||
| Issuance of common stock for debt settlement | — | |||||||||||||||||||||||||||
| Issuance of stock for PIPE financing | ||||||||||||||||||||||||||||
| Issuance of common stock for Settlement of Interest Payable on Related Party Debt | ||||||||||||||||||||||||||||
| Fair value of options issued with related party debt | — | |||||||||||||||||||||||||||
| Stock based compensation | — | |||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
| Issuance of common stock for warrants exercised | ||||||||||||||||||||||||||||
| Issuance of common stock for Settlement of Interest Payable on Related Party Debt | ||||||||||||||||||||||||||||
| RSU’s issued - termination of a director’s service | ( | ) | ||||||||||||||||||||||||||
| Fair value of options issued with related party debt | — | |||||||||||||||||||||||||||
| Warrant Inducement for warrant conversion | — | |||||||||||||||||||||||||||
| Stock based compensation – Emplyees | — | |||||||||||||||||||||||||||
| Stock based compensation - Directors | — | |||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
See accompanying notes to consolidated financial statements.
| -23- |
Mobivity Holdings Corp.
Consolidated Statements of Cash Flows
| For the Year Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Bad debt expense | ||||||||
| Loss on settlement of debt -Related Party | ||||||||
| Stock-based compensation | ||||||||
| Intangible Asset Impairment | ||||||||
| Goodwill Impairment | ||||||||
| Depreciation and amortization expense | ||||||||
| Amortization of debt discount | ||||||||
| Increase (decrease) in cash resulting from changes in: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Other current assets | ||||||||
| Operating lease assets/liabilities | ( | ) | ( | ) | ||||
| Other assets | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued interest | ||||||||
| Accrued Professional Fees | ||||||||
| Accrued and deferred personnel compensation | ( | ) | ( | ) | ||||
| Other liabilities - current | ||||||||
| Deferred revenue and customer deposits | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| INVESTING ACTIVITIES | ||||||||
| Purchases of equipment | ( | ) | ( | ) | ||||
| Cash paid for patents | ||||||||
| Capitalized software development costs | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| Payments on Notes Payable | ( | ) | ( | ) | ||||
| Proceeds from Notes Payable | ||||||||
| Proceeds from related party notes payable | ||||||||
| Proceeds from conversion of common stock warrants | ||||||||
| Processed from PIPE Funding | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of foreign currency translation on cash flow | ( | ) | ( | ) | ||||
| Net change in cash | ( | ) | ( | ) | ||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental disclosures: | ||||||||
| Cash paid during period for: | ||||||||
| Interest | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Non cash investing and financing activities: | ||||||||
| Debt Discount on Related Party Debt | $ | $ | ||||||
| Debt Discount on Notes Payable | $ | |||||||
| Fixed Assets contribution by lessor | $ | $ | ||||||
| Refinancing of debt-related party | $ | $ | ||||||
| Initial ROU and asset lease liabiltiy | $ | $ | ||||||
| Shares Issued for settlement of debt - related party | $ | $ | ||||||
| Interest Issued as Stocks Payable | $ | $ | ||||||
| RSU’s issued upon termination | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| -24- |
Mobivity Holdings Corp.
Notes to Consolidated Financial Statements
1. Nature of Operations
Mobivity Holdings Corp. (the “Company” or “we”) is in the business of developing and operating proprietary platforms over which brands and enterprises can conduct national and localized, data-driven marketing campaigns.
Mobivity’s Recurrency platform enables multi-unit retailers to leverage the power of their own data to yield maximum customer spend, frequency and loyalty while achieving the highest Return on Marketing Spend (ROMS) possible. Mobivity’s customers use Recurrency to:
| ● | Transform messy point-of-sale (POS) data collected from thousands of points of sale into usable intelligence. | |
| ● | Measure, predict, and boost guest frequency and spend by channel. | |
| ● | Deploy and manage one-time use offer codes and attribute sales accurately across every channel, promotion and media program. | |
| ● | Deliver 1:1 promotions and offers with customized Mobile Messaging, Personalized Receipt Promotions and Integrated Loyalty programs. |
Mobivity’s
Recurrency, delivered as a SaaS platform, is used by leading brands including Subway, Sonic Drive-In, Chick-fil-A, Checkers/Rally’s
and Circle K’s across more than
We’re living in a data-driven economy. In fact, by 2003 — when the concept of “big data” became common vernacular in marketing as much data was being created every two days as had been created in all of time prior to 2003. Today, Big Data has grown at such a rate that 90% of the world’s data has been created in the past two years. Unfortunately, despite there being so much data accumulated, only one percent of data is being utilized today by most businesses.
The challenge for multi-unit retailers isn’t that they don’t have enough data; in fact, national retailers are collecting millions of detailed transactions daily from thousands of points of sale around the world. The challenge is being able to make sense of this transaction data, which is riddled with data entry errors, collected by multiple POS systems and complicated by a taxonomy compiled by thousands of different franchisee owners. To normalize such an overwhelming amount of data into usable intelligence and then leverage it to optimize media investment and promotion strategy requires numerous teams of data analysts and data scientists that many retailers and restaurant operators simply don’t have. Which is why so many technology and data companies, that can help solve these challenges, have been invested in and acquired by brands including, McDonald’s, Starbucks and Yum Brands.
We generate revenue by charging the resellers, brands and enterprises a per-message transactional fee, or through fixed or variable software licensing fees.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, LiveLenz Inc. All significant intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates used are those related to stock-based compensation, asset impairments, the valuation and useful lives of depreciable tangible and certain intangible assets, the fair value of common stock used in acquisitions of businesses, the fair value of assets and liabilities acquired in acquisitions of businesses, the fair value of options issued with related party debt, and the valuation allowance of deferred tax assets. Management believes that these estimates are reasonable; however, actual results may differ from these estimates.
| -25- |
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year’s presentation. The reclassifications had no effect on previously reported net loss.
Acquisitions
We account for acquired businesses using the purchase method of accounting. Under the purchase method, our consolidated financial statements reflect the operations of an acquired business starting from the completion of the acquisition. In addition, the assets acquired and liabilities assumed are recorded at the date of acquisition at their respective estimated fair values, with any excess of the purchase price over the estimated fair values of the net assets acquired recorded as goodwill.
Cash and Cash Equivalents
We minimize our credit risk associated with cash by periodically evaluating the credit quality of our primary financial institution. Our balances at times may exceed federally insured limits. We have not experienced any losses on our cash accounts.
Accounts Receivable, Allowance for Doubtful Accounts and Concentrations
Accounts receivable are carried at their estimated collectible amounts. We grant unsecured credit to substantially all of our customers. Ongoing credit evaluations are performed, and potential credit losses are charged to operations at the time the account receivable is estimated to be uncollectible. Since we cannot necessarily predict future changes in the financial stability of our customers, we cannot guarantee that our reserves will continue to be adequate.
As
of December 31, 2023 and 2022, we recorded an allowance for doubtful accounts of $
From time to time, we may have a limited number of customers with individually large amounts due. Any unanticipated change in one of the customer’s credit worthiness could have a material effect on the results of operations in the period in which such changes or events occurred.
As
of December 31, 2023, we had three customers whose balance represented
Goodwill and Intangible Assets
Goodwill is tested for impairment at a minimum on an annual basis. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The discounted cash flow approach uses expected future operating results. Failure to achieve these expected results may cause a future impairment of goodwill at the reporting unit.
We
conducted our annual impairment tests of goodwill as of December 31, 2023 and 2022. As a result of these tests, we had total impairment
charges of $ and $
Intangible
assets consist of patents and trademarks, purchased customer contracts, purchased customer and merchant relationships, purchased trade
names, purchased technology, and non-compete agreements. Intangible assets are amortized over the period of estimated benefit using the
straight-line method and estimated useful lives ranging from to
The
Company’s evaluation of its long-lived assets resulted in $ and $
| -26- |
Software Development Costs
Software development costs include direct costs incurred for internally developed products and payments made to independent software developers and/or contract engineers. The Company accounts for software development costs in accordance with the FASB guidance for the costs of computer software to be sold, leased, or otherwise marketed (“ASC Subtopic 985-20”). Software development costs are capitalized once the technological feasibility of a product is established and such costs are determined to be recoverable. Technological feasibility of a product encompasses technical design documentation and integration documentation, or the completed and tested product design and working model. Technological feasibility is evaluated on a project-by-project basis. Amounts related to software development that are not capitalized are charged immediately to the appropriate expense account. Amounts that are considered ‘research and development’ that are not capitalized are immediately charged to engineering, research, and development expense.
Capitalized costs for those products that are cancelled or abandoned are charged to impairment expense in the period of cancellation. Commencing upon product release, capitalized software development costs are amortized to “Amortization Expense - Development” based on the straight-line method over a period.
The
Company evaluates the future recoverability of capitalized software development costs on an annual basis. For products that have been
released in prior years, the primary evaluation criterion is ongoing relations with the customer. The Company’s evaluation of its
capitalized software development asset resulted in impairment charges of $
Impairment of Long-Lived Assets
We evaluate long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset is expected to generate.
Foreign Currency Translation
The Company translates the financial statements of its foreign subsidiary from the local (functional) currency into US Dollars using the year or reporting period end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters (“ASC 830-10”). Assets and liabilities of these subsidiaries were translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average rates in effect for the periods presented. The cumulative translation adjustment is included in the accumulated other comprehensive gain (loss) within shareholders’ equity. Foreign currency transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the unaudited Condensed Consolidated Statements of Income and Comprehensive Income.
Derivative Financial Instruments
We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.
We review the terms of the common stock, warrants and convertible debt we issue to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.
Revenue Recognition and Concentrations
Our Recurrency platform is a hosted solution. We generate revenue from licensing our software to clients in our software as a service model, per-message and per-minute transactional fees, and customized professional services. We recognize license/subscription fees over the period of the contract, service fees as the services are performed, and per-message or per-minute transaction revenue when the transaction takes place. Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We consider authoritative guidance on multiple deliverables in determining whether each deliverable represents a separate unit of accounting. Some customers are billed on a month-to-month basis with no contractual term and are collected by credit card. Revenue is recognized at the time that the services are rendered, and the selling price is fixed with a set range of plans. Cash received in advance of the performance of services is recorded as deferred revenue.
During
the years ended December 31, 2023 and 2022, three customers accounted for
| -27- |
Comprehensive Income (Loss)
Comprehensive
loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources.
We are required to record all components of comprehensive loss in the consolidated financial statements in the period in which they are
recognized. Net loss and other comprehensive loss, including foreign currency translation adjustments and unrealized gains and losses
on investments, are reported, net of their related tax effect, to arrive at comprehensive loss. For the twelve months ended December
31, 2023 and 2022, the comprehensive loss was $ and $
We primarily issue stock-based awards to employees in the form of stock options. We determine compensation expense associated with stock options based on the estimated grant date fair value method using the Black-Scholes valuation model. We recognize compensation expense using a straight-line amortization method over the respective vesting period.
Research and Development Expenditures
Research and development expenditures are expensed as incurred, and consist primarily of compensation costs, outside services, and expensed materials.
Advertising Expense
Direct
advertising costs are expensed as incurred and consist primarily of E-commerce advertisements, sales enablement, content creation, and
other direct costs. Advertising expense was $
Income Taxes
We account for income taxes using the assets and liability method, which recognizes deferred tax assets and liabilities determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established to reduce deferred tax assets when, based on available objective evidence, it is more likely than not that the benefit of such assets will not be realized. We recognize in the consolidated financial statements only those tax positions determined to be more likely than not of being sustained.
Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all potential common stock equivalents (convertible notes payable, stock options, and warrants) are converted or exercised. The calculation of diluted net loss per share excludes potential common stock equivalents if the effect is anti-dilutive. Our weighted average common shares outstanding for basic and diluted are the same because the effect of the potential common stock equivalents is anti-dilutive.
We had the following dilutive common stock equivalents as of December 31, 2023 and 2022 which were excluded from the calculation because their effect was anti-dilutive.
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Outstanding employee options | ||||||||
| Outstanding restricted stock units | ||||||||
| Outstanding warrants | ||||||||
Recent Accounting Pronouncements
Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following are a summary of recent accounting developments.
In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU No. 2020-06 requires that the if-converted method of computing diluted Earnings per Share. The company adopted ASU 2020-06 on January 1, 2022.
| -28- |
3. Going Concern
We
have $
As
shown in the accompanying financial statements, the Company has incurred net losses from operations resulting in an accumulated deficit
of $
4. Goodwill and Intangible Assets
Goodwill
The following table presents goodwill and impairment for the years ended December 31, 2023 and 2022:
| Goodwill | ||||
| December 31, 2021 | $ | |||
| Acquired | ||||
| Impairment | ( | ) | ||
| December 31, 2022 | ||||
| Acquired | ||||
| Impairment | ||||
| December 31, 2023 | $ | |||
We
conducted our annual impairment test of goodwill as of December 31, 2023 and 2022, which resulted in impairment charges of $ and $
Intangible assets
The following table presents components of identifiable intangible assets for the years ended December 31, 2023 and 2022:
| December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Useful Life (Years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Useful Life (Years) | |||||||||||||||||||||||||
| Patents and trademarks | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Customer and merchant relationships | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Trade name | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Acquired technology | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Non-compete agreement | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||
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During
the years ended December 31, 2023 and 2022, we recorded amortization expense related to our intangible assets of $
During
the years ended December 31, 2023 and 2022, we recorded impairment of $ and $
Expected future intangible asset amortization as of December 31, 2023 is as follows:
| Year ending December 31, | Amount | |||
| 2023 | $ | |||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| Thereafter | ||||
| Total | $ | |||
5. Software Development Costs
The Company has capitalized certain costs for software developed or obtained for internal use during the application development stage as it relates to specific contracts. The amounts capitalized include external direct costs of services used in developing internal-use software and for payroll and payroll-related costs of employees directly associated with the development activities. The balance is included in the net intangible assets on the balance sheet.
The following table presents details of our software development costs for the years ended December 31, 2023 and 2022:
| December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Useful Life (Years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Useful Life (Years) | |||||||||||||||||||||||
| $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
Software
development costs are being amortized on a straight-line basis over their estimated useful life of
During
the years ended December 31, 2023 and 2022, we capitalized $ and $
During
the years ended December 31, 2023 and 2022, we recorded impairment charges of $
The estimated future amortization expense of software development costs as of December 31, 2023 is as follows:
| Year ending December 31, | Amount | |||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Thereafter | ||||
| Total | $ | |||
| -30- |
6. Operating Lease Assets
Adoption of Accounting Standards Codification (“ASC”) Topic 842, “Leases.” The Company adopted Topic 842 on January 1, 2019, using the modified retrospective method and the optional transition method to record the adoption impact through a cumulative adjustment to equity. Results for reporting periods beginning after January 1, 2019, are presented under Topic 842, while prior periods are not adjusted and continue to be reported under the accounting standards in effect for those periods.
The following are additional details related to leases recorded on our balance sheet as of December 31, 2022:
| Leases | Classification | Balance at December 31, 2023 | ||||
| Assets | ||||||
| Current | ||||||
| Operating lease assets | Operating lease assets | $ | ||||
| Noncurrent | ||||||
| Operating lease assets | Noncurrent operating lease assets | |||||
| Total lease assets | $ | |||||
| Liabilities | ||||||
| Current | ||||||
| Operating lease liabilities | Operating lease liabilities | $ | ||||
| Noncurrent | ||||||
| Operating lease liabilities | Noncurrent operating lease liabilities | $ | ||||
| Total lease liabilities | $ | |||||
During
the year ended December 31, 2023, we recorded amortization expense of $
Rent
expense was $
We
entered into our current lease starting in February of 2021 for
The maturity analysis below summarizes the remaining future undiscounted cash flows for our operating leases, a reconciliation to operating lease liabilities reported on the Condensed Consolidated Balance Sheet, our weighted-average remaining lease term and weighted average discount rate:
| Year ending December 31, | Amount | |||
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Thereafter | ||||
| Total future lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Total | $ | |||
| Weighted Average Remaining Lease Term (years) | ||||
| Operating leases | ||||
| Weighted Average Discount Rate | ||||
| Operating leases | % | |||
| -31- |
7. Notes Payable and Related Party Notes Payable
The following table presents details of our notes payable as of December 31, 2023 and 2022:
| Facility | Maturity | Interest Rate | December 31, 2023 | December 31, 2022 | ||||||||||||
| ACOA Note | — | |||||||||||||||
| TD Bank | — | |||||||||||||||
| Converible Notes | various | % | ||||||||||||||
| Related Party Notes | various | % | ||||||||||||||
| Total Debt | ||||||||||||||||
| Less current portion | ( | ) | ( | ) | ||||||||||||
| Long-term debt, net of current portion | $ | $ | ||||||||||||||
Principal payments on notes payables are due as follows:
| Year ending December 31, | Amount | |||
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Thereafter | ||||
| Total future debt payments | ||||
| -32- |
ACOA Note
On
November 6, 2017, Livelenz, entered into an amendment of the original agreement dated December 2, 2014 with the Atlantic Canada Opportunities
Agency (“ACOA”). Under this agreement the note will mature without interest and repayments began on June 1, 2016, while the
commitments terminated on February 1, 2024. The monthly principal payment amount of $
During
the twelve months ended December 31, 2023 $
TD Bank Loan
On
April 22, 2020, we entered into a commitment loan with TD Bank under the Canadian Emergency Business Account (“CEBA”), in
the principal aggregate amount of $
| -33- |
Related Party Notes
Secured Promissory Notes
On
June 30, 2021, we entered into a Credit Facility Agreement (the “Credit Agreement”) with Thomas Akin, one of the Company’s
directors (the “Lender”). The Credit Agreement was amended on November 11, 2022. The Company can borrow up to $
The
Credit Facility is secured by all of our tangible and intangible assets including intellectual property. This loan bears interest on
the unpaid balance at the rate of fifteen percent (
Under
the original terms of the Credit Agreement, the Company was to begin repaying the principal amount, plus accrued interest, in
On
August 22, 2023, the Company took a draw of an additional $
On
September 20, 2023, the Company took a draw of an additional $
On
October 3, 2023, the Company took a draw of an additional $
During
the twelve months ended December 31, 2023, a total of $
A
total of $
During
the twelve months ended December 31, 2023, the Company issued warrants to purchase an aggregate of
As
of December 31, 2023, the Company had drawn a total of $
Unsecured Promissory Note
On
July 1, 2021, we entered into UP Notes in the aggregate principal amount of $
On
August 13, 2022, the Lender agreed to postpone the
As
of December 31, 2023, the Company had a principal balance of $
Convertible Notes
During
fourth quarter 2023 the Company issued 8 Convertible Notes payable to related parties for $
During
fourth quarter 2023 the Company issued 10 Convertible Notes payable to related parties for $
The
Convertible Note and all accrued interest thereon are convertible into shares of our common stock, from time to time, at the option of
the holder thereof, at a conversion price per share equal to the larger of either $
As
of December 31,2023 the Convertible Notes issued to related parties had a principal balance of $
| -34- |
Interest Expense
The following table summarizes interest expense for the years ended December 31, 2023 and 2022:
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Interest expense | $ | $ | ||||||
| Total interest expense | $ | $ | ||||||
8. Common Stock and Equity Payable
Common Stock
2023
As
of December 31, 2023, we had an equity payable balance of $
During
the year ended December 31, 2023, the Company issued
2022
During December 31, 2022, the Company recorded stock-based compensation expense of related to restricted stock units for members of our board of directors.
As of December 31, 2022 we had an equity payable balance of $.
During the year ended December 31, 2022, the Company issued shares and, recorded stock-based compensation expense of related to restricted stock units for members of our board of directors. The Company recorded stock-based compensation expense of $ related to restricted stock units for employee compensation.
9. Stock-based Plans and Stock-based Compensation
Stock-based Plans
We have the 2010 Incentive Stock Option Plan, the 2013 Incentive Stock Option Plan, the 2016 Stock Incentive Plan and the 2022 Equity Incentive Plan under which we have granted stock options to our directors, officers and employees. As of December 31, 2023, shares were authorized under the plans and shares were available for future grant.
We believe that such awards better align the interests of our directors, officers and employees with those of our shareholders. Option awards are generally granted with an exercise price that equals the fair market value of our stock at the date of grant. These option awards generally vest based on of continuous service and have -year contractual terms.
| -35- |
| Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2021 | $ | $ | ||||||||||||||
| Granted | $ | — | $ | — | ||||||||||||
| Exercised | $ | — | $ | — | ||||||||||||
| Forfeit/canceled | ( | ) | $ | — | $ | — | ||||||||||
| Expired | ( | ) | $ | — | $ | — | ||||||||||
| Outstanding at December 31, 2022 | $ | $ | ||||||||||||||
| Granted | $ | — | $ | — | ||||||||||||
| Exercised | $ | — | $ | — | ||||||||||||
| Forfeit/canceled | ( | ) | $ | — | $ | — | ||||||||||
| Expired | ( | ) | $ | — | $ | — | ||||||||||
| Outstanding at December 31, 2023 | $ | $ | ||||||||||||||
| Expected to vest at December 31, 2023 | $ | $ | ||||||||||||||
| Exercisable at December 31, 2023 | $ | $ | ||||||||||||||
| Unrecognized expense at December 31, 2023 | $ | |||||||||||||||
The aggregate intrinsic value of options was calculated as the difference between the exercise price of the underlying awards and the quoted price of our common stock. At December 31, 2023, options to purchase shares of common stock were in-the-money.
The weighted average grant-date fair value of options granted during the years 2023 and 2022 was $ and $, respectively.
2022
On
March 29, 2022, the Company granted
On
May 16, 2022, the Company granted
On
September 22, 2022, the Company granted
On
December 14, 2022, the Company granted
In the twelve months ended December 31, 2022, the company recorded stock-based plans amortized expense of $.
In the twelve months ended December 31, 2022 we had a total stock-based compensation expense of , this is comprised of in restricted stock unit compensation expense, $ of stock-based compensation expense and of stock-based compensation expense in connection with the exercise of investor-based warrants
| -36- |
2023
On
May 11, 2023 the Company granted
On
July 14, 2023 the Company granted
On
July 17, 2023 the Company granted
On
August 25, 2023 he Company granted
On
November 30, 2023, the Company granted
In the twelve months ended December 31, 2023 we had a total stock-based compensation expense of , this is comprised of in restricted stock unit compensation expense, and $ of stock-based compensation expense in connection with the exercise of investor-based warrants
Stock-based Compensation Expense
| Years Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| General and administrative | $ | $ | ||||||
| Sales and marketing | ||||||||
| Engineering, research, and development | ||||||||
| $ | $ | |||||||
As
of December 31, 2023, there was approximately $
Stock Option Valuation Assumptions
| Years Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Risk-free interest rate | % to | % | % to | % | ||||
| Expected life (years) | ||||||||
| Expected dividend yield | ||||||||
| Expected volatility | % to | % | % to | % | ||||
The risk-free interest rate assumption is based upon published interest rates appropriate for the expected life of our employee stock options.
| -37- |
The expected life of the stock options represents the weighted-average period that the stock options are expected to remain outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior as influenced by changes to the terms of its stock-based awards.
The dividend yield assumption is based on our history of not paying dividends and no future expectations of dividend payouts.
The expected volatility in 2023 and 2022 is based on the historical publicly traded price of our common stock.
Restricted stock units
| Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2021 | $ | — | $ | |||||||||||||
| Awarded | $ | — | $ | |||||||||||||
| Outstanding at December 31, 2022 | $ | — | $ | |||||||||||||
| Awarded | $ | — | $ | |||||||||||||
| Released | ) | $ | — | $ | ( | ) | ||||||||||
| Outstanding at December 31, 2023 | $ | — | $ | |||||||||||||
| Vested at December 31, 2023 | $ | — | — | $ | ||||||||||||
| Unvested at December 31, 2023 | $ | — | — | $ | — | |||||||||||
| Unrecognized expense at December 31, 2023 | $ | |||||||||||||||
| -38- |
2022
On
March 29, 2022, the Company granted
On
May 16, 2022, the Company granted
On
September 30, 2022, the Company granted
On
December 31, 2022 the Company granted
In
the twelve months ended December 31, 2022, the company recorded $
2023
On
March 31, 2023, the Company granted
On
June 30, 2023, the Company granted
On
September 30, 2023, the Company granted
On
December 31, 2023 the Company granted
In the twelve months ended December 31, 2023, the company recorded in restricted stock units as board compensation.
| -39- |
Restricted Stock Unit Compensation Expense
| Years Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| General and administrative | $ | $ | ||||||
| Sales and Marketing | ||||||||
| $ | $ | |||||||
10. Warrants to Purchase Common Stock
The following table summarizes investor warrant activity as of and for the years ended December 31, 2023 and 2022:
| Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | ||||||||||
| Outstanding at December 31, 2021 | $ | |||||||||||
| Granted | $ | — | — | |||||||||
| Exercised | ) | $ | — | — | ||||||||
| Outstanding at December 31, 2022 | $ | |||||||||||
| Granted | $ | — | — | |||||||||
| Exercised | ) | $ | — | — | ||||||||
| Outstanding at December 31, 2023 | $ | |||||||||||
We did record stock-based compensation expense of $ and $for the years ended December 31, 2023 and 2022, respectively in connection with the exercise of investor-based warrants.
Warrants Exercised in 2022
On
February 9, 2022,
On
June 29, 2022,
On
August 24, 2022,
Warrants Exercised in 2023
During
March 2023,
During
August and September of 2023,
During
the fourth quarter,
11. Income Taxes
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was enacted and signed into law in response to the market volatility and instability resulting from the COVID-19 pandemic. It includes a significant number of tax provisions and lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (the 2017 Act). The changes are mainly related to: (1) the business interest expense disallowance rules for 2019 and 2020; (2) net operating loss rules; (3) charitable contribution limitations; (4) employee retention credit; and (5) the realization of corporate alternative minimum tax credits. The Company does not anticipate the application of the CARES Act provisions to materially impact the overall Consolidated Financial Statements.
For the years ended December 31, 2023 and 2022 the provisions for income taxes were as follows:
| 2023 | 2022 | |||||||
| Federal – current | $ | $ | ||||||
| State – current | ||||||||
| Foreign – current | ||||||||
| Total | $ | $ |
Under ASC 740, deferred income tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
| -40- |
Significant components of our net deferred tax assets and liabilities as of December 31, 2023 and 2022 are as follows:
| 2023 | 2022 | |||||||
| Deferred tax assets (liabilities): | ||||||||
| Net operating loss carryforwards | $ | $ | ||||||
| Stock based compensation | ||||||||
| Accrued compensation | ||||||||
| Depreciation and amortization | ||||||||
| Other | ||||||||
| Total deferred tax assets | ||||||||
| Valuation allowance for net deferred tax assets | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
The Company has provided a valuation allowance against deferred tax assets recorded as of December 31, 2023 and 2022 due to uncertainties regarding the realization of such assets.
The
net change in the total valuation allowance for the year ended December 31, 2023 was an increase of approximately $
As
of December 31, 2023, the Company has available net operating loss carryforwards of approximately $
The difference between the provision for income taxes and income taxes computed using the U.S. federal income tax rate for the years ended December 31, 2023 and 2022 was as follows:
| 2023 | 2022 | |||||||
| Computed expected tax expense | $ | ( | ) | $ | ( | ) | ||
| State taxes, net of federal benefit | ( | ) | ||||||
| Expiration of NOL carryforwards | ( | ) | ||||||
| Other | ||||||||
| Change in valuation allowance | ( | ) | ||||||
| Total | $ | $ | ||||||
The
Company has determined that during 2010 it experienced a “change of ownership” as defined by Section 382 of the Internal
Revenue Code. As such, utilization of net operating loss carryforwards and credits generated before the 2010 change in ownership will
be limited to approximately $
The Company files income tax returns in the U.S. federal jurisdiction, Arizona, and California. Because the Company is carrying forward federal and state net operating losses from 2006, the Company is subject to U.S. federal and state income tax examinations by tax authorities for all years since 2006. The Company does not have a liability for any uncertain tax positions. As of December 31, 2023, no accrued interest or penalties are recorded in the financial statements.
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12. Fair Value Measurements of Financial Instruments
The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2023:
| Description | Level 1 | Level 2 | Level 3 | Gains (Losses) | ||||||||||||
| Goodwill (non-recurring) | $ | $ | — | $ | ||||||||||||
| Intangibles, net (non-recurring) | $ | $ | $ | $ | ||||||||||||
The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2022:
| Description | Level 1 | Level 2 | Level 3 | Gains (Losses) | ||||||||||||
| Goodwill (non-recurring) | $ | $ | — | $ | ||||||||||||
| Intangibles, net (non-recurring) | $ | $ | $ | $ | ||||||||||||
The Company recorded goodwill, intangible assets and an earn-out payable as a result its business combinations, and these assets were valued with the assistance of a valuation consultant and consisted of Level 3 valuation techniques.
The Company’s financial instruments consist of cash, accounts receivable, accounts payable, and accrued liabilities. The estimated fair value of cash, accounts receivable, accounts payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments. None of these instruments are held for trading purposes.
13. Commitments and Contingencies
Litigation
Marina Soliman v. Subway Franchisee Advertising Fund Trust, LTD, Second Circuit Court of Appeals, Case No. 22-1726 – this is putative class action alleging that Defendant initiated telephone solicitations through text messages in violation of the Telephone Consumer Protection Act, 47 U.S.C § 227 et al. (“TCPA”). The district court granted the defendant’s motion to dismiss, and our firm took over the defense of the matter after it was fully-briefed in the Court of Appeals. The matter has been under submission with the Court since October 24, 2023. In the event that the Court reverses and remands the matter, the Company intends to seek an individual settlement of the matter, and if one cannot be reached, the Company intends to vigorously defend the matter.
Operating Lease
We
entered into a new lease starting in February of 2021 for
14. Employee Benefit Plan
The Company has an employee savings plan (the “Plan”) pursuant to Section 401(k) of the Internal Revenue Code (the “Code”), covering all of its employees. Participants in the Plan may contribute a percentage of compensation, but not in excess of the maximum allowed under the Code. The Company may make contributions at the discretion of its Board of Directors. During the years ended December 31, 2023 and 2022, the Company made no contributions to the Plan.
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15. Related Party Transactions
Related Party Notes
Secured Promissory Notes
On
June 30, 2021, we entered into a Credit Facility Agreement (the “Credit Agreement”) with Thomas Akin, one of the Company’s
directors (the “Lender”). The Credit Agreement was amended on November 11, 2022. The Company can borrow up to $
The
Credit Facility is secured by all of our tangible and intangible assets including intellectual property. This loan bears interest on
the unpaid balance at the rate of fifteen percent (
Under
the original terms of the Credit Agreement, the Company was to begin repaying the principal amount, plus accrued interest, in
On
August 22, 2023, the Company took a draw of an additional $
On
September 20, 2023, the Company took a draw of an additional $
On
October 3, 2023, the Company took a draw of an additional $
During
the twelve months ended December 31, 2023, a total of $
During
the twelve months ended December 31, 2023, the Company issued warrants to purchase an aggregate of
As
of December 31, 2023, the Company had drawn a total of $
Unsecured Promissory Note
On
July 1, 2021, we entered into UP Notes in the aggregate principal amount of $
On
August 13, 2022, the Lender agreed to postpone the
As
of December 31, 20232, the Company had a principal balance of $
Related Party Convertible Notes
During
the fourth quarter of 2023 the Company issued eight Convertible Notes payable to related parties for $
As
of December 31,2023 the Related Party Convertible Notes had a principal balance of $
Related Party Warrant Exercise
On
March 2, 2023, Thomas Akin exercised his common stock purchase warrant for
On
February 7, 2023, Talkot Fund LP exercised their common stock purchase warrant for
On
August 7, 2023, Thomas Akin exercised his common stock purchase warrant for
On
August 7, 2023, Talkot Fund LP exercised their common stock purchase warrant for
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16. Subsequent Events
Convertible Notes
During
January 2024, the Company issued three Convertible Notes to Thomas B. Akin for a total amount of $
During
February 2024, the Company issued three Convertible Notes to Thomas B. Akin for a total amount of $
During
March 2024, the Company issued two Convertible Notes to Thomas B. Akin for a total amount of $
During
April 2024, the Company issued two Convertible Notes to Thomas B. Akin for a total amount of $
All
Convertible Notes accrue
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure.
As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act, our management, with the participation of our president (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report, being December 31, 2023 (the “Evaluation Date”). Based on such evaluation and subject to the foregoing, such officers have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are not effective at the reasonable assurance level to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, an issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s board of directors, management and other personnel, 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 and includes those policies and procedures that:
| (1) | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; and |
| (2) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer. |
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Under the supervision of our Chief Executive Officer, being our principal executive officer, and our Chief Financial Officer, being our principal financial officer and principal accounting officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023 using the criteria established in Internal Control—2013 Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation under the criteria established in Internal Control – Integrated Framework, our management concluded that our internal control over financial reporting was not effective as of December 31, 2023.
As a small company with limited resources that are mainly focused on the development and sales of software products and services, the Company does not employ a sufficient number of staff in its finance department to possess an optimal segregation of duties or to provide optimal levels of oversight. This has resulted in certain audit adjustments and management believes that there may be a possibility for a material misstatement to occur in future periods while it employs the current number of personnel in its finance department.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report is not subject to attestation by our registered, public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this annual report.
Changes in Internal Control
There was no change in our internal control over financial reporting, as defined in Rules 13a-15(f)under the Exchange Act, that occurred during the fiscal year ended December 31, 2023 and 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
During
the three months ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item is hereby incorporated by reference to the 2024 information statement for our (the “2024 Information Statement”), or in an amendment to this Annual Report on Form 10-K (the “Form 10-K/A”), which we plan to file with the SEC within 120 days after December 31, 2023.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act, requires our directors and executive officers, and persons who beneficially own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes of ownership of common stock and our other equity securities. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
Based upon a review of forms filed and information provided by the Company’s officers and directors, we believe that all Section 16(a) reporting requirements were met during fiscal year end 2023.
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Item 11. Executive Compensation
The information required by this item is hereby incorporated by reference to the information to be included in the 2024 Information Statement or, alternatively, in the Form 10-K/A, which we plan to file with the SEC within 120 days after December 31, 2023.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this item is hereby incorporated by reference to the information to be included in the 2024 Information Statement or in the Form 10-K/A, which we plan to file with the SEC within 120 days after December 31, 2023.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is hereby incorporated by reference to the information to be included in the 2024 Information Statement or in the Form 10-K/A, which we plan to file with the SEC within 120 days after December 31, 2023.
Item 14. Principal Accounting Fees and Services
The information required by this item is hereby incorporated by reference to the information to be included in the 2024 Information Statement or in the Form 10-K/A, which we plan to file with the SEC within 120 days after December 31, 2023.
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a)(1) Financial Statements
The following Consolidated Financial Statements of Mobivity Holdings Corp. appear beginning on page 22 herein:
| ● | Report of Independent Registered Public Accounting Firm | |
| ● | Consolidated Balance Sheets as of December 31, 2023 and 2022 | |
| ● | Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022 | |
| ● | Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2023 and 2022 | |
| ● | Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 | |
| ● | Notes to Consolidated Financial Statements |
(a)(2) Financial Statement Schedules
The schedules required to be filed by this item have been omitted because of the absence of conditions under which they are required, or because the required information is included in the financial statements or the notes thereto.
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(a)(3) Exhibits
EXHIBIT INDEX
| * | Filed herewith | |
| ** | Indicates management compensatory plan, contract or arrangement | |
| (1) | Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 15, 2022 | |
| (2) | Incorporated by reference to the Registration Statement on Form S-1 filed with the SEC on October 20, 2008, File No. 333-154455 | |
| (3) | Incorporated by reference to the Company’s Current Report on Form 8-K filed December 2, 2011 | |
| (4) | Incorporated by reference to the Company’s Current Report on Form 8-K filed January 18, 2011 | |
| (5) | Incorporated by reference to the Company’s Current Report on Form 8-K filed August 10, 2012 | |
| (6) | Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 14, 2013 | |
| (7) | Incorporated by reference to the Company’s Annual Report on Form 10-K filed April 15, 2019 | |
| (8) | Incorporated by reference to the Company’s Current Report on Form 8-K filed May 24, 2013 | |
| (9) | Incorporated by reference to the Company’s Quarterly Report on Form 10-K filed March 30, 2022 | |
| (10) | Incorporated by reference to the Company’s Registration Statement on Form S-8 filed September 22, 2022 | |
| (11) | Incorporated by reference to the Company’s Quarterly Report on Form 8-K filed November 17, 2022 | |
| (12) | Incorporated by reference to the Company’s Registration Statement on Form 8-K filed February 6, 2023 | |
| (13) | Incorporated by reference to the Company’s Registration Statement on Form 8-K filed March 16, 2023 |
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DATE: April 16, 2024 | MOBIVITY HOLDINGS CORP. |
| /s/ Skye Fossey-Tomaske | |
| Skye Fossey-Tomaske | |
| Interim Chief Financial Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Thomas Akin | Chairman of the Board (Principal Executive Officer) | April 16, 2024 | ||
| /s/ Skye Fossey-Tomaske | Interim Chief Financial Officer (Principal Financial Officer and Principle Accounting Officer) | April 16, 2024 | ||
| /s/ Philip Guarascio | Director | April 16, 2024 | ||
| /s/ Ben Weinberger | Director | April 16, 2024 | ||
| /s/ Doug Schneider | Director | April 16, 2024 | ||
| /s/ Dennis Becker | Director | April 16, 2024 |
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