Mobivity (MFON) Q3 2025 loss widens amid heavy debt and cash strain
Mobivity Holdings Corp. reported sharply higher Q3 2025 revenue but continued heavy losses and leverage. Revenue from continuing operations rose to $853,614 for the quarter and $2,305,942 for the nine months ended September 30, 2025, up from $226,208 and $900,008 a year earlier, driven by its Recurrency and Connected Rewards platforms. Gross profit for the nine months increased to $946,575, but operating expenses of $7.3 million kept the business deeply unprofitable.
The company posted a Q3 net loss of $3.3 million and a nine‑month net loss of $8.6 million, compared with $2.5 million and $7.2 million in the prior-year periods. Interest expense rose to $2.1 million for the nine months, reflecting significant related-party and other notes, with total notes payable principal reaching $22.8 million.
As of September 30, 2025, Mobivity held $1.66 million in cash and had total assets of $3.0 million against total liabilities of $27.1 million, resulting in a stockholders’ deficit of $24.1 million. Management disclosed substantial doubt about the company’s ability to continue as a going concern and plans to rely on additional financings and operating cash flows.
Positive
- Strong revenue growth from continuing operations: Revenue rose to $853,614 in Q3 2025 and $2,305,942 for the nine months, up from $226,208 and $900,008 a year earlier, indicating traction in the Recurrency and Connected Rewards businesses.
Negative
- Material net losses and cash burn: Nine‑month net loss of $8,604,594 and operating cash outflow of $6,265,563 from continuing operations signal sustained negative profitability.
- Highly leveraged balance sheet with going concern risk: Total notes payable principal of $22,785,680, stockholders’ deficit of $24,112,670, and management’s explicit statement of substantial doubt about the ability to continue as a going concern are significant financial risks.
- Rising interest burden from related-party financing: Interest expense increased to $2,140,792 for the nine months, largely tied to high‑rate related-party notes, further pressuring earnings and cash flow.
Insights
Rising revenue is outweighed by large losses, heavy related-party debt, and a disclosed going concern risk.
Mobivity is growing its continuing revenue base, but its capital structure is highly stressed. For the nine months ended September 30, 2025, net loss was $8.6M, while cash from continuing operations was negative $6.3M. At the same time, interest expense climbed to $2.14M, showing how much of the income statement is absorbed by financing costs.
Total notes payable principal reached $22.79M, mostly to related parties at rates of 8%–15%, including $10.35M of related-party convertible notes and $5.87M under a secured credit facility. These instruments often carry equity-linked features and frequent amendments, which the company accounts for as debt modifications rather than extinguishments.
On the balance sheet, assets of $3.02M are far below total liabilities of $27.13M, leaving a stockholders’ deficit of $24.11M and an accumulated deficit of $148.8M. Management explicitly states there is substantial doubt about continuing as a going concern, and notes that further equity or debt financing and improved cash flow will be needed to meet obligations.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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MOBIVITY HOLDINGS CORP.
TABLE OF CONTENTS
| PART I – FINANCIAL INFORMATION | 1 |
| Item 1. Financial Statements | 1 |
| Condensed Consolidated Balance Sheets | 1 |
| Condensed Consolidated Statements of Operations and Comprehensive Loss | 2 |
| Condensed Consolidated Statement of Stockholders’ Deficit | 3 |
| Condensed Consolidated Statements of Cash Flows | 4 |
| Notes to Condensed Consolidated Financial Statements | 5 |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26 |
| Item 3. Quantitative and Qualitative Disclosures about Market Risk. | 32 |
| Item 4. Controls and Procedures. | 32 |
| PART II – OTHER INFORMATION | 33 |
| Item 1. Legal Proceedings | 33 |
| Item 1A. Risk Factors | 33 |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 33 |
| Item 3. Defaults Upon Senior Securities | 33 |
| Item 4. Mine Safety Disclosures | 33 |
| Item 5. Other Information | 33 |
| Item 6. Exhibits | 34 |
| SIGNATURES | 35 |
| i |
| Table of Contents |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Mobivity Holdings Corp.
Condensed Consolidated Balance Sheets
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Restricted Cash | ||||||||
| Accounts receivable,
net of allowance for doubtful accounts $ | ||||||||
| Current assets from discontinued operations | — | |||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Right to use lease assets | ||||||||
| Intangible assets and software development costs, net | ||||||||
| Fixed Assets | ||||||||
| Other assets | — | |||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ 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, current | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Related party notes payable, net - long term | ||||||||
| Notes payable, net - long term | ||||||||
| Operating lease liability | ||||||||
| Other Non-Current Liabilities - related party | — | |||||||
| Other Non-Current Liabilities | — | |||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ deficit | ||||||||
| Common stock, $ | ||||||||
| Equity payable | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| 1 |
| Table of Contents |
Mobivity Holdings Corp.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | ||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | $ | $ | ||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Bad Debt Expense | — | ( | ) | |||||||||||||
| General and administrative | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Engineering, research, and development | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income/(expense) | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss on sale of fixed assets | — | ( | ) | ( | ) | — | ||||||||||
| Loss on settlement of debt | — | ( | ) | |||||||||||||
| Settlement Losses | — | — | ( | ) | — | |||||||||||
| Foreign currency gain | ( | ) | — | — | ( | ) | ||||||||||
| Total other income/(expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Income (Loss) from discontinued operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive loss, net of income tax | ||||||||||||||||
| Foreign currency translation adjustments | ||||||||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic and Diluted net loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Basic and Diluted net loss from discontinued operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total Basic and Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of shares: | ||||||||||||||||
| Basic and Diluted | ||||||||||||||||
See accompanying notes to consolidated financial statements (unaudited).
| 2 |
| Table of Contents |
Mobivity Holdings Corp.
Condensed Consolidated Statement of Stockholders’ Deficit
(Unaudited)
| Common Stock | Equity | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | |||||||||||||||||||||||
| Shares | Dollars | Payable | Capital | Loss | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | ( | ) | |||||||||||||||||||
| Debt discount - related party debt | — | — | — | — | — | |||||||||||||||||||||||
| Issuance of common stock for settlement of interest from equity payable - related party debt | ( | ) | — | — | — | |||||||||||||||||||||||
| Interest Payable on related party debt recorded to equity payable | — | — | — | — | — | |||||||||||||||||||||||
| Stock based compensation - employees | — | — | — | — | — | |||||||||||||||||||||||
| Stock based compensation - directors | — | — | — | — | — | |||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Debt discount - related party debt | — | — | — | — | — | |||||||||||||||||||||||
| Interest Payable on related party debt recorded to equity payable | — | — | — | — | — | |||||||||||||||||||||||
| Stock based compensation | — | — | — | — | — | |||||||||||||||||||||||
| Stock based compensation - directors | — | — | — | — | — | |||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance, June 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Issuance of common stock for warrant exercise | — | — | — | — | — | — | — | |||||||||||||||||||||
| Fair market value of options issued with related party debt | — | — | — | — | — | — | — | |||||||||||||||||||||
| Issuance of common stock for settlement of interest payable on related party debt | ( | ) | — | — | ||||||||||||||||||||||||
| RSU’s issued - termination of director’s service | ||||||||||||||||||||||||||||
| Interest Payable on related party debt recorded to equity payable | — | — | — | — | — | |||||||||||||||||||||||
| Stock based compensation - employees | — | — | — | — | — | |||||||||||||||||||||||
| Stock based compensation - directors | — | — | — | — | — | |||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Common Stock | Equity | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | |||||||||||||||||||||||
| Shares | Dollars | Payable | Capital | Loss | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
| Debt discount - related party debt | — | — | — | — | — | |||||||||||||||||||||||
| Stock based compensation - Employees | — | — | — | — | — | |||||||||||||||||||||||
| Stock Based Compensation - Directors | — | — | — | — | — | |||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | — | — | — | $ | ( | ) | ( | ) | ||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Debt discount - related party debt | — | — | — | — | ||||||||||||||||||||||||
| Issuance of common stock for settlement of interest payable on related party debt | — | — | — | — | ||||||||||||||||||||||||
| Stock based compensation - Employees | — | — | — | — | — | |||||||||||||||||||||||
| Stock based compensation -Directors | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
| Net loss | — | — | — | — | — | $ | ( | ) | ( | ) | ||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Balance | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Debt discount - related party debt | ( | ) | — | — | ||||||||||||||||||||||||
| Issuance of common stock for settlement of interest payable on related party debt | — | — | — | — | ||||||||||||||||||||||||
| — | — | — | 298,188 | 298,188 | ||||||||||||||||||||||||
| Stock based compensation - Employees | — | — | — | — | — | |||||||||||||||||||||||
| Stock based compensation -Directors | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | — | — | — | $ | ( | ) | ( | ) | ||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Balance | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
See accompanying notes to consolidated financial statements (unaudited).
| 3 |
| Table of Contents |
Mobivity Holdings Corp.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| 2025 | 2024 | |||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Net income (loss) from discontinued operations | ( | ) | ||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Bad debt expense | ||||||||
| Stock-based compensation | ||||||||
| Stock-based compensation from restricted stock | ||||||||
| Loss on disposal of fixed assets | — | |||||||
| Depreciation and amortization expense | ||||||||
| Amortization of Debt Discount | ||||||||
| Increase (decrease) in cash resulting from changes in: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Other current assets | — | — | ||||||
| Other assets | ( | ) | — | |||||
| Accounts payable | ||||||||
| Prepaid Expenses | ( | ) | ||||||
| Accrued interest | ||||||||
| Accrued and deferred personnel compensation | ||||||||
| Other liabilities - current | ( | ) | ||||||
| Lease Operating Assets | ( | ) | ( | ) | ||||
| Deferred revenue and customer deposits | ( | ) | ( | ) | ||||
| Net cash and restricted cash used in operating activities of continuing operations | ( | ) | ( | ) | ||||
| Net Cash and restricted cash used in operating activities of discontinuing operations | ( | ) | ||||||
| Net cash and restricted cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| INVESTING ACTIVITIES | ||||||||
| Cash paid for patent equipment | — | ( | ) | |||||
| Purchases of equipment | ( | ) | ( | ) | ||||
| Net cash and restricted cash used in investing activities | ( | ) | ( | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| Payments on notes payable | — | ( | ) | |||||
| Proceeds from Related Party Debt | ||||||||
| Proceeds from Notes Payable | — | |||||||
| Net cash and restricted cash provided by (used in) financing activities | ||||||||
| Effect of foreign currency translation on cash flow | ||||||||
| Net Change in cash and restricted cash | ||||||||
| Cash and restricted cash at beginning of period | $ | $ | ||||||
| Cash and restricted cash at end of period | ||||||||
| Supplemental disclosures | ||||||||
| Interest paid | $ | — | $ | — | ||||
| Non Cash investing and financing activities: | ||||||||
| Fair value of options issued with related party debt | $ | $ | ||||||
| Shares issued for settlement of debt - related party | $ | $ | ||||||
| Shares issued from stock-payable | $ | $ | — | |||||
| AP exchange for related party notes payable | $ | $ | — | |||||
| AP exchange for notes payable | $ | $ | — | |||||
See accompanying notes to consolidated financial statements.
| 4 |
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Mobivity Holdings Corp.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Nature of Operations and Basis of Presentation
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.
On September 25, 2024, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with SMS Factory, Inc., a Florida corporation (“SMS Factory”). Pursuant to the Asset Purchase Agreement, SMS Factory purchased all of the right, title and interest in the Company’s SMS/MMS text messaging customer accounts, excluding certain Excluded Assets (as defined in the Asset Purchase Agreement) utilized in the operation of the Company’s SMS/MMS text messaging platform business (the “Business Assets”) effective as of September 25, 2024 (the “Closing Date”). Given that the effect of the Asset Purchase Agreement meets all the initial criteria of ASC Topic 205-20, Presentation of Financial Statements – Discontinued Operations for the classification of discontinued operations, the assets, liabilities, and operating results of Mobivity Holdings Corp have been classified as discontinued operations as of September 30, 2024 and December 31, 2024 and for the nine months ended September 30, 2025 and 2024. The consolidated financial statements for the prior periods have been adjusted to reflect comparable information.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and disclosures required by GAAP for annual financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on April 7, 2024.
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| Table of Contents |
In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of our condensed consolidated financial statements as of September 30, 2025, and for the three and nine months ended September 30, 2025 and 2024. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results for the full year ending December 31, 2024.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. 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. Management believes that these estimates are reasonable; however, actual results may differ from these estimates.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year’s presentation. The reclassifications did not affect previously reported net losses.
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 Equivalents and Restricted Cash
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.
Restricted cash is held for as a deposit to guarantee our letter of credit required for currently office lease. We also hold in restricted cash a deposit by our office space’s sublease tenant.
As
of June 30, 2025, a total of $
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 September 30, 2025, and December 31, 2024 we recorded an allowance for doubtful accounts of $
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.
| 6 |
| Table of Contents |
We
conducted our annual impairment tests of goodwill as of December 31, 2024. As a result of these tests, we had a total impairment charge
of $
Intangible assets consist of patents and trademarks, purchased customer contracts, purchased customer and merchant relationships, purchased trade names, purchased technology, non-compete agreements, and software development costs. Intangible assets are amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from one year to twenty years. No significant residual value is estimated for intangible assets.
The
Company’s evaluation of its goodwill and intangible assets resulted in
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 Financial Accounting Standards Board (“FASB”) guidance for the costs of computer software to be sold, leased, or otherwise marketed (Accounting Standards Codification subtopic 985-20, Costs of Software to Be Sold, Leased, or Marketed, or “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. The technological feasibility of a product encompasses technical design documentation and integration documentation, or the completed and tested product design and working model. Software development costs are capitalized once the technological feasibility of a product is established and such costs are determined to be recoverable against future revenues. 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 canceled or abandoned are charged to product development expenses 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 twenty-four-month
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 assets resulted in
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 ASC 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.
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, 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 fees 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.
Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“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 under ASC 606 through the following steps:
| ● | identification of the contract, or contracts, with a customer; | |
| ● | identification of the performance obligations in the contract; | |
| ● | identification 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 nine months ended September 30, 2025 and 2024, two customers accounted for
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Comprehensive 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 a comprehensive loss.
For
the three months ended September 30, 2025 and 2024, the comprehensive loss was $
For
the nine months ended September 30, 2025 and 2024 , the comprehensive loss was $
Stock-based Compensation
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 trade shows, sales enablement, content creation, paid engagement
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.
Net Loss Per Common Share
Basic net loss per share excludes any dilutive effects of options, shares subject to repurchase, and warrants. Diluted net loss per share includes the impact of potentially dilutive securities. During the three and nine months ended September 30, 2025 and 2024, we had securities outstanding which could potentially dilute basic earnings per share in the future. Stock-based compensation, stock options and warrants were excluded from the computation of diluted net loss per share when their effect would have been anti-dilutive.
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 is a summary of recent accounting developments.
In November 2023 FASB issued ASU 2023-07, Segment Reporting – Improvements to Reportable Segment Disclosures. ASU 2023-07 requires public entities “improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.” The Company adopted AS 2023-07 as of December 31, 2024. The Company’s CODM has determined that Mobivity Holdings Corp has one reportable segment. This will result in no changes to the reporting of our or presentation our financial statements. The measure of segment assets is reported on the balance sheet as total consolidated assets.
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3. Discontinued Operations
On September 25, 2024, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with SMS Factory, Inc., a Florida corporation (“SMS Factory”). Pursuant to the Asset Purchase Agreement, SMS Factory purchased all of the right, title and interest in the Company’s SMS/MMS text messaging customer accounts, excluding certain Excluded Assets (as defined in the Asset Purchase Agreement) utilized in the operation of the Company’s SMS/MMS text messaging platform business (the “Business Assets”) effective as of September 25, 2024 (the “Closing Date”).
The following table presents a reconciliation of the carrying amounts of the major classes of these assets and liabilities to the current assets and liabilities of discontinued operations as presented on the Company’s Consolidated Balance Sheet:
Schedule of Consolidated Balance Sheets and Statements of Loss
As of September 30, 2025 | As of December 31, 2024 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Accounts receivable | $ | — | $ | |||||
| Total Assets | $ | — | $ | |||||
The following table provides details about the major classes of line items constituting “Income from discontinued operations” as presented on the Company’s Consolidated Statements of Loss:
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | - | $ | $ | ||||||||||||
| Cost of Revenue | ||||||||||||||||
| Gross Profit | ( | ) | ||||||||||||||
| Operating Expenses | ||||||||||||||||
| Bad Debt Expense | ( | ) | ||||||||||||||
| General and administrative | ||||||||||||||||
| Sales and marketing | — | |||||||||||||||
| Engineering, research and development | — | |||||||||||||||
| Other operating expenses | — | |||||||||||||||
| Total operating expenses | ||||||||||||||||
| Foreign currency gain | — | — | — | ( | ) | |||||||||||
| Loss on settlement of debt | — | ( | ) | — | ( | ) | ||||||||||
| Total other income/(expense) | — | ( | ) | — | ( | ) | ||||||||||
| Income (Loss) from Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Income (Loss) from Discontinued Operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The Company’s execution of the Asset Purchase Agreement has met the criteria to be reported as discontinued operations. In accordance with GAAP, assets and liabilities of discontinued operations are presented separately in the Consolidated Balance Sheets, and results of discontinued operations are reported as a separate component of Consolidated net loss in the Consolidated Statements of Loss, for all periods presented, resulting in changes to the presentation of certain prior period amounts. Cash flows from discontinued operations are reported separately in the Consolidated Statements of Cash Flows. The assets and liabilities of discontinued operations are presented separately in the Consolidated Balance Sheets for all periods presented.
4. Going Concern
The
Company had $
Our additional cash from our convertible notes 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.
As
shown in the accompanying financial statements, the Company has incurred net losses from operations resulting in an accumulated deficit
of $
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5. Intangibles
Intangible assets
The following table presents details of our purchased intangible assets as of September 30, 2025 and December 31, 2024:
Schedule of Intangible Assets
| Balance at December 31, 2024 | Additions | Impairments | Amortization | Foreign Exchange and Other | Balance at September 30, 2025 | |||||||||||||||||||
| Patents and trademarks | $ | | $ | $ | — | $ | ( | ) | $ | — | $ | |||||||||||||
| $ | $ | $ | — | $ | ( | ) | $ | — | $ | |||||||||||||||
The
intangible assets are being amortized on a straight-line basis over their estimated useful lives of
Amortization
expense for intangible assets was $
Amortization
expense for intangible assets was $
The estimated future amortization expense of our intangible assets as of September 30, 2025 was as follows:
Schedule of Finite Lived Intangible Assets Future Amortization Expense
| Year ending December 31, | Amount | |||
| 2025 | $ | |||
| 2026 | $ | |||
| 2027 | $ | |||
| 2028 | $ | |||
| 2029 | $ | |||
| Thereafter | $ | |||
| Total | $ | |||
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6. Operating Lease Assets
The
Company entered into a lease agreement on February 1, 2021, for
The
Company entered in to a sublease on March 1, 2024 for its office facilities in Chandler, AZ through February 28, 2025. Monthly rental
payments including rental of office furniture and excluding taxes, are $
The following are additional details related to leases recorded on our balance sheet as of September 30, 2025:
Schedule of Additional Details Related to Leases
| Leases | Classification | Balance at September 30, 2025 | ||||
| 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 | $ | |||||
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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:
Schedule of Lessee, Operating Lease Liability
| Year ending December 31, | ||||
| 2025 | $ | — | ||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | — | |||
| Thereafter | — | |||
| Total future lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Total | $ | |||
Schedule of Lease Cost
| Weighted Average Remaining Lease Term (years) | ||||
| Operating leases | ||||
| Weighted Average Discount Rate | ||||
| Operating leases | % |
7. Notes Payable and Interest Expense
The following table presents details of our notes payable as of September 30, 2025 and December 31, 2024:
Schedule of Debt
| Facility | Maturity | Interest Rate | Balance at September 30, 2025 | Balance at December 31, 2024 | ||||||||||
| Related Party Unsecured Promissory Note - Principal | % | |||||||||||||
| Related Party Secured Promissory Note | % | |||||||||||||
| Related Party Convertible Notes | various | % | ||||||||||||
| Convertible Notes | % | |||||||||||||
| Related Party Senior Secured Convertible Notes | Various | % | — | |||||||||||
| Senior Secured Convertible Notes | Various | % | — | |||||||||||
| Related Party Senior Secured Notes - Round 2 | Various | % | — | |||||||||||
| Total Notes Payable Principal | ||||||||||||||
| Less Total Debt Discount | ( | ) | ( | ) | ||||||||||
| Total Debt | ||||||||||||||
| Less current portion | ( | ) | ( | ) | ||||||||||
| Long-term debt, net of current portion | $ | $ | ||||||||||||
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Related Party Notes
Unsecured Promissory Note (“UP Notes”)
On
July 1, 2021, we entered into UP Notes in the aggregate principal amount of $
On
January 31, 2023, the Lender agreed to postpone the
On
January 31 2024, the Lender agreed to postpone the
During
the nine months ended September 30, 2025, a total of $
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
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On January 31, 2023, the Company then entered into Amendment No. 1 ( “Amendment 1”), which amends our existing Credit Facility Agreement[1], dated as of November 11, 2022, between the Company and Thomas B. Akin, and any convertible notes issued thereunder. Amendment 1 amends the existing Credit Facility Agreement to extend the maturity of the agreement and related convertible notes thereunder until December 1, 2025. Principal payments have been deferred to a period beginning on January 1, 2024 and ending December 1, 2025, and further provides that any accrued interest on unpaid advances under the agreement is to be paid quarterly in shares of our common stock, at a price per share equal to the volume-weighted average price of our common stock quoted on the Over-The Counter Venture Market operated by OTC Markets Group Inc. (“OTCQB®”) over the ninety (90) trading days immediately preceding such date. Amendment 1 provides for corresponding amendments to the form of convertible notes to be issued under the Credit Agreement in the future and any outstanding convertible notes issued under the existing Credit Facility Agreement. Amendment 1 was considered a debt modification as the cash flows under the amended terms do not differ by at least 10% from the cash flows under the original agreement.
On January 31, 2024 amended terms were agreed upon and the Company then entered into Amendment No. 2 (“ Amendment 2”) signed on May 3,2024, which amends the terms of the Credit Facility Agreement, between the Company and Thomas B. Akin, and any convertible notes issued thereunder. Amendment 2 amends the existing Credit Facility Agreement to extend the maturity of the agreement and related convertible notes thereunder until June 30, 2026. Principal payments have been deferred to a period beginning on July 31, 2024 and ending June 30, 2026. The Company determined that the change in repayment terms should be accounted for as a modification as opposed to a complete extinguishment of debt, based on the guidance in ASU 470-50. The key components of this determination were as follows: (a) the changes in the structure of the debt was not deemed significant; and (b) the modification of terms were not deemed substantial enough to be treated as an extinguishment, since the present value of the new note terms did not exceeded the present value of the prior note terms by more than 10%.
On August 13, 2024 amended terms were agreed upon and the Company then entered into Amendment No. 3 (“Amendment 3”) signed on May 3,2024, which amends the terms of the Credit Facility Agreement, between the Company and Thomas B. Akin, and any convertible notes issued thereunder. Amendment 3 amends the existing Credit Facility Agreement to extend the maturity of the agreement and related convertible notes thereunder until June 30, 2026. Principal payments have been deferred to a period beginning on October 31, 2024 and ending September 30, 2026. The Company determined that the change in repayment terms should be accounted for as a modification as opposed to a complete extinguishment of debt, based on the guidance in ASU 470-50. The key components of this determination were as follows: (a) the changes in the structure of the debt was not deemed significant; and (b) the modification of terms were not deemed substantial enough to be treated as an extinguishment, since the present value of the new note terms did not exceeded the present value of the prior note terms by more than 10%.
The Company entered into Amendment No. 4 (“Amendment 4”) to Amended and Restated Credit Facility Agreement and Convertible Notes (the Credit Facility Agreement), signed on November 21,2024, which amends the terms of the Credit Facility Agreement, between the Company and Thomas B. Akin, and any convertible notes issued thereunder. Amendment 4 amends the existing Credit Facility Agreement to extend the maturity of the agreement and related convertible notes thereunder until March 31, 2027. Principal payments have been deferred to a period beginning on April 30, 2025 and ending March 31, 2027. The Company determined that the change in repayment terms should be accounted for as a modification as opposed to a complete extinguishment of debt, based on the guidance in ASU 470-50. The key components of this determination were as follows: (a) the changes in the structure of the debt was not deemed significant; and (b) the modification of terms were not deemed substantial enough to be treated as an extinguishment, since the present value of the new note terms did not exceeded the present value of the prior note terms by more than 10%.
During
the nine months ended September 30, 2025, a total of $
Related Party Convertible Notes
The
Company entered into Convertible Notes, (each a “Convertible Note” and collectively, the “Convertible Notes”)
with multiple investors. The Convertible Notes accrue interest at a rate of
Related
Party Convertible Notes issued in prior periods at the beginning of 2024 had a balance of $
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During
the first quarter 2024 the Company issued 8 Convertible Notes payable to Thomas B. Akin for $
During
the second quarter of 2024 the Company issued 8 Convertible Notes payable to Thomas B. Akin for $
During
the third quarter of 2024 the Company issued 4 Convertible Notes payable to Thomas B. Akin for $
During
the fourth quarter of 2024 the Company issued 5 Convertible Notes payable to Thomas B. Akin for $
During
the first quarter of 2025 the Company issued 5 Convertible Notes payable to Thomas B. Akin for $
During
the second quarter of 2025 the Company issued 5 Convertible Notes payable to Thomas B. Akin for $
During
the third quarter of 2025 the Company issued 1 Convertible Notes payable to Thomas B. Akin for $
During
the nine months ended September 30, 2025 the company recorded $
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Related Party Senior Secured Convertible Notes
On
March 17, 2025, Mobivity Holdings Corp. (the “Company”) entered into a convertible promissory note purchase agreement (the
“Senior Secured Notes”) with four accredited investors, including Thomas B. Akin, a member of the Company’s Board of
Directors (“Board”), and Bruce E. Terker, an owner of
During
the first quarter of 2025 the Company issued 7 Convertible Notes payable to related party investors for $
Related Party Senior Secured Notes - Round 2
During
the third quarter of 2025 the Company issued 11 Convertible Notes payable to related party investors for $
Convertible Notes
Convertible Notes
Convertible
Notes issued in prior periods at the beginning of 2024 had a balance of $
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 $
During
the nine months ended September 30, 2025 the company recorded accrued interest of $
As
of September 30, 2025 the Convertible Notes had a principal balance of $
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Senior Secured Convertible Notes
On
March 17, 2025, Mobivity Holdings Corp. (the “Company”) entered into a convertible promissory note purchase agreement (the
“Agreement”) with four accredited investors, including Thomas B. Akin, a member of the Company’s Board of Directors
(“Board”), and Bruce E. Terker, an owner of
During
the first quarter of 2025 the Company issued 10 Senior Secured Convertible Notes payable for $
Interest Expense
Interest
expense was $
Interest
expense was $
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8. Common Stock and Equity Payable
Common Stock and Equity Payable
2024
On
June 30, 2024 a total of $
On
June 30, 2024 a total of $
On
September 30, 2024 a total of $
On
September 30, 2024 a total of $
During
the nine months ended September 30, 2024
As
of the nine months ended September 30, 2024 we had an equity payable balance of $
2025
On
January 24, 2025 a total of
On
January 24, 2025 a total of
On
March 31, 2025 a total of $
No gain or loss was recognized upon the conversion of the notes payable due to the recurring related-party nature of the debt.
On
March 31, 2025 a total of $
No gain or loss was recognized upon the conversion of the notes payable due to the recurring related-party nature of the debt.
On
June 30, 2025 a total of $
On
June 30, 2025 a total of $
On
July 15, 2025 a total of
On
July 15, 2025 a total of
No gain or loss was recognized upon the conversion of the notes payable due to the recurring related-party nature of the debt.
On July 15, 2025 a total of
On
July 23, 2025 a total of
On
July 23, 2025 a total of
On
September 30, 2025 a total of $
On
September 30, 2025 a total of $
During
the nine months ended September 30, 2025, the Company issued
As
of the September 30, 2025 the Company had an equity payable balance of $
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Stock-based Plans
Stock Option Activity
The following table summarizes stock option activity for the nine months ended September 30, 2025.
Schedule of Share Based Payment Arrangement Options Activity
| Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | ||||||||||
| Outstanding at December 31, 2023 | $ | |||||||||||
| Granted | $ | — | — | |||||||||
| Forfeited/canceled | ( | ) | $ | — | — | |||||||
| Expired | ( | ) | $ | — | ||||||||
| Outstanding at December 31, 2024 | $ | |||||||||||
| Forfeited/canceled | ( | ) | $ | — | — | |||||||
| Expired | ( | ) | $ | — | — | |||||||
| Outstanding at September 30, 2025 | $ | |||||||||||
| Expected to vest at September 30, 2025 | $ | |||||||||||
| Exercisable at September 30, 2025 | $ | |||||||||||
| Unrecognized expense at September 30, 2025 | $ | — | ||||||||||
2024
On
April 1, 2024, the Company granted
During
the twelve months ended December 31, 2024 we had a total stock-based compensation expense of $
2025
During
the nine months ended September 30, 2025
During
the nine months ended September 30, 2025 we had a total stock-based compensation expense of $
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Stock-Based Compensation Expense from Stock Options and Warrants
The impact on our results of operations of recording stock-based compensation expense for the three and nine months ended September 30, 2025 and 2024 were as follows:
Schedule of Stock-based Compensation Expense
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| General and administrative | $ | $ | $ | $ | ( | ) | ||||||||||
| Sales and marketing | ||||||||||||||||
| Engineering, research, and development | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Valuation Assumptions
The fair value of each stock option award was calculated on the date of the grant using the Black-Scholes option pricing model. The following weighted average assumptions were used for the nine months ended September 30, 2025 and 2024.
Schedule of Valuation Assumptions
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Risk-free interest rate | — | % | % | |||||
| Expected life (years) | — | |||||||
| Expected dividend yield | — | % | — | % | ||||
| Expected volatility | — | % | % | |||||
The risk-free interest rate assumption is based upon published interest rates appropriate for the expected life of our employee stock options.
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 the 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 the Company’s 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 2025 and 2024 is based on the historical publicly traded price of our common stock.
Restricted stock units
The following table summarizes restricted stock unit activity under our stock-based plans for the year ended December 31, 2024 and for the nine months ended September 30, 2025:
Schedule of Restricted Stock Unit Activity
| Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2023 | $ | — | $ | |||||||||||||
| Awarded | $ | — | $ | |||||||||||||
| Outstanding at December 31, 2024 | $ | — | $ | |||||||||||||
| Awarded | $ | — | $ | |||||||||||||
| Outstanding at September 30, 2025 | $ | — | $ | |||||||||||||
| Expected to vest at September 30, 2025 | $ | — | $ | |||||||||||||
| Vested at September 30, 2025 | $ | — | $ | |||||||||||||
| Unvested at September 30, 2025 | — | |||||||||||||||
| Unrecognized expense at September 30, 2025 | $ | — | ||||||||||||||
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2024
On
March 31, 2024 the Company granted
On
June 30,2024 the Company granted
On
September 30, 2024 the company granted
In
the nine months ended September 30, 2024 the Company recorded $
2025
On
March 31, 2025 the Company granted
On
June 30, 2025 the Company granted
On
September 30, 2025 the Company granted
In
the nine months ended September 30, 2025, the Company recorded $
Stock Based Compensation from Restricted Stock
The impact on our results of operations of recording stock-based compensation expense for restricted stock units for the three and nine months ended September 30, 2025 and 2024 was as follows:
Schedule of Stock-based Compensation Expense
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
As of September 30, 2025, there was no unearned restricted stock unit compensation.
Warrants
The following table summarizes investor warrants as of September 30, 2025 and the years ended December 31, 2024 and 2023:
Schedule of Investor Warrants
| Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | ||||||||||
| Outstanding at December 31, 2023 | $ | |||||||||||
| Granted | $ | — | — | |||||||||
| Canceled/forfeited/expired | ( | ) | $ | — | — | |||||||
| Outstanding at December 31, 2024 | $ | |||||||||||
| Granted | $ | — | — | |||||||||
| Exercised | — | $ | — | — | ||||||||
| Canceled/forfeited/expired | ( | ) | $ | — | — | |||||||
| Outstanding at September 30, 2025 | $ | |||||||||||
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2024
During
the first quarter of 2024,
During
the second quarter of 2024,
During
the third quarter of 2024,
2025
During
the first quarter of 2025,
During
the second quarter of 2025,
During
the third quarter of 2025,
9. Fair Value Measurements
Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which requires us to develop our own assumptions. This hierarchy requires companies to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, we measure certain financial assets and liabilities at fair value.
The following table presents assets that are measured and recognized at fair value as of September 30, 2025 on a recurring and non-recurring basis:
Schedule of Fair Value Measurements Recurring and Nonrecurring
| Description | Level 1 | Level 2 | Level 3 | Gains (Losses) | ||||||||||||
| Goodwill (non-recurring) | $ | — | $ | — | $ | — | $ | — | ||||||||
| Intangibles, net (non-recurring) | $ | — | $ | — | $ | $ | — | |||||||||
The following table presents assets that are measured and recognized at fair value as of December 31, 2024 on a recurring and non-recurring basis:
| Description | Level 1 | Level 2 | Level 3 | Gains (Losses) | ||||||||||||
| Goodwill (non-recurring) | $ | — | $ | — | $ | — | $ | — | ||||||||
| Intangibles, net (non-recurring) | $ | — | $ | — | $ | $ | — | |||||||||
10. Commitments and Contingencies
Litigation
As of the date of this report, the company has one pending legal proceeding related to alleged violations of the TCPA (Telephone Consumer Protection Act) Violation. This proceeding is a putative class action complaint 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”). We are unable to determine at this time whether it may result in a “material” exposure as defined.
In
addition, a settlement was reached and signed on April 9, 2025 in a previously active TCPA case, a putative class action complaint alleging
that Defendant initiated telephone solicitations through text messages to Plaintiff and members of a putative class in violation of the
TCPA. A settlement was reached and a settlement loss of $
Operating Lease
As
of September 30, 2025, we have an operating lease asset balance for this lease of $
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11. Related Party Transactions
Unsecured Promissory Note (“UP Notes”)
On
July 1, 2021, we entered into UP Notes in the aggregate principal amount of $
During
the nine months ended September 30, 2025, a total of $
Secured Promissory Notes
On
June 30, 2021, we entered into a Credit Facility Agreement with Thomas Akin, one of the Company’s directors (the “Lender”).
The Credit Facility Agreement was amended on November 11, 2022 to allow the Company to borrow up to $
During
the nine months ended September 30, 2025, a total of $
Related Party Convertible Notes
During
the first quarter of 2025 the Company issued 5 Convertible Notes payable to related parties for $
During
the second quarter of 2025 the Company issued 5 Convertible Notes payable to Thomas B. Akin for $
During
the third quarter of 2025 the Company issued 1 Convertible Notes payable to Thomas B. Akin for $
During
the nine months ended September 30, 2025 the company recorded $
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Related Party Senior Secured Convertible Notes
During
the first quarter of 2025 the Company issued 7 Senior Secured Convertible Notes payable to related party investors for $
As
of September 30, 2025 the Convertible Notes had a principal balance of $
Related Party Senior Secured Notes - Round 2
During
the third quarter of 2025 the Company issued 11 Convertible Notes payable to related party investors for $
For more details regarding the three related party transactions, please refer to Note 7 - Notes Payable and Interest Expense.
12. Reportable Segments
The customer acquisition and engagement segment derives revenues from customers by ways for customers to acquire new customers and in increase customer retention by email, text messaging and app interaction. the first is The Company’s Connected Reward program that encourages engage by offering real life rewards through on of the many marketing channels. In addition, we offer SMS messaging programs that allow the companies to send company updates, offers and promotions through email and SMS/MMS messaging. The accounting policies are the same as the policies listed in the summary of significant accounting policies.
The chief operating decision maker (“CODM”) of the Company is our President who assesses performance of our single operating segment and decides how to allocate resources based on consolidated net loss that is reported on the consolidated statement of operations, as well as through other performance measures. The CODM considers consolidated net loss in deciding how to allocate resources into the Company based on net income that also is reported on the income statement as consolidated net income.
The CODM is provided quarterly with reports on cash and accounts receivable to make decisions regarding resource allocation. The measure of segment assets is reported on the balance sheet as total consolidated assets.
The CODM uses net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the customer acquisition and engagement or into other parts of the entity, such as for acquisitions or to pay dividends. Net income is used to monitor budget versus actual results. The CODM also uses net income in competitive analysis by benchmarking to the Company’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation.
The
Company has
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The following table shows net sales by operating segment:
Schedule of Net Sales by Operating Segment
| Customer Acquisition and Engagement segment | ||||
| Revenues | $ | |||
| Less: | ||||
| Customer Acquisition Costs | ||||
| Dues and Subscriptions | ||||
| Legal and Accounting and Professional Fees | ||||
| Travel Expense | ||||
| Administrative Expenses | ||||
| Advertising Expense | ||||
| Payroll and Related Expense | ||||
| Outside Services | ||||
| Interest Expense | ||||
| Other Expenses (1) | ||||
| Customer Acquisition and Engagement segment Net Income | $ | ( | ) | |
| (1) |
13. Sales of Certain Contracts
Acquisition by SMS Factory
On September 25, 2024, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with SMS Factory, Inc., a Florida corporation (“SMS Factory”). Pursuant to the Asset Purchase Agreement, SMS Factory purchased all of the right, title and interest in the Company’s SMS/MMS text messaging customer accounts, excluding certain Excluded Assets (as defined in the Asset Purchase Agreement) utilized in the operation of the Company’s SMS/MMS text messaging platform business (the “Business Assets”) effective as of September 25, 2024 (the “Closing Date”).
In
consideration for the Business Assets, SMS Factory is expected to assume certain Performance Obligations and pay to the Company, for
a period of two years following the Closing Date, an Earn-Out Payment in an amount equal to two times the Gross Profit earned from each
Customer Account, including an upfront pre-payment of the Earn-Out Payment equal to $
The Asset Purchase Agreement includes customary representations, warranties and covenants by the parties.
14. Subsequent Events
On
November 7, 2025, SMS Factory, Inc. (“SMS”) filed a complaint against the Company in the Circuit Court of the Fifteenth Judicial
Circuit in and for Palm Beach County, Florida (the “Action”). The complaint relates to an Asset Purchase Agreement dated
September 25, 2024 (the “APA”) pursuant to which SMS purchased certain SMS/MMS text messaging customer accounts from the
Company and agreed to pay the Company an earn-out based on gross profit for a two-year measurement period, including a $
The Company denies the allegations and intends to vigorously defend against the Action. At this time, the Company is unable to reasonably estimate the possible loss or range of loss, if any, associated with this matter. Accordingly, the previous accrual of revenue has been recorded to bad debt allowance as of September 30, 2025]. The Company will continue to evaluate this matter and will record an accrual when a loss is probable and the amount can be reasonably estimated, or will provide additional disclosure as further information becomes available.
In connection with the Action, the Company has filed a counterclaim against SMS arising out of the same Asset Purchase Agreement dated September 25, 2024 and related post-closing conduct. The Company’s counterclaim alleges, among other things, that SMS failed to comply with its contractual obligations under the APA, including obligations related to the earn-out calculation and reconciliation process, and seeks monetary damages, offsets and/or recoupment of amounts claimed by SMS, attorneys’ fees and costs, and other relief.
Any potential recovery associated with the Company’s counterclaim represents a gain contingency in accordance with ASC 450, Contingencies. Accordingly, no amounts have been recognized in the accompanying financial statements as of September 30, 2025. The Company will recognize a gain, if any, when realization is probable and the amount is reasonably estimable.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Quarterly Report on Form 10-Q contains “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, in connection with the Private Securities Litigation Reform Act of 1995 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 Such forward-looking statements include statements about our expectations, beliefs or intentions regarding our potential product offerings, business, financial condition, results of operations, strategies or prospects. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends, or results as of the date they are made and are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” or “will,” and similar expressions or variations. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those risks disclosed under the caption “Risk Factors” included in our 2023 annual report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on April 17, 2024, and in our subsequent filings with the SEC. Furthermore, such forward-looking statements speak only as of the date of this report. We undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.
Overview
Mobivity Holdings Corp. (the “Company” or “us”, “our”, or we”) 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 locations and digital environments 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 2 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.
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.
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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 or implemented at all.
Recent Events
Related Party Convertible Notes
During the first quarter of 2025 the Company issued 5 Convertible Notes payable to Thomas B. Akin for $250,000. As an inducement we issued 416,667 warrants to purchase shares of our common stock at $.60 per share. Simple interest on the unpaid principal balance of this Note will accrue at the rate of 8.0% per annum. Accrual of interest will commence on the date of The Convertible Note, will continue until this Note is fully paid, and will be payable in a single installment at maturity three years from the date the Convertible Note was issued.
During the second quarter of 2025 the Company issued 5 Convertible Notes payable to Thomas B. Akin for $950,000. As an inducement we issued 1,583,332 warrants to purchase shares of our common stock at $.60 per share. Simple interest on the unpaid principal balance of this Note will accrue at the rate of 8.0% per annum. Accrual of interest will commence on the date of The Convertible Note, will continue until this Note is fully paid, and will be payable in a single installment at maturity three years from the date the Convertible Note was issued.
During the third quarter of 2025 the Company issued 1 Convertible Notes payable to Thomas B. Akin for $300,000. As an inducement we issued 500,000 warrants to purchase shares of our common stock at $.60 per share. Simple interest on the unpaid principal balance of this Note will accrue at the rate of 8.0% per annum. Accrual of interest will commence on the date of The Convertible Note, will continue until this Note is fully paid, and will be payable in a single installment at maturity three years from the date the Convertible Note was issued.
Related Party Senior Secured Notes
During the first quarter of 2025 the Company issued 7 Convertible Notes payable to related party investors for $1,575,000. Simple interest on the unpaid principal balance of the Convertible Note will accrue at the rate of 15% per annum. and automatically convert into the same equity securities issued for cash in the Qualified Financing, or at the option of the Investors, into the same equity securities issued for cash in a Corporate Transaction, each as the Convertible Note. Interest on the Convertible Notes will be accreted and added to the unpaid principal balance prior to conversion. The Convertible Notes are payable in one installment three years from the date of the Convertible Note.
Related Party Senior Secured Notes - Round 2
During the third quarter of 2025 the Company issued 11 Convertible Notes payable to related party investors for $4,040,681. Simple interest on the unpaid principal balance of the Convertible Note will accrue at the rate of 15% per annum. and automatically convert into the same equity securities issued for cash in the Qualified Financing, or at the option of the Investors, into the same equity securities issued for cash in a Corporate Transaction, each as the Convertible Note. Interest on the Convertible Notes will be accreted and added to the unpaid principal balance prior to conversion. The Convertible Notes are payable in one installment three years from the date of the Convertible Note.
Senior Secured Convertible Notes
During the first quarter of 2025 the Company issued 10 Senior Secured Convertible Notes payable for $425,000. Simple interest on the unpaid principal balance of the Senior Secured Convertible Note will accrue at the rate of 15% per annum. and automatically convert into the same equity securities issued for cash in the Qualified Financing, or at the option of the Investors, into the same equity securities issued for cash in a Corporate Transaction, each as the Convertible Note. Interest on the Convertible Notes will be accreted and added to the unpaid principal balance prior to conversion. The Senior Secured Convertible Notes are payable in one installment three years from the date of the Senior Secured Convertible Note.
Acquisition of Certain Contracts by SMS Factory
On September 25, 2024, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with SMS Factory, Inc., a Florida corporation (“SMS Factory”). Pursuant to the Asset Purchase Agreement, SMS Factory purchased all of the right, title and interest in the Company’s SMS/MMS text messaging customer accounts, excluding certain Excluded Assets (as defined in the Asset Purchase Agreement) utilized in the operation of the Company’s SMS/MMS text messaging platform business (the “Business Assets”) effective as of September 25, 2024 (the “Closing Date”).
In consideration for the Business Assets, SMS Factory is expected to assume certain Performance Obligations and pay to the Company, for a period of two years following the Closing Date, an Earn-Out Payment in an amount equal to two times the Gross Profit earned from each Customer Account, including an upfront pre-payment of the Earn-Out Payment equal to $303,000. The Asset Purchase Agreement includes customary representations, warranties and covenants by the parties.
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Results of Operations
Revenues
Revenues consist primarily of those generated by 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.
Revenues for the three months ended September 30, 2025, were $853,614 an increase of $627,406 compared to $226,208 for the same period in 2024.
Revenues for the nine months ended September 30, 2025, were $2,305,942 an increase of $1,405,934 compared to $900,008 for the same period in 2024.
This increase is primarily due to an increase of Connected Rewards revenue.
Cost of Revenues
Cost of revenues consists primarily of cloud-based software licensing fees, short code maintenance expenses, messaging-related expenses, and other expenses.
Cost of revenues for the three months ended September 30, 2025, was $591,763, an increase of $471,638, or 393%, compared to $120,125 for the same period in 2024.
Cost of revenues for the nine months ended September 30, 2025, was $1,359,367, an increase of $818,206 , or 151% , compared to $541,161 for the same period in 2024.
This increase is primarily due to an increase in Connected Rewards revenue resulting in a higher cost of good sold.
Bad Debt Expense
Bad Debt expense for the three months ended June 30, 2025 was $0, an decrease of a $7,575 gain, or 100%, compared to a gain of $7,575 for the three months ended September 30, 2024 . This decrease is due to a decrease in invoice aged past 90 days.
Bad Debt expense for the nine months ended September 30, 2025 was $1,692, an decrease of $13,157, or 89%, compared to $14,849 for the three months ended September 30, 2024 . This decrease is due to a decreasel invoices aged past 90 days.
General and Administrative
General and administrative expenses consist primarily of salaries and personnel-related expenses, consulting costs, and other expenses.
General and administrative expenses increased $821,946, or 357%, to $1,051,914, during the three months ended September 30, 2025, compared to $229,968 for the same period in 2024. The increase in general and administrative expenses was primarily due to an increase in software fees, legal fees and payroll expenses.
General and administrative expenses increased $1,844,477, or 340%, to $2,387,467, during the nine months ended September 30, 2025, compared to $542,990 for the same period in 2024. The increase in general and administrative expenses was primarily due to an increase in share based expense for warrants issued, legal fees and payroll expenses.
Sales and Marketing
Sales and marketing expenses consist primarily of salaries and personnel-related expenses, stock-based compensation expenses, consulting costs, and other expenses.
Sales and marketing expenses increased $661,384, or 335%, to $859,097 during the three months ended September 30, 2025, compared to $197,713 for the same period in 2024. The increase is primarily due to an increase in consulting fees and payroll expenses.
Sales and marketing expenses increased $2,080,017, or 384%, to $2,621,779 during the nine months ended September 30, 2025, compared to $541,762 for the same period in 2024. The increase is primarily due to an increase in consulting fees and payroll expenses.
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Engineering, Research & Development
Engineering, research & development costs include salaries, stock-based compensation expenses, travel, consulting costs, and other expenses.
Engineering, research & development expenses increased $415,566, or 128%, to $739,318 during the three months ended September 30, 2025, compared to $323,752 for the same period in 2024. This increase is primarily due to a increase in payroll expense and consultant fees.
Engineering, research & development expenses increased $1,452,249, or 173%, to $2,292,456 during the nine months ended September 30, 2025, compared to $840,207 for the same period in 2024. This increase is primarily due to a decrease in payroll expense and consultant fees.
Depreciation and Amortization
Depreciation and amortization expenses consist of depreciation on our equipment and amortization of our intangible assets.
Depreciation and amortization expense increased $3,937, or 643%, to $4,549 during the three months ended September 30, 2025 compared to $612 for the same period in 2024.This increase is primarily due to increase in intangible and fixed assets.
Depreciation and amortization expense increased $14,979, or 533% to $17,791 during the nine months ended September 30, 2025 compared to $2,812 for the same period in 2024.This increase is primarily due to increase in intangible and fixed assets.
Interest Expense
Interest expense increased $290,936, or 55%, to $820,777 during the three months ended September 30, 2025, compared to $529,841 in the same period in 2024. This increase in interest expense is primarily related to the increased balance on related party notes payable and the issuance of Convertible Notes.
Interest expense increased $710,815, or 50%, to $2,140,792 during the nine months ended September 30, 2025, compared to $1,429,977 in the same period in 2024. This increase in interest expense is primarily related to the increased balance on related party notes payable and the issuance of Convertible Notes.
Settlement Losses
Settlement losses consist of legal settlement for TCPA settlements.
Settlement losses for the three months ended September 30, 2025 and 2024 were $0 and $0, respectively.
Settlement losses for the nine months ended September 30, 2025 and 2024 were $2,500 and $0, respectively.
Loss on Sale of Fixed Assets
Loss on sale of fixed assets consists of an asset being sold for less than its carrying value.
Loss on sale of fixed assets for three months ended June 30, 2025 and 2024 was $0 and $6,514, respectively.
Loss on sale of fixed assets for nine months ended September 30, 2025 and 2024 was $6,876 and $6,514, respectively
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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 three and nine months ended September 30, 2025, was $1 Canadian equals $0.70 U.S. Dollars, respectively. This compares to an average rate of $1 Canadian equals $0.74 during the same period in 2024. 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 gain of $555 and a loss of $1,358 for the three months ended September 30, 2025 and 2024, respectively.
The change in foreign currency was a gain of $1,541 and a gain of $216,687 for the nine months ended September 30, 2025 and 2024, respectively.
Liquidity and Capital Resources
As of September 30, 2025, we had current assets of $2,581,484, including $1,655,318 in cash, and current liabilities of $10,148,984, resulting in a working capital deficit of $7,567,500.
We believe as of the date of this report, we do not have the working capital on hand, along with our expected cash flow from operations and budget reductions, to sufficiently fund our current level of operations through the end of the next 12 months or beyond. We will require additional capital and will seek to obtain additional working capital through the sale of our securities and, if available, bank lines of credit. There can be no assurance we will be able to obtain access to capital as and when needed, or that the terms of any available financing will be commercially reasonable.
The Company entered in to a sublease on March 1, 2024 for its office facilities in Chandler, AZ through February 28, 2025. Monthly rental payments including rental of office furniture and excluding taxes, are $24,470. The Company has transition to a 100% remote work force and this has resulted in a decrease in monthly rental expense.
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Cash Flows
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | (5,970,967 | ) | $ | (5,405,028 | ) | ||
| Investing activities | (2,400 | ) | (13,327 | ) | ||||
| Financing activities | 6,365,680 | 5,317,965 | ||||||
| Effect of foreign currency translation on cash flow | 1,987 | 216,445 | ||||||
| Net change in cash | $ | 394,300 | $ | 116,055 | ||||
Operating Activities
We used cash and restricted in operating activities totaling $5,970,967 during the nine months ended September 30, 2025 and used cash and restricted cash in operating activities totaling $5,405,028 during the nine months ended September 30, 2024. Key drivers of the cash used in operating activities are the net loss of $8,524,778 , a net loss from discontinued operations of $79,816, changes to accounts receivable of $491,038, accrued interest of $1,583,021, stock-based compensation of $400,021 , stock-based compensation expense for RSU’s of $243,747 accounts payable of $257,218, and amortization of debt discount of $550,703.
Investing Activities
Investing activities during the nine months ended September 30, 2025 were $2,400 compared to $4,559 in the nine months ended September 30, 2024.
Financing Activities
Financing activities during the nine months ended September 30, 2025 consisted of $6,115,680 of proceeds from related party convertible notes and $250,000 in convertible notes compared to $5,325,000 of related party convertible notes in the nine months ended September 30, 2024 Payments of $0 were made on notes payable compared to $7,035 in the same period in 2024.
Critical Accounting Estimates
We have adopted various accounting policies to prepare our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these financial statements requires us to make estimates, judgments, and assumptions. Our significant accounting policies and estimates are disclosed in Note 2 to the accompanying notes to the condensed consolidated financial statements. There were no material changes to our critical accounting policies and estimates during the nine months ended September 30, 2025.
Refer to Note 2, “Summary of Significant Accounting Policies,” in the accompanying notes to the condensed consolidated financial statements for a discussion of recent accounting pronouncements.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk.
We are a smaller reporting company as defined by Item 10(f)(1) of Regulation S-K. As such, we are not required to provide the information set forth in this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, with the participation of our Principal Executive Officer and Interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this report. “Disclosure controls and procedures,” as defined in Exchange Act Rule 13a-15(e), are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Principal Executive Officer and Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our management, including our Principal Executive Officer and Interim Chief Financial Officer, concluded that as of September 30, 2025 our disclosure controls and procedures were not effective.
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.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the nine months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
As of the date of this report, the company has one pending legal proceeding related to alleged violations of the TCPA (Telephone Consumer Protection Act) Violation. This proceeding is a putative class action complaint 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”). We are unable to determine at this time whether it may result in a “material” exposure as defined.
In addition, a settlement was reached and signed on April 9, 2025 in a previously active TCPA case, a putative class action complaint alleging that Defendant initiated telephone solicitations through text messages to Plaintiff and members of a putative class in violation of the TCPA. A settlement was reached and a settlement loss of $2,500 was accrued during the 3 months ended June 30, 2025.
Item 1A. Risk Factors.
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”), which could materially affect our business, financial condition or future results. There have been no material changes from the risk factors previously disclosed in the Form 10-K except as stated below:
The Company has filed a Rule 13e-3 Transaction Statement on Schedule 13E-3 and a preliminary proxy statement to stockholders, both of which are under the review of and subject to comments of the staff of the SEC, to effect a reverse stock split as part of a plan to deregister the Company’s common stock under the Exchange Act, which could negatively affect the liquidity and trading prices of our common stock and result in less disclosure about the Company, without the Company’s stockholders having the protections provided by the liability provisions of the Exchange Act and the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).
On July 31, 2025, a Special Committee of the Board consisting entirely of independent and disinterested directors, approved a transaction whereby the Company would effect a reverse stock split of the Company’s shares of common stock, in conjunction with terminating the Company’s public company reporting obligations, subject to obtaining the requisite approval of the Company’s stockholders at a Special Meeting of Stockholders to be held for that purpose.
Specifically, the Special Committee approved a transaction whereby the Company would effect a 1-for-25,000 reverse stock split of the Company’s common stock (the “Reverse Stock Split”). If the proposal is approved, at the effective time of the Reverse Stock Split each share of common stock owned by a stockholder in any one account holding fewer than 25,000 shares immediately prior to the Reverse Stock Split will be automatically converted into the right to receive $0.29 in cash for each such share owned immediately prior to the Reverse Stock Split, without interest (the “Cash Payment”), and such stockholders (“Cashed Out Stockholders”) will no longer be stockholders of the Company. Stockholders owning shares of common stock in any one account holding 25,000 or more shares immediately prior to the effective time of the Reverse Stock Split (“Continuing Stockholders”) will remain stockholders of the Company and, to the extent any Continuing Stockholder owns a number of pre-split shares that is greater than 25,000 but is not evenly divisible by 25,000, then the fractional shares of such stockholder resulting from the proposed Reverse Stock Split would be cashed out at the Cash Payment. The Company estimates that approximately 3,481,673 shares of the Company’s common stock (representing approximately 4.7% of the shares of common stock currently outstanding) would be cashed out in the Reverse Stock Split and the aggregate cost to the Company of the Reverse Stock Split would be approximately $1,500,000. This amount includes approximately $1,009,685 needed to cash out fractional shares that would otherwise result from the Reverse Stock Split in respect of Cashed Out Stockholders (and the Cash Payment owed to certain Continuing Stockholders in lieu of fractional shares), and approximately $300,000 of legal, solicitation, filing, and other costs needed to effect the Reverse Stock Split. This total amount could be larger or smaller depending on, among other things, the number of fractional shares that will be outstanding after the Reverse Stock Split as a result of purchases, sales and other transfers of our shares of common stock by our stockholders.
The Reverse Stock Split will be submitted to a vote of the Company’s stockholders at a Special Meeting of Stockholders to be called for that purpose. The Company has prepared and filed a preliminary proxy statement and Schedule 13e-3 with respect to the Reverse Stock Split.
The Special Committee may abandon the Reverse Stock Split at any time prior to the effectiveness of the Reverse Stock Split, even after stockholder approval, if the Special Committee determines in its business judgment that the Reverse Stock Split is no longer in the best interests of the Company and its stockholders.
Any trading in our common stock (after the Reverse Stock Split and deregistration under the Exchange Act) will only occur in privately negotiated sales and potentially on the OTC Pink Market, if one or more brokers chooses to make a market for our common stock there and complies with applicable regulatory requirements; however, there can be no assurances regarding any such trading.
Stockholders holding the Company’s common stock following the Reverse Stock Split and subsequent filing to become a non-reporting entity may no longer have the information that is currently provided in the Company’s filings with the SEC pursuant to the Exchange Act regarding such matters as the Company’s business operations and developments, legal proceedings involving the Company, the Company’s financial results, the compensation of the Company’s directors and named executive officers, and Company securities held by the Company’s directors, officers and major stockholders. In addition, it is likely that there will be limited liquidity for the Company’s common stock and that trading of shares may only continue in privately negotiated sales. As a result, stockholders may not be able to purchase or sell the common stock at all or at prices they desire.
Further, the Company’s stockholders will no longer have the protections provided by the liability provisions of the Exchange Act and the Sarbanes-Oxley Act applicable to the Company and the Company’s directors, officers and major stockholders, including the short-swing profit provisions of Section 16, the proxy solicitation rules under Section 14, the stock ownership reporting rules under Section 13, provisions relating to personal attestation by officers about accounting controls and procedures potential criminal liability regarding the disclosure by the Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information
During
the nine months ended September 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)
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Item 6. Exhibits
| Exhibit No. | Description | |
| 2.1 | Asset Purchase Agreement, dated September 25, 2024, by and between Mobivity Holdings Corp. and SMS Factory, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on October 1, 2024) | |
| 3.1 | Restated Articles of Incorporation filed with the Nevada Secretary of State on August 12, 2022 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on August 15, 2022) | |
| 3.2 | Amended and Restated Bylaws of Mobivity Holdings Corp. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed June 27, 2025) | |
| 10.1 | Convertible Promissory Note Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 5, 2025) | |
| 10.2 | Form of Convertible Promissory Note (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed August 5, 2025) | |
| 10.3 | Form of Amendment to Senior Secured Convertible Promissory Note (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed August 5, 2025) | |
| 10.4 | Form of Amendment No. 5 to Existing Notes (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed August 5, 2025) | |
| 31.1 | Certification by Principal Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002 * | |
| 31.2 | Certification by Principal Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002 * | |
| 32.1 | Certification Pursuant to 18 U.S.C. Section 1350 ** | |
| 101.INS | Inline XBRL Instance Document * | |
| 101.SCH | Inline XBRL Taxonomy Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document * | |
| 101.DEF | Inline XBRL Taxonomy Definition Linkbase Document * | |
| 101.LAB | Inline XBRL Taxonomy Label Linkbase Document* | |
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document * | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101) |
* Filed electronically herewith
** Furnished electronically herewith
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SIGNATURES
Pursuant to the requirements 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
| Mobivity Holdings Corp. | ||
| Date: December 29, 2025 | By: | /s/ Bryce D. Daniels |
| Bryce D. Daniels | ||
| President | ||
| (Principal Executive Officer) | ||
| Date: December 29, 2025 | By: | /s/ Skye Fossey-Tomaske |
| Skye Fossey-Tomaske | ||
Interim Chief Financial Officer (Principal Accounting Officer) | ||
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FAQ
How did Mobivity (MFON) perform financially in Q3 2025?
For Q3 2025, Mobivity generated revenue from continuing operations of $853,614, up sharply from $226,208 in Q3 2024. However, it recorded a net loss of $3,303,320 versus a $2,458,552 loss a year earlier, as higher operating expenses and interest costs more than offset revenue growth.
What were Mobivity (MFON) results for the nine months ended September 30, 2025?
For the nine months ended September 30, 2025, Mobivity reported revenue from continuing operations of $2,305,942 and a net loss of $8,604,594. Comprehensive loss over the same period was $8,603,053, reflecting continued operating losses despite higher sales.
What is the cash and debt position of Mobivity (MFON) as of September 30, 2025?
As of September 30, 2025, Mobivity held $1,655,318 in cash and $134,965 in restricted cash. Total notes payable principal was $22,785,680, including related-party unsecured, secured, convertible, and senior secured convertible notes, leaving total liabilities of $27,132,181 against total assets of $3,019,511.
Did Mobivity (MFON) disclose a going concern issue?
Yes. Management stated that recurring net losses, an accumulated deficit of $148,798,100, limited cash of $1,655,318, and expected future losses raise substantial doubt about Mobivity’s ability to continue as a going concern. The company plans to rely on additional financings and future operating cash flows.
How concentrated is Mobivity (MFON) revenue among customers?
For the nine months ended September 30, 2025, two customers accounted for 69% of Mobivity’s revenues. For the same period in 2024, two customers represented 52% of revenues, indicating significant customer concentration risk.
What happened with Mobivity’s discontinued SMS/MMS messaging operations?
On September 25, 2024, Mobivity sold its SMS/MMS text messaging customer accounts under an Asset Purchase Agreement with SMS Factory, Inc. The SMS/MMS business is now reported as discontinued operations, with no remaining assets as of September 30, 2025 and a nine‑month 2025 loss from discontinued operations of $79,816.
How much interest expense did Mobivity (MFON) incur in 2025 so far?
For the nine months ended September 30, 2025, Mobivity recorded $2,140,792 of interest expense, up from $1,429,977 in the prior-year period, primarily due to its sizable portfolio of related-party and other notes payable.